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.

If the UK and EU can do a deal is everything now fine?

In case you hadn’t seen it, here is my article that was published in the Guardian yesterday. It was my luck that on the evening of publication, and after it appeared that Johnson had put a hopeless deal to the EU, his talks with Varadkar suddenly sounded positive. But is everything as it seems?

The obvious point is that one set of bilateral talks do not make a deal. Both parties had reason to sound positive. The EU does not want to be blamed for obstructing a deal, and Johnson wants grounds for going into the forthcoming election with the prospect of a deal. Cummings rhetoric is quite consistent with that, as they want to make No Dealers believe that will be what eventually happens and they also want Dealers (not least MPs in his party and cabinet) to think a deal is possible. He also wants to have grounds for boycotting any Public Vote in the unlikely event parliament tries to vote for that before an election.

But let’s suppose there is substance behind what happened yesterday. What would that substance have to be? It is highly likely it avoids any kind of hard border on the island of Ireland, which in turn means a completely different set of trading arrangements in Northern Ireland compared to the rest of the UK. Or in other words, all customs checks shift to between Northern Ireland and the rest of the UK.

I suggested around the time Johnson became PM that this would be an option he might take. The almost universal reaction to my suggestion was that it would not get past parliament, because the DUP and other MPs would vote against. But of course Johnson wants a General Election. He is a Prime Minister with little power at present. So he might hope that if he got a larger majority than May had after 2017, and with the help of Labour leavers, he could get such a deal through.

Speculating about that when we don’t know the details of the deal are pointless. The key issue I want to address is whether such a deal would make my Guardian article look stupid. As it talked about no deal, of course. But in substantive terms, you could write something similar about a Johnson deal that solves the Irish border problem in this way. Obviously concerns about peace in Northern Ireland disappear. Whether Scotland will get independence is also more problematic. But the UK would still have to spend a lot of political time negotiating a free trade deal with the EU, and that would be more difficult than it would have been with May’s deal.

The reason is that currently Johnson’s proposals for a free trade deal abandon regulatory alignment. They want to reduce workers rights and consumer protection and environmental protections, and that will mean a far less extensive trade deal with the EU than under the backstop. That in turn means that the long term economic costs of any deal will still be large, although obviously not so large and we avoid the short term disruption.**

But the core of the article, that this is going to be something imposed on a majority by a minority, still applies. And it remains true that only a few thousand people will benefit for a deal of this kind, and everyone else will lose. So in that sense the core message of the article applies whether Johnson gets a deal or not.

** Postscript (12/10/19) Chris Giles crunches the number here 

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 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.     

Conservative zugzwang

Would really like to get back to macro, as some interesting things have been happening, but there are just too many compelling issues following GE2017 to talk about first.

The GE2017 result left the Conservatives in a position that chess players call a zugswang, which means whatever you do makes your position worse. They needed to turn to the DUP to get an overall majority, which leaves them with a secure hold on power. But that move in itself will lose them some popularity, kills their ‘coalition of chaos’ charge, and runs the risk of damaging Northern Ireland. The Good Friday agreement says that the sovereign should exercise power with “rigorous impartiality”. It will be up to the DUP to persuade Sinn Fein that all they are getting from the government is extra money for Northern Ireland. So to hold on to power, the Conservatives put the Northern Ireland peace process in jeopardy and give a gift to Labour.

The Conservatives will not fight another election with May as their leader. Their MPs, whatever they may say in public, are angry at her incompetence in running a campaign, putting together a manifesto, responding to the press, and almost everything else. The longer she stays in post, the longer the memory of that dismal campaign lingers and the more the brand gets tainted. However an election to replace her will reopen the split over Brexit which could tear the party apart.

Here is a worst case scenario. After the referendum, the Remain half of the party were in shock, and so they allowed May to define what Brexit meant. She did it in such a way as to ensure Hard Brexit, which will inflict considerable damage on the economy. Remain MPs felt they had no way of resisting that (few tried), but as Ruth Davidson made clear in any election in the near future they will be less passive, trying to elect one of their own who will perhaps keep the UK in the EEA (a Norway type deal), and certainly stay in the customs union. Leave MPs will do everything they can to stop that, and it is difficult to see this time their candidate mysteriously withdrawing before the membership are consulted. The Leave membership, with the help of the press, will choose the Leave candidate. Ruth Davidson might then declare independence from the main party.

It could be a terrible mess, spread out over time. It is a contest which will allow, with delicious irony, Corbyn to describe the Conservatives as too hopelessly divided to govern. Furthermore if they hold the contest while the EU negotiations are going on, Labour will justly accuse them of wasting precious time. But if they leave any contest until after the A50 negotiations have ended, the less time a new leader has to improve the Conservative brand, particularly when their majority makes them look powerless and ineffectual. It is a zugzwang.

The same applies to how they turn their fortunes around. The obvious move is to abandon austerity. The agreement with the DUP and other factors mean that the existing deficit targets will not be hit, so turning the deficit into surplus appears a distant prospect. But ending austerity in the mind of the voter means spending more on the NHS and schools. It should also mean reversing the cuts to in work benefits. However to, for example, match Labour’s spending commitments with some attractive alternatives of their own without raising taxes will blow the deficit. That would destroy the ‘we are competent because we cut the deficit’ line so carefully built up over seven years. To raise taxes will damage their core vote. Once again, a zugzwang.

You can add immigration. Fail to meet their target once again, and their credibility on this issue will be destroyed, but try meeting it and the economy is in serious trouble. Of course none of this means that the Conservative are bound to lose the next election. As a Conservative Prime minister once said, events dear boy, events. But for the party it means the liklihood that things will get worse before possibly getting better.