EU Referendum


Brexit: poking the pig


22/11/2019




I'm not in the least interested in the Labour Party manifesto. Barring a colossal gaffe by Johnson, I'm prepared to concede that the Tories have this election in the bag, so whatever Corbyn promises is largely irrelevant.

Even at this early stage, the polls are headed in one direction only, and I don't see Corbyn gaining enough ground to make a dent in the Tory lead. The latest is an IpsosMori poll which gives the Tories 44 percent against Labour's 28 percent – a 16 point lead. Farage's party, incidentally, is on three percent – a tenth of its European elections showing.

Come the election, there may of course be local shocks but probably not so many that they skew the overall result. The only real question is the size of the Tory majority.

Even if I'm wrong, our economic fate is not going to be a lot different, regardless of which party gets elected. Economically, Corbyn may be leading us to a train wreck – and there are plenty of partisan (and not so partisan) pundits willing to attest to that. Not least of these is the Institute for Fiscal Studies which says that Labour's manifesto spending and taxation pledges are "colossal" and "not credible".

But the point is that Johnson is also poised to lead us down the path of economic perdition. Apart from any other policy initiative, if he executes his plan to close down the EU-UK negotiations at the end of December next year – with or without a deal - the consequence will almost certainly be a recession.

It seems to me, therefore, that the most important issue of this election campaign is to expose Johnson's plan for what it is, and – insofar as it is possible – to shame him into changing course before he gets elected. That way, it might be harder for him to change his mind when decisions need to be made.

One can be slightly encouraged, therefore, by the recent media interest. In addition to the Telegraph and Guardian articles which I mentioned in yesterday's piece, there was also an item in the Financial Times and then we have a lengthy Twitter thread from Katya Adler on the likelihood of Johnson concluding a trade deal with the EU by the end of December.

However, although it is a view from Brussels, ostensibly straight from the horse's mouth, Adler doesn't tell us much we didn't know already or could not have worked out for ourselves. Nevertheless, it serves as confirmation and widens the audience, even if her employer didn't see fit to broadcast her report.

One wonders if this reluctance to air this issue has anything to do with Peter Oborne's recent claim that the BBC doesn't want to "out" Johnson as a liar for fear of undermining the public's trust in British politics.

Anyhow, returning to Adler's tweet, she leads with a quote from an "influential European diplomat" responding to Johnson's assertion that a trade deal with the EU can be completed by December next year. "Not in my wildest dreams would I imagine that a possibility", the diplomat says.

This Adler contrasts with comments from Michel Barnier and incoming trade commissioner Phil Hogan, who both say a deal can be done quickly. But, she writes, while Brussels would be prepared to offer Johnson a quick FTA, it would have "the utmost levels of EU regulation bells and whistles attached", the latter being the flanking policies which Adler calls "level playing field provisions".

More or less, I made the same point yesterday, although I allowed for a reduced state of alignment that would come with a Canada-style deal. But what is conceded by Adler's sources is that the messiness of "We'll give you this, if you give in on that" negotiations gives rise to the delay, and also means it's unlikely that a sector by sector EU-UK deal could be reached.

This would entail one part of a future relations agreement being signed off (e.g., security), while more complicated areas were still being negotiated. Instead – it would appear – the EU would treat the talks in the same manner that it approaches accession negotiations, requiring one chapter to be closed (i.e., agreed) before the next one is opened, then applying the principle that nothing is agreed until everything is agreed.

Interestingly, Adler asserts that her contacts say that Johnson has already told them he can't accept being tied to EU rules like that after Brexit. And for that reason Brussels believes EU-UK trade negotiations will take longer than the eleven months to the end of December 2020. On that basis, the EU officials that Adler has talked to believe that the transition period will "very likely" be extended.

What we don't see in Adler's vocabulary, though, is the concept of a "bare bones" agreement – of the type suggested by Sabine Wayand. That actually cuts across the thinking conveyed by Adler and brings another dimension to the table.

Since the understanding of many MPs and journalists, in relation to free trade, seems to stop at tariffs and quotas, Johnson could probably get away with standing the negotiations on their head, opening with a blank piece of paper and setting out an agreement of very limited scope.

Johnson could (if he was so minded, and someone told him about it), refer to the Norway/EEC free trade agreement signed off in May 1973 after only a few months of negotiations, after the Norwegian people had rejected joining the EEC in their referendum. At a mere 113 pages, this served for over twenty years until the EEA Agreement came into force, although with several additional protocols in the interim.

Critics might claim that there is no direct parallel, and they would be right in so doing. But a Johnson government could take the view that a "quick and dirty" treaty would be preferable to being tied up with the EU for several years in protracted negotiations, with no guarantee that the end result would be particularly advantageous to the UK.

Thus, the concept of a "bare bones" treaty that we can revisit at intervals, adding to it to resolve pinch points, has certain attractions, and is something that Johnson could possibly sell to a compliant parliamentary party, basking in the glow of a recent election victory.

By the time we came to December 2020, more than a year will have elapsed since the worst-case scenario of a no-deal Brexit, and the authorities at Calais and other Channel ports will have honed their procedures to minimise vehicle handling delays.

Businesses also – on both sides of the Channel – are remarkably resilient and, when the Commission contingency measures are applied, it is likely that any visible, headline effects of a "bare bones" deal might be minimal.

On the PR front, Johnson could escape immediate media criticism and it would not be for many months down the line before the serious adverse effects began to be apparent, many of which could be disguised by the creative use of government statistics.

When or if Johnson becomes prime minister, Katya Adler says that the EU is predicting that trade talks will start around March. It then thinks there'll be brinkmanship by both sides, threatening no-deal ahead of transition period ending December 2020, but in the end the period will probably be extended.

Adler then tangentially refers to the "uncertainty" this throws up, but takes it no further. What we all need reminding of is that, as it stands – this side of voting on 12 December – we are being sold a pig in a poke. Maybe Johnson will go "quick and dirty", maybe he will not. Maybe he'll try for "Canada-plus", and maybe not. We just don't know.

To be asked to vote on the Brexit issue, where the policy line is completely uncertain, and the consequences of getting it wrong potentially disastrous, is quite intolerable. Johnson must come clean on what his intentions are, and he must justify his decision. And, for all its failings, only the legacy media can give that pig a different kind of poke.