Winner of the New Statesman SPERI Prize in Political Economy 2016

Friday, 16 November 2018

Brexit. Of course everyone hates a compromise, but like much else its the best option, isn't it?


This is the argument put forward by May and her supporters, but rather more significantly it is also the case argued by Martin Sandbu here and other very rational and realistic people. When you have two sides implacably opposed, compromise is often the way forward. No one likes the compromise, but that is the nature of compromises. It a mature democracy where we don’t want to be at our throats all the time, compromise is inevitable.

Labour are actually arguing the same thing. They just think they can get a better compromise, and they have a good case because they will not have to constantly try and appease a large group of Brexiters. But they can only do this when in power, and so if they do not get the General Election they want then all options are open, including arguing for Remain in a second referendum. This too can make sense. If May’s compromise is worse than Remaining, and Labour cannot implement their better compromise, then it makes sense for Labour to campaign for Remain. It is a sensible case that I have yet to hear Labour leaders make, but give them time say supporters.

I want to argue something very different. Let me start with an analogy. You have been feeling unwell for some time. Someone suggests you take some snake oil that they say will make you feel much better. Another person, who happens to be a doctor, says snake oil will do you harm and your ills have other causes that cannot be fixed quickly. You really want your problems cured soon. A third, wise person tells you to compromise: try the snake oil but with half the recommended dose. A compromise seems sensible, so that is what you do. Your temperature soars to 104 and you end up in A&E.

I think this analogy is more accurate than the traditional two sides and compromise idea proposed by May, Labour and Martin Sandbu. The snake oil was sold with the big lie that we could leave the EU, gain sovereignty, reduce immigration but keep the economic benefits of being in the EU. That lie was believed by Leavers. Behind that was a second, more pervasive lie, which is that reducing EU immigration would improve access to public services and increase real take-home pay. In terms of the first lie, the deal May has done  keeps a few of the economic benefits of the EU but with a substantial loss of sovereignty. (The deal Labour wants to do keeps even more of the economic benefits but loses more sovereignty.) In terms of the economic dimension (public services, incomes) and sovereignty, a Brexit deal is either worse in one of these dimensions or both. It is difficult to know in what dimension people will be better off or feel happier.

But surely people were voting to leave the EU, and we would have at least done that. But the evidence suggests the EU was of little concern to voters until 2016. According to IPSOS Mori, only a few percent of people thought the EU was an important issue in 2010. In 2015 it only occasionally reached double figures. This strongly suggests that people voted Leave not because they wanted to leave the EU for its own sake, but for what they believed would be a consequence of leaving in some other dimension. This is the key to understanding why a compromise does not work.

Most Brexit voters will not be moderately happy with a deal that makes them worse off: they will not be happy at all. Most Brexit voters will not be moderately happy with a deal that gives the UK less say in the rules the UK has to obey than when in the EU: they will not be happy at all. A true compromise is something that gives each side something, but the incredible thing about Brexit is that what most Leavers want from Brexit is not possible, yet most politicians and much of the media refuse to tell them that.

The curse of Brexit is that anyone enacting it will be unpopular, not because most Leave voters do not get all they want but because they do not get anything they want. In fact, like the snake oil analogy, they will probably be worse off or have less say. Brexit was always a fantasy, and anyone who makes Brexit concrete will fail to deliver that fantasy. As most politicians have not had the courage to call Brexit out as the fantasy it is, voters are likely to blame the politicians who fail to produce their fantasy rather than blaming themselves.

May will keep telling lies, in the tradition of Brexit, to try and get her deal passed. She claimed outside Downing Street that she had secured our departure from Freedom of Movement. She has done no such thing. The final trade deal is still to be negotiated, and will not be known until after it is too late to change our mind. As pointed out here, the proposed Customs Union for mainland Britain is seriously incomplete. Once we have left the EU, we have no options left so we are in an even weaker position than we are now.

To say, as Philippe Legrain does here, that those arguing for Remain are playing Russian roulette with the UK economy are wrong. A majority of MPs asking for a referendum between May’s deal and staying in the EU is called democracy, and clearly if there was not a majority for such a referendum May’s deal is better than No Deal. The whole ‘taking a risk’ story is the result of deliberate choices by a Prime Minister that wants her deal passed on the basis of fear. MPs have to decide what deal is least worse for the UK, and that is clearly staying in the EU. 

In June 2016 we narrowly voted to Leave, when the Leave campaign claimed Turkey was about to join the EU and we would have more spending on public services if we left, in a campaign that used money that exceeded election rules the origins of which are still unclear. We now know that Turkey joining the EU is not on the horizon, according to the OBR there will be less money available for public services after we leave, and we will have to end up paying and obeying with no say over the rules. Our best estimates are that the UK economy is already 2.5% poorer as a result of Brexit, and on top of that the Brexit collapse in sterling has cut real wages. According to the lastest large poll two thirds of people want a say on the withdrawal agreement and there is a clear majority to Remain. Here is a similar YouGov poll. This is despite neither main political party arguing for the Remain option. It is time parliament respected the views of the people, not their hope 2 years ago when they were promised the moon but today when those promises have not been delivered.



10 comments:

  1. Interesting. I personally would ban referendums as they are not the actions of a democratic state. Whether one wants to hold another to cancel one because the majority would not understand democracy just speaks volumes for UK education/political climate as does our OxBridge leaders for those institutions.

    Having voted remain (because I don't think the Uk can deal with stuff like this and think I may have been right) and gone through this I would love to leave the EU. Its vile technocrats so remind me of the disaster of economics of Brown followed by austerity largely followed/supported by his say anything droogs and the coalition who followed (Balls did TBF know it was nonsense but stayed for the ministerial salary). Yes it does annoy when pimps of this rotten economy are so sanctimonious about forecasts of marginally less GDP growth. Really the biggest disaster since yourselves? I may have been a terrible Poly Economics graduate but International economics was pretty undeveloped then and from what I read from LSE 2 years ago still is - economists and worse people who read them hanging their hats on previous unspecified data in their model (156 pages to find that assumption for a non analogous situation, really) - economic disaster after what we've been through? Maybe WTO genuinely was but the LabLibCon consensus of 2008-15 was worse far worse and the divisive poor baiting of the last 20 years did more societal damage - never mind asset price stoking - more and more people working for almost no GDP growth never mind per capita and more and more breadline.

    As much as I would like to be outside the EU - it's nothing like the fear I have of this hollowed out economy with its bloated asset prices and private debt and climate change. Not worried if my imputed rent, illusory asset wealth and GDP go down, whatever - poorer countries do a better job than us anyway with no need for foodbanks sanctioning stigmatising etc etc.

    However it does seem a compromise no one wants not least compelling us to be subject to the technocrats I despise for nothing but a Pyrrhic leave. General Pyrrhus salutes you Mrs May.

    There seems no reason to support this deal than because of a referendum 2 years ago. Like staying married to someone for the kids when you have none. This deal would be a lifetme with no offspring only pain.

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  2. Yes, the great panto of politics. You see this kind of thing a lot in politics – perhaps there's a name for it. Certain Big Things get cemented into the operating assumptions of being mainstream. In my country – Australia – and I'm guessing others – governments often go to elections with irresponsible fiscal promises. The Opposition typically calls them out on this for a while in general terms, but as the election draws closer, of course the Opposition are seeking to make the most attractive promises they can whilst staying within the 'fiscal envelope' (as we say these days!) set by the government.

    So both parties become complicit in a delusion. Both parties refuse to show 'leadership' (as we say these days). Meanwhile the press take their cues as to what to cover and what's within the bounds of reasonableness, from the two major parties. And there you have it. An election which should be talking about how to rein in the budget being about other stuff. (I'm thinking of the pre financial crisis election debates of 2004 and 2007 in Australia, so this is pre-austerity – not that we really had austerity)

    Something similar is happening here. There's a 'red line' (as we say these days) provided by the referendum – which says 'Brexit'. So the parties thrash around too scared to say "actually that decision was badly framed and silly and could only be well made if we set up the debate differently".

    And so the parties practice media management 101 all the way to its dismal outcome. Very sad.

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  3. It's not often that i agree wih every word of a blog post but your reasoning is impeccable.

    The only thing missing is what you think the question should be on refII.
    Arguably, there is a mandate for the question to be Deal or no Deal.
    I think that any legitimate poll needs to at least include both of these options.

    How about a "keep negotiating" option?

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  4. Agree entirely and have fervently argued the same. I would only add that you let the Labour leadership off the hook somewhat. Corbyn was calling for the evocation of Article 50 on the day of the result. He was being disingenuous when he claimed to have both supported and voted Remain - his (long) history from his time as an acolyte of Tony Benn has been anti-EU.

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  5. Absolutely spot on, Simon. Waiting for politicians - especially Labour ones - to make this assessment in a pro-active and positive way is rather like watching paint dry. But an interesting few weeks ahead.

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  6. Do you agree with the EU's current treatment of Italy? Why would you want to stay in a union that treats its members so badly?

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  7. I entirely agree. But please don't say "we narrowly voted to Leave". I didn't - as a UK expat in Europe, one of the people most affected, I wasn't allowed to vote either way. And this is democracy?

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  8. Any comment on the result of any deal is pure speculation as no one knows the future.

    In my view a " no deal" scenario would be disruptive but this is a marathon not a sprint and one has to take a view over 40 years not 40 days. The "no deal" soothsayers are just playing project fear. We do not know what th result of no deal would be over 40 years.

    Also your implicit call for parliament to effectively call a second referendum, or even call it off is playing Russian Roulette with democracy. If such a referendum was close and it effectively overturned the first what do you think many would say? It would not be polite.

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  9. Persuasive as always. I do wonder, given her position, why May is not more honest about the implications of the Brexit vote (the only concession to an honest position she makes is in her continued refusal to say that Brexit was a good idea). My own view is that someone needs to take on the oft-repeated idea that people did not vote to become poorer, since that is precisely what people voted for, whether or not they wished for it (a smoker does not smoke in order seriously to damage his health, but that is the predictable outcome of his smoking; likewise people may not have voted for Brexit with the intention of making themselves poorer, but that was the predictable outcome of their vote).

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  10. Economically sound but politically blind. The facts were there during the referendum but the majority chose ideology/lies over facts. It may very well do so again-and then what?

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