Is this good for Johnson, whether he wins or loses?

I have no idea whether Johnson will get his deal through on Saturday. As the broadcast media is obsessed by headcounts I will leave it to them. What I will say is that the idea that MPs will be taking a decision that has a profound influence on everyone in this country (in which will do such serious economic and political damage to the UK) on the basis of only two days of scrutiny with no assessment of its impact is just absurd, and typifies everything that is wrong about Brexit.

Who knows why Johnson changed strategy during or before his meeting with Varadkar. Maybe it was fears about security in Northern Ireland after No Deal created a border. Maybe he always had the idea in mind of going back to the EU’s original plan to keep Northern Ireland in the Customs Union and Single Market. It seemed to be the obvious thing for Johnson to try, as I suggested in August. Maybe the suggestion came from Varadkar. But whatever it was, there is a huge irony in where we are now.

What Johnson has agreed to is basically the first deal the EU proposed. It is a deal that May said no UK Prime Minister could accept, and the deal condemned by Johnson a year ago. The backstop has now become the deal. No wonder Varadkar looked so pleased after his meeting with Johnson, and no wonder European leaders look so pleased when the deal was finally agreed. Of course the EU could agree to something they had already proposed.

Why has the ERG apparently agreed to this, when they said they could not possibly support it first time round? Unfortunately (or perhaps not) I cannot put myself in ERG shoes and answer that question. What does annoy me is when the BBC’s political editor praises Johnson for having got the EU to drop the backstop, when in reality he has forgotten all ideas of alternative arrangements and made the original backstop the deal. Indeed the BBC in lavishing praise on Johnson, and failing to point out his earlier rejection of almost the same proposal, is doing its bit to get the deal over the line on Saturday.

If Johnson fails on Saturday to get parliament to vote for his deal, he has got himself a very strong Brexit line to take into any General Election. Winning a General Election has always been Johnson’s prime goal. Before that walk among the trees with Leo Varadkar, Johnson’s election strategy had been to formally argue that he could get a deal (to keep Tory MPs on board), but hope a sufficient number of Farage inclined Leavers took this to mean he would leave with no deal.

Johnson's new deal is also a better election strategy. Few English voters care about Northern Ireland, regrettable though that is, and so they will feel no qualms about giving Johnson enough MPs to drop his DUP alliance. For Leavers, the idea of voting to get Brexit over the line will seem irresistible. Of course if Johnson does win and gets his deal through parliament Brexit will continue in the form of negotiating an FTA, but we will be out of the EU.

The risk that Johnson always had in actually finalising but not passing a deal is that Farage would convince enough voters his deal was not true Brexit and that they should therefore vote for him. However I suspect that will be very hard for Farage with this deal. What part of the deal can Farage use to convince Leavers it is not a real Brexit? As I noted above, talking about the EU annexing Northern Ireland is unlikely to impress most voters.

Does it make sense to hold a People’s Vote (PV) on Johnson’s deal vs Remain if Parliament can find the votes for that? Here the calculation is very simple. Unlike the PVs I talked about in earlier posts, which would have almost certainly led to a Johnson boycott, it will be much harder for him to boycott a vote on his own deal. However much he says that a second vote betrays the first, running away from a vote on your own deal just looks bad. So I suspect we would get a proper PV, even if Johnson resists it in many ways beforehand.

The main reason he will eventually agree to it is that he thinks he can win. He may well be right. Remainers should not put too much faith in the small majority in polls of Leave versus Remain. It could well be 2016 all over again.

Alasdair Smith goes through some of the lines that Johnson/Cummings will take. It is classic disinformation of the type that some of us can still remember from 2016. They will claim that the deal ensures that Britain will be free of EU laws and regulations, and now free to strike trade deals of our own. In reality this is true only if the UK does not sign a trade deal with the EU. Trade deals are all about harmonisation of tariffs and regulations, and there is no way the EU is going to harmonise on anything other than their own.

Nor is abandoning a level playing field made real until it comes to negotiating a FTA with the EU. The EU will certainly insist on one if there is tariff alignment, because tariffs are the EUs weapon against a country undercutting the EU by lowering standards. The reality has always been that complete sovereignty, in the sense of having nothing to do with EU laws and regulations, is only true if the UK is prepared to avoid an EU FTA completely. Indeed that possibility remains open to Johnson with this deal. If he does not get any FTA's this deal will morph into No Deal, except that Northern Ireland is safe.  

The alternative to a PV is an election, which parliament is sure to get. If Labour forms a government after that election then it is almost certain Brexit is dead. The Tories will vote against a soft Brexit as not a ‘real’ Brexit, and Remainers will vote for Remain. So the critical variable is the probability of that election outcome. I suspect most people would put the probability of a PV win for Remain as higher than Labour winning the election, simply because in the latter the Remain vote is split by the Liberal Democrats.

If Johnson does get his deal through parliament, or wins a PV, he will enjoy at least a week of media adulation that will be unbearable for Remainers. I had wondered if there might be a sting in the tail for him. With Brexit out of the way, he will have lost his main weapon against his opponents in a General Election. He may suffer the fate of his idol Churchill, and (in leavers eyes) win the war only to lose the peace.

However I can think of countless reasons why winning on Saturday will hand Johnson the election on a plate. There is the adulation from Leavers and the media of course. Remainers will also not quickly forget, and they will be looking for someone to blame, and many will blame Corbyn. That feeling may be intensified if it turns out, as it may well do, that it was Labour MPs who were critical in getting Parliament to approve the deal on Saturady. In short, whether he wins or loses, Johnson is set pretty for the General Election.

Brexit Endgame: second stage (which is unlikely to end with no deal)

We have entered the stage where everyone seems to be worrying about a No Deal Brexit. It was inevitable that the EU would use this as a threat - that is the whole point of the A50 process. Rather less obvious is that the UK would do so as well: we have master tactician David Davis - this is going to hurt us more than you so you should be very afraid - to thank for that. But to be fair, appearing irrationally stupid enough to contemplate No Deal is about the only weapon the government has in its negotiations with the EU. So both sides talk up its chances, which naturally leads everyone to panic. If you want an antidote, this post is for you, although please bear in mind that what follows is about probabilities not certainties, and you can never rule out the possibility of this government doing something really stupid.

Stage one, recounted here, was the break with the Brexiter hardliners to re-engage with the EU after six months backtracking from the December agreement. I call the second stage as what Theresa May has to do to get over the March 2019 hurdle that sees the UK exit from the EU. [1] Unfortunately, given parliament’s failure to provide any guide to the executive, our only clue about what this entails is to think about what is in Theresa May’s interests. (For May, unlike the Brexiters, there is no Brexit ideology we need to worry about, so its interests rather than ideas that matter.)

May’s primary interest is to get a deal. She does not want to go down in history (and down is where she would go if there was no deal) as the Prime Minister who led us to a disastrous No Deal Brexit. Her secondary interest is in perpetual Brexit, by which I mean negotiations that continue to keep Brexit in the news so that a majority of Conservative MPs dare not allow an election for leader and so she stays as PM. These interests tell us what May will try to do.

Perpetual Brexit requires leaving most of the negotiation of what the final relationship will be with the EU until the transition period. That might seem odd, given that this final relationship is what the Chequers document is all about, but see below. I think the EU will probably be broadly OK with that (although I do not think they should be [2]), as long as May agrees to the Irish backstop. As I argued here, May will do all she can to convince the EU that it is politically impossible for her to agree to this backstop. But the likely outcome is that she will fail, and her interests therefore require that she does accept the backstop to get a deal.

The reason why accepting a backstop is politically difficult for her is that any deal that includes it is likely to be opposed by both the DUP and Brexiters. If Labour vote against the final deal then she does not have the votes in parliament for the deal. A potential way around DUP opposition is to convince them that the UK during transition will negotiate a deal that makes the backstop redundant. (For some speculation on all this, see Peter Foster here.)That is a key reason for the Chequers document. But the DUP are as unlikely to accept her word as the EU, so they would require some form of words in any EU agreement that could be held as a commitment.

In passing, if you have a sense of deja vu about all this, you are not imagining anything. This is what happened at the final stages of the December agreement.

The problem with this approach is that anything that would make the DUP happy is likely to worry Brexiters. The more that May says the UK will stay close to Europe so the backstop will never happen, the more the ERG will talk about becoming a vassal state to the EU. It looks, at the moment, like an impossible position. But many things can happen between now and parliament’s vote on any deal with the EU, so I think it will be foolish to discount the possibility that she might just succeed. If she does, we have what I’ve called perpetual Brexit, which in reality means transition=BINO for some time if not forever. (The final deal will probably be BINO with face saving: perhaps I should call this BINOFACE.)

What threats could May invoke to get any deal through parliament. In the negotiations leading up to the deal both the UK and EU will use the threat of No Deal. However once the deal is made threatening No Deal if parliament fails to vote for it is counterproductive if she is trying to convince Brexiters, because No Deal is exactly what these idiots want. A threat of no Brexit however might inspire her Remain rebels. The same would be true of a threat of a second referendum. Perhaps the best threat for her is a general election, because neither the Brexiter nor Remain rebels would want to be responsible for a Corbyn government. The problem with any threats however is that this is not a repeated game, so there is no incentive for her to go through with her threat if it also conflicts with her interests, and people know that.

If she fails to win a vote on the final deal, I still cannot see leaving without any deal as a likely option. It just isn’t in anyone’s interests to let that happen, apart from the Brexiters. But it would be hard for the EU to agree to an extension of A50 on the hope that something turns up. This is where a referendum might become a reality (combined with an extension), as a way out of an impasse. If that happens, it will be the ultimate irony that Brexiter intransigence gives the Remainers what they want. However there is a caveat, and that is that May will propose a referendum with a two way choice between her deal and No Deal. There would be a final fight in parliament to get Remain on the ballot paper in some way.

I doubt, however, that May would want to fight a referendum where Remain is a possibility, because it is quite likely that Remain would win, particularly if Labour leads the campaign for Remain. That would make her position very difficult. As a result, she may prefer the option of a general election. A lot will depend on the polls at the time. But the bottom line is that either an election or a referendum (accompanied by an A50 extension) are more likely than crashing out with No Deal if parliament rejects the final deal. But don’t expect either side to tell you that.

The possibility of parliament voting down any deal and even the possibility of no deal, with the government stockpiling medicines etc, should focus open minds on how ridiculous our position has become. Brexit may get voted down because no one is happy with the form of Brexit we will get. Yet neither the government or parliament is able to say this is ridiculous and we should stop in now. Ostensibly this is because they feel they have to implement the ‘will of the people’. But this is so short sighted, because even the people who voted Leave will be unhappy with the Brexit they get when they see what it is. They voted, it should always be noted, for the “easiest trade deal in history” (Fox) where “we hold all the cards” (Gove). We now know better, but it seems our representative democracy is paralyzed by a vote for a fantasy.    

[1] I’m not going to stick my neck out even further than I am in this post by saying how many stages there will be, beyond saying that it is at least three. The point about calling it an endgame is that the result is clear with best play from the winning side.

[2] Some Remainers do not like me saying so, but the willingness of the EU to keep the terms on which we leave vague when it is voted on in parliament is a bit of an insult to democracy. None of their business, you may say, but they are as much part of theis negotiation as the UK. The majority of UK voters, and probably MPs, would not vote for a BINO type deal where we pay, obey but have no say, and the EU side must know that is where we are heading if a border in the Irish Sea is ruled out.

Tangled up in red

There have been three constants in the Brexit negotiations so far. The first is that the UK side makes speeches, and the EU side drafts agreements. In a way this is logical, because of the second constant, which is that the clock is always ticking. The ticking clock means the EU has nearly all the power in these negotiations. That leads to the third constant, which is that whatever is finally agreed is pretty close to the original EU drafts. It is obvious if you think about it. The EU side has the power and they also have a clear purpose and unity in achieving it. The UK side is weak and divided with no clear purpose, so the best it can do is to give speeches so UK voters get the impression the UK is influencing what is going on.

The EU published yesterday a framework for an FTA between the UK and the EU. Given the logic above that means any agreed FTA will be pretty close to this framework. It has been designed by the EU to be compatible with Theresa May’s red lines. The EU is quite clear that it would be possible to have fewer barriers to trade than this FTA framework involves, but this would require changing the UK’s red lines. These red lines include that the UK will not be part of any customs union with the EU or the Single Market for goods.

Some have interpreted this framework as implying that the EU is prepared to compromise on the hard line it took on the Irish border last week. However the document starts by noting that “negotiations can only progress as long as all commitments undertaken so far are respected in full”. That includes the first stage agreement involving the Irish border, which gave three possible options: an agreement between the UK and EU so strong that it meant no hard border was required, a technological solution, or Northern Ireland staying in the EU customs union. The second option is magical thinking. 

What the EU FTA framework shows is that the first option is not going to happen. The UK are not going to get an FTA much better than this, precisely because they are not as yet prepared to accept the obligations that go with a customs union or the Single Market. So Northern Ireland has to remain in a customs union with the EU to avoid a physical border, and there is no reason why the EU should compromise over this. 

That means that the EU's FTA document is for the remaining UK, and would involve a customs border between two parts of the UK. It seems incredible that the Conservative party could accept that, and the DUP will certainly not. As a result, the UK will carry on pretending that an alternative solution is possible, and saying that the EU should “get on with” looking at the first two options for the border. The EU has no intention of doing that, because the EU does not do magical thinking over Brexit.

This impasse could be broken by parliament if enough Conservative MPs had the nerve to vote for the UK to remain in the customs union, as Labour now wish. That would be absolutely the right thing to do, because the arguments that we should stay out of a customs union are absurd. We are likely to get much better trade deals with third countries as part of the EU than outside. It already looks like we will lose deals the EU has already made. And with Trump in the White House raising tariffs it is crazy. 

Ironically one reason Tory rebels may fail to rebel is that the delusion that there are other solutions to the Irish border problem will be broken sometime in the autumn anyway because of the second constant, the ticking clock. The clock in this case is that the EU will not agree to a transition period until the UK signs up to the legal version of the first stage agreement. So sign the UK will.

Whenever the UK government is finally forced to concede that it will have to agree to stay in a customs union with the EU the Brexiters should finally break with the government. That is the event that May has been so desperately trying to avoid, which is why she has got herself so tangled up with her red lines. If May understands what is going on, then she will spend the next few months trying to convince the Brexiters that signing the legal version of what she already agreed in December is not the commitment to the UK staying in a customs union that it in fact is. Declaring that it was something the UK could not sign was not a wise way to start that process. May is all tangled up in her red lines, and the country is all tangled up in blue. 

Postscript (09/03/18) Yesterday Donald Tusk said he was putting "Ireland first". The UK had to provide "specific and realistic" plans to avoid a hard border in Ireland before Brexit talks could make any progress. 

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 real obstacle for the Brexit negotiations

I’m not going to say anything about the content of yesterday’s speech: I talked about the likelihood of a transition arrangement that involved us staying in the Customs Union and Single Market back in March. My only uncertainty then was whether May could be pushed to a No Deal outcome, but as the government has done absolutely nothing to prepare for that outcome it now seems an empty threat. As for a two year transition period, its an insider joke. You have to have no idea about trade negotiations to imagine it could be done in that time, but as that includes most Brexiteers it serves its purpose.

Instead I want to talk about is what could be the real obstacle to the negotiations moving on to the next stage, and that is the Irish border issue. Many have noted that putting it as a first stage issue seems illogical, because what happens to the Irish border will depend on future trade arrangements between the UK and the EU. There obvious answer to why the Irish border question got put in the first stage is that the EU want to force the UK into staying in the EU’s Customs Union precisely to avoid recreating a border between the two parts of Ireland.*

The UK’s paper on this question makes it clear that there is no realistic compromise on this issue, as Ian Dunt’s discussion makes clear. There is a third way, which is for Northern Ireland to remain part of the Customs Union while the rest of the UK is not, but the DUP will have none of that. This was a major implication of the election result and May’s bribes to obtain a confidence and supply arrangement with the DUP.

A key political question will therefore be whether the Irish government and the EU will play this card that they have dealt themselves. The Irish government would like to, but I suspect (from past experience) that if they came under pressure from the rest of the EU they would back down. But the EU would also like the UK to remain in the Customs Union to resolve the border issue. Indeed everyone would be better off if the UK committed to staying in the Customs Union on a permanent basis. The only obstacle to this are the fantasies of Brexiteers, personified in the department led by Liam Fox.

I said I was not going to talk about it, but perhaps this was one reason why May gave her speech yesterday. By confirming that there could be a transitional deal (which Richard Baldwin might call a pay, obey but no say period), she hopes to dampen the resolve of the Irish government and the EU to make this a sticking point in the negotiations. Will either party think to itself 2 years will become 5, by which time we will have a different government that is likely to make the transitional permanent, or will they use their dominant position in the negotiations to try and force the UK to stay in the Customs Union to avoid creating a border (and perhaps also force the resignation of Fox and others)? At the moment we do not know, but I suspect once again Mrs. May and her cabinet have misjudged the EU side.

*I've added to this sentence and elsewhere compared to the first version of this post, which might have been construed as implying the border was being used as an instrument to achieving an economic goal. I do not think that is the case.