Home Flexcit Impact Assessments Monographs Contact Archive

Brexit: a state of chaos

2018-09-24 09:28:15

Having spent most of yesterday in the relatively sane environment of a Duxford air show (pictured, taken by Pete), I returned home to find the nation, politically, in a state of chaos over Brexit. Clearly leaving the scene for even this short period was a grave mistake.

Pre-eminent amongst the madness which has descended upon us, it appears, is a Cabinet with a majority determined to dragooning Mrs May into proposing a Canada-style deal for our exit settlement, despite Dominic Raab's warning that this would leave Northern Ireland "subject to a wholly different economic regime".

With the oaf blathering so inanely it is painful to read, we find we are to be treated today with some more insanity from "Snake oil" Singham, courtesy of the increasingly sinister IEA, supported by those intellectual titans, Johnson and David Davis.

I am not going to critique this fully until I have seen it, but the previews are sufficient for me to expect the worst. The only thing likely to be in its favour is that it will be so mad that not even Mrs May's government would be quite so stupid as to take it to Brussels.

That will not, of course, relieve us from the waste of time involved in assessing it, but then that is a feature of this Brexit so-called "debate", where we expend massive amounts of time on lunacy while perfectly good proposals largely ignored by the media and politicians.

Nevertheless, some of the more sensible issues are still being aired while the sterling Peter Hitchens talks more sense in one article than any thousand I have read elsewhere.

The more the idiots thrash around ignoring the issue, trying to devise an ever madder range of alternatives, the more obvious it becomes that the so-called Norway option is the only way to manage a sensible Brexit.

What we need to be aware of, though, is that the EEA Agreement is what Pete dubbed an adaptive framework. There is no single agreement each of the three Efta states which are party to it have adapted it to suit their own specific requirements. The UK too will need to make its own adaptations and, because it is a far more complex (and bigger) economy with more sophisticated needs the adaptations will have to be considerable.

Thus, in my advocacy for the Efta/EEA option, the biggest mistake I made in the early days was to argue that it was an "off-the-shelf" arrangement. It isn't, and the process of negotiating the necessary adaptations would doubtless take a long time, with the expenditure of considerable diplomatic effort.

Furthermore, while the EEA Agreement would be a necessary step, it is not sufficient even with adaptations covering such issues as freedom of movement, customs cooperation (with special reference to Northern Ireland), and technical matters such as rules of origin and external tariffs.

In addition, we will need separate agreements on a wide range of other issues. Norway, the largest of the Efta/EEA states, has 56 recorded bilateral (and more than 20 multilateral) treaties with the EU, including an all-important agreement covering administrative cooperation on VAT. In fact, on this one subject, we will need to go much further than Norway if we are to secure frictionless borders.

If we also include the negotiations required for us to rejoin Efta which will be necessary in order for us to access the institutional structures of the EEA Agreement, without re-inventing the wheel then it is unarguable that we do not have sufficient time between now and 29 March to conclude the necessary arrangements.

That really leaves us with only one realistic option. That is for Mrs May to bite the bullet and accept the draft withdrawal agreement, as it stands, complete with the (as yet unfinished) protocol on Northern Ireland.

The political declaration on our future relationship, however, should be very much simplified. It can be distilled down to a few sentences, based on a commitment to facilitate negotiations on adapting the EEA Agreement, with all parties acknowledging that UK participation would continue. This would then define our future relationship although it would not preclude future changes to the nature of the EEA.

This notwithstanding, as long as we have legally withdrawn from the EU on 29 March which would be the case if this option was taken then the referendum vote is being honoured. The vote concerned leaving the EU nothing more and nothing less. The official leave campaign ostentatiously avoided committing to a specific withdrawal plan, and was content to leave the mechanics of leaving to the government. So be it. It is time for government to govern.

The crucial thing is that we secure a legal separation, but do so with that all-important transition period. That will give us the space to secure Efta membership, the EEA adaptations and the additional agreements necessary to make for a successful working arrangement with the EU and its Member States.

Hopefully, it will also buy us time to organise and agree continuity with our global trading partners, to ensure that the current arrangements enjoyed as members of the EU are able to continue. The idea that we are going to be able to negotiate a whole raft of new trade deals with the rest of the world, in time for the ending of the transition period (which is what we would otherwise need to do), is facile to the point of being dangerous.

Furthermore, if we convey any sense that we are in competition with the EU for deals with the rest of the world, in an attempt to use them as leverage for a better deal with the EU, then we will be setting the scene for economic disaster. If they have a choice forced upon them, more of our trading partners will opt for the EU rather than the very much smaller UK market.

Nor can we assume that the Efta negotiations are going to be straightforward. To avoid complications arising from a mismatch with the EU's external tariffs (which, for the moment, we plan to adopt via the WTO and the tariff schedules), then we will need a special dispensation from the Efta states.

It maybe that we actually need a novel form of associate membership of Efta, sufficient to give us access to the institutional structures of the EEA, without being bound by the detailed provisions of the Efta convention.

All of this is complicated. But then leaving the EU was always going to be complicated, despite the asinine assertions of diverse pundits, ranging from Peter Lilley to Gerald Batten and Liam Fox. This much Mrs May will need to recognise. If that risks having her government collapses around her, she can put to her party that any seeking alternative will precipitate a general election. And does the Conservative Party really want another election just now?

But then, what do we do about the Labour Party apart from shake our collective heads in wonderment? If the Tories are in chaos, a new word much be coined to describe the turmoil afflicting the UK's second party.

Looking at the disease corrupting the entire UK political process, though, Mrs May could probably get away with ignoring the opposition parties, and make her appeal directly to opposition MPs, as individuals. Here, she needs to grip the situation in a way that she has not done, and make clear to the nation the consequences of a "no deal" Brexit, inviting MPs of all parties to join her in fending off certain disaster.

Sadly, in her Friday statement she reaffirmed her original claim that "no deal is better than a bad deal", giving herself little room for manoeuvre.

Somehow, using whatever form of words necessary, she needs to claw back on that and make it clear that the actual consequences of leaving without a deal is not something that this country can afford. She may be assisted in this endeavour by the latest tranche of "technical notices" on the consequences of a "no deal" Brexit, due out today, including the long-awaited aviation paper.

But, it is probably there that the "bloody difficult woman" will fail. I cannot see her rising to the challenge. She has truly boxed herself into a corner, leaving herself no escape route.

And that leaves us in precisely the same place I found us in when I got home yesterday in a state of chaos. Worse still, we can see the way out, but we are lacking the politicians who are capable of taking us there. The chaos of their making is so profound that they are incapable of resolving it.