I pointed
out two days ago that the real costs of Brexit are long term, which
unfortunately means that those who argued for Brexit will never be
held responsible in political terms for the damage it will do. As
John Springford
argues,
that also strengthens the hand of those arguing for a hard Brexit
(aka maximum damage). So who will speak for the 48%+ who want to
limit the damage?
Potentially the majority of MPs do. We have united opposition from
the SNP and LibDems. The great majority of Labour MPs also oppose
Brexit. Polly Toynbee suggests
this should become their unifying cause whatever the leadership does.
And of course around half of Conservative MPs probably voted, in a
personal capacity, to Remain. That has to be a worry for Theresa May,
which is why she has made it clear that MPs will have no effective
say in the Brexit negotiations.
So is this just going to amount to a lot of despairing and angry
complaints as the Brexiters do their worst. Not quite. There is one
source of opposition left standing (in the sense of having some power): Philip Hammond and H.M.Treasury.
The Treasury has always been the job Hammond wanted,
and not because he wanted to radically change that institution. It
should also not be forgotten that it was Treasury economists who
wrote the analysis suggesting the long run impact of Brexit on the UK
economy could be very large, and the larger the further away from the
single market we ended up being. Some will think this was a stitch-up
job to please Osborne, but I think that is extremely unlikely. After
all the Treasury analysis was pretty close
to other estimates, and it was overseen by Charlie Bean who is
excellent at judging what is academically kosher.
It is for this reason that we are already seeing headlines
talking about Hammond blocking Brexit ‘progress’. How much power
he has to do this will depend on the Prime Minister. If Theresa May
sides with her Brexit ministers against Hammond, as it seems
increasingly likely (see Martin Wolf here),
this will mark the end of a long period where the Treasury has
dominated economic policy in the UK.
That dominance started after a meeting in an Islington restaurant,
where Gordon Brown extracted the maximum price for standing aside in
favour of Tony Blair. The Treasury under Brown not only stopped Tony
Blair from adopting the Euro, but also exerted a control over the
economic aspects of other departments that had not been seen before.
Under the Coalition government Osborne and Cameron worked very
closely together, and the austerity strategy - supported by key
Treasury civil servants - dominated the domestic agenda. If May sidelines Hammond over Brexit, the Treasury will have moved
from dominance to playing second fiddle very quickly indeed.
I am increasingly convinced that Theresa May was a Brexiteer herself. She just did not want to come out in case the remain won, and instead was with the remain camp but keeping quiet, ready to jump ship depending on circumstances.
ReplyDeleteThinking about the anti-immigrant campaigns while she was home office minister, I can only suspect that her heart was with the Brexiteers. Although I had an EU passport, her anti-immigrant trucks/posters still sent a chill down my back because the underlying message was that the government was looking and looking for a reason to deport you.
Hopefully the treasury will be able to wield influence or at least provide a platform for those opposed to hard brexit. Chancellor's are strong when they have emerged as part of an election winning team and go on to consolidate power eg. Brown and Osborne. Unfortunately for Hammond this doesn't apply to him as he only just got the job.
ReplyDeleteBBC website 'EU vote: Where the cabinet and other MPs stand' 22 June 2016 (http://www.bbc.co.uk/news/uk-politics-eu-referendum-35616946) gives 185 Tory MPs as Remain and 138 as Leave.
ReplyDeleteUltimately it is the potential ability of the House of Commons to refuse to repeal the European Communities Act that I feel is the best guarantee of a Brexit that does not do irreparable harm to the country, if that is possible.That is what the Brexiteers promised in the referendum campaign and the House of Commons is fully justified in holding them to their promise.
ReplyDeleteThe largest component of a majority to defeat unacceptable terms would be the Labour Party. So far Jeremy Corbyn and his immediate associates have shown very little interest in the terms of Brexit. Judging by a speech he made at Bloombergs last week that may be changing.(a Google search will get a summary and video but I have not been able to find a complete text).
In any case Labour MPs would be fully justified in opposing Brexit on bad terms. Hopefully the Scottish Nationalists , whatever has happened about a Scottish referendum, would see that there is no value for Scotland even in just England and Wales being on bad terms with the EU.
Of course the hard right will present such a vote as defying the will of the people. That is why it is so important that it is made clear now that the result of the referendum was not a vote to leave on any terms or a blank cheque for right wing fanatics but a conditional and indeed split (Scotland and Northern Ireland) result.
At the moment the only pressure on Theresa May comes from that hard right and , in the nature of things , she is likely to respond in some degree to that. The rest of us need to increase the pressure in the other direction and that , I feel is largely down to the Labour Party or some of its components.
In my opinion this view does not imply a need for a second referendum. IF Parliament refuses to endorse the negotiated terms that would provoke a General Election which at least would have the merit of ensuring that the winners had the responsibility of actually doing what they promised.
Does the Act matter? If the Art.50 notice is given by royal prerogative I assume the whole process becomes a matter of severing mutual obligations between sovereigns. In other words, once the process starts domestic legislation is irrelevant.
Delete«So far Jeremy Corbyn and his immediate associates have shown very little interest in the terms of Brexit»
DeleteIt is a pointless waste of political time and capital to try to oppose with mere hypotheticals.
If you happen to know what «the terms of brexit» are please send a urgent letter to J Corbyn so he can start working on that. Be sure to send a copy to T May, D Davis, L Fox too, as they are trying to find them out too. :-)
«the only pressure on Theresa May comes from that hard right»
DeleteThe pressure on T May comes from discovering that 60% of her voters are for "Leave" but 75% of her MPs are for "Remain".
Fwiw, according to parliamentary guidance to MPs, the royal prerogative allows making treaties, but doesn't mention terminating treaties, but it seems reasonable to assume terminating would be included. So May could use the royal prerogative without putting a motion far less a bill before parliament.
DeleteHowever, there is little in advice on the royal prerogative about changing primary legislation, because as Keith MacDonald notes, membership enshrined in the European communities act, which would have be repealed, and it is less clear how that would be achieved by triggering article 50, or by royal prerogative.
Go argue.
You cannot rely on the right of the Parliamentary Labour Party: some are now even prepared to sabotage UK's membership of the single market in order to pander to immigration prejudices.
ReplyDeletehttp://politics.co.uk/blogs/2016/09/19/labour-s-cowardice-on-freedom-of-movement-helps-tories-secur
https://www.theguardian.com/politics/2016/sep/19/labour-urged-to-make-immigration-controls-a-key-brexit-demand
Why should our young pay the cost of the failure of the Eurozone. Surely that should be their problem.
DeleteAnd if they can dump their unemployed in the UK where is the incentive to change anything in Southern Europe.
That is the *point* of the EU. The citizens all have to become travellers wandering the continent in search of their next zero hours contract.
One question came to mind: There are rumours (well, in various media, but until there is some official announcement I assume them to be rumours) that various EU countries are competing for various EU agencies currently based in the UK as well as trying to attract investment that was planned for the UK in either finance or technology or manufacturing. One of the arguments used by Brexiteers is that the EU economy is moribund. Is it not possible that if the diversion of investment from the UK is sufficient, the effect might be stimulative to the EU, thus providing a counterfactual to the state of the UK economy? I am not an economist and do not have the figures at hand (nor am I familiar with such sources) but was just wondering if the potential is such to stimulate the EU economy while damaging the UK economy due to lack of investment.
ReplyDeleteLol, good one, Frank!
DeleteIf the UK ends up with 'Hard Brexit', can Mrs May keep her promise on Northern Ireland's border? And would it not significantly increase the likelihood of Scotland having another referendum (the Scottish Government have emphasised the importance of the single market). One of my worries is that the complexities are so great it will overwhelm the machinery of goverment, which nowadays seems to me to resemble and old jalopy more than a Rolls Royce.
ReplyDeleteI recall working in Westminster a decade ago, hearing civil servants and others in the Bubble complain that the Treasury had grown too big, too powerful. I can imagine the same people then longing for its diminution now wishing for its influence. I suspect they will be disappointed again.
ReplyDeleteS
"...the austerity strategy - supported by key Treasury civil servants..."
ReplyDeleteI've often wondered about this, it's natural that George Osborne (with no economic credentials) should seize on the crisis as an excuse to indulge his ideology and try to shrink the size of the state, but surely the treasury is staffed by civil servants who do have economic credentials. If, as you are fond of reiterating, 'the majority of mainstream macroeconomists oppose austerity' why were they not pointing out the dangers of this policy.
I remember reading somewhere that the treasury was actually run be a couple of 'pre-Keynesian' mandarins (no names were mentioned). Having worked in the Treasury, you might know how this works.
Notwithstanding that 'the majority of mainstream macroeconomists oppose austerity', it's interesting that Ed Balls (who apparently does have economic credentials) failed to offer any real alternative to austerity in 2015, so perhaps it's no surprise that so many people couldn't see any reason to vote Labour.
Without speaking for Simon, he had often written of the division between academic, largely no-axes-to-grind, economists, (see also wonderful advice from Paul Romer) and economists with interests, E.g. working in city.
DeleteHistorically, the treasury, and the civil service as a whole, would fit in the neutral, no-axe... camp, but politicisation of the civil service under recent governments, where keeping your job/pension has become an important influence on expressed views, has inevitably had some impact.
Sadly not all ministers are as malleable as Jim Hacker, nor all permanent secretaries as resilient as Sir Humphrey Appleby.
The Treasury has lost a good deal of credibility after publishing the Immediate Economic Impact of leaving the EU. You cannot try and rewrite history and claim the long run impact was always the main concern when considering Brexit, when the Treasury writes:
ReplyDelete"The analysis in this document comes to a clear central conclusion: a vote to leave would represent an immediate and profound shock to our economy. That shock would push our economy into a recession and lead to an increase in unemployment of around 500,000, GDP would be 3.6% smaller, average real wages would be lower, inflation higher, sterling weaker, house prices would be hit and public borrowing would rise compared with a vote to remain."
Do I need to stress that this is not discussing actual departure from the EU but the immediate impact on the economy if the UK dared to vote leave. Their analysis is so flawed that it comes closer to being a lie than the so called lies of the Leave camp.
The Tories had promised to call article 50 the morning after the referendum. That would have caused a much larger adjustment shock than the current situation where article 50 might be called some time in a few years.
Delete