Will the Conservative party ever recover from Brexit?

I am sure many sensible Conservative MPs and supporters hope that once we leave the EU, the nightmare of Brexit will pass, and they can continue to be the natural party of UK government. They know that Brexit is an advanced form of irrationality, but they hope that once the Brexiters have achieved their goal the fever will pass and it will be business as usual. In particular they can elect as their leader someone who has both an appeal to voters and an ability to take sensible decisions, neither of which Theresa May or her Brexiter usurpers is capable of.

This Brexit syndrome, which infects nearly half the Conservative party MPs and most of its membership, is a visceral dislike of the EU in all its manifestations. I am not talking about why most voters chose to leave, which was an unfortunately all too familiar reaction to a public campaign that has blamed immigrants for every grievance and fear they have. Brexit syndrome is instead manifested in a belief that you must leave a customs union with your overwhelmingly biggest trading partner so you can seek inferior trade agreements with other more distant countries. The only explanation for that belief is a deep irrational dislike of all things EU.

For those Conservative MPs not subject to Brexit syndrome I have bad news. Leaving the EU as planned is not a cure. The nightmare of Brexit will not pass. Whatever deal the UK eventually concludes with the EU, it will be unacceptable to the Brexiters. Only a clean break with all things EU will satisfy them.

Many people still write as if the nature of the final deal is still wide open, ranging from Canada to Norway, and they are encouraged to do so by the government and to an extent by the EU. But this, like the government’s position, seems to me to ignore the political imperatives. One of these imperatives is the agreement the UK has already signed, which precludes a hard Irish border. There is no good reason why the EU will go back on that agreement. Yes of course the EU is quite capable of ignoring the wishes of one of its smaller members if that conflicts with the wishes of the majority, but that is not true in this case. The Irish border problem forces a deal that involves the UK staying in the customs union and at least parts of the single market, and that is the type of deal that most of the actors within the EU would also like.

It is only a matter of time before this reality becomes clear to Conservative party members, most of whom are infected with Brexit syndrome. That will be the point at which Brexit MPs will feel confident enough to challenge for the leadership. They will have a powerful song to sing: how we are still obeying rules set in Brussels, but without any say in what those rules are. No sovereignty of the simplistic kind that appeals to nationalists, and no ability to pursue all those wonderful trade deals that Mr. Fox was going to obtain for British business. If only politicians had had the courage to go for a clean Brexit, and had not been dissuaded from doing so by treacherous civil servants. There are plenty more verses with a similar theme.

If you keep wanting something that is so impossibly bad for the UK that no sane leader would ever enact it, then you can go on agitating for it forever. The Brexiters will not stop when we leave the EU, precisely because the terms under which we are almost certain to leave will give them even more cause to complain. Ironically leaving the EU makes the Brexit problem worse rather than better for the Conservative party.

There is no quick solution to this problem. If a Brexiter was able to capture the Conservative party leadership, they could only get their clean Brexit through parliament by achieving a Conservative landslide: that was what May hoped for and failed to get. As long as the Conservative party is in government, the chaos and fantasy politics that the UK has suffered since June 2016 will stay with us. Even if a Brexiter did not replace May, the party would be paralysed by Brexit syndrome to a degree that would make John Major’s difficulties seem trivial.

It seems to me that there is only one way the Conservative party can go. There is no cure for Brexit syndrome, so those that have it must become irrelevant. That requires a long period in opposition, like the period Labour suffered from 1979 to 1997. A period long enough for the current Brexit membership, plus defectors from UKIP, to be replaced by more sensible people who can see that a party that suffers from Brexit syndrome is a party that can never govern effectively, and which is always in danger of doing the country great harm. 

It says a lot about so much of our political commentariat that so many words have been written in horror about how Labour is ‘suffering’ from an influx of new idealistic members who just want to make things better, while so few have been written about the very real danger caused by a moribund Conservative membership that just wants to break off all relations with our nearest neighbours.

Has Ireland scuppered Brexit?

Should I be shocked that no quantitative Brexit impact assessments were commissioned by David Davis? Is it surprising that there has been no cabinet discussion of the final trade deal? Not if you accept the parallel I draw here between Brexit and Trump. Brexit is an expression of ideology or feeling, an act of faith. An impact assessment is therefore beside the point, and just dangerous to the project. I think you only get outraged by this if you haven’t really accepted what the true nature of Brexit is, and how it came to pass. By this I do not mean why people voted for Brexit, but why a large section of the UK press and Conservative party made it their primary political project. The true nature of Brexit means that the normal rules of politics do not apply, and could not apply.

I was surprised about Ireland. I did not realise until September [1] what it would require from Theresa May. Back in March as Article 50 was triggered I thought that would inevitably mean an open ended transition period (despite lots of talk about 2 years), and so the final destination of Brexit would not be decided until after the next election. If the Conservatives lost that, Corbyn would satisfy himself that the EU would not hinder his economic programme, and we would end up staying in the Customs Union and Single Market (CU&SM). [2]

But will the question of the Irish border change that? Those that constructed the Article 50 process understood that any country leaving the EU would be desperate for a deal, which is why there is a two stage process. The two stage structure maximises the chance that the EU will get the deal they want on the first stage issues. In terms of citizen’s rights and the leaving bill that has proved correct.

What the EU realised long before the UK was that Brexit involved a unique problem. The UK’s only land border with the remaining EU could not be allowed to become a hard border without putting the Good Friday agreement at serious risk. Yet the EU requires a hard border, and the WTO would insist that the UK recognised that (again Brexiter talk of not building one is just nonsense). Ireland’s most important priority was that there should be no hard border, and as a result the rest of the EU agreed to make that part of the first stage.

Once again, this shows you the nature of the Brexit project. Any Brexiter interested in reality would have realised that Brexit put the Good Friday agreement at serious risk, any would have at least thought about the problem. But Brexit is not a reality based project, and so they did not. We should be thankful that the Irish government made this a priority.

In simple terms there are therefore only two possibilities for Brexit that avoid a hard border. Either the UK stays in the Customs Union and Single Market (CU&SM), or just Northern Ireland does and there is a sea border between two parts of the UK. (What 'alignment' means is what the EU chooses it to mean.) The UK government still wants to pretend that other possibilities exist: something technological or that the stage 2 agreement they come to will not require a hard border. But the Irish government quite rightly insists that if neither of those two happen, the UK government recognise that at least part of the UK will stay in the CU&SM. That in the agreement the UK almost signed a few days ago.

It was scuppered because the DUP quite rightly wanted to know which of these two arrangements the UK government had in mind. Above all else, the DUP do not want a sea border between Northern Ireland and the rest of the UK, because they see that as making unification much more likely. I suspect the fact that whatever May said in her last minute phone call was not enough to satisfy the DUP means they will be prepared to bring down the government unless they get some sort of public guarantee that there will be no sea border.

In which case, May will finally have to call the Brexiters' bluff. Maybe she can convince them to keep faith in their rhetoric that there is a technological fix (there isn’t) or there will be a final trade agreement that deals with the problem (there won’t be) and let her commit to no sea border in the eventuality that neither happen. If she cannot, their only other option is the nuclear one of trying to force May out. As the latest poll I have seen suggests the Conservative party membership’s favoured candidate is Someone Else, that looks like a risky move. But if they take that risk, Ireland will indeed have made a difference.

But if they do not, and May does sign up to stage 2 on the basis of UK membership of CU&SM as the fallback position, does that change anything? You would think it should, but because it is the fallback position the UK government will start negotiations over a transition arrangement and a final trade agreement. After we officially leave May will then resign and the Conservatives will set about the task of trying to win the next election. Trade negotiations with the EU will be put on the back burner. We end up at in exactly the same place as I expected we would be back in March.

The only difference is that it will be blindingly obvious that this is all for show. Having signed up to staying in CU&SM as a default, the EU has zero interest in concluding any other kind of agreement, particularly as it will not safeguard the border. It will just be a matter of time before the arrangement whereby we stay in the CU&SM is formalised. But will any British politician that matters have the courage to tell the British people the truth?

The truth is that all their vote has achieved is that they will now have no say in the rules the UK has to follow. Instead whoever wins the next election will come back with some ‘deal’ over freedom of movement which few still care about because no one is coming to the failing UK economy. And of course the Brexiters will cry betrayal because we are, as far as they are concerned, still in the EU, and we will be back to where we were before the referendum, except with no say in the rules we have to obey.

I would really like to think that this can be avoided. Perhaps before we formally leave the EU, enough Conservative MPs (and despite all the noise from some Remainers about Corbyn, it is Conservative MPs who matter) will put country before party and call for a second referendum. Ireland increases that possibility, but from the evidence so far I do not see it happening.

[1] As someone told me, being ahead of the UK MSM on this is a very low bar.

[2] For all those who insist that the Labour leadership wants to leave, you have to realise two things. First, by the time Corbyn takes over we will have left, and he has no interest in pursuing the sunny uplands of trade deals with countries like the US. Second, there is nothing in the CU&SM that really hinders his immediate economic programme. So why leave the CU&SM just after he gets elected? It would profoundly alienate those who voted for him and damage the economy on his watch.  

The Brexit Revolution and its source of power

What we are seeing in the UK right now is quite incredible. The referendum vote itself was quite something: people voting to make themselves poorer than they might otherwise be for some ill-defined notion of control or because of myths about immigration. But what has happened subsequently is even more extraordinary.

With a referendum vote so close, it would have been both natural and statesmanlike for the government to go with the majority in the most unifying way possible. The obvious way forward would have been to arrange a open-ended transition where we were out of the EU but still in the Customs Union and Single Market, leaving the government to see what it might be possible to negotiate as an alternative. In other words the policy the Labour party are currently suggesting. From the polls that seems to be what the majority of people want. Little would change for business, so this way forward from the vote would have caused only minor immediate economic damage.

Instead of this, it seems that the leaders of the Leave campaign have not just won that vote, but have effectively taken over the government, dictating not just the government's preferred terms and timetable of leaving but also taking away large chunks of power from parliament at the same time, Henry VIII style. A few brave Conservative MPs plea for parliament to be given just a minimal say in some of the most profound changes in the UK in decades, and their faces are put on the front page of the main ‘serious’ right wing newspaper under the headline ‘mutineers’.

How can this be happening in a country known for its pragmatism? It seems more like the revolution that happened 100 years ago, where the revolution’s leaders declare any doubt or deviation from the path they decide as treachery. Any suggestion that it might be to our advantage to conduct negotiations to Leave in a slightly different way is declared as nothing more than a plot to overturn the Revolution. At one stage business leaders had to pretend Brexit was going to be wonderful before they were allowed to talk to ministers. Anyone who dares to point out bits of reality that might get in the way of the one true path is a saboteur that really wants to overturn the will of the people. This is a regime in a democracy that seems at times more like a dictatorship.

How can this be happening? How can so few wield so much power? Why does the Prime Minister, who was a Remainer, now dance to the tune of the revolution's leaders? A referendum in which 52% of voters chose just to leave the EU, nothing more, cannot confer this kind of power. Even the right wing press are not that powerful on their own. The answer I think lies in a group of perhaps little more than 100,000 people, two thirds men and around half of whom are over 65. They are the membership of the Conservative party.

These members are far more anti-European than the party’s MPs or its current Prime Minister. The threat the Brexiters have, which Remain MPs fear and which has governed so many of the Prime Minister’s actions, is that they will force a leadership election. In any election a Brexiter is almost certain to be on the ballot that goes to party members, and given that electorate (and the influence the Tory press have on them) a Brexiter will almost certainly win. They will then go for a clean break from the EU, or what is commonly known as No Deal.

What else could explain a Prime Minister putting forward legislation involving a fixed date to leave that might make her own life more difficult, just because it was suggested (one might guess) by the editor of a right wing tabloid at his birthday party? Why else does she tolerate almost open insubordination by her foreign secretary that would in any other situation have led to him losing his job. Why is she so concerned about keeping her Brexiter ministers happy and as a result ignores the rest of her MPs and by now the majority of the country? She has focused all her energy on preventing a rebellion from her right and as a result has completely neglected the discussions with the EU.

Although the influence of Conservative party members is talked about a bit, I still find the contrast with Labour just a year or two ago extraordinary. Then all that political commentators could talk about was the malign influence that half a million Labour party members were having on the opposition party. Yet here we have a much smaller group of Conservative party members effectively holding the government, parliament, the Prime Minister and therefore the country hostage, during the most important period of UK politics in a generation. Will our political commentariat that are not part of this revolution please wake up.   

What ignoring Ireland tells you about our governing elite

The hapless progress of the Brexit negotiations continues. I do not mean the almost childish nonsense of May’s new wheeze. Instead I’m talking about the Irish border. It seems, if you read most of the UK press, that out of the blue this new obstacle has been sprung on the UK at the last minute. Some of the press talk about surprise, while the Guardian talks about it ‘emerging’. Some have even decided to cover up their ignorance by inventing conspiracy theories. With political commentary in the UK largely reflecting the beliefs of the UK side, then this also means that this surprise extends to our negotiating team.

In reality there is nothing to be surprised about. The Irish border was one of the three issues to be dealt with in the first stage. As the UK government has consistently said they are leaving the Customs Union and Single Market (CU/SM), and have failed to convince even themselves that they can invent a new magically invisible border that can police countries that have different customs and regulatory regimes, it was only natural that an EU paper would suggest that Northern Ireland stay in the CU/SM to avoid a hard land border.

So why did the UK, and its media, seem to forget about this third issue, when even I had flagged it up as the critical issue a couple of months ago. What I think happened is that the Brexit side convinced itself that, because a hard border would only arise as a result of different trade regimes, then the border was really a trade issue and so should be in stage 2. In other words the EU had simply made a mistake in putting it in Stage 1, and would therefore quietly forget about it.

That reasoning was part wishful thinking and part delusion. Wishful thinking because, as I wrote back in September, it is a problem with no obvious solution that Brexiteers would accept. And delusion because the UK side continues to imagine that the EU is governed by Franco/German interests, and why would these countries be concerned about what happens in Ireland. What it completely failed to understand, and what the EU had understood, was the importance of the border issue to the people on both sides of it. It was an important reason why Northern Ireland voted to Remain.

But I wonder if there is something deeper behind the UK attitude. For too many people in England, the ‘troubles’ in Ireland were a quarrel in a strange country between people of whom we know little, to paraphrase Neville Chamberlain. As a result, there is little comprehension of why a hard border should be such a big deal. You would think memories of bombs going off in England’s cities would change that, but I’m not sure it did, anymore than more recent terrorism has led to a better understanding among English people of tensions within Islam. In contrast, most people in Northern Ireland would move heaven and earth not to go back to those times.

Even while all this might be true, it is no excuse for the same attitudes to be held by our political leaders. John Major knew better than this, as did Tony Blair. Only the arrogant disdain for different realities displayed by Brexiteers can explain a mistake of the magnitude of ignoring the border issue. I suspect any politician that lied the way the Brexiteers lie, or lived in the alternative reality they appear to live in, would not have survived long in UK politics two decades ago, whereas now it has become a criteria for holding high office.

At the end of the day there is little difference between Brexiteers who tell people that new trade deals with countries outside the EU can make up for trade lost with the EU, and Republicans who say scrapping Obamacare will extend coverage and their tax bill reduces taxes for most people. In both countries when the ability to gain office is determined by how well you can fire up or charm a base, because a large part of the media will then assure you have a good chance of winning elections, is it any wonder the political system fails to select for competence, understanding or respect for wisdom and knowledge.

There is a simple solution to the problem of the border. It is for the UK side to commit to only negotiate new trade arrangements that would be consistent with a soft border. [1] That would mean staying in the Customs Union and parts of the Single Market, but it could leave open the possibility of negotiating over the remaining parts of the Single market and perhaps free movement. Anyone who tells you that this concession by the UK side does not respect the referendum result is once again lying: Leave won precisely because they ruled no arrangement out. Any red lines erected after the referendum carry as much weight as the Prime Minister currently has authority.

Already we have many people in the UK saying why should we adapt our policies to keep the people of Ireland happy. This is the Chamberlain type attitude that I talked about earlier. The Irish border is at least as much our creation and our concern as it is of anyone else. Maintaining peace within the UK should be any government’s top priority. The fact that it has failed to make it onto Brexiteers to do list tells you as much about their outlook and competence as you need to know.

[1] Whether the UK will be forced to take this position I do not know. I stand by what I wrote recently that there will almost certainly be a deal, one element of which will be a transition where we stay in the EU/SM. Indeed I understated my case there. First, there can be no such thing as no deal. As Davis has explained, there are things that have to be sorted to keep planes flying and the like. He has described this as “some sort of basic deal without the bits we really want”. What that remark shows is that the ‘no deal is better than a bad deal’ line is simply a bluff and he knows it. The bad deal is no deal. And finally there is parliament. I know it has been pathetic until now, but that does not mean it would sign off on the worst possible kind of Brexit. But what the border issue will most likely show is that it is unlikely we will get to a deal involving transition without cabinet resignations.

The Brexiteers know the war is far from over

It is easy to view the letter from 72 MPs criticising the BBC for being biased against Brexit as just another example of the government putting pressure on the news organisation. But if that is all it was, it is odd to have another conservative MP, Nicky Morgan, describe the letter as chilling.

I would argue that this letter as another example of the fear I talked about in this post. Fear by Brexiteers that their little English coup may still unravel. Their reasons for fearing this are real enough. The original Leave vote was based on lies and on obscuring the truth. These lies are perpetuated by those who now feel obliged to advance the Leave cause. I talked in my last post about how Tim Harford had recently noted that tobacco firms had managed to delay by decades the response to the first studies in the early 1950s that smoking was harmful. What chance, then, did economists have before the referendum? But the lies told and truths dismissed in the referendum are going to start to unravel as soon as negotiations begin.

One of the main initial topics of those negotiations will be how much the UK will have to pay the EU. Many of those who voted Leave expected it to be the other way around. For this reason, the UK would like everything to be discussed together, so that this bad news can be hidden. But this is not the way the EU likes to do things, and the negotiations are going to be done the way the EU dictates. Remember they hold all the cards, because it is the UK who suffers most with no deal.

This bad news could be avoided if the UK walked away, which is one reason why the option of no deal is beginning to sound attractive to the Brexiteers. But the British people do not want this. Here is a recent poll that contrasts the popularity of a EEA/Norway option with no deal.

What is described as ‘Hard Brexit’ here is really ‘No Deal Brexit’. The poll says that as many Conservative voters will be as unhappy with no deal as they would be with the EEA option. While the full horror of no deal for the UK economy will take years to manifest itself in lower GDP, the consequences in terms of firms leaving will be immediate. David Davis has not modeled the impact of no deal because he already knows the results would be terrible. [1]

If this is what people feel when confronted with the truth, the only option left to the Brexiteers is to try and hide the truth. Little things are all they ask for from the BBC. Like not mentioning Brexit when talking about rising inflation, because to do so would be ‘controversial’. To play down news of firms planning to leave the UK, because that was the news last week. To not present the view of the EU in negotiations, because this is like a battle and the BBC must be patriotic. The Brexiteers hope that with these ‘small modifications’ to broadcast news, and the pure propaganda from much of the press, they can get away with a deal that is not in the UK’s interests.

If those pursuing this agenda do not think the war is over, it would be foolish for those opposed to leaving the EU to believe it ended with the triggering of Article 50. The Brexiteers fear that if there is no deal, MPs in parliament will at last find their voice to say no. Those opposed to leaving the EU must do all they can to encourage that possibility.

[1] Among political commentators, all predictions by economists are assumed to have equal weight, so even Janan Ganesh writing in the FT can say “politicians are allowed to question [economists] record of clairvoyance”. That is not true, because economists’ predictions are not all alike, as I have explained many times. One of his favourite politicians, George Osborne, has said that Brexit is the “biggest single act of protectionism in history”. History as well as economics tells us that protectionism of this kind is invariably harmful.

Will May face down those who want no deal?

In which I find a silver lining around the current weak state of the Labour party

The negotiations between the UK and EU that will take place over the next two years involve two components. The first will be about non-trade issues, such as how much does the UK pay to the EU to cover pensions etc, and agreeing the rights of EU citizens currently in the UK and vice versa. The second will be the terms of the transitional arrangements for trade while a full trade agreement is negotiated.

The obvious transitional arrangement is for the UK to stay in the EEA, which means staying in the Single Market and customs union while a new trade agreement can be negotiated. It would also mean on the face of it accepting free movement and European Court judgements.

What will be difficult for May is continuing free movement, accepting European Court judgements and paying as much as the UK currently pays during the transitional period. It may be possible to fudge all of those, such that May can appear not to cross her red lines in accepting a transitional arrangement. But to agree to this, the EU will want something else that allows them to say the transitional arrangement is clearly worse than staying a member. That may be the detail that the negotiations over a transitional arrangement are all about.

These negotiations will not be about meeting somewhere between the UK's and the EU's position. That would be a major misunderstanding. The moment the UK triggers Article 50, all the cards are in the EU’s hands, because the UK has a lot more to lose by falling out of the EU with no agreement than the EU has. And Frances Coppola is right is saying that the EU is quite capable of playing hard ball. So the negotiations are more about the UK exploring the EU's trade-offs rather than a genuine give and take.

The key criteria for the EU is that any deal has to be obviously worse than EU membership. A lot will depend on whether the EU negotiators are prepared to take the UK not having a say on the rules of the game as sufficient to indicate a worse deal compared to full membership. That will help determine how much the UK pays the EU during the transitional phase.

That is obviously the sensible way for both parties to proceed. The only uncertainty is whether the UK feels able to accept it. The problem for the hardest of Brexiteers (which includes the Mail and Sun) is that a transitional arrangement of this kind makes it very easy for the UK to change its mind. That could easily happen if the prospective trade agreement makes firms start to leave the UK and public sentiment changes because the promised land was not as advertised. That has been their nightmare all along, which has led the Mail to call judges enemies of the people. Based on what has happened so far, we could expect these Brexiteers to start turning their guns not on the EU, but on May herself, if it looks like the deal will go the way I suggest.

If this happens, how will May react? You can look at what has happened so far as a guide. The trouble with doing that is all the ‘bad deal is worse than no deal’ stuff may just be Econ 101 game theory: make it appear as if you might walk away to get a better deal. The reaction of the press to the NIC changes in the Budget were an obvious warning shot from them towards May. Her climbdown makes it appear as if the press are calling the shots, but that may simply be a sweetener for the major let down that is yet to come.

So recent events provide no clear guide as to how May will react if the hard Brexiteers turn on her. It all comes down to a question of character. In this respect, a discussion by David Runciman in LRB of Rosa Prince’s biography of May is very interesting. He writes

“May didn’t do negotiation; in the words of Eric Pickles, one of her cabinet colleagues, she is not a ‘transactional’ politician. She takes a position and then she sticks to it, seeing it as a matter of principle that she delivers on what she has committed to. This doesn’t mean that she is a conviction politician. Often she arrives at a position reluctantly after much agonising – as home secretary she became notorious for being painfully slow to decide on matters over which she had personal authority. Many of the positions she adopts are ones she has inherited, seeing no option but to make good on other people’s promises. This has frequently brought her into conflict with the politicians from whom she inherited these commitments. By making fixed what her colleagues regarded as lines in the sand, she drove some of them mad.”

I have written before that it was unfortunate that our post-referendum Prime Minister should be the minister who had tried and failed for six years to reduce immigration. Runciman's description above also helps explain why she did not do the two things David Cameron would have done if he had remained leader: given the close vote seeking the softest Brexit possible, and before doing that going back to the EU to see if they were now prepared to be more flexible on free movement. But it does not really tell us how she will play the next two years.

I can see one hopeful element that could allow May to see off those pushing for no deal, and that is the hopeless position of the Labour party. If Labour was strong, the last thing she would want was a 2020 election dominated by internal Conservative fights over her ‘Brexit sell out’ and the press against her. That might have forced her to appease the ‘no deal’ Brexiteers. Luckily in this respect the official opposition is the last thing she has to worry about during these negotiations.