“No-one voted for Brexit to become poorer.” Really? We vote to deny ourselves money all the time.

Security, cohesion, integration, solidarity: all are intangible. But we pay – literally – to gain them. Why single out self-government?

Philip Hammond may have coined the phrase – an appropriate use of the term, in this case.  “No-one voted to become poorer or less secure,” he told the Conservative Party Conference in 2016, less than six months after the Brexit referendum vote.  As others have taken those words up, the last three have tended to drop off it.  But was he right?

Obviously, even as senior a Minister as the Chancellor cannot have read the minds of all 17 million plus of those who backed Leave – the largest number of people who have ever voted for anything in a British poll.  But let us leave the point there, and turn to his own department’s forecasts.  The Treasury’s median long-term estimate is that a WTO-based outcome would reduce cumulative growth over 15 years from about 25 per cent to about 17 per cent.  In other words, GDP would, under this scenario, be eight per cent lower than it would otherwise be.  It would rise more slowly, not fall.

So even the Treasury, the high temple of Remain, doesn’t expect us to become poorer – but rather, less rich than we would otherwise be.  You may counter that this lost growth would mean lost wages and tax receipts, lower spending and higher tax.  Or that some short-term forecasts do suggest that we will become poorer this year in the event of No Deal.  (The CBI is pushing a very-worst-case scenario today.)

We could come back by pouring cold water on all such forecasts, starting with George Osborne’s referendum campaign projections of an “immediate” recession, half a million more people unemployed, and house prices 18 per cent lower than they would otherwise have been.  Instead, the economy grew, unemployment fell and house prices rose.  But rather than vanish into a statistical snowstorm, we ask our readers to view Hammond’s statement from a different angle – two angles, to be precise.

The first is from the Left.  Trident costs the taxpayer roughly £2 billion a year.  That money could instead be spent on tax cuts or public services.  Very many on the Left (and some on the Right) argue that it should be.  They say that we don’t use Trident, wouldn’t ever use it, shouldn’t ever use it.  The cash should go instead on schools or hospitals or benefits or childcare.

Next, mull an argument from the Right.  Overseas aid comes at a price of about £14 billion annually.  Again, that money could be spent on public services or tax cuts – or, the Right being the Right, on debt repayment.  A lot of people on it – and a sprinkling on the Left – hold that development aid is wasted or stolen and perverts incentives and is subject to the law of unintended consequences.

Now stand back from the fray, and ponder a stubborn fact.  Voters consistently back Trident and aid.  No, that’s not quite right.  Rather, put it this way: voters consistently return governments committed to both.  Then turn to another subject to illustrate the same point.

Pro-migration campaigners argue that it makes us richer – both overall and per head.  Others dispute that claim.  Let’s assume for the sake of the argument that those campaigners are right.  Even if every single voter could be persuaded of this, there is reason to doubt that all of them would come round to wanting higher rather than lower migration.  Very many would believe that there would still be costs in some places to higher immigration – in terms, for example, of pressure on housing.  And then there is the i-word: integration.

At which point, it is worth standing back from Hammond’s statement, and asking not whether he was right or wrong, but what he actually meant – or implied.  Who is the “no-one” in question?  Who are those to whom he glancingly refers?  Obviously, the British people.  But that’s a term which invites further thought.

In one sense, the British people is a single entity; in another, it is lots of groups of people, breaking down in turn into families and individuals.  Many of them help to pay for others.  Older people tend not to use schools, but they help to fund them.  Younger people use the NHS less than older ones, but they help to pay for it.  Londoners, some say, subsidise the rest of the UK.  And so on and so forth.

Readers will see where all this is going.  At each election, we vote to “make ourselves poorer”, in the sense of becoming less rich than we otherwise would be.  We plump for Trident because we worry about our security (to reprise the Chancellor’s word); or for lower migration because we think it will mean more cohesion, or for overseas aid because of solidarity with those who suffer. We vote to fund public services we don’t use and parts of the country we don’t live in.  Security, cohesion, solidarity: these are intangibles.  They can’t be touched or smelled or tasted – seen or heard.  They may lead to material gains, but they are not material themselves.  None comes with a price tag, but all have value.

Let’s end by illustrating the point.  John Hume was fond of quoting his anti-sectarian father, who used to say: “you can’t eat a flag”.  True – and anyone who has tried to do so has presumably been disappointed.  But the reverse also applies.  No-one, we suspect, has ever sung: “I vow to thee, my breakfast.”  Those intangibles – such as self-government, to cite another – matter.  From one point of view, the desire for the last is a form of solidarity or even for, to use a more EU-ish word, subsidiarity.

You can properly reply that self-government and patriotism aren’t the same thing, or even that they don’t overlap at all.  So be it.  What you can’t do, this site believes, is claim that Brexit alone, uniquely, exceptionally, will make us less rich than we otherwise would be (if it does so at all).  By commission, by omission, in the ballot booth and out of it, we opt to do this all the time – almost without noticing.

When it comes to the EU, the Treasury has never been impartial and its predictions cannot be trusted

Fear of leaving the EU without a deal, and of trading with the EU thenceforth under WTO terms, has been created primarily by the much-cited series of predictions of severe adverse economic consequences by HM Treasury. It is therefore of some importance to decide whether their predictions are credible. One set of their pre-referendum predictions […]

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Fear of leaving the EU without a deal, and of trading with the EU thenceforth under WTO terms, has been created primarily by the much-cited series of predictions of severe adverse economic consequences by HM Treasury. It is therefore of some importance to decide whether their predictions are credible.

One set of their pre-referendum predictions referred to the adverse consequences within two years of a vote to Leave the EU rather than leaving itself. Since we have now lived through the period they covered, we now know that apart from one minor point, the fall in the value of sterling, they were all false.  Every other prediction they made, on GDP, (which was predicted to fall rapidly by between 3.6% and 6.0%) on employment, house prices, wages, inflation, FDI and public finances, was wrong, often by risibly large margins, and always in the same direction. This suggests they were deliberately manipulated to give a politically helpful result for the then Government-backed Remain campaign.  They naturally raise questions about the Treasury’s other three sets of predictions about the long-term consequences of Brexit itself.

These cannot be tested by reality until 2030 or beyond, but since they rely on a number of highly improbable assumptions and estimates, they are no less contrived than their short-term predictions, and no more credible. These assumptions and estimates cannot all be examined here, but we can identify the most improbable and incredible, the ones that have contributed most to the Treasury’s characterisation of trading under WTO terms as the worst possible post-Brexit option.

Their first set of long-term predictions was published in April 2016, and depended to a large extent on the assumption that future UK intra-EU trade in goods would increase at the same rate as that of all other members. This was followed by the estimate that by 2030, if it remained a member then, UK trade in goods would have grown by 115%.  If, by contrast, the UK left to trade under WTO rules, it would not enjoy any of that 115% growth, and primarily for this reason, its GDP in 2030 would be 7.5% smaller than it would have been if it had remained a member.

This seems to have prompted Remain supporters to describe the transition to a no-deal exit as a cliff edge, a car crash, or a leap in the dark, and trading under WTO rules as chaos, catastrophe and Armageddon. Since most of world trade, and much of UK trade, is routinely conducted under these self-same WTO rules, the aptness of these metaphors is questionable, but what matters here are the assumptions on which the Treasury prediction was based.

Questions about it might first have been raised with the Treasury itself since a rare piece of in-house classified research conducted in 2005 had shown, like more recent studies, that the rate of growth of the UK’s intra-EU trade during the Single Market has differed greatly from that of other members, most especially from those in Eastern Europe. This HMT research also showed that over the 31 years from 1973 to 2004 it had grown by only 16%, while later IMF/DOTS figures showed that over the 22 years from 1993 to 2015 UK exports to the EU 14 had grown by 25%. To then ‘estimate’, as the Treasury authors do, that over a mere 15 years to 2030 UK-EU trade in goods would suddenly increase by 115%, may be reasonably called absurd, or even a deliberate manipulation to produce a highly misleading prediction. A recent re-examination of the same evidence, using the same gravity approach as the Treasury, but referring to the UK alone, estimated the likely increase of trade in goods with the EU by 2030 to be ‘in the range 20-25%’.

The Treasury was a contributor to the second set of predictions, the EU Exit Analysis Cross Whitehall Briefing of July 2018.  Its wildest assumption was that UK goods trading with the EU under WTO rules would immediately incur tariff, non-tariff and customs charges with a total tariff equivalent value of 30%. It qualifies as wild because the total tariff equivalent value of the goods exports of United States and Japan to the EU have been reliably estimated to be just 20%, or only two thirds as much as those the Treasury predicts for UK exports after a no-deal Brexit, even though its product standards are identical to those of the EU.

Patrick Minford analysed these non-tariff and customs charges in considerable detail, and pointed out that some of the barriers conjured up by the authors of these predictions would be discriminatory and therefore illegal under WTO rules, which the EU generally respects. Why UK civil servants should assume that their EU counterparts would deliberately ignore them post-Brexit is unclear. However, with the help of the 30% total tariff equivalent value, leaving with no EU deal and trading under WTO rules again emerges as the worst post-Brexit option, resulting in a shortfall in UK GDP by 2030 of about 7.7% versus what it would have been had the UK remained an EU member.

The third set of predictions was published in November 2018 specifically to inform Members of Parliament about the long-term economic consequences of various future relationships with the EU in advance of their fateful ‘meaningful vote’ on the agreement negotiated by Mrs May. It contrives, as Andrew Lilico observed, to show the ill-effects of trade under WTO rules by the simple ploy of exaggerating all the future gains of EU membership and minimising all the possible gains that might follow the UK taking back control of immigration, regulation and trade policy.

The outstanding example of the latter is the 0.2% gain to GDP that it estimates would result from FTAs that the UK might conclude with the US, Australia, Canada, India, China and 12 other non-members. It qualifies as an absurdity because the European Commission had previously estimated that the gain to EU GDP of concluding agreements with a similar set of countries would be 1.9%, almost ten times as much therefore as agreements negotiated by the UK alone which would, one imagines, be better tailored to British exporters.

By repeatedly making other estimates in a similar manner, the report arrives at the desired prediction. Indeed, the final prediction that made the headlines, a 9.3% shortfall in UK GDP by 2035-36, was reached simply by assuming that there would be zero immigration from EEA countries until 2035-36, a proposal that no one has ever made. The recently published White Paper suggests it is far removed from any likely future government policy.

The remarkable thing is that any of these Treasury predictions have been given any credibility whatever and were not dismissed with a laugh, just as the predicted immediate consequences of a vote to Leave have often been. Part of the explanation must be that specialist publications like The Economist and the Financial Times, and specialist correspondents of other media such as the BBC, Sky, The Guardian and The Times did not check and flag these and other questionable assumptions and estimates on which these predictions depend.

Perhaps they did not have the time or maybe they welcomed Treasury support for the Remain cause, but a further reason one suspects, is that, like the rest of us, they wanted to trust Treasury mandarins. They saw them as honest, upright, non-partisan experts performing their duties by providing entirely trustworthy and reliable evidence to inform ministers and public debate.

Unfortunately, on European issues at least, this image is woefully mistaken. The Treasury has never regularly and dutifully conducted impartial research on the impact of EEC/EU membership on the UK economy. And it has never been asked to do so by any government since 1973, probably because ministers were usually engaged in persuading the ever-sceptical British public of the merits of European integration and doubted that empirical research would be an altogether reliable ally.

Since 2000, the Treasury has, like other departments, been obliged to conduct impact assessments of proposed legislation derived from EU regulations and directives, but it never sought to translate them into a meaningful national cost/benefit analysis. In 2003, at the time of the debate on joining the euro, Treasury mandarins searched the world for experts on optimal currency areas and debated and published their differing views shortly before the Chancellor announced his decision. The research conducted in 2005 and mentioned above was a one-off, and remained classified until an FOI request in 2010.

When they were asked to make the case for Remain, Treasury mandarins therefore had no historical analyses to draw on, apart from the 2005 one they wanted to forget. And they did not instantly assume a quasi-judicial impartiality. Apart from the one month purdah periods before the 1975 and 2016 referendums, they had never been asked to be impartial on this issue, and they evidently felt under no obligation to be impartial with respect to the division of opinion in the country at large. Hence, they immediately showed themselves to be fervent, unabashed advocates for continued EU membership and produced predictions to delight their all those who shared their view.

All of us have paid, and are still paying, a high price for the Treasury’s failure to conduct and publish impartial analyses of the impact of EU membership on the UK economy over the preceding forty-plus years in accordance with our image of them, and with their own core values and rule books. Had they done so, the referendum debate would have been rather more informed and enlightening than it was. Instead of constructing Project Fear for the Remain side, they might have tried to match Business for Britain’s superbly documented case for Leave in Change or Go.

In the course of such research, they would necessarily have had to understand and explain why the exports of countries trading with the EU under WTO rules, like the United States, Canada, Australia, Singapore and a host of emerging societies have been growing so much faster than the supposedly frictionless ones of the UK over the life of the Single Market. American exports to the EU, for example, grew by 68% from 1993 to 2015, and the smaller British exports by just 25%. If trading with the EU under WTO rules has proved so successful for others, why would it be the worst possible option for the UK after Brexit?

They might also have been able to explain why it is that UK exports to 111 countries around the rest of the world under WTO rules have also grown so much faster than its exports since 1993 to the EU itself, and to those countries with which the EU has negotiated trade agreements from which the UK was supposed to benefit. These are questions that the Treasury mandarins have preferred not to address.

Much relevant evidence to determine whether or not trading under WTO rules is the worst post-Brexit option could be obtained from UK companies which currently trade with the EU from a member country and with the rest of the world under these rules, since they are able to make direct comparisons. The Treasury is well-placed to conduct such research via HMRC but this is more evidence that it has decided it, or the government, or the country does not need. Some companies have, however, spontaneously testified about their experience of trading under both systems. It directly contradicts the sharp contrast between them which the Treasury has sought, with some success, to make the centrepiece of the debate about the UK’s post-Brexit options.

Lord Bamford, Chairman of JCB, the UK’s largest manufacturer of construction equipment, for instance, recently felt ‘compelled to say this about a no-deal Brexit: there is nothing to fear from trading on World Trade Organisation (WTO) terms… Trading with Australia on WTO terms is as natural to us as trading with Austria on EU single-market terms. John Mills, founder of JML, which sells to ‘80 countries at the last count’, said that ‘about 80 percent of all our international trade is on WTO terms, so we know what the paperwork’s like. Once you’ve done it half a dozen times, you’ve got it all on the computer, it just isn’t that difficult.’

Even more emphatically, Alastair MacMillan, whose company exports to 120 countries in the world including every EU member, points out that ‘there is little difference in the way we handle freight going to the EU compared to the rest of the world. The United States is our biggest market and we compete directly against US companies in their own market, in part, because we deliver next day to anywhere in the United States by 1pm their time, customs cleared. That, to me, is frictionless trade and it is at a cost that is not dissimilar to the same service to customers in the EU’.

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May must ensure that increases in NHS spending are tied to outcomes

It’s a politically sensitive subject and the Government has a lot on its plate, but the Treasury is right to be concerned with ensuring value for money.

Today’s Financial Times reports that a new row is brewing between numbers Ten and Eleven Downing Street over Theresa May’s plans for extra NHS spending.

According to the paper, the Treasury is worried that the Prime Minister is pushing ahead with a £20 billion ‘reform’ plan which doesn’t actually secure adequate commitments to deliver savings and value for money.

Others have accused May of ‘displacement activity’, or needlessly dividing the Government’s focus in the crucial weeks before Britain’s departure from the European Union. But the Treasury complaint deserves scrutiny, because it illustrates the unhappy state of the will to healthcare reform in today’s Conservative Party.

Thanks in no small part to Dominic Cummings, who made NHS spending a central focus of the Leave campaign, there is now a consensus in favour of more of it which spans the Tories from the traditionally pro-NHS left to the usually reform-minded, but currently Brexit-focused, right.

By contrast, there is nobody talking seriously about major reforms to how the Health Service operates. Even Liz Truss, busily staking her claim to the mantle of the Cabinet’s most enthusiastic free-market reformer, hasn’t unveiled a plan for the NHS.

Perhaps this ought not to surprise us. Enthusiasm for healthcare reform historically comes in cycles, with the likes of Ken Clarke, Alan Milburn, and Andrew Lansley interspersed amongst Secretaries of State who take a more managerial approach. Jeremy Hunt, despite is high-profile clash with the doctors’ union, was one of the latter.

There are several reasons good reasons why Conservatives might be cautious of any ambitious programme for the NHS. Taking a bold stance on social care, which is subject to very similar pressures, arguably cost the Party its first comfortable majority in thirty years. Likewise the ill-fated Lansley reforms are still fresh in the memory and scarcely likely to motivate people to dip their toe in that particular pool.

Another factor, in light of a looming leadership election and the prospect of an election before 2022, is that Conservative members and voters alike are older than the average citizen, and likely to be unenthusiastic about disruption to health or social care.

Despite this, however, the Treasury’s concerns still need answering. ‘Spending more money’ is not an adequate substitute for an actual policy agenda, at least on the right, and passing the buck for serious reform to the next political generation will only make that reform much more difficult – and possibly painful – when its time comes.

“For mighty dread had seized their troubled mind”

Unlike the angel, we’re unable to announce tidings of great joy. But it’s worth mulling why the Christmas season can pause even Brexit hostilities.

The United Kingdom has the right, like other member states, to leave the European Union. A means is set out in Article 50 of the Treaty on European Union, and others are arguably available too.  Since that right is available, exercising it should be uncontroversial – especially since the decision to Brexit was made by the biggest popular vote in British electoral history.  But it has not turned out to be so.  Why?

There are a mass of reasons.  Leave’s margin of victory was narrow – although most voters initially swung behind the decision, and very many continue to ask: why can’t the politicians just get on with it?  MPs split Remain-Leave by perhaps five to one.  This always had the potential to disrupt Brexit, and so it is proving now.  Departure was handled at the top of government by both Remainers and Leavers, and the muddle of aims and aspirations weakened policy-making and negotiation, perhaps fatally.  Leavers themselves do not all agree on the way forward: some hanker for EEA membership; others would actually welcome No Deal; most are somewhere in the middle, wanting a free trade agreement.  Above all, Theresa May lost her negotiating clout when she bungled last year’s election, and returned from it more at the mercy of the Commons than ever.

The civil service and state institutions are sensitive to political authority.  They didn’t swing fully behind Margaret Thatcher until after her landslide victory in 1983, and their identification with Tony Blair was exposed by the Iraq War inquiries.  Very many civil servants have worked extremely hard to help deliver Brexit.  But there can be little doubt that some at the top share the scepticism of Nick Macpherson, the former Treasury Permanent Secretary, or the hostility of Simon Fraser, his equivalent at the Foreign Office.  The views of both are available to readers on Twitter.  In parts of the City, among the bigger businesses, at the top of most unions, in the media (with a lot of exceptions), in the law (with fewer), and among the universities and the lobbyocracy there is sustained antipathy to Brexit.  This agglomeration controls the commanding heights of our culture.

If not exactly an elite, it is certainly an ascendancy – or has been.  Its take on EU membership has been that of government and state policy for over 50 years, and the popular decision to leave dealt a deep wound to its sense of status, self-worth and entitlement.  “The most striking and disturbing development since the 2016 referendum has been the emergence of what can without much exaggeration be termed a Remainer revolt,” Robert Tombs has written.  Its arguments, he added, “have rarely if ever been heard in any advanced country since the nineteenth century. For example: that most voters did not know what they were voting for; that working-class voters were too ignorant to make a choice; that people without advanced education should have their political rights reduced; that older people should have no right to an equal democratic voice.”

One should keep a sense of proportion.  As we suggested earlier, most people are fed up with the Brexit debate – turned off and tuned out.  But for a substantial minority it has an explosive power more commonly associated with political rifts outside this country: the Dreyfus Affair in France comes to mind.  Very broadly, the M25 belt leans one way and the rest of England the other; Scotland and Wales went in different directions in 2016; Northern Ireland is in the eye of the storm; there is class and age division (and some important ethnic differences).  An MP was murdered on the brink of the 2016 vote.  With the Prime Minister’s deal apparently becalmed, the options of No Deal and No Brexit loom – upping the rhetorical stakes, busting Cabinet unity, bending the main political parties and pointing towards constitutional unknowns.  There is displacement activity.  How else can describe the row over whether or not one politician called another a “stupid woman”?

This Christmas offers only a very brief break from Brexit.  Even if May’s deal clears Parliament – which looks very unlikely – the great drama will roll on, as the EU seeks to trade off access for its citizens (and to our fish) against access to its markets.  But it is worth asking what people or institutions have the power to bring reconciliation, calm and perspective, however temporarily.  The Queen is one – maybe less through the accumulated command of the monarchy, weighty though that is, than through her record of service and her own virtues.  The parades and silences of November 11 are another.  They carried a special weight on this hundredth anniversary of 1918.

Christmas is the last Christian festival with the same reach and universality.  Most people in Britain are not practicising Christians – and other faiths plus atheism are on the rise – but their background is a broadly Christian one.  Whitsun long ago vanished into a bank holiday.  Easter is a pause on the journey to summer.  Neither are particularly accessible.  The Holy Ghost seems, well, ghostly.  And though the idea of resurrection has an intuitive power, it is beyond imagination.  By contrast, Christmas offers something concrete – the birth of a child.  Most people can get on its wavelength.

“‘Fear not,’ the old carol has it, ‘for mighty dread had seized their troubled mind’.”  For many individuals and families, the season has its downs as well as its ups.  All the same, this may be a Christmas with even more than the usual share of troubled minds.  Unlike the angel, ConservativeHome is not qualified to redress the balance by announcing tidings of great joy.  But it may console our readers to know that we will pause publication for only two days, Christmas Day and Boxing Day.  The site will be back on December 27.  We will say our temporary farewell on Monday.

How unusual – Downing Street trying to persuade the Home Office to be tougher on immigration

Normally it’s the other way round. How long will it be before the traditional divide reasserts itself?

The Home Office and the Treasury have a fraught history of squabbling over immigration. Home Secretaries place primacy on questions of border integrity and control, and know that various of their predecessors’ careers have been destroyed by failing to live up to popular expectations and their own promises on the topic. The Treasury, meanwhile, believes – both due to its own analysis and its regular contact with large businesses – that their colleagues on Marsham Street are imperilling economic growth with an obsession with constraining immigration at any cost.

The balance of power within government between these two positions ebbs and flows. In the Cameron years, the “tens of thousands” net migration pledge held – at least rhetorically, if not practically – as a form of uneasy truce. The two occupants of Downing Street were instinctively more relaxed about immigration than Theresa May, but they recognised that any prospect of electoral success required at least some presentational effort to square away the issue.

Nonetheless, as the target was repeatedly missed it became a source of friction in both directions, with the Treasury wondering aloud about relaxing an unmet goal, perhaps by exempting students, and the Home Office pointing to the rise of UKIP as a deterrent against any attempt to abandon it. Everybody knew that the net migration pledge was essentially unfulfillable, at least while the UK economy grew and EU membership required free movement, but the already sensitive topic was becoming harder and harder to handle. It duly helped to sink Cameron’s renegotiation, and then contributed in no small part to his defeat in the referendum.

Traditionally the Treasury has tended to have more influence in Number 10 than the Home Office. Chancellors hold a more mighty Great Office of State, they live next door to the Prime Minister, and they control the purse strings. Added to which, the growth of the rights which the Treasury claims over other departments means that its officials often end up going to Number 10 in various capacities, both operational and policy.

Given that context the immigration battle within government normally involves the Treasury pushing for more, with a sympathetic hearing from the Prime Minister, and the Home Office battling for less, waving the polls as a cudgel.

However, this is 2018 so everything is upside down and back to front – hence the peculiar sight of a Home Office-dominated Number 10, occupied by a Prime Minister personally committed to the “tens of thousands” pledge, trying to persuade a more business-minded Home Secretary to be tougher on immigration than he would instinctively like.

One can see in the way that May prioritised immigration apparently above everything else including the costs of EU regulation in her Brexit negotiations that she has no intention of shifting her position. Where David Cameron once joked that he and she were the only two supporters of the net migration target in government, she now seems like the only one. Indeed, it has fallen to a frustrated Downing Street to clarify today that this is still the official policy, after the Home Secretary told the BBC “there’s no specific target.”

I wouldn’t expect this unusual state of affairs to persist for very long, though; the traditional Treasury vs Home Office divide will likely reassert itself in time. Brexit offers the chance to draw some of the fury out of the immigration debate, as can already be seen by a softening of public opinion now that people at least believe the policy will be under their democratic control. As that happens, I suspect we will see more intense inter-departmental scraps about it, as ambitious ministers bid to appeal to different segments of the electorate – in other words, returning the topic to one of normal democratic politics.

Nick de Bois: What my government experience taught me about No Deal – and why planning must be stepped up

I well remember the representations from Treasury and BEIS to focus on the risks and play down the opportunities.

Nick de Bois was Chief of Staff to the former Brexit Secretary, Dominic Raab. Before that he was MP for Enfield North 2010-2015. He is author of Confessions of a Recovering MP.

As we fast approach March 29 2019 and our exit from the European Union, the clamour for not doing so without a deal in place grows to a deafening crescendo. From calls for second referendums from both within the government and outside to poorly considered alternatives of Norway, EEA, EFTA (and a combination of all three), plus of course the emergency extension of Article 50 – all, it seems, because leaving on the 29th March without a deal is too frightening to consider.

It’s not.

As Roberto Azevedo, the head of the World Trade Organisation, has said, a no-deal Brexit would not “be the end of the world” but added it would not be “a walk in the park either”.

He is right. Although some paint the defaulting to WTO rules as a walk in the park, that ignores the complex set of bi-lateral arrangements that help smooth trade on WTO rules which, on their own, do not break down sufficient barriers to trade either in goods or services to the degree we are used to with the EU.

But those underlying measures are being put in place where possible And of course countries that have been trading with us under EU FTA’s are already seeking to replicate those arrangements with the U.K – with Japan being the most obvious example.

Enough, however, is not being made of the opportunities that would open up under WTO rules and leaving the Common Commercial Policy and the Customs Union of the EU. Bluntly, the U.K would be free to introduce substantive countervailing measures to help drive a new era of trade and growth outside membership of the EU.

First, we could introduce temporary import tariff duty cuts; the immediate recovery of full legislative and regulatory control, a swifter end to our EU financial contributions, the introduction of new free trade deals and wide-ranging fiscal measures to stimulate growth and investment.

These ideas, and others, were put to the cabinet last September as part of a No Deal Cabinet Planning session. We hear little about this because Ministers, with the exception of Dominic Raab, didn’t want to talk about them. It is regrettable that government still resists the calls to make the case for the opportunities that can be grasped from leaving the EU without a deal. I well remember the representations from Treasury and BEIS to focus on the risks and play down the opportunities.

I won’t pretend that seeking a deal is not the preferred option, and that reducing friction and barriers to trade has more chance of success with a U.K./EU deal than without, but refusing to countenance No Deal and presenting to the public a one-sided assessment of the risk and not the opportunities from No Deal has been a flawed negotiating strategy,  and has allowed a climate of irrational fear to fester making “any deal better than no deal” the new Government policy.

Countervailing opportunities aside, we are allowing a narrative to emerge that the government is ill-prepared for mitigating the risk of No Deal. During my stint as Chief of Staff to Raab, I was enthused by the considerable No Deal planning work undertaken by the Department for Exiting the European Union under instruction from ministers.

Much of that entered the public domain in August when we launched 106 technical notices advising business, consumers and NGOs on what preparations were underway or steps that business would need to take to plan for leaving the EU without a deal.

Ensuring continuity of supply and services has been the cornerstone of preparedness for No Deal, which is why the U.K has stated, for example, that it will recognise EU product and safety standards and recognise professional qualifications – so that we can continue to benefit from EU imports, logistics, skills and services from our neighbours. It remains to be seen if these moves will be reciprocated.

At the time I left the department, the EU refused to let UK officials engage widely with member states or the Commission to mutually agree sensible steps to ensure minimum disruption in the event of No Deal.  The work has been done on our side: it would be a wholly malicious move by the EU not to reciprocate now as No Deal looms.

Nevertheless, whilst  the planning for No Deal continues on this side of the channel, it remains at risk of not being ready in time for our exit from the EU simply because Number 10 has been too cautious to embrace the plans by putting the full weight of government resources behind them to ensure successful implementation. That should change now – and yesterday’s announcement that the cabinet should “ramp up “ preparations is frankly not enough.

If the Government fails to get its proposed Withdrawal Agreement through Parliament then, as the law stands, the U.K. will come out of the EU in March – most probably without an agreement on the terms of our divorce and what our future relationship will look like. The excitable talk of Parliament or even some members of the Cabinet stopping us leaving without a Ddeal is simply a distraction from focusing on being prepared for departure without a deal.

The right course of action now is for the Government make implementing No Deal plans the official policy, and immediately shift the full resource of government behind that policy. Indeed, the cabinet has already been told that it have passed the recommended date for doing that. Any further delay is at best irresponsible, at worst bordering on reckless.

It doesn’t matter how loud the chorus of calls become for a second referendum, Norway Plus or claims that parliament won’t allow No Deal to happen.  The reality is that in law we are set for leaving on the 29th March at 11pm. Parliament voted for it and now the Government should get ready for it. They have the tools in place; all they need is conviction.

No deal planning. Hancock goes early, orders it – and sets an example.

“We’ve instituted it within the NHS already and I would like to see the whole Government going to that position because it’s the responsible thing to do.”

“Obviously, I can’t comment on what will be discussed in Cabinet tomorrow, but we all want to make the necessary preparations.” That’s more or less what a Minister would usually say, if cornered by a media enquiry, about today’s discussion on No Deal plans.

But these are not normal times.  Some Ministers, like Penny Mordaunt today, lean towards a managed No Deal – if that’s possible – when Theresa May’s deal fails to clear the Commons in January, assuming that to be the case.  Others, like Greg Clark or David Gauke, want an indicative vote and a second referendum.  Amber Rudd who, seemed recently to be all for Norway Plus, may have joined them.

Matt Hancock’s breaking ranks over No Deal preparations must be seen in that light.  He ordered the NHS to go to full No Deal planning last week, thus taking matters into his own hands at a time of paralysis at the top.  (Downing Street would have been consumed by the leadership ballot challenge.)

“We’ve instituted full No Deal planning within the NHS and the department already, and I would like to see the whole of Government going to that position – because its the responsible thing to do,” he told Newsnight.  He said that he doesn’t want No Deal to happen, but that it might happen, so government must be prepared (a point we made yesterday).

The Health Secretary’s allies say that he didn’t want to make a fuss about the decision – which is why it didn’t become public last week – and has only spoken on the record because news of it leaked very recently.  The Prime Minister has now decided to step No Deal preparations, they add, so he wasn’t speaking out of turn by being interviewed yesterday.

Be that as it may, getting ahead of the game won’t do Hancock’s standing any harm, either within the Party or out of it).  In a recent profile of him for this site, Andrew Gimson wrote that he inspires “a mixture of admiration, amusement, astonishment and frank dislike, and rival theories abound to explain how he got where he is today”.

But “beneath the laughter could be detected a note of respect,” the profile continued, and this is the key to cutting through those theories.  The Health Secretary has made the transformation from an integral ally of George Osborne to the Prime Minister’s Cabinet table through hard work, puppyish enthusiasm and administrative grasp.  The tech-enthused Hancock has only just turned 40.

He has kept his head down over Brexit and his fingerprints off any plots.  A former Remainer, the Health Secretary has steered clear of anything to do with a second referendum, and hasn’t done anything so definitive as taking a clear position on the Canada-versus-Norway question.  More broadly, he sees himself as a keeper of the modernising flame.

“Hancock’s car keeps pitching up outside Number Eleven Downing Street,” Liz Truss said during her joke-crammed speech at the Spectator recently.  He is believed to have his eye not on Number Ten but the Treasury, which would suit an economist who cut his teeth at the Bank of England before moving on to become Osborne’s Chief of Staff.

Certainly, he is no fan of Philip Hammond – suggesting in Cabinet that the latter is a “stubby-fingered accountant” in a clash about immigration and wages.  The Chancellor had complained that a restaurant in his constituency couldn’t hire enough staff from abroad.  The Health Secretary replied that it should pay higher wages to attract British staff.  He is a healthy fourth in this site’s Cabinet League Table.

Hancock is far from being the only Cabinet member pushing for full no deal preparations.  Sajid Javid has been pushing very hard.  The Cabinet members who voted Leave make up the mass of others taking the same view.  One Minister who sits at the top table said that planning at DEFRA and Transport is relatively well advanced.

At any rate, May finally seems to have got the message that moving to full No Deal preparation is not only a prudent move to make, but might just persuade the EU to move.  But as ever it will be worth searching the small print of whatever is announced today.

The Remainers’ shocking litany of lies

In their annoyance at the people for rejecting their beloved EU, yesterday’s men claimed that the people had been bamboozled by lies, Russian propaganda and their stupidity in not understanding the huge benefits of the EU. Particularly to our establishment. Their real concern was that their own lies and manufactured fears were rejected by the […]

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In their annoyance at the people for rejecting their beloved EU, yesterday’s men claimed that the people had been bamboozled by lies, Russian propaganda and their stupidity in not understanding the huge benefits of the EU. Particularly to our establishment. Their real concern was that their own lies and manufactured fears were rejected by the people after forty years’ experience of the rambling shambles that is the EU.

Defeated, they’ve now launched an even bigger programme of lies to put the people back into their box and con them to stay in it and the EU. They’re top grade lies, mostly propagated by the author of the Iraq Dossier as Tony Blair’s representative on earth, one A Campbell. Here are the lies:


This is really a confidence trick based on the assumption that apathy and fed-upness at being buggered about will reduce the Brexit vote to allow some of the people to reverse the vote of more of them. It can’t be a vote on Mrs May’s solution because Parliament won’t pass it and the politicians can’t agree on any alternative. So the ballot will be “Stay in? Yes or Yes”. The EU will reject any alternative, as it did with Greece’s referendum.


Although it’s already relegated to the periphery. Unless it accepts the euro, Schengen, the EU army and the dominance of Germany, it must stay there and unlike most members we won’t get any aid. Only our own money back with their costs taken out.


In fact it’s a protective bloc set up to protect French agriculture and German manufacturing. Its share of world trade is declining, the euro wont work and has led to deflation and unemployment. We run a £95 billion deficit which means the export of jobs, money and demand. Membership is a drain not a boost.


Oddly the rest of the world trades with the EU on WTO terms more successfully than we do as members. They can hardly punish us without damaging themselves and the scare stories of the Treasury and the Bank of England both assume that Brexit would mean deflation. In fact it would compel a Keynesian expansion, the opening of new markets and cheaper food.


Yet small nations are the most successful; independent nations are growing faster because they can manage their economies to suit their own purposes. Outside a bloc designed to suit France and Germany, so can we.


Small business doesn’t trade with the EU. The assumption is that British business has no guts, no resilience, can’t compete in other markets and is totally dependent on trade agreements negotiated by the EU in its interest not ours. British complacency might benefit from a shock, as Australia and New Zealand did when Britain betrayed them to join the EU.

There is however one element of truth – though it’s one they don’t tell. Our leaders love the EU because it gives them a bigger stage to strut on, an excuse for their failures and the illusion that they’re still important – the only satisfaction left to them, after screwing up Britain.

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A plea to the PM from a Leave-supporting businessperson: Stop the scare stories and embrace a Sovereign Brexit

What follows is an open letter to the Prime Minister written by a businessperson who backed Leave at the referendum but who for professional reasons is currently unable to enter the political fray. Dear Prime Minister, I have watched with a sense of appalled inevitability your recent unsuccessful visit to Brussels, characterised as it was […]

The post A plea to the PM from a Leave-supporting businessperson: Stop the scare stories and embrace a Sovereign Brexit appeared first on BrexitCentral.

What follows is an open letter to the Prime Minister written by a businessperson who backed Leave at the referendum but who for professional reasons is currently unable to enter the political fray.

Dear Prime Minister,

I have watched with a sense of appalled inevitability your recent unsuccessful visit to Brussels, characterised as it was by a lack of ideas, an absence of combativeness and a reckless and relentless desire to cling on to every rotten element of the vassal state deal that you and your small Remainer clique of advisers in Downing Street have concocted with the EU. Harsh words? Perhaps, but they are words that are endorsed – sometimes in more polite phrases, sometimes in less polite phrases – by the vast majority in our country and even of our Parliament.

Why are you so recklessly clinging to every suspect element of this ‘Brexit in name only’ deal? Many believe the problem all began with your still-secret promises made to Nissan, the car manufacturer in Sunderland, shortly after you took power in 2016. You have never published those promises. Many of us guess that it was partly as a result of those promises that in your talks with the EU you then gave away – whether in ignorance or because you never truly meant to leave the Customs Union – every possible negotiating element that would allow the United Kingdom to pursue its own independent economic and trade policies. Was that so? Can you not come clean with the electorate and tell us what those Nissan promises were, how much they are now constraining you and how much your desire to cling to your secret agreement with one company, Nissan, has led you to all this foolishness? Because if that is the case, then the honourable thing for you to do would be to resign and let someone else – someone not burdened by that promise – create a way forward for our country that is not shackled by that apparently all-constraining Nissan cursed promise.

If there was no such promise, then I am puzzled by your insistence that a WTO-terms deal – what is most truthfully termed a ‘Sovereign Brexit’, the thing that 17.4 million people actually voted for – must be ruled out by you. Your Remainer friends who dominate the media have managed to spin non-facts into a general belief that a Sovereign Deal would be catastrophic. Your grid in Downing Street has, month after month, delivered to a credulous press and public a remorseless stream of doom-laden statements by those rent-seeking members of the business community on whom you have chosen to rely to spin your message. Yet neither you, nor the spinners, nor your business allies, actually ever credibly articulated what the specific negatives of such a deal would be (the contemptible catastrophe forecasts by your discredited Treasury modellers, and by your apparently politically motivated Governor of the Bank of England, are no longer believed by anyone – as I am sure you must know).

What could go wrong, and what would go right, in a Sovereign Brexit? The claims of your Remain-loving enablers as to what might go wrong are economic. They relate first to exports from the EU into this country and second to exports from the United Kingdom into the EU. Once even the briefest analysis is conducted, both sets of claims are quickly seen as hogwash.

Exports from the EU into the UK – no disruption threat there

There have been the most extraordinary and juvenile claims of potential (albeit very short-term) shortages in this country after 29th March 2019. Even you, lamentably, mentioned your diabetes and your desire for being sure of your supply of insulin. Who persuaded you to say that? Did you give the slightest thought to how ridiculous that scare story was? Insulin is sold under a wonderful system we call private enterprise, from one company to another. In the UK’s case, it’s mostly a Danish company selling insulin to companies in Britain. The insulin is put on a plane or a boat and comes over to our country. What, do you assert, would prevent this from happening after a Sovereign Brexit? Come on, what? Are you saying that the EU would somehow seek to prevent insulin being placed on a ship or a boat and exported to us? You aren’t saying that, are you? Such an action would be illegal. Or, OK: let’s even say that, however unlikely, the EU indeed decided on 29th March to start acting entirely illegally (again: for a short period of time only, which is all they could possibly ever do). Then the UK would get its insulin from the US, or the Danish company would sell the insulin to Norway, or some other non-EU country, which would then export it on to the UK. Businesses successfully deal with complications of this sort all the time. All that the EU’s (highly, highly unlikely) illegality would result in is the Danish company losing money, one way or another. But you and I know that the EU wouldn’t shoot itself in the foot like that.

So, were you claiming instead that Britain would somehow put up barriers against Danish insulin coming into the country after 29th March? We wouldn’t, would we? Come on, you know that, don’t you? So why did you raise a false scare story, that would have had tens or hundreds of thousands of diabetics worried that their supply of insulin was suddenly going to dry up, when you know it’s hogwash? Isn’t that the sort of rabble-rousing nonsense that we try not to do in the Conservative Party?

Insulin is just an example of any other product that comes into the UK from the EU. We would not prevent any product from arriving; the EU would have no legal locus (or indeed any physical ability) to prevent any product from being sent; can you please just stop being silly and admit that there would be no supply shortages in the UK? (And please, can we in particular try to keep our Conservative ministers from making fools of themselves, in their eagerness to support you, by escalating the level of ludicrousness of such scare stories from a possibility of momentary disruption of a day or two, through to six-week problems, through to six-month problems? The more outlandish their claims get, the less anyone believes them – though some Remainers tactically pretend to. We will actually need to have a set of ministers who are seen as competent by the UK electorate after all this settles down, if the Conservatives wish to remain in power.)

The UK’s exports to the EU – not credible to assert any long-term or even short-term disruption

Let’s turn to the second set of scare stories running against a Sovereign Brexit. We keep being warned about “lorry parks in Kent”. The idea is that Calais will somehow impose restrictions on us, so that we won’t be able to get our goods speedily into France and through to the rest of the EU. Of course, we send just 6% of the UK’s exports through Calais, and those exports can swiftly be diverted to go through other ports, were Calais were to seek to prevent the easy flow of UK goods into Europe. But we needn’t particularly worry about anything like that happening, because every local official from Calais, and the Pas de Calais region, has said that this will not happen. It would take an edict from President Macron – an edict that would be entirely illegal, whether in EU law or in the WTO agreement – to impose such a blockade (Indeed: if you really were to believe – and I for one don’t think you do – that Macron would truly seek to impose an illegal blockade, then it would be utterly abject of you, and unworthy of the Prime Minister of our sovereign nation, to bow to a perception of a threat of this sort).

In any event, let us assume that the worst happens and that Macron does indeed seek some way of blocking British exports into the EU. The French did that once before, when they for a while diverted Japanese VCRs to Poitiers, so that EU manufacturers could win in the VCR market. They were very swiftly brought to court by the WTO and made to stop. Japanese VCRs continued to dominate the world (and the EU) market. France have never tried that trick again. And what would be the result for the French, were they to try it on us? Well, within a couple of weeks, as their just-in-time-systems were affected, thousands of French and German auto workers – possibly tens of thousands, in the unlikely event that the French were successful for more than a few days – would be thrown out of work, as French and German car manufacturing plants had to shut down. Do you really think, Prime Minister, that this would be allowed to happen? Or is your assertion, that somehow the EU would inflict such a monstrous act of self-harm upon itself, just a stance that you are pretending to believe in, so as to insist on this foolish deal that you and the EU are trying to impose upon the British people?

In either case – exports or imports – the very wildest claims are of a possible disruption that would last for, even your wildest claims allege, only a few months. Why, then, should this be the dispositive consideration, when we are talking about Britain’s future for many decades to come? Why would you shackle the country permanently to a lordly EU, in order to avoid a very temporary (and, if you read my above arguments, not going to happen anyway) disruption? Why would you abandon even the threat of a WTO terms deal – and in so abandoning it, allow us to become the hapless prey of what everyone now knows are entirely ruthless EU negotiators?

The Irish Border and the Backstop – a Hoax

On the Backstop, and its claimed urgency and importance, the trick is to look at your language, where one finds your people always using the passive mood – a classic giveaway. You say you are worried about a hard border “being imposed” (passive mood). You do not offer a noun in front of the verb, to show who it is, exactly, that is predicted to be going to do this “imposing”. That’s because, in fact, nobody wants to, nor do they intend to, impose such a border. You have said that Britain will never impose a hard border. The EU has said that it will never impose a hard border. The Irish have said that they will never impose a hard border. The Revenue of the UK has said that imposing a hard border will in all circumstances be entirely unnecessary. Talk of a hard border is nonsense, and you know it. Plan after plan has been published showing how the Irish border question can easily be dealt with, away from the border. To assert that this issue might bring back the IRA, that there will be one disaster or another if we don’t have the Backstop, is irresponsible. Which brings us back to what many aver, that the Backstop is just a cover for implementing some promise you made to the auto industry in 2016, that we would be in some form of Customs Union with the EU – precisely the thing that 17.4 million people voted against.

(And by the way, could you please get your people to stop briefing the credulous media as to how the EU don’t like the Backstop? To believe that – if indeed you do – would be a colossal, monumental piece of self-delusion. The EU love this Backstop, created as it is without an exit clause, with the EU entirely in control as to when – if ever – the backstop is removed. And Leo Varadkar is of course – and rightly – terrified of a Sovereign Brexit because the Irish economy would, unlike the UK’s economy, drastically contract as soon as we stopped buying Irish agricultural products and started buying cheaper, alternative produce from New Zealand and Argentina, were the EU to fail immediately to agree a free trade deal with the UK.)

As constituted in your proposed deal, the Backstop turns Britain into a permanent, shackled vassal state of the EU, subject to all its laws, on which we’d have no say; gradually reduced to a pathetic vestigial outcropping of the EU, with German goods and French produce increasingly defined under EU laws as the only sources that we will be allowed to accept. If the EU wishes – and why should they not? – that Backstop would be for good. Our manufacturing, already half destroyed by our membership of the EU, would continue to shrink, and our farmers and fishers would continue to be at a disadvantage – forever.

The positives of a Sovereign Brexit

So much for the specious arguments that a Sovereign Brexit would be problematic, and that your surrender deal is therefore necessary. But what about the positives for a Sovereign Brexit? I sometimes wonder what Downing Street’s grasp of numbers is like. Do you have any true feel for what £39 billion, so insouciantly promised to the EU in return for illusory favours, could do for this country were we to spend it on ourselves, as we could if we opted for a Sovereign Brexit, rather than giving it away?

For a start, were there any sector (including your much-loved auto sector), but let us say, for example, the agricultural or the fisheries sector, that indeed for some (unlikely) reason suffered during any years of further negotiations, then just a small fraction of this £39bn would be enough to keep those industries whole, for the (in the scheme of things) short period it took to get a free trade deal with the EU. We do not owe this £39bn to the EU. It’s possible that the EU could make an argument for us paying over a small fraction of that amount as one or another obligation, that we might eventually agree, but we certainly wouldn’t pay it any time soon, were the EU to keep on playing the sort of hardball with us that they have adopted so far as their negotiating posture; it would take them years, possibly decades, to establish legally that we owed the money.

Regardless, there is no way that the UK would ever have to pay anything but a small fraction of the full sum. Don’t you think, Prime Minister, that the EU are rather keen to have that money? Do you not see that by ruling out a Sovereign Brexit, and by promising to pay the money before you have agreed a trade deal with the EU, you have taken two enormous bargaining chips off the table? Wouldn’t keeping that money in a Sovereign Brexit scenario make a huge positive impact for the UK?

So, for a start, we’ll have that £39 billion (a sum that in your deal, as we pay it to the EU, will massively and worryingly increase this country’s debt – for no clear return). But a Sovereign Brexit will give us so much more than just that money; we’ll retain our ability to do free trade deals with that part of the global economy from which 90% of future global growth will be coming (you may know this as the ‘not the EU’ world. I hope you sometimes think about it?); we’ll keep our ability to unshackle our entrepreneurs from EU regulation (so that, as just one random example, we can regain the 12% of the global clinical trials industry that we used to have, until EU regulations in 2002 suddenly collapsed our share to around 2%); and above all, the clothing, food and other essentials that the people of the United Kingdom buy in the future being far cheaper as we move outside the protectionist barriers of the EU’s Customs Union and Internal Market.

You know very well, Prime Minister, how all of your allegedly neutral and objective advisers have ostentatiously ignored all of these benefits. You know they have failed to seriously review the many analyses that show that far from a Sovereign Brexit being negative for the British economy, it is likely instead to have a significant positive effect. You know that the insistence of your Treasury officials on publishing neither their models, nor the assumptions they put into those models, make an absolute nonsense of the credibility of those models and a mockery of the alleged impartiality of those officials. Please, Prime Minister: you are juggling with the future of this country. At the very least, you should be honest with the people of this country – both in acknowledging the above points, and in forcing your officials to own up to the way they have jammed their thumb onto one side of the scales of public opinion.

Prime Minister, you are offering us a deal where you propose to break up the Union and hand Northern Ireland over to the EU. You intend to hand over money ahead of any trade deal, thus assuring that whatever is agreed in that deal will be even more horrendous than what you have come up with so far – Gibraltar threatened, our fisheries destroyed, our people deprived of their chance for the benefits of free trade and subjected to semi-permanent, quite likely perpetual, enshacklement to the EU. You have gone back on every single promise you made when the Conservative Party made you their leader, when you gave your Lancaster House speech, when you said “Brexit means Brexit”.

The sorry band around you are desperate for your deal to go through because if we went for a Sovereign Brexit instead, they, and their enablers in the media and big businesses, would be exposed as the complete charlatans that they are, when a WTO terms Leave is implemented (the Leave that those 17.4 million voters expected to happen). This is why your myrmidons are fighting so hard, because all of them – your advisers, the civil servants involved, the Treasury forecasters, your small clique of Remain ministers, The Economist, the FT, the BBC, and on and on – would have no choice but permanently to disappear from public life once we implemented a Sovereign Brexit and all their egregious negative spinning and outrageous scare stories were proved as false as their original 2016 Project Fear was.

You, however, Prime Minister, have a glorious chance to escape their fate, by doing one thing: you can still, now, and energised by Juncker’s utterly disrespectful behaviour to you in this past week, turn around to the European Union and say, finally:

“Fine. I understand you don’t want to do a deal. We’re now going to go full bore for a Sovereign-terms Brexit. Let’s sort out some administrative things like us allowing you to fly your planes over the UK, but other than that, let’s see each other in Geneva at the WTO. Do come back to us if you want to discuss some kind of Canada-plus deal, but otherwise, let’s all spend our time constructively in the next three months preparing for Britain’s Sovereign Exit from the EU.”

For the sake of our country Prime Minister, please take this chance. Now.

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It almost works

Were it not for the backstop, May’s deal would get over the line – with support from an overwhelming majority of Conservatives, including us.

Imagine for a moment that, at some point before Christmas or in the New Year, the backstop was radically amended – that a unilateral exit mechanism were to be slapped on to it.  Then go on to picture the following events.  The revised deal passes through Parliament, and there is no early general election.  And at the end of transition in 2020, a decision is taken about whether or not to extend it. Let’s presume that at this point it is indeed lengthened for, say, six months.  At this point, the backstop duly kicks in.  Then, at the beginning of 2022, the Government leaves the backstop, just in time for the general election of later that year.

During this sequence of events, the first substantial objection to the backstop – that we aren’t free to leave it – would have fallen away this very winter.  The second complaint – that the backstop places a regulatory border in the Irish sea and, given the presence of a backstop within a backstop in the text of the Withdrawal Agreement, a potential customs border too – would last for a mere sixth months or so.  Then the division that it causes within the United Kingdom would end.

From that point, the Government would have the freedom to leave the continuing customs union, and negotiate, sign and effect meaningful trade deals.  For example, the way would be open for it to pursue one with the United States, if it wished: the American Government has made it clear that any such arrangement will be restricted if the backstop is in place.  More broadly, the gains for Britain from May’s deal would at this point no longer be outweighed by the losses.

Let us remind ourselves what these wins would be.  As we wrote in our analysis of the deal after it was agreed, we would regain control of our borders, under its proposed terms, after the end of the transition period, extended or unextended.  Free movement would be no more.  We would also regain control of money.  We would almost certainly want to pay up for participation in specific European programmes.  But automatic payments into the EU budget would come to an end.  A Prime Minister Johnson would be able to tip the entire sum down the gaping maw of the NHS if Parliament so agreed.

There would be a role for the European Court of Justice in relation to EU nationals for eight years.  An arbitration panel would refer points of EU law to the Court, and there is a good case for saying that the panel would then be bound by its rulings.  But it is important not to confuse disputes about the meaning of EU law with those between the UK and the EU more broadly.  These would be resolved by a dispute resolution process.  Meanwhile, the Withdrawal Agreement’s legal underpinning for the backstop would become otiose when the backstop ended.

In short, Theresa May won on borders and money in the negotiation, and minimised the ECJ’s scope on laws, which could reasonably be scored as a points win.  She has won almost no credit for this achievement, first, because she has no media allies or strong public backing, but faces formidable opposition from both second referendum Remainers and UKIP-type Leavers; second, because U-turns and broken pledges elsewhere have bust her credibility and third, of course, because of the backstop.

There is another, big, structural gain from her deal.  Under its terms, we would be tied to developing EU acquis on state aid and competition.  However, we would not be so bound elsewhere – for example, in social or environmental matters.  Some EU27 countries are worried that British governments will be able to undercut their social model in future.  So under the deal’s terms, we will gain freedom of movement for goods – up to a point – without conceding freedom of movement for peoples.  The four freedoms have been prised apart.

Now, there are powerful objections to this rosy scenario.  Frictionless entry to EU for British goods will doubtless be bargained off against permissive entry to the UK for EU citizens, and to British waters for EU fishermen.  Guarantees in the Political Declaration rather than the Withdrawal Agreement lack legal bite.  Even were a unilateral exit to be negotiated from the backstop, we would still have agreed to pay the £39 billion or more agreed under the terms of the agreement – thus reducing our bargaining power during trade negotiations.  Essentially, the EU wants a high-alignment, high-access settlement, and so does our Treasury-led Government.

And the strongest case against our imaginary dropping of a permanent backstop is that it simply isn’t on the table: that the EU will not shaft a remaining member, Ireland, for the sake of a departing one, the UK, as this morning’s news confirms.  We concede the point at once.  Were Leo Varadkar not determined to take a high-risk gamble that the UK/Ireland land border will end up no harder than now – and had the Government rumbled him earlier and treated Ireland more attentively – matters might not have reached this pass.  Still, we are where we are.  This Prime Minister is most unlikely to win any worthwhile backstop concession in the New Year.

Why sketch out this scenario at all, then, if it almost certainly won’t happen?  The answer is: to make a point well worth making – namely, that only a single obstacle prevents May from winning the backing of her Party for her deal.  Most of the hostility to it would collapse were there a uniteral exit mechanism.  The list of objectors would then shrink from the 71 we clocked to a much smaller number: fewer than 20, at a guess.  Most would swallow a limited role for the ECJ, and reject the other objections that we have listed.

Sure, they would say, the EU will seek to gain entry for their citizens and fishermen.  But it would have no automatic right to either – and that’s what the referendum was all about, wasn’t it? – taking back control.  Yes, we would have lose some bargaining power by agreeing to part with £39 billion.  None the less, we would retain some too, because of our power to refuse access to our country and waters.  All in all, a reformed backstop would be allow the Conservatives and Labour to square off against each other on EU policy in future elections.

For were the UK free of the backstop come 2022, the Tory election manifesto would reflect its Eurosceptic centre of gravity, by proposing a Canada-type policy for future trade talks.  Labour’s, meanwhile, would be more Norwegian in flavour.  These two visions would then compete at the polls – at least to the degree that both parties, and voters, wanted to fix their attention on the future of Brexit.

As we say, this won’t happen – at least under this Prime Minister.  Her deal and the backstop march together in step.  And admittedly, even with a right to unilateral exit, this Government would be likely to exercise it if no deal waited on the other side of the door.

None the less, that exit would be there – which, ultimately, is what matters.  We’ve said before that Brexit isn’t a still photo, but a moving film – or should be.  Where Britain will be on day one isn’t where we will be in year ten.  The backstop freezes that film and prevents it from playing.  Provide a sure means of escape from it, and the film begins to roll.  And May’s deal thus becomes acceptable.

Unfortunately, there is vanishingly little prospect of that.  The backstop lies between her and success like a hollow in the path of a runner.  It is so narrow as almost to be leapable. But it plunges many, many miles deep.