Chaos and capitulation

22 June 2017

Must we go over our chaotic circumstances? Let’s simplify heroically: it’s the Seventies. May has exhausted her popular credit and media honeymoon in record time, going from Teflon woman to Calamity Jane in eight disastrous weeks. Nothing she does gets the benefit of the doubt. Her responses to national tragedy or setbacks in DUP negotiations are seized upon as further evidence in a show-trial where she has already been found guilty. This cannot carry on for long.

Despite this, the Government’s formal position has been to resist any push-back on its intentions for Brexit. This has prompted a firestorm of dissent from Tory grandees (Clarke, Hague, Heseltine, Major), and never-reconciled Tory Remainers (Davidson, Hammond, Soubry), fanned by interested parties from the City and industry. Corbyn is disingenuously fielding Starmer for cross-party consultations, while preparing an opportunistic vote to winkle out Tories willing to bolt the party line. A high-tone from the Lords and spikiness from Edinburgh will flesh out May’s nightmares.

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On 19 June, the Government published its “Terms of Reference for the Article 50 TEU negotiations”. These represent a capitulation to Brussels’ agenda, process and relaxed approach to publicity. Later that day, this was reflected when Davis met Barnier to perform his famous U-turn on sequencing. Two responses suggest different lessons.

British commentators inclining to Remain say that it proves what they’ve always said: moth-eaten John Bull is bound to be knocked off his shaky perch once he pits himself against the adults in the room. Some European officials have joined them in this.

Other Europeans have taken a different view, expressing surprise that the Brits folded so promptly. They have drawn attention to the fragility of the EU’s nominal unity, bought at the cost of promising everyone in the EU27 everything including extraterritorial demands which some of its own judges see as ludicrous.

The latter response tells us that Davis’ U-turn was not inevitable - it may even have been politic, in the spirit of reculer pour mieux sauter. It is certainly a signal that the UK has no reason to abandon its objectives. So let’s review the form.

Will there be any sort of Brexit at all? I’d say the chances are still two out of three, as the train is on the track and will be hard to stop.

Will we pay the €100bn? We might, the way things are going. And the price might be right if we can move things our way on the following points.

What will happen to EU expats. They’ll enjoy domestic rights at least - just as they should. On the other hand, and to speak personally, I’d sooner crash out than yield on extraterritorial supervision by the ECJ. But others feel far less strongly on this.

What will happen about new EU immigration? May is now at a disadvantage on a topic dear to her heart. Once again to speak personally, I am more of an open doors guy, but I saw inflexibility on freedom of movement as tactically desirable as cementing departure from the single market (see next).

Will we leave the single market? This is becoming less likely as attracting revived objections under the aegis of “jobs", in truth a mask for the regulatory comfort of incumbents. It would be poor policy to remain as it would make it impossible to conclude trade deals which include services, as already under way pro forma with the US.

Will we leave the customs union? I see the chances as better than 50% as this is pretty much a minimal condition for any sort of Brexit.

What sort of transition or interim deal is in prospect? As things stand, longer a rather than shorter transition, but neither indefinite nor an interim deal that risks no real Brexit.

Will May get her “deep and special” free trade deal with the EU? This ought not be a problem as we start out in mutual regulatory accord, but future changes in regulation call for delicate arrangements for dispute resolution.

So what about dispute resolution? Hard to say. Arbitration in London would be my choice. German politicians have spoken of a joint court. Once again, I’d sooner crash out than yield on extraterritorial supervision by the ECJ, but once again, others feel less strongly.

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At this point Brexit looks closer to out of control than anyone would wish. Hope may just be found in Davis’ pre-election claim that DExEU was spending as much time on “plan B” as on Article 50 negotiations. Even so, May’s lack of domestic command makes it hard for her to proclaim “no deal is better…”, so a crash-out engineered by HMG has become less likely. Then again, an unintended cliff-edge must be seen as more on the cards, precipitated by chaos at home or over-ambition in Brussels.