Hard Brexiters (which increasingly looks like it will be “disorderly Brexit”) are now openly making a spectacle of Theresa May. After May made a move towards realism in her September speech in Florence, where she offered to make a payment to the EU during a rather vaguely described “transition period,” the rabid Brexit wing has been even harder after her than usual. Last week, she was apparently muscled into supporting having Parliament set a specific Brexit date in its Great Repeal Bill, as opposed to having the flexibility to firm that up later, as the legislation currently stipulates. Oh, and the dates and time she proposed appears to be 23 hours later than the EU’s idea of when Brexit is now set to happen
Like many others, Matthew Parris in the Times tore into the idiocy of this idea and used it as a point of departure to describe the leadership vacuum in the UK. But the headline (which may not be his doing) described the situation as May humiliating herself. I don’t think that is quite right. May is tolerating being used and abused by the likes of Boris Johnson and Michael Gove. Look at their latest stunt: a letter expressing “no confidence” in May signed by 40 Conservatives.
This is a nasty stunt. Its purpose is simply to browbeat May. You need 48 votes to put a no confidence vote before Parliament, and even if things were to get that far, it probably would not pass. The Tories are deeply divided and it isn’t clear whether Labour wants the poisoned chalice of taking up the Brexit negotiations and aftermath (they could easily excuse unenthusiastic support of May as putting country before party, that having snap elections now would be disastrous for Brexit execution). One British politics watcher volunteered that Johnson and Gove are unlikely to have pulled that trick on a bloke.
From Parris:
What on earth is going on when a prime minister (in name only) has to write a newspaper column promising to bind her own hands by act of parliament? And when she does so purely to calm jangled nerves in a Brexit movement whose followers do not themselves know what they want or who leads them, while an equally leaderless former-Remain movement stares at its shoes, bereft of a response, an agenda or anyone to command them?
Theresa May, we learn, has promised to introduce a new clause in the European Union (Withdrawal) Bill stating that references to “exit” mean “exit on March 29 2019 at 23:00:00”. We will therefore, apparently, automatically leave the EU, or turn into pumpkins, or both, as the clock strikes, er, 11…
Behind an appearance of resolve, such a clause is a testament of weakness: an implicit recognition that people don’t trust you to keep to your promise — like saying “cross my heart and hope to die”. Mrs May knows she’s a one-woman hostage situation, in office at the pleasure of a relatively small but fanatical wing of her parliamentary party: the hard Brexiteers, gripped by a jihadist willingness to blow up the government along with themselves if they don’t get their way…
…she knows she will soon be breaking difficult news to them: news of how much Britain is prepared to pay, and what we may have to concede, for the deal we’re negotiating. Some Brexiteers won’t like this: hence the need now to throw them red meat.
Parris confirms what even US observers have likely already figured out: it unlikely that Johnson or Gove could become the leader of the Tory party. Not only is the party deeply split, but Johnson is not well liked personally and is correctly seen as the most reckless sort of opportunitist. Moreover, it is still possible that the hard Brexiters did manage to force yet another round of elections, polls now show that only a pretty small minority, IIRC 26%, think the UK is managing Brexit well. So confidence in Tory competence has dropped like a stone. Moreover, the Tories poor performance in May’s misguided snap election was widely seen as a vote against a hard Brexit. So there is every reason to think Labour would win if there were elections now.
Yet like the NRA in the US, the Brexit ultras keep wielding influence out of proportion to their apparent popularity. The less irrational wing of the Conservatives appeared to be getting the upper hand after the disastrous snap election. But their most influential minister, Philip Hammond, has been on the defensive for the last couple of months.
The ability of the hard line Brexiters to punch well above their weight is due to having the strong and vocal support of the press barons. But it is also due to their success in pushing May around, or at least being able to check her. The appearance of power alone can be self-reinforcing.
But how long will May stand for this treatment? She might rationalize it as doing her best to prevent worse outcomes. But the difference between catastrophic and cataclysmic is unlikely to be calibrated well by the public or historians.
This video manages to look kind compared to what is actually going on. After all, May merely looks silly:
But Brexit looks like an entire country engaged in deliberate mutilation, like cutting, which is antiseptically described as “non=suicidal self harm“. Personally, a disorderly Brexit looks plenty suicidal. However, the discomfort of looking at Brexit reminds me more and more of the movie Black Swan, in which a newly promoted prima ballerina who is already tightly wound and practices cutting, comes apart under the stress. The movie starts mixing her delusions with her activities, and it becomes harder and harder to tell them apart.
And the beliefs of the Brexiteers are simply incomprehensible to everyone else. It’s like dealing with cultists. This tweetstorm gives a terrific short-form treatment. Key observation:
Been conversing (on and offline) with grassroots Brexitists again. Really struck by their intense lack of interest in the details of how to make it happen – verging on hostility to it, as if the search for practical steps to make it work is a trap (1/9)
— Alan Finlayson (@ProfAFinlayson) November 9, 2017
I think that’s one more piece of evidence for the fact that Brexitism is a species of Utopian ideology, for which the belief in its happening is more important than its actually happening (2/9)
— Alan Finlayson (@ProfAFinlayson) November 9, 2017
Its wish is to become/embody an archetype – an ideal sort of (English) person, cleansed of Un-English things and with the power to make anything happen (like English Gods of old) (5/9)
— Alan Finlayson (@ProfAFinlayson) November 9, 2017
This utopianiasm is interacting in a nasty way with the ugly side of British management, such as it is. The US has tendencies along these lines, but nowhere near as fully advanced as the syndrome Clive described recently:
What’s struck me most about the UK government’s approach to the practical day-to-day aspects of Brexit is that it is exemplifying a typically British form of managerialism which bedevilles both public sector and private sector organisations. It manifests itself in all manner of guises but the main characteristic is that some “leader” issues impractical, unworkable, unachievable or contradictory instructions (or a “strategy”) to the lower ranks. These lower ranks have been encouraged to adopt the demeanour of yes-men (or yes-women). So you’re not allowed to question the merits of the ask. Everyone keeps quiet and takes the paycheck while waiting for the roof to fall in on them. It’s not like you’re on the breadline, so getting another year or so in isn’t a bad survival attitude. If you make a fuss now, you’ll likely be replaced by someone who, in the leadership’s eyes is a lot more can-do (but is in fact just either more naive or a better huckster…
To the big cheeses, the problem is with the underlings not being sufficiently clever or inventive. The real problem is the dynamic they’ve created and their inability to perceive the changes (in the same way as swinging a wrecking ball is a “change”) they’ve wrought on an organisation.
May, Davies, Fox, the whole lousy lot of ’em are like the pilot in the Airplane movie — they’re pulling on the levers of power only to find they’re not actually connected to anything. Wait until they pull a little harder and the whole bloody thing comes off in their hands.
Here is an vignette, of a “You aren’t imaginative enough” Glorious Brexiteer versus someone trying to minimize the damage of Brexit, courtesy bizmath, hoisted from the Guardian’s comment section (I’d provide a link except the comments are not indexed in Google, oddly):
Hoofitoff
‘Employers agree. Unions agree. The City agrees. An overwhelming majority of parliament agrees. All wants a frictionless, tariff-free, open relationship with the EU, negotiated outside its political framework – however “asymmetrical” that might be. Even within the leave camp, majority opinion is for the retention of single market freedoms, provided there are restrictions on EU immigrants accessing public services. This is the sensible view May should be harnessing and cohering.’
This option is simply not available – the UK retains a tariff-free open relationship with the EU by either paying for Associate Membership (Norway/Switzerland model) or by remaining in the EU. The EU cannot allow ‘retention of single market freedoms’ without a country committing to the four freedoms, so ‘restrictions on EU immigrants accessing public services’ is out of the question. Of course, the UK currently has the option to do what all of the 27 EU countries do, which is to apply the 3-month rule to EU citizens.
Meanwhile in the real world outside of Westminster, I have just spent the autumn at the annual Trade Fairs and Exhibitions in Europe as my company trades almost exclusively with customers in the EU. We received some clear messages;
1) EU customers would love to continue to do business with UK companies, but with no certainty regarding access to the market, certifications, tariffs, prices and delivery times, they are very reluctant to place any orders beyond next summer. They cannot order parts or components from British companies (to be used in the assembly of their own final products) as this creates huge complications when they want to sell on if these parts are not of EU origin.
2) Competitors based within the EU are spending time and effort exploiting this uncertainty and are aggressively targeting our customers, offering all of the certainty that UK companies cannot. They are doing their 2018 and 2019 deals now. By the time the UK government reaches a decision, regardless of whether it is Brexit or Remain, lasting damage will have been done and hundreds of thousands of orders and jobs will have been lost.3) National and Regional governments in the EU are very keen to attract jobs and investment to their areas. They recognise that a million job losses in the UK means the opportunity to attract a million jobs to their areas. E.g. Land Rover have already invested £1 billion in a new car factory in Slovakia. Companies such as mine really have to relocate in order to remain in business, and we have been met with positive advice and support everywhere that we have been. It makes the headlines when Nissan or Toyota threaten to leave, but nobody notices the thousands of small companies quietly moving away and taking their jobs and tax revenues with them.
AliWaterson
Thanks. I wish this comment was circulating in Westminster.
Hoofitoff
It is. This is what the CBI, Institute of Directors, Motor Manufacturers, Federation of Small Businesses et al meant when they wrote to Davis two weeks ago and what they would have been telling May and Corbyn last week at the CBI conference.
Whether anyone is listening is another matter. Listening to Davis last week you could be excused for thinking that he’d misplaced the letter under his Daily Telegraph or put it in the bottom drawer along with the Sector Reports. If he has read the FT over the last 18 months, he will have been getting the same message.
carlosalberto1970
If you cannot see opportunities in Brexit maybe you should try another line of work.
If the EU can see threats and opportunities, you can bet there will be the same for UK businesses, which you have interestingly left out of your unbiased analysis.MugwumpCockwomble
Tell us what great opportunities Brexit offers to those who are losing tarif free access to a market of almost 500m consumers.
Hoofitoff
We have looked at the opportunities that Brexit presents.
We have spent 15 years building up a successful business, a good team of staff, loyal customers and a good reputation. We have the world’s largest and most stable trading bloc located 25 miles away. Being located in the south-east of England, we can be in any European city within 2 hours. Our products can reach our customers overnight – we have even had couriers deliver samples to customers same day. We have a stable payments system with few problems with currency fluctuations, as all EU currencies are pretty much tied to the Euro. Only the Pound fluctuates, but we can manage that. We need very little in the way of customs paperwork, and what we do complete is standard for all 27 countries.
None of the post-Brexit opportunities come even close to this. Tariffs and distance to market will make our products uncompetitive. Our skilled staff, mainly from the EU due to their language skills and local knowledge, do not feel welcome and do not know if they can remain. Entering new markets will require new staff with new skills. Non-tariff barriers will delay our shipments. It costs time and money to employ someone to complete customs paperwork, both for imported materials and exported finished goods – all adding more to the price of our products. If we attempt to enter the US market, we risk our entire business coming under the jurisdiction of the US authorities. Even if we want to export to new countries, the government cannot tell us the rules and agreements under which we can trade – these might take another 2-5 years to agree.
Changing the business or looking at other markets means starting from scratch. Despite Johnson and Fox claiming that the world is queuing up to do business with the UK, there is no evidence of this. There are no new undiscovered markets – the entire developed world has well-established marketplaces that are extremely difficult to enter.
Meanwhile there are indeed opportunities and we have a simple solution to our problem – we will relocate to within the EU and join the thousands of other companies doing the same. We have been offered modern, clean facilities with excellent transport links, putting us even closer to our customers. We will have high-speed internet, even in a semi-rural location 20 miles from the nearest major town. We will re-organise our workforce – our staff can work remotely from their new locations in their home countries, improving their work/life balance and reducing our costs. Except for mining and agriculture, almost all businesses today are extremely portable and can relocate within weeks. Even car factories can be dismantled and relocated, or production outsourced to factories with spare capacity. As the CBI and others keep telling the government, they need clarity by Christmas or they will be leaving the UK.
It would be better if I were wrong, but I don’t see any way out of this mess. As ugly as things are with May at the helm (and I never thought I’d say this), having her quit or be deposed is likely to lead to even worse outcomes.
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I think the 48 vote issue is to do with the 1922 committee – purely internal matter for the party.
Here in the UK it doesn’t seem people are exercised over the state of play, and the topic doesn’t come up in conversation with strangers. My feel is that consumer spending is dropping fast.
I’ve started calling discussion Brexit the “third rail” of British conversations. Sort of like discussing bowel movements in polite company – it’s just not done. This all hit home for me when I was on a business trip to Ireland recently and was finally able to discuss it with some people who weren’t my partner. It made me realise how much everyone is just hiding from this.
As an example – I asked a very senior manager about what the next year project roadmap looked like and if Brexit was included. Answer: No. It doesn’t matter what industry you are in. That should be top of the list. It’s mad. I have no idea how to get this onto the radar.
Nope – finance services are all starting to kick off the emergency relocations plans they created earlier on, and Brexit plays quite a bit of role. Where they don’t admit much is in staffing/HR.
That said, I talked to an important MD at one of the large US banks in early 2015, and asked about Brexit. He said “no impact on our UK ops”. Yet they were amongs the first ones that had said their ops would be largely relocated, and I’m reasonably sure the MD in question just didn’t know.
Early 2015, before the referendum was scheduled? If you don’t mind me asking, why were you concerned about it then?
The moment Cameron said “referendum” (and I mean it almost literaly) I went to the web to download the citizenship application, to avoid the rush.
Thank you. Insightful as always.
There is total paralysis at the heart of the UK government. And the clock is ticking.
Who was it compared the UK government to a group of people who pulled the pin out of a grenade in a locked confined space and then started a fist fight about what to do next?
On the last para – there are still two ways to go around it and get the best out of this (which is admittedly still not great but..), but would require a lot of courage. These still may not work, but are IMO the best bets UK has at the moment.
I believe that both outcomes would probably work for majority of the country (even thought it would give heart attacks to hard brexiters, although it would give Daily Mails and the like something to write about ..).
The first is to ask for extension of A50 deadline right now (and yes, I know it needs to be unanimous, which is why the time to ask for it is now, not in six months, where the UK would have to put even more concessions). To recognise that the UK wasted a lot of time, that even at best terms it couldn’t do it in two years, and humbly beg the EU to extend the deadline, while agreeing to pay the full UK commitments already for that period. I believe that the UK eating the humble pie could actually satisfy a lot of egos in order to get a reasonable, not attrocious conditions. (especially if the need to eat the humble pie was blamed on the likes of Johnson and Gove, who have little support outside of fanatical Tory membership, and Gove probably not even there).
The second is to immediately ask for a Norway style, off-the-shelf, deal. Again, some humbling of the UK would be in order, but probably not as much as the first one. The deal would still not be enough, as it wouldn’t cover services though, but at least it would ward off the worst case scenario, which at the moment looks to be the default case.
I didn’t go into detail but I don’t see asking for an extension as realistic even though it ought to be. The UK needs a three year standstill, as in nothing changes. I don’t see why the EU would agree. “Oh we had an Article 50 drop dead date. So what will you give us to be so nice to you?” And there is no domestic support. Even having the ECJ have any say after March 2019 is a non-starter for the ultras, and that seems to be a condition of the EU giving any extension.
Not only is the UK not going to ask for it (May’s floating of a transition period in Florence was precisely that, and that had led directly to the successful hard Brexiter bludgeoning of her, witness her adopting the straightjacket of a firm Brexit time), but the UK won’t get enough time to make a difference, particularly given that we are halfway through the time to Brexit and all the UK has done is faff about. It was reported in the FT (I need to turn in, otherwise I’d dig it up) that the most the EU would give is till the end of 2020. That’s not enough time to negotiate a new trade deal, let alone a new services deal.
Re an off the shelf Norway deal, I don’t see how that works. Per the pushback on the Henry VIII powers in the Great Repeal Bill, many MPs recognize you can’t cut and paste in language in existing laws. Every trade deal has lots of negotiating over fine points that are specific to that nation. Norway is in the EEA, which means a lot of stuff like agriculture and services sits outside EEA arrangements and were therefore negotiated on a bespoke basis. Any Norway arrangements re services will not even being to contemplate the issues posed by the City.
Colonel’s sources some time back indicated, that A50 extension is there but for UK’s asking. How much true it is, I don’t know.
But I suspect the government doing the asking would have to exclude the likes of Johnson, Fox, Gove etc. and it would have to be clear to the EU it is also maybe not super strong, but at least a reasonably stable government. Which, in this case, I can’t see very well happening (as it would require courage to go past party lines – on both sides of the aisle, and really think what’s best for the country), and that is the real problem the UK has.
Re Norway – I wrote “would still not be enough” – but I do think it woud ward off the total chaos no deal scenario.
Its certainly been widely reported that a 2 year time extension is on the table, although presumably there would have to be some pretty strict conditions on this if it was to be passed by the European Parliament for certain. I think there is some astonishment that the British haven’t jumped at the offer.
Another issue of course for the EU side is that they seem (probably justifiably) convinced that May will not survive long, which means that any informal deals with her personally aren’t worth bothering with. So there is no incentive whatever for the EU to make any significant concessions before 2018.
The two-year transition is Theresa May’s ask per her Florence speech. An ask does not mean the other side has agreed. She was quickly rebuffed on one part:
Germany and France have dashed British hopes of fast-tracking talks on a two-year post-Brexit transition deal, insisting that the UK’s EU divorce bill be resolved first.
https://www.ft.com/content/9229c870-aab3-11e7-93c5-648314d2c72c
I cannot locate the article I saw earlier, but it was pretty definitive in its tone that the EU only wanted to give May until the end of 2020, which is 21 rather than 24 months.
Yes, sorry, I’d forgotten that it was significantly shorter than 2 years.
I think that the British government is caught in a paradox in that the only possible exits are humiliating*, but the economy is highly unlikely to get bad enough to make such a climbdown politically feasible until its too late. If you look at the Conservative Party its clear that a very substantial percentage – possibly a majority – are on the spectrum from Remainers to ‘soft, reluctant, Brexiteers’. So in theory, if May fired Gove/Boris and declared that a reset was needed on negotiations she would have significant support.
However, the ‘sensibles’ will remain very much a quiet, acquiescent group until business really starts screaming. Right now, they seem cowed by their grassroots and the media into staying quiet, so May has no support if she tries to face down the likes of Gove and Boris. I don’t see any hope at all at this stage of May growing a backbone and talking some truths to the public and then firing the Brexit crazies from the cabinet. That is the only way she will be able to make the sort of concessions that will allow for some sort of sensible interim agreement.
*note that they wouldn’t be humiliating if they had owned up to the public from the beginning that a price would have to be paid to exit the EU.
I don’t understand this line of criticism — it has always been basically impossible that there would be anything but a hard Brexit, because of Britain’s physical incapacity to negotiate same, right?
So the hard Brexiteers are right, in that what they want is absolutely what should be expected and prepared for, and the soft Brexiteers are deranged and craven.
No, it is not impossible that there would be anything other than a hard Brexit. The UK was under no obligation to trigger Article 50 at any point in time. They could have done the prep work they have abjectly failed to do, starting with basics like getting their customs systems in order. They have over 750 pacts that will need to be redone as a result of Brexit. They have done no triage on them. Most of them are not trade pacts and thus are not subject to the treaty prohibition on negotiating them pre-Brexit. Those could have been sorted out before triggering Article 50.
The hard Brexiters are completely irresponsible and it is utterly disingenuous for you to depict them otherwise. They have thrown the steering wheel and brake away and are pushing on the accelerator as hard as they can to drive the UK over the cliff. To change metaphors, this looks like a bizarre Gotterdammerung-like “burn it all down” death wish. I have said repeatedly is the only way to ameliorate the considerable downside of Brexit would be war-level planning and mobilization of resources, and in particular, a clear industrial plan for how the UK would create competitive/strengthen competitive export sectors. But the hard Brexiters are also Thatcherite free market ideologues who don’t believe in planning or muscular government.
I have a small quibble, that being I would replace “irresponsible” with “hysterical”.
Fifty years of the two-pronged strategy of; “Let’s you and him fight” and “Heads I win tails you lose.” on the part of the oligarchy and their/our bought and paid for ‘leaders’, have left a large and growing portion of the populace of both the UK and USA both bankrupt, and totally committed to the fairy-tale fraud perpetrated by their ‘masters’.
Reaganism/Thatcherism (direct and absolute rule of the rich) has reached its logical conclusion in an angry and hysterical reaction on the part of those who were duped into believing in it’s tenets.
They don’t yet understand the true roots of the problem, and probably never will, and they are still under the sway of the lies told them by the craven poles who are not representatives of ‘the people’ as much as the storm troopers of the rich.
It doesn’t surprise me at all that the result is hysteria and violent ignorance, and under those circumstances, planning and hard work are not the top of the agenda.
Your ‘only way’ conclusion? I couldn’t agree more. It is difficult to believe a UK government could be as inept as this one is proving to be, even given the ridiculous ideology they frame everything in.
The ‘framing’ has been going on so long, that some of them believe it.
It’s the worst thing in the world to believe your own hype.
What’s in it for the press barons? Is it just an effective method of selling clicks and generating ad revenue?
I think it goes far back before anyone has heard of clickbait. The Mail and Express were openly supportive of fascism in the 1930’s and, along with the Telegraph, have held a consistent quasi libertarian nationalistic right wing politics for more than half a century. A deep hatred of the EU has been part of that and those papers in particular have consistently led with ridiculous and almost all invented anti-EU stories since the 1970’s. The Murdoch papers have, less consistently, but very firmly, upheld their owners dislike of what they see as EU statism in contrast to their favoured anglo-flavoured neo-liberalism and neo-con ideology. So it is entirely consistent for the majority of the newspapers to have been strongly pro-Brexit.
its also noticeable of course that the owners of most or all the papers are not living in the UK, are frequently tax exiles, and have all sorts of connections to the sort of dubious financiers who may well be planning to benefit from Brexit chaos, either personally or politically.
Leaving the EU increases the power of the press barons because no longer will UK politicians be able to say ‘I would love to do that Mr Murdoch but the EU will not let me’.
For more background info, this recent essay on Blair’s Europe policy is quite interesting:
https://www.prospectmagazine.co.uk/politics/tony-blair-and-europe-shattering-the-ming-vase
Some extracts:
Do the simple thought experiment: that we joined the euro but didn’t invade Iraq, and you get a sense of how different things might have been.
It is now clearer than ever that the decision not to join has determined Britain’s fundamental relationship with the EU, and France and Germany in particular, ever since. If we had joined the euro it is hard to see how it would be possible to be leaving the EU.
There was a widespread mandarin and political view before 1999 that the euro probably wouldn’t happen, in the same way as Eden was convinced the Treaty of Rome would never happen and if the euro Six really did try something so ambitious it would soon collapse. The only problem is that the Treaty of Rome did happen; the euro also happened and it appears to be surviving. The only thing that has collapsed is our entire foreign and trade policy because we bet the house on the French and the Germans being useless.
Now comes Lord Kerr claiming UK can ignore Brexit and stay in EU. Wishful thinking on the part of the Remainers?
“Lord Kerr claims exit process is reversible without loss of Britain’s budget rebate”
https://www.ft.com/content/2b47aa32-c629-11e7-b2bb-322b2cb39656
One wonders how London’s derivatives clearing house operations will be affected by Brexit. How much time is really required to sort that without over straining the EU derivatives market.
In other news in the FT (sorry, no link):
“Pound falls fast after Theresa May no-confidence report”
I have noticed several articles that stated that Brexit can be reversed. As an outside observer I was wondering if there is any poll data or observations that indicate any support is coalescing around this idea?
The only poll I could find was AOL-UK News on-line poll that showed 72% were for reversal. Any chance this could at all be accurate?
Online polls are totally unreliable.
The EU would agree if the UK asked to back out. It would take a unanimous vote of all 27 countries but no one doubts that would happen. They would probably demand that the UK give up the discount on its dues that Thatcher negotiated.
But no way will the UK ask. All political leaders, even Labour, has said the UK is proceeding with Brexit. No one has the guts to call a referendum. You’d have to have the Tories fall, Labour in, and Labour reverse itself and call for a referendum. Even in the highly unlikely event that Corbyn were to do that, it’s not clear that he could get it through Parliament.
You will start seeing panic in the first quarter of 2018. Even if the pols were to get religion, the hard Brexiters and press barons will call for the scalps of anyone who were to try to reverse Brexit. And with a year or less to the drop dead date, there is unlikely enough time to approve and hold a referendum and then have Parliament vote to go to the EU and get out of Brexit (constitutionally, it is Parliament that has the call, the referendum is merely an expression of popular will).
Found my July 26 2016 comment:
—-
I see the results as (let’s assume A50 will be invoked in a reasonable timeframe)
– DD spending six+ months trying to beat his head against EU, failing to understand that UK red lines have nothing to do with EU red lines.
* Check* Except I didn’t count on Tories wasting the first three months out of those six by getting stomped in elections. The failure to understand that UK’s red lines have zilch to do with EU’s red lines is even more pronounced that I expected too.
– some amount of realization that there’s only 18 months left strikes, and panic starts settling in. Blame game starts, with UK firing the first shots.
*Check* Actually EU was so far, until this month pretty nice to the UK.
– EU hardens its stance. For six months blame game continues, while nothing gets resolved
This will be next March. EU is starting to harden their stance already (“two weeks to deliver”).
– UK wakes up to having only 12 months to negotiate, and starts panicking, suggesting more unworkable and not thought out stuff.
Well, they are already doing it now, so I don’t expect anything better.
Two end-game scenarios:
– 6 months to go, and it’s clear no agreement will be reached, DD is fired and replaced by someone who effectively agrees for UK to stay in EEA, with no concessions, full contribution (forget Thatcher’s rebate) to EU, in exchange for passporting the City. In effect, UK rolls over. It technically exits EU, at the cost of losing even more sovereignty. Practically, nothing much changes. This is right now my central scenario (I’m an optimist).
– UK falls out of the bed entirely, drops out of EU, and chaos ensues – the companies that assumed “WTO” option left already, the ones that didn’t aren’t prepared to deal with it. EU doesn’t have enough capacity to deal with it either.
I’m not an optimist anymore, so the second scenario is my central one right now.
There will not be passporting for the City. EU nixed that. UK staying in the EEA isn’t a solution. EEA does not cover agriculture and services and some other things I can’t recall. So there is still tons of stuff to negotiate and services deals take longer. And there are those 750 other agreements, about 20% of which (like nuclear stuff) are really important and also need to be renegotiated.
So there is no “practically nothing changes” scenario. Ivan Rogers said that to Parliament last month.
I did say this (all text in italics) was from T+1 month (where T+0 was the referendum date), and my central scenario now is the second one (total chaos).
The Liberal Democrats have (had) a manifesto commitment to reverse Brexit (constructed as offering a second referendum but everyone knew what was on offer) in the 2017 election.
They got nowhere in the only poll that counts (the election results).
As Yves explained much more comprehensively above, nah gonna happen.
And even if something really bizarre happens and cats start sleeping with dogs and we did have a second referendum, it would simply solve nothing regardless of the results. Remember, we’ve been banging on about the whole wretched subject for 30 years (almost all my adult life, certainly). It’s not going to end in a way which makes everyone happy, no matter what.
Has anyone seen signs of System D preparations for Brexit? Is there a family in Cornwall overhauling Dad’s old smuggling boat, or are small farmers putting up more hoop houses?
I’ve read somewhere on the Twittosphere that putting the hard date in the Exit Bill makes reversing A50 more difficult – and that would be the major aim of fixing that date by law.
As Yves said the other day, “assume brace position”, because a crash is coming. Imagine the UK economy tanking, all EU nationals (teachers, business, NHS personnel) leaving the country as they have become ‘undesired’, no flights going into or out of Europe, no radio-therapy, and something very close to civil war on Irish-N.Ireland border. Only sociopaths like Brexit, as they’ll get new slaves for nearly free.
Speaking of Brexit crashes, here’s some Brexit humo(u)r that I stumbled over yesterday. Those familiar with older Brit motor vehicles should appreciate it:
https://www.markpack.org.uk/files/2017/04/The-Austin-Brexit.jpg
I’ve owner British vehicles similar to that.
I had a colleague, post graduate on a staff course, in Uni who bought a new MGB, and in its first year spent 8 months being “repaired.”
I discovered shank’s pony was the most reliable form of transport.
That’s interesting, I’ve always heard it as “Shank’s mare”.
The ad extols the joys of breaking down in the middle of nowhere.
I’ve read that Important People in the Brit motorcycle industry management in the 1960s actually claimed that their customers would miss sitting on the curb in the rain doing a periodic rebuild of something that shouldn’t have been worn out.
On my BSAs I found that the more original parts I replaced with race-quality items the better they became. I never had an automobile, but I had Matchless, Greeves and BSA competition singles. They were fun when they ran.
British Motorcycles were well know as portable oil leaks, because the crankcase was split vertically. The Japanese fixed that by splitting the crankcase horizontally.
David Davies has just made a big concession (in Parliament so not a policy-making-by-Daily-Mail bit of nonsense which can easily be rowed back) that there will be a vote by Parliament on the terms of Brexit.
http://www.bbc.co.uk/news/uk-politics-41975277
So, lots of implications but the main one to me is that there has to be some sort of cross-party consensus on the deal and it’s hard to see a (forgive the poor wording, I’m writing quickly!) a hard Brexit getting through.
Brexit illustrates a cultural ineptness in the UK system, where the devil ins in the details, but the boss is only interested in results.
The US would probably have convened a “task force” reporting to management with skills seconded from everywhere to plan the process, and management would not make a decision until the task force objective, Produce the plan of action post triggering article 50, for was complete.
To call it a concession is generous. The govt would very likely (even assuming there would be a few Labour MPs crossing the aisle) lose these crucial votes, and it looks like May has zero willingness to put any Brexit vote that she could lose to the parliament – I guess it would how to the on-the-fence MPs that they wouldn’t stand out so much anymore, and risk the whole thing…
That said, unfortunately, Tory Brexiters have a point – if the Parliament votes no on the deal, what are the other options, given that reversing A50 is definitely not in the UK’s parliament gift? IMO that doesn’t mean Parliament should not get a say, but it’s a question on whether it matters.
But there is a deal, presumably, unless the EU has just sat there not saying a single word for the past six months. Which seems unlikely.
Not a deal which the U.K. government is willing (presently) to accept of course. But that’s not the same thing at all as there not being a deal.
The way I understand this, the parliament will have no input into/control over the negotiations.
Which means that a no-deal scenario might still exist – because right now, there’s still no deal at all, and the deal has to be done in some sort or other within the next 8 months or so (basically before the summer 2018). On the past performance, it still doesn’t look rosy.
It also depends on what is the “deal” as in what is the definition. I.e. if Bernier says “this is the deal”, but Davies (or the UK governent) does’t agree to it at all, are the still required to put it in front of the parliament? Or in other words, who will be presenting “the deal”? Who controls the table? What if there’s an EU offer, which the UK governmnet doesn’t want to accept, and a “competing” UK offer, which the EU doesn’t want to accept? Does the parliament get to chose?
Also, what is the timing? Will it be before or after EP voted? I.e. will it be “this or nothing” deal (in which case the vote is really just symbolic), or will there be some, however small, ability to go back?
Agree totally there is a lot of ambiguity. Just been watching the EU Withdrawal Bill debate in Parliament and the government statement said are that the vote will be on “the deal”. So there’s wriggle room being built in — which will have to be sorted out one way or another to satisfy Remain MPs. But what seems to be emerging in the debate is that it is the deal, or deals, which are put before the European Parliament. So it is up to the Commission what they choose to put up in front of the MEPs and U.K. MPs will also get to vote on it.
But with this government, you just never know, do you?
If that was the result (i.e. UK MPs get to vote on what is in front of EP), that would be indeed a game changer – even though it would be throwing themselves at the mercy of strangers (funny how taking control works..)
So, suppose Davis goes to the parliament two months before Brexit and says: ok I got this deal XY.
And the parliament says: oh noes we don’t like it!
Then Davies goes back to the EU and says: sorry guys, we have to start the negotiations anew; the EU says: screw you, we are not going to offer another deal.
Consequence: hard brexit.
Because “disorderly brexit” is the default result if there is no deal, not “stay into the EU” (that I doubt the EU would accept so easily btw).
I read it a different way – its a guarantee of a hard or chaotic Brexit.
He is saying the vote will not be on ‘Brexit’, but on the terms of Brexit. He said that if Parliament votes ‘no’, then they have to go back to renegotiate, but Brexit will never be reversed.. Since it is inevitable that any deal would be close to the wire, it would be almost impossible to do a successful renegotiation.
In other words, Parliament would be presented with a deal and told ‘its either this, or Brexit with no deal’. I think this would compel the pragmatists to vote with it, no matter how ‘hard’ or bad it is, as they would see the alternative as worse, while the hardliners have made it clear they would quite like a chaotic exit. So I see this as a way to force pragmatists on board with the vote, and hence (if its voted down) to be able to blame the opposition for any chaos if there is a no deal..
What if the EU offers the UK a choice of options? That could give Parliament a real decision to make.
I don’t think it would be practical to offer a list of options, primarily because they’d have to offer the same to the European Parliament (or have them approve all the options). I don’t see that as something that could work.
But there would have to be a deal of some sort. You couldn’t have a vote on a deal which was there is no deal. “The proposal put before the house is whether to accept the terms of the deal which has been arrived at after the conclusions of the exit negotiations, which is that there isn’t a deal”. Even the Tories aren’t that stupid. It might of course still be a no good, awful, very bad deal.
And, crucially, the motion could be subject to amendments. If it was a bad deal, amendments could be made — and potentially passed — insisting that the deal was changed. That would then have to be the deal at least as far as the UK was concerned.
Which does, it goes without saying but I’ll say it anyway for the sake of completeness, still not guarantee that the EU would have to offer that deal, we’re still in Relying on the Kindness of Strangers territory there. But it would force the UK government to have to put the terms of whatever parliament decided should be the deal back to the EU.
Early thoughts on my part but I was just musing what would happen if the EU was to say ‘you can choose between 3 options :
A. Train crash Brexit.
B. A Canada type FTA provided you have satisfied us on the Article 50 issues.
C. An association arrangement which allows the UK more control over freedom of movement in exchange for an increased financial contribution but largely maintains existing trading arrangements. ‘
Something like that might be interesting and if the EU made it clear that the UK Parliament could choose, maybe it would weaken the role of the Executive who are scarcely covering themselves in glory at present?
Yes, it all might change but I read the vote in parliament on the deal as a throwing in of the towel by the Conservative Party leadership. They’ve ended up (if this comes off, it isn’t yet set in stone) doing what — after the inconclusive 2017 election result made it inevitable — they should have done from the get-go in respect of managing Brexit, which was to have a government of national unity. Or, maybe better and more accurately put, a government of national disunity and muddling through.
Which probably sounds all weak and wishy-washy to a lot of ears. But I’d always maintain that in some instances — Brexit being one — muddling through is better than “strong, determined leadership” which usually means my-way-or-the-highway thinking and do-or-die policy making.
The Tories have, in effect, said “we don’t want this on our plate because there’s no good outcomes and whatever we do it’ll never be win-win; we’ll inevitably end up annoying some, probably all, constituencies — parliament can decide.” Which, given no party having a clear majority, means it’ll be a free vote. Labour Remain and Brexit factions can gang up with Conservative and SNP Remain and Brexit factions. Whipping will do no good at all for either party, not on this issue. Too many feel too strongly to not defy the whips.
I think this reading is too optimistic. They did put in A50 to the vote, which was largely symbolic (TBH, I don’t even understand why they spent so much energy fighting it).
There’s no muddle through in this that I can see – the vote is going to be “yes/no” (especially if say EP already voted on it). It will be a free vote on that, but it will be, IMO, pretty much useless vote. Sort of like if they put starting a nuclear war to a vote. No real options.
The way I see it is that they actually did something smart politically, because they will put Labour and the Tory backbenchers between a rock and a hard place – which makes it much harder to say when the effect of hard brexit are felt “it’s those hard brexiter’s fault!”, because the answer would be “but you voted for it too!”
I’d like to be wrong, but from what I reado on what the parliamnet will be able to vote on, I can’t see it at the moment. Happy to be corrected though.
I think Clive you are right that this is the key point. It gives the EU all the cards because they face a choice:
1. offer something unacceptable to the hard brexiteers. Parliament votes or Teresa May declares no deal to vote on. Hard brexiteers lose, EU gets a great deal and the UK is humiliated. Tories have a leadership election. Hard brexiteers win this but still can’t win a vote. General election. Unknown.
2. Deal offered is acceptable to hard brexiteers. Parliament votes on carnage vs complete chaos. No confidence motion brings down government. Election.
Or what?
All in all, an overly-dynamic situation to be able to make any definitive conclusions about.
But one very important point which you mentioned that I’d like to unpack a little: national humiliation.
I’ll let other highly informed and thoughtful Naked Capitalism commentators chip in and would never claim infallibility on this, but I would make a bold but high-materiality statement — the British, unlike an awful lot of nations I can think of, simply are just not that bothered about national humiliation. Yes, we’re all priggish and full of blustery bombastic rubbish. From the country that brought you Boris Johnson and all that. But despite appearances and, somewhat paradoxically, we are, in the final analysis, quite pragmatic. If a climb down, strategic retreat, humiliating u-turn is needed, that’s what we’re good at. Yes, we’ll sit and sulk and blame everyone else but ourselves. It’s, after all, what we like doing best.
So, short version, never ever rule anything out where the British are concerned on the basis that it’ll be too humiliating.
I think the British genius has been in turning humiliations into triumphs. Take Dunkirk for example. Or the loss of India.
Right, must include Lost parts of France, Galiopili, Khartoum, Black Hole of India, Loss of American Colonies, in that list of successes.
No, I sense a desire to be able to pass on the blame….
Sorry I didn’t explain clearly – what I mean is that in a hypothetical situation that sometime late in 2018 a deal is agreed in enough detail that it could be approved by European heads of state and the European Parliament (I don’t see how it could be put to London otherwise), it will be too late to renegotiate in any detail.
So Parliament will be told ‘Here is the deal recommended by the government. But you have to be aware that a ‘no’ vote means that there will be no deal, it will be a chaotic exit’.
In that situation, I don’t see that pragmatists in any party will feel they will have any choice but to vote ‘yes’.
I suspect the paralysis is all about money: aka EU Exit fee.
Because that’s the first order of Brexit, I believe, and there is no agreement, nothing else happens. Clever positioning of events from the EU.
This may seem like a distinction without a difference but it is a huge one.
Deal = hard Brexit. This is very bad.
No deal (as in Parliament rejects deal) = disorderly Brexit. This is cataclysmically, unimaginably God-awful.
Ivan Rogers talked about this in his testimony. No one is considering what I have been calling “disorderly Brexit,” the no deal scenario. It is the worst of all possible worlds, worse that the “hard Brexit” everyone is talking about. Sir Ivan made clear that NO ONE in the press and officialdom is thinking or even mentioning the disorderly Brexit scenario, it is too terrible to contemplate.
Unfortunately there is worse to come. One thing I have noticed before seems to have been confirmed in this weeks UK Public accounts committee brexit hearing, is that the funding required to upgrade the new UK customs IT system to take EU trade volumes has not yet even been allocated by the treasury. I quote:
‘HMRC does not yet have funding to increase the capacity of CDS or to develop contingency options. HMRC does not know how much it would cost to upgrade CDS to deal with the potential increase in declarations, and says it will only know this in January 2018. The existing CHIEF system is its main contingency option, but we are surprised to hear that HMRC and HM Treasury (HMT) are still only ‘in conversation’ over the £7.3 million needed to upgrade CHIEF to be able to deal with the potential 255 million declarations that could be made each year’
So all those worrying about whether such a system can be delivered in time may be missing the point: we haven’t even started on such a system.
The minutes are somwhat alarming and worth a read….
https://publications.parliament.uk/pa/cm201719/cmselect/cmpubacc/401/40105.htm#_idTextAnchor008
I’m curious about “what next” after what increasingly looks to be an inevitable disorderly Brexit.
The UK economy may shrink in 2018 as companies relocate, and worse will follow in 2019 when outgoing trade precipitously declines. It has previously been noted in articles or comments at NC that UK imports ~30% of its food. They will be facing war-time style basic survival constraints (for the 3rd time in little over a century).
Would it be accurate to say that UK is facing Great Depression scale economic contraction and GD scale mass hardship?
That’s a disturbing prospect. OTOH, it would also seem to permit an epochal political realignment of the kind the US experienced in the 1930s, and perhaps more profound and longer lasting.
UK still has its own currency and some degree of policy freedom. To what extent would an aggressive UK New Deal (or beyond New Deal) style of governance in a supermajority Labour government be able to ameliorate the hardships?
Maybe this is fantasy, but it seems to me that the Tories might be unintentionally sharpening the contradictions of their present system and accelerating its downfall.
Increasingly these days, I am tempted to think like a Marxist, to the extent that I know how.
The UK needs imports to survive. The necessity of keeping the pound’s foreign exchange value will defeat any such plan.
Only an Autarky, with no foreign debt can pull off MMT.
I refer you to the IMF’s action with Harold Wilson’s Government in the mid ’60s.
The British actions appear to be a classic example of “Rearranging the deck chairs on the Titanic.”
The UK could pull off MMT stimulus if it had a competitive export sector, or a chance to build one within a reasonable timeframe (i.e. if it was able to pay for the imports w/o stimulus killing the currency).
The answer to the first one is “no except services” (which will get killed), the answer to the second is what Yves wrote “war-like mobilisation of resources and planning”. Which would have had to really happend before A50 was triggered, as now too much time would have to be spent on just managing the diasaster – which often precludes any long-term thinking.
It seems to me that a loose money policy (fiscal and/or monetary) at the same time as your industrial/export base is shrinking rapidly (on the assumption that many industries move to the Eurozone) is a recipe for a collapse in your currency and hyper inflation.
As you say, only a warlike mobilisation (and restriction on currency movements and travel) could prevent that. Its very hard to see how that could be done in the time available.
I really don’t see what sort of room for manoever a new government would have if there was an election in 2018, it doesn’t matter how competent or radical it is. Only a complete reversal of Brexit would save it.
The “complete mobilisation” is Yves’ line to give the due where it’s right :) – and I agree with it wholeheartedly.
Your last para is exactly my point – but unfortunately, it looks to me like either of the two main UK parties just don’t get it.
They *could* do that – The big blocker I see is that Britain has reached near saturation levels in tribalist identity politics; nobody and nothing can be moved because some of the other tribes might gain from the move and that would be totally unbearable to the “losers”.
I am beginning to worry that the only politically possible “next move” after a hard Brexit will be towards Fascism (whether it be of the “red”, the “white” or the “beige” flavour).
Everyone in multicultural Britain, even Corbyn, I suspect, presently dreams of forming one tribe strong enough to subdue all the others and then set about “rebuilding” the country according to only their will, rather than reaching some kind of soppy, “socialist”, unifying consensus about “A Britain for everyone”.
I think the oligarchs fomenting Brexit believe that they will be the ones to reach the top of the pile first and become The Man, and they know that a disorderly, catastrophic, Brexit is a great leveller of the barriers that normally keep their kind in check.
I believe the best option now is that Labour wipes out the Tories in the next election, Corbyn turn out not to be the hardline marxist one suspects him to be, then they do a second referendum and re-join the EU without any special concessions. Blaming everything on the Tories, who will be out for a decade or more. I just don’t see that happening.
I think there might be some confusion here about the letters – the Boris and Gove letter is separate from the no-confidence letter. The former letter, just written by just the two of them, set out their Brexit ideas. Apparently it was sent confidentially to just May and her Private Secretary.
The other letter is about the election of the leader of the Conservative Party and it is an internal Conservative Party matter rather than a Parliamentary matter. To hold a vote of confidence in Mrs May as Leader of the Party (and hence Prime Minister), there needs to be a letter signed by at least 48 Conservative Members of Parliament. So far it is reported that this letter has 40 signatures. Sooner or later there will be the 48 signatures.
I may not have written it clearly, but the account I read at The Times depicted Johnson and Gove as the moving forces behind the no-confidence letter.
Having been following NC’s coverage of Brexit for a few months now, the odds of war-level economic disruption to the UK seem only to be growing–to the point that it’s increasingly a certainty. Taking that as an assumption, may I ask what are some of the commentariat’s learned hands’ views of impact on the US and/or global economy as the world’s fifth largest economy essentially takes itself offline? Will a worst-case Brexit be enough to trigger the long-anticipated but as-yet-elusive major correction on an increasingly bubble-like US stock market?
I suspect that it would be a bit like when a buffalo stumbles on the Serengheti. The predators and vultures get a good meal while the rest of the herd shuffles on with numbers depleted.
I could stand corrected on this, but I don’t think even the worst case scenario (I’ve seen the figure of 20% loss of GNP) occurs for the UK that it would be that serious for the world economy taken as a whole, unless it exposed deeper systemic issues (i.e. if there were knock-on effects of UK banks collapsing) or if it triggered a black swan event. It will knock a few percent off EU growth, I doubt if it would be more than a blip to the US and Chinese economies.
Not being learned or anything, I think not much will happen outside of Britain. Maybe “fifth largest economy”, but, with the majority of that being the FIRE (Finance, Insurance, Real Estate) it is mostly “accounting profits”.
The UK markets will be devastated. There will be a long, crushing recession, export businesses will leave for the continent or at least set up backup facilities, so employment numbers and wages will suck even harder, making the skilled people leave also.
It is quite likely that some unnoticed derivatives will go “BooM” and people not used to foreign keyboards will make more fat-finger mistakes for a while. So we will see some financial instability.
Nothing which will tank the markets in a big way – there are other, larger, forces that might, like the ECB’s lunatic policies coming unstuck and the FED’s ongoing unwinding of qualitative easing eventually being noticed by “the markets”.
If the timing is right “they” might well blame Brexit for it. In financial markets the effect comes first, then the cause is assigned after.
As near as I can tell, support for Brexit follows the same “logic” as support for Trump. It’s not about policies, or change, or any real belief in improvement. Rather, it is about pissing off the right people. The belief seems to be that if it angers The City, it can’t be all bad.
Jim A. you have a point. Good article on Politico today that says the same; https://www.politico.eu/article/brexit-britain-is-in-denial-over-immigration/.
I love coming back to NC articles and reading the comments as they pile up. I learn so much. Yves, thanks so much for bringing them back.
Nah. Yves and Co are savants geniuses. We’re just uninformed proles, who very occasionally stumble over a fact.
No, no, no! We have had great comments on Brexit and they have been very helpful to me in formulating posts. Some people have inside knowledge or useful insights from their work, other are reading the press and catch important details in stories that I didn’t see.
I think that’s probably right. Unfortunately IMO a lot of those who voted Leave were treating the Referendum like the local council elections – a chance to give a good kicking to the pols & predators causing them pain.
Sadly, unlike council elections, there’s no chance of a do-over in 2 years time when the current set of lies are exposed.
Maybe that’s an extreme view & doesn’t represent the more thoughtful end of the Leave spectrum whose views I have some sympathy with.
Coming soon to a theater near you!
Brexit: The Approach to the Abyss, by H. P. Lovecraft
Featuring:
The Great Unwashed Masses, as themselves
Legatum Institute and The Press Barons, as the Esoteric Order of Dagon
Boris Johnson, as Nyarlathotep, the Crawling Chaos
The CBI and The Civil Service, as the Faculty at Miskatonic University
Teresa May as the initially skeptical protagonist who gradually becomes aware of the hideous reality and the unspeakable fate that awaits humanity, and consequently loses the faith of her peers and becomes widely regarded as paranoid and/or insane
While I enjoy a good horror show, especially when it’s set at a safe distance on the other side of the world, I am finding this one a tad too realistic for my taste. I am hoping this is the kind of story where the terrible fate is heroically and narrowly averted, and not the kind where everyone gets eaten by giant octopus gods from another dimension. If it does turn out to be a Lovecraft story I fear the odds are heavily in favour of the latter.
I believe you casting of the “Teresa May” character not quite correct.
“Out of her depth” and “Unable to delegate” cross my mind, as well as a complete inability to plan.
If she were becoming insane, how could we spectators tell?
Her major mistake was to trigger article 50 before she had a plan, and had costed the plan, and then present it to Parliament for funding and approval.
When I read this Post I am reminded of Mao’s Great Leap Forward. I hope it turns out better for Great Britain than it did for china in 1959.
Near the end of 1959, with China in the midst of Chairman Mao Zedong’s crazily utopian Great Leap Forward, the official Communist Party newspaper issued some dietary instruction for the masses of the country’s newly collectivized agricultural workers. ”The peasants must practice strict economy,” The People’s Daily intoned. ”Live with the utmost frugality and eat only two meals a day, one of which should be soft and liquid.”
https://www.google.com/search?q=when+chinese+thought+communism+had+succeeded+and+famine+ensued&oq=when+chinese+thought+communism+had+succeeded+and+famine+ensued&aqs=chrome..69i57.30674j1j7&client=ubuntu&sourceid=chrome&ie=UTF-8
I hope this link works.
Britain should have remained in the unelected corporate EU. Who needs democracy anyway? Why not give these masters of the Fourth Reich the ability to print their money also? Who needs those pesky fights over austerity measures when they can be cooked into every budget? We are joining hands as one global community! Forgot the fact the EU is now creating its own standing army:
“The European Union has taken a major step toward developing the capacity to wage war in the future independently of and, if necessary, against the United States.”
http://www.wsws.org/en/articles/2017/11/14/euro-n14.html