Project Fear was the device that allowed those arguing for independence for Scotland to ignore the short term fiscal realities , and it was the device used by Leave to discount the countless warnings that Brexit could make the UK significantly poorer. The device was indulged by the broadcast media, who now duly quote it back at businesses who warn that jobs are at stake with any kind of hard Brexit.
There are good reasons why so many businesses have finally decided to make their concerns public. They have lost all faith that the government knows what it is doing, and they have recently lost faith in parliament restoring any kind of sanity. Hence the warnings from Airbus, BMW, and the society of Motor Manufacturers. This is no posturing, as figures for car industry investment show. These numbers will only jump back up once Brexit uncertainty ends if the final deal is a positive one as far as car makers are concerned. A UBS survey suggests that car makers are not unusual in this respect.
So why are firms not excited by the opportunities a Tory Brexit will bring in terms of less regulation and ‘global Britain’? They know global Britain is a myth: they can export perfectly well outside the EU as it is, and they are more likely to get a good trade deal with third countries by being in the EU than outside it. Those who say that a post-Brexit UK could do trade deals tailor made to UK business misunderstand what trade deals are mainly about nowadays. They are about harmonisation of regulations. And if a country is going to harmonise its regulations, it will do this with the EU rather than the UK because the EU is a much larger market.
Which is why the prospect of a regulation free post-Brexit UK has little appeal to businesses that trade. What business wants is harmonised regulations, giving them less costs and a large market. The EU is really all about harmonisation of regulations. These include regulation on working hours or the environment because all these things are required to get a level playing field for business and therefore a true single and very large market.
As Anthony Barnett in a very interesting essay argues, the sovereignty argument for Brexit involves a huge misconception. What the EU does (human rights aside) is harmonise regulations. Most people, including Leavers, have little problem with that. What Brexiters did was relabel this as giving away sovereignty, which sounds bad. I often ask Leavers if they can name any EU law ‘imposed’ on the UK that they do not like, and I have yet to get anyone to respond with one. It is the principle, one said. But their inability to quote an example of loss of sovereignty reveals an underlying truth. The EU is about harmonisation of regulations, regulations that most people have no problem with.