Thursday, 7 June 2018

David Davis Could Start the Ball Rolling

An update follows after this post...

As I write, David Davis, Secretary of State for Exiting the European Union, may or may not resign very soon. It is, they say, fifty-fifty. Along with the transition, Theresa May will employ the backstop applying to the whole of the UK to preserve the no border between Northern Ireland and Ireland, and other trading arrangements, until there is an agreement that creates frictionless trade. David Davis apparently needs a cut off date. The problem is that without such an agreement, the backstop could go on forever.

Now Boris Johnson has a different strategy. As well as being third rate, like pretty much the rest of them, including the Prime Minister, he is also both incompetent and care-free. On the latter, he says what he likes, and effectively tempts the Prime Minister to sack him, which she never does. Boris carries on, making an idiot of everyone. David Davis is not like this. He may have been ineffective in negotiating, he may laugh things off, as he does, ha ha, but he is capable of following collective cabinet responsibility and acting as if he has a brain. He is capable of timing. And here comes timing now.

If he is going to do it, now is the time to do it, because if he goes the whole government ability to kick cans down the road runs out. This is what Theresa May is trying to do: extend the period of trying to do the impossible. But the Brexit crowd see the time running out where extension beyond the dates becomes the de facto reality: single market and customs union by stealth.

Go now, would be the answer, whilst there still is time to avoid a complete crash. Going now starts a train of events which, indeed, could see the Tory Party split as it did under Peel, or something equivalent coming that makes the Tories like Asquith's Liberal Party. Davis won't want that, but he might fancy himself as leader to make the decisions that May cannot, and indeed consider himself as 'acceptable' in a way that Rees-Mogg would indeed cause many Tories to deny the Tory whip.

Not that Davis could control House of Commons votes any better. It is now time for the House of Commons to become, in effect, on this, the government. The majorities and minorities have to be arranged cross party by the members themselves owning and working through the various amendments. The problem with this, of course, is the pathetic position taken by the Labour Party. It is also in fantasy land regarding what is possible and not possible. It wants to leave the club, but stay within the benefits of the club and indeed have a say in what the club management wants. Er, no, it doesn't work like that. You are either in the club or you are not. Fortunately, for those who might join in the future, without time limit, you can get the benefits of the club for a payment, whilst having no place in the management. Anything else is not there, and it never was, and, as has been said, trade deals with 'most favoured nation status' like others, aren't worth the paper they are written on, and take an awful lot of paper and a long time to write.

What people are learning is that the European Union is the fact on the ground in just about everything. It is intricate to so much people value and need in every day life. The whole binary referendum was voted upon in ignorance, and has been the biggest demonstration if ever needed why we have representative and not direct democracy. We pay people to have the time to consider matters and make decisions, and this is why Parliament is sovereign on behalf of the electorate. MPs are not mandated; they are paid to consider and then decide. The House of Lords is part of Parliament, and its members are paid to consider and advise, in effect. It is time for MPs to act with sense towards the political economy and cultural life of the United Kingdom, and further, I would say, to break the mental yoke of this referendum.

Once again, referenda are only useful once a Parliament has made a decision, not instead of it making a decision. Certainly it should not come about simply as a strategy in Tory Party politics, at such reckless risk to the British Isles. It is time to say, it was advisory only, and if you don't like it, kick us out at a General Election.

If David Davis does resign, it could indeed spark events that, even via the Fixed Term Parliament Act. It is important then, especially for the Liberal Democrats, and all actual Remain MP candidates, to state that General Elections trump referenda. They do because no UK Parliament can be bound by its predecessor or anything else for that matter. So if we do come to a General Election, we have got to say look at the reality of the last two years, look at the actual cliff edge, but not just that, but look at the values the European Union expresses and how it makes a continental economy work, how we are one people across the geographical space. Let's be more like transformative Ireland.

The notion that there will be an agreement, and that Labour etc. will consider it and whether it reaches certain tests, and there will be this 'meaningful vote' just seems to be sliding away. The issue is, will David Davis set matters into motion by which this political impasse can be resolved - not just one way or the other, but in a way by which we can all breathe one huge sigh of relief.


What happened next day? Theresa May kicked the can down the road again. To stop the resignation/s (three or four, potentially) she put a cease date into the backstop document, except a cease date would stop it being a backstop. It would, if it was an absolute date, but it is a 'should' date or aspiration.

Meanwhile, Boris Johnson shoots his gob off again. In an earlier night time meeting, he said the Treasury is the heart of the remain camp, that Donald Trump would have negotiated better, and that the Brexit that happens could keep us in lunar orbit of the European Union.

May didn't sack him, of course, but got on a plane to Canada. It turns out she has told remain Tory MPs not to defeat her on the withdrawal bill coming up next week in June, because on a trade bill they will be able to defeat her in July.

This reminds me of the song, "No wheels on my wagon, and I keep rollin' along..."

Sunday, 20 May 2018

The UK and the EU: Crunch Time Very Soon

It is a while since I blogged on the subject of the European Union and Britain supposedly leaving it. The reason is that the ball keeps moving, and I wait for the next development.

However, the crunch time seems to be looking very close.

Conservative Nicky Morgan recently did a presentation in a factory that needs just in time across Europe. It needs the Single Market and Customs Union. She chose in the cross-party approach two ex-politicians, Nick Clegg and David Miliband. Presumably Anna Subrey is keeping Chukka Umuna to herself (ha ha).

The idea is that this wing of the Tory Party can deliver the House of Commons, as it has already delivered the House of Lords.

Now a group of Conservatives have tried to start where they more or less leave off, and aim to go across party and exclude the more swivel-eyed leavers. They will isolate the 70 or so (maximum) fantasists that we can somehow leave without causing considerable economic and political damage.

The assumption is that Labour will not deliver a European Economic Area (EEA) solution in its voting: a solution that would keep Ireland economically united, and indeed Britain economically united with Europe. Nicky Morgan is a little disingenuous on this matter: one minute she sees the EEA as possible, but next it is clear that it is what she and the others want. Of course, she is trying not to frighten the Tory horses.

The fact that the far right in terms of leaving the EU won't get the prize they want (a sort of independent, bargain basement, economic wonderland) does not seem to trouble them. And this is because they see the whole thing in terms of the Conservatives and Democratic Unionist Party (DUP) holding a majority. If Theresa May PM (I think she is the Prime Minister) goes with the new group, they will withdraw the whip from themselves and the government will lose its majority.

All this is coming close, because Theresa May is telling European leaders that the whole UK will be going for the 'backstop' in the agreement made that allowed stage 2 of negotiating to take place. The backstop keeps Northern Ireland in regulatory alignment with Ireland, but the DUP will be happy that it also keeps Northern Ireland tied to Britain. The Cabinet, we are told, has approved this, but given that her Customs Partnership plan was so publically dished by her own Cabinet members, surely some must be on the verge of resigning should this actually go into action. It means the UK in the Customs Union, or at least complete regulatory alignment - no separate trade deals.

They will, of course, given the Fixed Term parliament Act, also challenge Theresa May will a candidate of her own. No doubt she will want to avoid a loss of majority and a leadership challenge, but Tories in this initiative and to the left (closest to Europe) would say although she can be challenged and have to fight a leadership election, she would win.

Problem is, of course, that elections of all kinds get a traction of their own. She would not be sure. A leader of more close solutions to the EU, rather than her constant ambiguity, might well win.

Labour, of course, would want to take up the reins of negotiating our exit from the EU. It might try to govern otherwise too, although it is unlikely to say the least. Corbyn isn't exactly surrounded by followers, even on his own side, and his own non-EEA position hardly is going to work. Tories might sit back expecting no deal to be just as likely.

My view is that sufficient in the House of Commons facing a no deal disaster will slam on the brakes. This will mean, not transition period, not out because the EU says clear off, but in and staying in, and it may well require another Article 50 trigger.

Basically, now, the British political system is unable to deliver an exit from the European Union, not without a General Election and/ or a second referendum to shift the deadlock. (In my view referenda are unnecessary and not part of the UK constitution, except to confirm a made decision: the EU referendum was surely a lesson for that.)

We should stay in the European Union, where political representation is necessary as regards the progress of the Single Market and Customs Union. Parliament is sovereign: it makes decisions and no one parliament binds another. A General Election always trumps referenda, which can only be advisory (regarding a taken decision).

It seems to me this is a Robert Peel moment for the Tory party. This is when Peel favoured Corn Laws repeal and he split the party: in fact it gave birth to the modern Conservative Party.

The more 'moderate' Tory attempt to isolate the far right independents will inevitably gravitate to the Customs Union and even Single Market (if you are in one, you may as well be in the other). This group won't isolate those who have been doing the cross-party approach regarding the House of Commons (also seen in the House of Lords in its continuous defeats of the Government). The seventy or so who will be cut adrift will surely have their own manifesto - claiming it is the Tory manifesto, the referendum result in total victory terms. They will be tempted to field candidates: Tory against Tory. There may well be all kinds of alliances going on in constituencies up and down the land, the result being Party identity changes afterwards. It's why there does not need to be a centre party now: such a party would follow the break up or the Tories, that might split not into two but three, or at least part of it go elsewhere leftwards.

Whatever happens the crunch point is approaching, and it's just a case of when it happens. The road down which the can has been kicked is running out, and the consequences could be shattering.

Hopefully, while this unfolds, we stay in the EU: either until they can sort it out after significant political renewal or continuously.

Sunday, 1 April 2018

Thirty-Five Years Ago

Recent events with all these diplomatic expulsions remind me of when in the late 1980s I was concerned about Marxism in Higher Education. I'm not talking about the teaching - which was partly Marxist in the earliest 1980s in undergraduate days, especially Sociology - but about the students and especially those who came from abroad.

I learnt my Marxism from the best of them, so I know all about economic determinism. My essays into this particular undergraduate Marxist class were those of economic liberalism, to challenge their dominant ideology, but my writing used the idea that dispersed economic ownership caused dispersed power. In fact, oddly, the European Politics I learnt about was also of the same thought process: an economic determinism where institutional business sharing across national boundaries brings about political merging within Europe.

Someone must have passed on the fact that as an undergraduate I did write some very right wing essays: Hayek and Friedman, and the Economic Liberalism that had taken over the Tory Party. It didn't last because by the end of 1982 I was a social liberal. But the record was deposited and my services were required.

Some wondered at the time how it was I afforded doing postgraduate work. I was approached, of course, and I won't say by whom (obviously). I then was given a contact. What I did was use the postal services relating to the Methodist Chaplaincy to receive and send messages. I used to write reports, on a single sheet of paper on a glass base, and these were posted. My working name was Revd. Standfast, and my reports followed on from Research Methods Tutorials and organised and private social events. Messages for Revd. Standfast at the Chaplaincy were for me, and were about concerns by the authorities over some of these folk.

I used to sit in these tutorials and listen to this (what I considered) Marxist garbage that some of the foreign students expressed, and in some cases decided that they didn't actually believe in it but were trying to be academically 'right on'.

Those I suspected further I befriended, and I think only in one case did I pass on serious concern. There was this very intense and gifted female, who had a circle of friends she was trying to convince to be anarchistic - to turn political thought into action. What happened was I went to her student house and had these discussions, where I challenged her with Hayek's The Constitution of Liberty and she had a go at me about the Marxist Frankfurt School. We got quite friendly amid the debating. You can imagine me in bed with her with this going on, enjoying the fruits of investigating her rather closely as well as her in her circle of friends. She was called Maria, was Spanish, and had a tendency to wear revealing nighties around the student house after we got up in the morning. Some of her radicalised female friends were just as enticing. It was a happy time.

The work lasted for a year and a half, and I write about it now because it is the anniversary of it starting in 1983. Thirty-five years ago! My work meant the authorities had everything they needed. As it happened, my Spanish target left six months after the work was finished. I think she took up research in Belgium. I think she was told to go. Others were monitored: some of them left the country earlier during the Miners' Strike, so Maria knew that they were on to her. Yes, the Revd. Standfast received a letter thanking me for my services; I have it in front of me: dated October 1st 1984.

Thursday, 29 March 2018

Less than a Year to Resist Leaving the EU

So it is a year and counting down to leaving the European Union.

It is becoming clearer by the day that the supposed benefits to leaving are evaporating, whereas the benefits of sharing sovereignty deliver large blocs and both political and economic security among friends.

On the one hand we have over the Atlantic an increasingly free market dystopia with unreliable leadership; and to the east we have the gangster infused political autocracy that is Russia. The European Union is a confederation (that is, Member States retain their sovereignty and send their executives to make key decisions, retention of the veto in some matters remains crucial). Even if the European Union elects a President it still remains a confederal arrangement.

The original association was an iron and steel community. This set the foundation: that by sharing economic institutions we share interests, cannot fight, and have the same political goals. Decades later, and the institutions have developed extra demoocratic input: the European Parliament of course, and extra scrutiny in the nations.

We now face what some call BRINO (Brexit In Name Only) or a "technical Brexit". Jacob Rees Mogg is correct in one sense: that this neither satisfies those who would leave or those who would stay. Correct. It means retaining alignment with the EU but having none of the decision making.

A free trade deal is not worth the paper it is written on, and we have all learnt now that the EU is a legal entity and produces legal papers. It's not about speeches but hard text that attempts to nail down interpretations - but interpretations do go to courts, and will always go to the European Court of Justice.

It cannot be better than Canada, or the Canada agreement demands its own improvement (Most Favoured Nation clause). It cannot be much, if there is freedom to move from present complete alignment of trade regulations to something looser. The EU jealously guards its autonomy of decision taking regarding its regulations, and alignment means alignment.

If Northern Ireland stays aligned to Eire then either it is put into a kind of quarantine (a border in the Irish Sea) or the whole of the UK is aligned. This is not 'a' customs union, but THE Customs Union. The Single Market makes selling virtually administration free.

Theresa May and government know that the hard Brexiteers do not command the House of Commons. They might have been the tail to wag the Tory dog, and got us into this mess, but not in terms of passing a EU Departure vote through Parliament. The assumption is that the softest Brexit is the only one that will pass. It doesn't follow.

What is more likely is a deal that is a crunch point, and a descent rapidly into a General Election to decide the matter.

At the moment the Liberal Democrats seem to have gone into hibernation, although they tell us that they are talking to other MPs and especially Labour MPs, particularly of a centrist direction, and indeed the Labour Party seems stuck in a mire of internal disputes (e.g anti-semitism) which further generate a gulf between MPs and the leadership. There are cross-currents party-wise on EU and anti-EU lines at present. How a General Election will work is not clear, but clearly candidates are going to have to declare an EU or nationalist hand. Labour has nudged towards a more EU friendly stance (in terms of 'a' customs union) but it remains as muddled and ineffectual as it was. It is just not clear enough. Theresa May is shifting all the time, as only someone who lacks conviction on this matter can: from a pro-remain to a hostile leave to a friendly leave position.

The crunch points politically come before a year is up: the transition period is supposed to be after the final deal is done and accepted. But if it is not done, or not accepted, then there is a political chaos likely that is bound to leave the option of staying in as the demonstrable best option. The argument should be made now for this: sharing sovereignty is good, building shared economics is successful, and joining in with all matters of co-operation including security.

So it seems at present as if we are going from a stance of being a member with opt-outs to becoming a non-member with associate opt-ins. Opting in is expensive, and we don't get a say in matters through established institutions.

The daftest Brexit types seem to think the EU can be magicked away. It cannot, and is not going anywhere. Stop the mental fantasy and get real. It is a place where you pool sovereignty and join the modern world.

Sunday, 25 February 2018

As the Labour policy approves 'a' customs union...

First of all, let's crack this one about trade outside the EU allowing expansion just as we would want.

We go to China for a trade deal. What do we have to give to get a look-in at their huge market? Surely as we go with a 'need for a deal', we discover a renewed threat regarding steel imports and the viability of the UK steel industry. China needs to face a large bloc for the rest of us to have a chance to get a grip on a Chinese view of making and selling steel.

We say to the United States, we want a trade deal with you. The United States says, if you want a deal with us, it must include our agriculture. Don't expect to see cattle on the prairies like we see them in our UK fields. They are in sheds, a miserable, intensive, life. Chicken? Ugh.

Or we say welcome back to the Australians and New Zealand. Can we have a trade deal with you? Watch out UK farmers! Here comes cheap lamb, undercutting, as if life on the hills isn't tough enough already.

 The Indians have already told us the terms of a free trade agreement with them: much more immigration into the UK of Indian nationals. Given that the referendum was in large about immigration, that will be an interesting agreement.

This is why blocs must do trade deals, or very large economies.

In any case, can the UK do trade deals? Powers from the EU given to devolved parliaments and assemblies create their own divergence. We'd have to have 'common standards' in the UK, and then would it be the UK government doing trade deals, or Scotland, Wales and whoever runs Northern Ireland?

Meanwhile, Labour has shifted policy. It will now press for 'a customs union' which, presumably, could be The Customs Union but Labour has a problem with that. Labour wants a customs union in which we have an input, unlike buying into the EU customs union from the outside.

It doesn't take long to realise the problem with this. The Customs Union of the EU is an integral part of EU decision making, in which we have been a part. There cannot be two customs unions, each making different decisions, just as regulatory alignment means The Single Market in minature on a product by product basis. The EU guards its independent and complete decision making jealously, and all paying hangers-on do as it determines.

This is why a free trade deal is never up to much. So long as a nation state retains its own regulatory autonomy, then not much is possible. Canada's deal also says: if another nation gets a better deal then this also applies to Canada. So Canada plus plus plus is Canada. It's called 'Most Favoured Nation' and built into the Canada deal. Canada does not have regulatory alignment. So the United Kingdom won't get much from a free trade deal, and it will take years to achieve.

So a Customs Union is The Customs Union, or it is nothing. So is The Single Market. The given model is Norway or the European Economic Area. It is a passive role, of occasional meetings about interests but not decision making.

Thus it is, for sovereignty, and for economics (but also for much else), that we may as well make our apologies to the European Council and European Commission, stop this stupidity, and stay within the European Union.

No more referenda - divisive and misinformed, except to confirm a major, made, constitutional decision. We have representative democracy, giving to MPs the time and space to come to reasoned decisions along party preferences. No parliament ever can bind another; a General Election renews the body politic.

It is time for the House of Commons to grab the centre and control of this whole Brexit madness. At the minimum, of course, it should vote across parties to institute Single Market and Customs Union membership - and the Fixed Term Parliament Act can prevent a General Election in order to do it.

The Conservative Government Cabinet is; divided on the Europe issue, but a policy of divergence (managed or otherwise) will not carry the House of Commons or the House of Lords and is utterly unsuitable for Ireland. So the House of Commons must grab the initiative and take the decisions with the Lords scrutinising. I see a core behind the scenes role for the Liberal Democrats here, more so than Labour, although the 'remainers' in the large parties are getting together.

Or, let us have this General Election, and stand for policies regarding the European Union. Candidates make it clear that they are in, out or shaking it about. The country can then decide. I don't think a referendum on 'the deal' will do it: Parliament is quite capable of responding to the deal.

The options stay the same. 1) We are out, and severely damaged and go into a low cost, low wage capital-poor (low productivity), poor welfare, economy off the shores of Europe. 2) We have a connection via the Single Market and Customs Union, but cannot join in deciding policies. 3) Or we stay in.

Staying in is logical, and it is about sharing sovereignty in a confederation that is the European Union. It is about liberties, peace, standards, economic overlapping, and liberal democracy. Of course there should be an elected President of the Commission, the body that proposes and regulates, and we should be fully in this. It is still a confederacy, because power is with the Council of Ministers. It was time the public was educated about how these institutions work, rather than being subjected to the media diet of tribal drivel that has dominated for far too long.

Wednesday, 31 January 2018

The Tory Split Gets Closer

On Tuesday 30th my friends and I were enjoying our usual weekly pubs travelling, where I don't do the drink but do the driving. At the end a long unseen chap turned up, having now acquired a low-paid occasional hours job.

But his first words to me were, "I bet you're thinking of the Single Market." We have had discussions before. Then he said, "Jacob Rees-Mogg, he's the man."

Previously our friend has been UKIP through and through. The fact that none of these parties and politicians represent his working interests matter not a jot: he wants out of the European Union and at any cost.

I did not argue with him; what I did was turn what he said for the benefit of my friends. "There you are, do not underestimate the likelihood of Jacob Rees-Mogg becoming Prime Minister, with the whole Downton Abbey fantasy about who can and should rule." My friends have previously said that this is so far fetched and impossible, that Jacob Rees-Mogg is a joke from the past.

When an existing Prime Minister, on the aeroplane to China, has to tell journalists that she is "not a quitter", and that there is "a long term job to do", and then later in China introduces one of her failed Tory speech stock phrases "the British Dream", you know that she is in trouble.

She is falling victim to the predicted (at least by me) later to happen split in the Conservative Party. If the referendum had resulted in 'Remain', the Tory Party would have divided there and then, and Labour stayed united ahead of possible political change. However, with the 'Leave' vote, the Tories held together and Labour challenged its leader and had to patch itself back together. There was then Theresa May's failed General Election strategy, but still left her's as the largest party and in government.

However, things are now changing. After the Remain faction (favouring the Single Market and Customs Union membership) showed its strength, but who would leave May in charge as she promised a close relationship with Europe, her tacking the ship in their direction and failure to enact other polices has led to the 'Leave' faction to start flexing its muscles.

Anna Soubrey MP ('Remain') said that there are about thirty-five of them, whereas, likely, there are thirty-five strong remainers. It only took eleven of them to successfully rebel previously on avoiding a fixed end date for leaving the European Union! There are definitely more than thirty-five fanatical leavers in the Tory Party and so far they have been happy that the end was coming, and that Theresa May was some kind of puppet to do it, via her split Cabinet.

But now they have focussed on the implementation period of twenty-one months, when we take all EU laws but have formally left, dubbed the 'Vassal State' period, and attacked the Chancellor of the Exchequer for his wish to see as little change as possible after we have left and after the transition period.

Why so?

Firstly, it is because of the EU-friendly talk, once seen as aiding negotiations towards the end, now seen as coming with substance: just what is this uniquely close deal with Europe meant to be? So far the existers have knows that despite all the government's flannel about a unique deal, the necessary trade deal is limited. But what if the end result is close to the Single Market and Customs Union? This would be BRINO - a Brexit In Name Only result, which is the supposed Vassal State continued.

Secondly, no Tory wants a General Election, it is thought. But, it seems, Labour support has flatlined. The magic of Jeremy Corbyn seems limited. One more heave won't work. He's a Marmite man, which means that even if many come to love consuming him, just as many find him distasteful. He hits a wall of support. In the polls the Tories only match Labour, when the Tories are chaotic and visionless. Labour should be streets ahead.

Thirdly, as a matter of timing, if a leadership contest and even a General Election delays the government further in coming to a position of what is wanted after leaving the European Union, and upsets negotiations, this does not matter to the more extreme Leavers. Why not? Because they want to leave without a deal. World Trade Organisation basic rules and no more payments to the EU suits them fine. It matters not if things go Kamikaze, because wrecking will do kust nicely.

The same was seen with our occasional acquaintance in the final pub. It doesn't matter about the economy, or society, or culture, or security, or policing, or anything: it's a visceral get out and fast. For them, the EU is so mythicised into a hate institution that it is out at any cost. This has built up for years.

With the crash-out comes the UK as a kind of regulations-free Singapore, an offshore from Europe low wage low productivity economy like a one-time Hong Kong - in complete contrast to Theresa May's Joseph Chamberlain philosophy of economic and social nationalism across the classes - little of which ever materialises. (It doesn't materialise because a) the government has no further time for strategy implementation and b) the Tory hearts aren't in such a reversal from basic Thatcherism.)

Someone like David Davis can point out that there is no Vassal State because a law change initiated inside the twenty-one month period by the EU could only come into place after that period of time. That's how long things take to change. The extreme exiters don't care about such arguments.

The upshot is that as Theresa May is incapable of changing her Cabinet, with Boris Johnson going DIY and Philip Hammond worried about economic cliff edges, and as other policy needs are lost, she can thus be challenged from the hard right. The time is now coming for them to act.

However, and here is the rub. If they do challenge, remove her, and replace her with someone more like them, the likes of Anna Soubrey and maybe thirty five and more, would refuse the Tory whip - and that is the split. They would enact what seems to be the case: that the present House of Commons (as is the House of Lords) has a balance in favour of something close to if not itself in the Single Market and Customs Union. By realigning, the future visioned by the Chancellor becomes more likely.

And thus the Tory Party splits: and splits because the options on the table at the European Union are very limited.

As I discussed in the previous blog entry, trade deals aren't worth much at all. Furthermore, the EU cannot give us very good terms, because others without regulatory alignment will have the right to the same 'unique, close' deal we would get. This cannot happen: it allows others to foce change in the EU institutions. So a deal is limited to Canada, or it is going to be membership of the Single Market and Customs Union by the EEA model of taking the rules and having no political input except by occasional informal invitation. The EU and its Court of Justice keeps a grip on its Single Market and Customs Union. Nothing else is on offer. It is why the Labour Party has to stop being vague. Corbyn says OK to the SM and CU if we have an input, thus it cannot be as the SM and CU exists. But that is all that exists!

Let's go back to how the choice has always been. If we are to be in the Single Market and Customs Union without being in the Council of Ministers, providing Commissioners and Members of the European Parliament, we indeed do lose soverignty. But we do anyway, because the EU is a fact on the ground. Even outside, a trade deal and regulatory alignments mean keeping to EU rules. Meanwhile, Germany - in the EU - has expanded its trade with China far greater than we have: we do not need to leave to do this.

Thus there is a simple solution.

Partially like Lord Michael Heseltine has said on BBC Parliament: we should stop the negotiations now, say we are sorry, and he says have a referendum. I think General Elections trump referenda. All we need is politicians to realise this has all been an impossible and an ill-informed diversion from normal politics, for Tory Party reasons, and stop it, and go to the country on that basis. Perhaps, to do this, the Tory Party needs to split first.

It probably will. Day after day the Tory Party and its Cabinet get into deeper contraditions from which these institutions cannot escape. The contraditions are made worse by a Fixed Term Parliament Act that allows MPs to grasp the initiative and start to assert the general will of Parliament - or they must go to the country for a real 'Brexit General Election'. This is also where the Liberal Democrats must assert their own leadership; prior to this they must negotiate across the parties with 'Remain' and staying in MPs as candidates.

If the extreme Leavers want us to leave, then go to the country. Have a party like UKIP, or a replacement, or a right wing Tory offshoot, or all of these, and win a General Election. Then carry out the policy. Otherwise the logic is clear: a twenty-one month transition/ implementation period does not matter: but being in the Single Market and Customs Union afterwards does matter. For that, we should stay in, and share sovereignty (and so much else), and make decisions with our neighbours. The European Union is not going to go away, so we may as well be in it.

Sunday, 14 January 2018

Why a UK Free Trade Agreement with the EU is Worthless

There is a lot of nonsense 'out there' that assumes that the UK can replicate or nearly replicated the access it has to the European Union wide market once it leaves via a bespoke Free Trade Agreement (FTA).

First of all, the agreement with Canada, for which we could be "plus plus plus" is not all it is set out to be. It is basically an improvement on World Trade Organisation rules. However, this agreement has an important provision in it, that does affect the UK directly. It is called Most Favoured Nation (MFN) which means, in the context of this agreement, that anything better offered to any other nation in a free trade agreement must also be offered to Canada.

So if the British deal was much better, the Canadian deal would have to improve. So what is to stop that?

It is all to do with Regulatory Alignments, that is standards and rules that exist in trading. In other words, the European Union or Canada cannot be sure that the other party has and will maintain Regulatory Alignment in any particular economic sector. Furthermore, the EU is reluctant to enter into Regulatory Alignment agreements outside the EU Single Market, because it means the EU loses regulatory control over its own single market.

When the United Kingdom leaves the European Union, and seeks to 'go it alone' (unlike Norway), it must have a Free Trade Agreement instead. The UK starts with Regulatory Alignment, but it would be free to diverge. So a Free Trade Agreement would have to go into immense detail sector by sector to fix Regulatory Alignments, and would mean binding the UK to EU regulations as the EU would demand its autonomy over the Single Market where all these sectors operate. Otherwise a decision to diverge would mean a decision to lose access on anything other than World Trade Organisation rules or yet another agreement, that would have to be less than in the Single Market.

And in any case, again, to give the UK something on a Free Trade Agreement would be to offer it to Canada on the MFN basis, and yet Canada has divergent and potentially divergent rules.

First of all, then, a FTA is going to be immensely complex. It cannot possibly be negotiated by Autumn 2018, by March 2019 (the date of leaving) or correctly now the end-date, after an eighteen month or so transition period (end of 2020).

That there could be divergences built in immediately increases trading costs; that we move to an FTA means being treated as divergences likely and thus being an outsider.

The UK exports eight times as much in goods to the EU than Canada; the service sector (Finance especially) is hugely greater.

(An alternative, of course, is the highly costly WTO basis of trade. Overnight trade becomes expensive and bureaucratic, with the assumption of diverging anywhere. We cannot base WTO rules on a devalued pound, because a devalued pound is a less-worth currency, and thus imports are expensive. Lowering the value of the pound is not an alternative to increasing productivity and actually lowering prices. We end up becoming a low-wage low productivity and low social welfare with a low quality political economy: some Tories may slaver at this prospect, but it is hardly the reason why so many frustrated at low living standards voted to leave the EU.)

All this leads to a simple conclusion: there is no "jobs first" deal with the EU available that does not place us in the Single Market and Customs Union as regulated by the European Union's European Court of Justice. Sir Keir Starmer ought to tell his boss Jeremy Corbyn why we cannot come out of these two institutions, and develop a House of Commons and House of Lords consensus to stay in - at the very least.

It follows that in order to affect policy across the Single Market and Customs Union, we should stay inside the European Union. We then are part of this confederation through the initiating and regulating Commission, through decisions by the Council of Ministers, and checked by the European Parliament. The EU is the reality on the ground, and politicians should stop fantasising.