Labour’s Brexit stance is a tragedy for Labour but the current Brexit mess is an entirely Tory failure.

Before deciding that I’m writing about Labour when I should be writing about the disaster that is Theresa May, please read to the end.

As it becomes obvious (sort of) that there is no majority among MPs for a People’s Vote (something that has actually been clear for some time), the argument has been made that this justifies Labour’s failure to support a People’s vote and instead to seek a compromise, a softer Brexit. I have talked about the wisdom of compromise over Brexit before, but I want to make a different point here, about the stance that Labour has taken over Brexit.

In 2015 Labour lost a General Election where the strong card, perhaps the only strong card, of the Conservatives was their handling of the economy: in other words austerity. It would therefore not be ridiculous to claim that the vote was a verdict on austerity. Some Labour MPs did just that, and argued that if Labour were to win the next election it had to match George Osborne’s policy.

Thankfully on that occasion a new Labour leadership did not take their advice. There were three compelling reasons to continue to argue against austerity - indeed to argue against it much more strongly than Balls and Miliband had done. First and most importantly, it was a policy that made pretty well everyone worse off, and almost certainly led to premature deaths. Second, austerity was a policy that was very unpopular among party members. Third, there were good reasons to believe that the popularity of austerity among the public at large would fade away over time.

I think all these points apply to Brexit as well. Does the fact that 2016 was a referendum while 2015 was a General Election make a difference? Here we have to talk about the nature of the 2016 referendum result. It was not, and could never be, an unconditional instruction to leave under any circumstances. As the form of leaving was unspecified, and the conditions under which we would leave were strongly disputed (with the winning side proving to be completely wrong), it should only have been a request for the government to investigate how we might leave.

It was also won narrowly, with the winning side spending significantly more than was legal. That alone casts a question of legitimacy over the result. I find it extremely odd that some on the left say otherwise, and suggest Remainers have to prove that the additional spending made the difference, something that it is almost impossible to do. Do they realise the precedent they are setting? The right always has more money for obvious reasons, and if the only consequence of overspending by the right is a fine then that is an open invitation to try and buy elections.

Labour’s early approach to Brexit was successful in avoiding the 2017 election being a rerun of the referendum, but there were other ways of doing that. A reasonable strategy that would have achieved the same end was to accept the vote (obviously), but to reserve judgement while the government was negotiating. It would make sense to put down markers about being extremely skeptical that Brexit promises could be met and, crucially, whether a deal that was beneficial could be found.

As the outlines of the government’s deal became clear, Labour should have done what was right and what its members wanted, and campaigned for a second referendum. Once Labour had to put its cards on the table, triangulation ran out of road. The case for a vote on the final deal became unassailable once it was clear Leave promises about what the EU would do were worthless, that there were alternative ways of leaving each of which had some public support, and the public were not getting behind Brexit but were still deeply divided about whether to Leave and how to Leave. 

The Labour leadership’s arguments against doing that were of exactly the same form of those who wanted to adopt Osborne austerity after 2015: the policy that members wanted was seen as a vote loser. Even if they are right about backing a second referendum being a vote loser (and I strongly suspect they are wrong), the only argument I can see for treating austerity and Brexit differently is a belief that one matters much more than the other, and such a belief is very misguided.

What about the argument that there are not enough MPs in parliament to support a second referendum? In my view that is an entirely separate point. In general opposition parties cannot get their way, but that does not mean they stop campaigning for what they think is right. It may well be that parliament will never vote for a second referendum, and some compromise - a softer Brexit - is all that can be achieved. I hope that is not the case, but it could well be. But that does not mean a party should start off campaigning for the compromise you may be forced to reach, rather than campaigning for what is right.

Some people argue that we have to support Brexit to show solidarity with those left behind who support it. That ignores those left behind who voted against it, but even so it is not a good way to proceed. You could say exactly the same about immigration, which many of those left behind blame for their situation. It would be quite wrong for Labour to adopt an anti-immigration policy they did not believe in just to show solidarity with those who wanted it. The same is true of Brexit.

But I have to make one final, and critical, point. I think Labour’s Brexit policy is tragic because it has, directly or indirectly, diminished support for Labour and its leadership among many people who might vote Labour. By triggering Article 50 Labour bear some responsibility for Brexit, and I have suggested before that the successors to the current leadership should come from those who voted otherwise. However I cannot say with any certainty at all that Labour’s policy has had any effect on the Brexit process as such. It is not at all clear that if Labour had adopted the stance I suggest above it could have stopped Brexit, This Brexit mess is entirely Tory affair. To quote Alison McGovern, “This is a Tory problem, a Tory solution and a Tory obsession.” It is Tory disunity and madness that has delayed Brexit. It is a terrible Tory Prime Minister that has made democracy in the UK become a laughing stock among the rest of the world. Those who claim the Tories and Labour are equally to blame or equally responsible for Brexit are wrong. 

May's speech to the public on Wednesday night was Trumpesque, and extremely dangerous. She blamed MPs for delaying Brexit when she had delayed one vote for no good reason, and then basically said its my deal or no deal. She pretended she was acting for the people while parliament was frustrating the people’s will, when in reality less than 40% of voters support her deal and parliament is reflecting that. She seems on the point of taking us over the cliff edge and it is only Tory MPs that can stop her. To make such an authoritarian, populist speech without realising what she was doing tells you all you need to know about her character and political ability.

Her proposal to the EU only made sense if she was prepared to leave with No Deal, which in turn signals to the ERG that they should not vote for her deal. The EU is much too sensible to agree with that, and has in effect given parliament three weeks to work out an alternative to May’s deal. That requires Tory MPs to cooperate with the Labour leadership, something they have not yet been prepared to do [1]. To the many who suggest that somehow the Labour leadership could have prevented the mess we are in I say show me how you can be sure of that, because to me this looks like all the Tories own work from David Cameron to today.

[1] If Tory MPs do finally have serious discussions with the Labour leadership, the Single Market is critical. If all the leadership does is demand to stay in a Customs Union (something inevitable with May's deal given the backstop), it will be equally responsible for the damage caused by leaving the Single Market. Phrases about 'access to' or 'staying close to' the Single Market bind the government to nothing. 

If you enjoyed the last two years and want more of the same, vote for May’s deal

Trade negotiations happen after the Withdrawal Agreement (WA) is signed, so why don’t those wanting a softer Brexit just vote for the WA and argue about trade later? The Political Declaration which does talk about trade is vague and non-binding. The reason is straightforward. Parliament will get very little say on the framework for those trade talks. The only real chance most MPs will get to influence the type of trade relationship the UK has with the EU is by directing the government now, as the price of passing the WA.

However so far parliament has largely failed to do that, largely because Conservative MPs have put party unity above the future health of the country. So what will happen to politics and the economy if parliament votes to pass May’s deal, either today or in a few months time? The first and well known point to make is that nothing would immediately change as far as UK firms and citizens are concerned, because we would start a transition period where we remain inside the Customs Union (CU) and Single Market (but no longer have any say on the rules of either). There will be little economic bounce from ending No Deal uncertainty, for reasons outlined below. So the immediate action will be about the politics of negotiating what happens after the transition period ends.

If you want to know what that would be like, just look at the last year or two. Most of the arguments within the Conservative party over the last year or so have been about trade, and not the content of the WA. So signing the WA settles very little. It does mean that we have signed up to the backstop, but May still pretends that this backstop means we can still stay outside the CU. I cannot see Brexiters meekly accepting that the UK should join the CU either. We will continue to have endless discussion of unicorn ‘alternative arrangements’ for the Irish border designed only to avoid us being up to a CU. The inevitable truth of course is that the backstop implies some part of the UK has to be in the CU, but as the last two years have shown large parts of the Conservative Party refuse to accept reality when they don’t like it.

At some point during the transition period Theresa May could be replaced as Prime Minister. It seems very likely, given the views of Conservative Party members on Brexit, that a Brexiter will be elected in her place. The likely outcome of that, as far as Brexit is concerned, is either that nothing changes, or that the government attempts to persuade the EU to do the impossible.

For example Theresa May is determined that we should leave the Single Market (SM) because her primary aim is to end Freedom of Movement (FM). Any successor is likely to want to leave the SM because they do not want to be bound by EU regulations on minimum workers rights or the environment. Because of the economic damage that will cause (see below) the government will attempt to get a trade agreement with the EU that mitigates that harm. They will find out, yet again, that it is impossible to get anything close to the benefits of the SM without being in the SM. And because the UK will not want to accept that, the negotiations will go on and on.

But at least No Deal will be off the table? Unfortunately just as you think you have avoided one cliff edge, another appears. If no trade deal is done during the transition period, we crash out much like we would with No Deal now. And the Brexiters in government will be saying not to worry the EU always cave at the last minute. They will fight extending the transition period from 21 months, even though it is impossible to negotiate a trade agreement in that time, because the ERG wants to fall off a cliff.

In short, if May’s deal is approved we can look forward to a politics dominated by internal squabbles within the Conservative Party, and the absence of constructive negotiations with Brussels, for perhaps the next four or more years. Much as we have seen for the past two years. This is because the WA does nothing to resolve internal Conservative conflicts, and more fundamentally conflicts inherent with Brexit itself.

If, despite it all, the government manages to negotiate a trade agreement with the EU, what will be the economic and political consequences for the UK? Will it all be worthwhile in the end? A good guide to the economics is the study involving a collaboration between the Centre of Economic Performance and The UK in a Changing Europe, which is both authoritative and representative of similar work. They believe that from 2030 onwards UK GDP per capita will be lower by between 1.9% and 5.5% as a consequence of leaving the Single Market. The midpoint of that range represents lost resources for each household of about £3,000 each year. There will of course be a large hit to the public finances, implying higher taxes or less public spending, even after allowing for an end to contributions to the EU.

Why such a large range? The 1.9% mostly comes from the direct effects of lower and more costly trade, using standard trade modelling techniques together with reasonable estimates of the barriers created by leaving the SM. The government using a similar model get similar numbers. The higher figure in the study’s range is based on empirical evidence for the impact of trade on productivity, which captures other effects such as lower foreign direct investment or reduced competition. Because the empirical evidence captures many more effects than the model, we would expect it to be larger. Those who dispute numbers of this scale in this range have to explain not only why the models, including those used by the government, are wrong but also why the simple correlations between trade and prosperity more than back the models up.

Our best guess is that we have already lost over 2% of GDP as a result of stagnant investment and sterling’s depreciation. As a result, most people will probably not notice the economic impact of ending the transition period, because most of the firms that were going to leave will have already left as a result of cliff edge uncertainty. Instead Brexit will be a gradual decline in the UK relative to the remaining EU.

What about Global Britain? Most trade agreements involve tariff reduction, so being in the CU largely limits the scope for Mr. Fox to do new trade deals. In addition, who would want to harmonise their regulations with the UK, when the gains from doing the same for the EU are much greater. A more likely outcome is that we harmonise our regulations with the US.

The government will be desperate to sign a trade deal with the US to show that ‘global Britain’ is more than a slogan, and that means the US will largely get their way in terms of regulations (including food standards) and participation in the NHS. Thus the longer term political consequence of parliament agreeing to May’s deal is the gradual transition of the UK into a US style economy.

In an age where the regulations governing trade in goods and services are increasingly decided by large regional blocks, the only rationalisation of Brexit that makes any kind of sense is that we move from the EU block to the US block. That is what a lot of the Brexiters want, which is why they resist the backstop so much, because that ties our tariffs to the EU. But the political consequences of tariffs are less important in shaping an economy than regulations on things like working conditions and the environment. That is why, even with the backstop, Brexit will mean we will become more like the US economy. Whatever the merits or otherwise of that, a big difference is that we had a say in how the EU is run but we will have none in what the US does. A 51st state without representation if you like. Taking back control it is not.

What does the ‘Stupid Woman’ saga tell us about the media

It was the middle of December 2018, with 100 days to go before the UK was due to leave the EU. Parliament was supposed to have had a ‘meaningful vote’ on the Withdrawal Agreement (WA) negotiated by the EU and Theresa May. If parliament failed to approve the WA and nothing else happened, the UK would exit with No Deal (ND) and economic and social chaos would follow. It was therefore vital that this vote took place to move things forward, but after days of debate the government ‘pulled’ the vote, which simply meant it didn’t happen. May now says it will happen in the second half of January.

There was no good reason to delay the vote. It was done because the government was certain it would lose. Much better, the executive decided, to play for time and hope that in January the prospect of ND would scare a few more MPs into voting for the WA. Few politicians have risked the future of their country in such a major way just to try and win a vote, but that was not all. The government also approved billions in spending to prepare for ND. Billions that might not have needed spending if the government had allowed a vote, and MPs had subsequently agreed some way through this impasse.

The leader of the opposition was understandably furious about this delay. Corbyn accused Theresa May of "running down the clock" on alternatives to her Brexit deal by seeking assurances from the EU that she knew she would not get. He attacked May for a criminal waste of money simply designed to "make her own bad deal look like the lesser of two evils". The government and Theresa May were on the ropes.

But then Conservative MPs suddenly found something they could unite about. One of them had thought they had seen Corbyn mouth the words ‘stupid woman’ after one of Theresa May’s replies. Conservative MPs implored the Speaker to do something about this ‘gross insult’ (see picture above). Corbyn was forced to return to the house, and claimed he had said ‘stupid people’.

If this sounds trivial to you relative to the state the country finds itself in as a result of the Prime Minister’s actions, you would of course be correct. But as far as most of the UK media were concerned, what Corbyn had actually said became the lead story of the day. Just try typing ‘stupid woman’ into Google. They employed lip readers to speculate on what he had said, or rather what he had said under his breath. Was Corbyn lying about what he had mouthed or not? It made great TV and great copy. Everyone could watch the video and make their mind up (although of course once you have a phrase in your head it is easy to see what you want to see).

I could not help being reminded of the US presidential elections and Clinton’s emails. The US broadcast media hardly talked about policy, or character, but mostly talked about Hillary Clinton using her personal email to do business while Secretary of State. As an issue it was trivial compared to the obvious flaws in Trump as a person, but it allowed Trump to repeat endlessly his phrase ‘crooked woman’. Perhaps if he had said ‘stupid woman’ things might have been different!

The eagerness of Conservative MPs to focus on what Corbyn didn’t say, which is clear in this wonderful photograph, reflects that they desperately wanted to change the subject away from what May had done. The UK broadcast media, with perhaps a single exception [1], took the bait. I think this tells us three interesting things about the values of political journalists in the broadcast media.

The first, and in some ways least interesting, is that this media is bias against Labour, and Jeremy Corbyn in particular. Least interesting because it is something academic studies have already shown pretty clearly. The second is that the media appear to have no sense of what is actually important. What Corbyn mouthed in parliament is totally trivial. May spending billions just because she was going to lose a vote is right at the top of things that are important.

How can the media focus on the trivial when there is something really important to talk about instead? This I think is the third point about what all this tells us about the values of political journalists in the broadcast media, and it in some way goes to explain the other two. UK political journalism is obsessed by parliament. So when lots of Conservative MPs get excited about something, it has to be the main story, even though it is obvious that the media is being played.

This third explains the first two to some extent [2]. The media is anti-Corbyn because most MPs are anti-Corbyn: many Labour MPs would rather have a different leader. The media’s sense of what is important is governed by what parliament thinks is important. So, for example, because neither of the main parties seem to care about scandals involving the Vote Leave campaign (too much spending, where the money came from), the BBC largely ignores it. Worse still, because key MPs are implicated in this scandal, the BBC in particular appears to take their side, as this piece by Peter Jukes sets out clearly. In many ways, therefore, the BBC in particular has become Parliament's Broadcasting Corporation.

[1] Channel 4 led with the real crisis, and discussed the incident about half way through their hour long 7pm bulletin.

[2] I emphasise the some. The research I linked to above suggested little bias in who appeared in the media at the end of the Labour government, but a clear Conservative bias subsequently. In other words the anti-Labour bias at the BBC is not just because the Conservatives have more MPs.

Why Theresa May should not get anyone’s sympathy vote

She may have fortitude in the face of misfortune, and it is easy to feel sympathy for her in comparison to the Brexiters in the Conservative party. But to a large extent she has brought that all upon herself, from the moment she became Prime Minister. Here are some of her bigger mistakes.

1. Appointing Brexiters to key posts in cabinet, including the minister who would be in day to day charge of the negotiations, and Boris Johnson. A clever wheeze, some political commentators opined, to make the Brexiters own the result. In reality not so clever when the aim of the Brexiters is not to get a deal. In the end she had to take over negotiations herself to get anywhere at all, and of course she owned the result.
   
   
2. Rather than listening to experts on the EU, law and economics when formulating her plan, she listened to her political advisors whose only interests were in keeping the party together. As a result she wrote red lines that she has had to cross over to get a deal, and wasted a lot of time in between.
   
   
3. If she had listened to anyone with even the slightest knowledge she would not have rushed to start the Article 50 process.
   
   
4. Holding a General Election in 2017, in the middle of the negotiation process, and then holding on to power when that gambit failed by bribing the DUP with, as the Tories like saying, taxpayers money.
   
   
5. Ignoring the Irish border for over a year. Then agreeing a deal on the Irish border in December 2017. Then declaring in the House of Commons that no Prime Minister could ever approve such a deal when the EU put that agreement in legal form.

Two things seem to have motivated her throughout this process: to appease the Brexiters, and to end Freedom of Movement. Both have influenced the Withdrawal Agreement, although not in ways she suggests. In the two years she could have been outlining a deal that brings the UK much closer to the EU, but she has quite deliberately done the opposite.

There is a story going round that she had no choice in all this. She had to appease the Brexiters at every turn because her survival depended on it. This is simply not the case. She has brought her present position on herself through her constant appeasement of the Brexiters. She could and should have marginalised the Brexiters at the very start of her premiership, when she was at her most powerful, and been honest with people about what the trade-offs were. The Brexiters would have huffed and puffed, but they never had enough support to bring her down, particular in the early months of her premiership. If she had done that, and listened to sound advice, the last two or more years would have been a much calmer and more rational period.

But she was not going to do that because of her obsession with ending freedom of movement and reducing immigration. May is the author of the hostile environment, that has inflicted suffering on so many people, just so she can try and meet some arbitrary target. Yet when Amber Rudd, her replacement as Home Secretary, had to deal with the flack that the hostile environment caused when the media discovered it was being applied to the Windrush generation and their descendants, May allowed Rudd to resign without a hint of apology from herself as author of the policy. Her recent description of migrants who came to the UK when we were in the EU as 'queue jumpers' is unfortunately all to typical of this Prime Minister. 

It is a mistake to see stubbornness as fortitude, particularly when the person’s misfortunes are entirely self-inflicted. It would be a serious mistake to be sympathetic when she is finally standing up to the mad Brexiters when she should have done this 2 years ago. Her failure has given us a deal which makes voters worse off and gives them less sovereignty. She has put this country in a position that we have only months before we leave with no deal, saying you take my deal or you have chaos. She has done all this with only one thing in her mind: it is a strategy that maximises her chances of staying leader for longer (see this post on perpetual Brexit). When you keep making serious mistakes, having someone who is stubborn and self-centred as Prime Minister is extremely dangerous.

If May loses her Brexit vote, what happens next?

If the withdrawal agreement is defeated in parliament (due to too many Brexiters and Tory Remainers voting against and not enough Labour rebels voting with May) what happens next? Answering that question has some impact on whether the agreement with the EU will be voted down, of course. As I noted in an earlier post, what May says will happen before the vote will have virtually no implications for what actually happens because May has no interest in keeping her word.

I want to pursue one possibility, but I’m making no predictions this will actually happen. It is, in a way, a precautionary tale, because it tells us what might happen if parliament is not very active. Losing the vote will be a huge personal blow for May. In those circumstances, the last thing a Prime Minister wants is to appear to be powerless. She will therefore try to regain the initiative quickly.

One option is to go back to the EU and ask for more time. If the vote is very close this will be very tempting. She will be thinking about twisting arms of certain rebel MPs to try and get them to switch. But I suspect the EU will not play this game, partly because agreeing any serious extension of Article 50 would have to involve all member states, and partly because they would fear subsequent requests after each further failure. An instant rebuff from the EU will not be the look the already weak PM will want, so this road is not as attractive as it might first appear.

Announcing a General Election is another possibility, but this too is problematic, essentially because she has already tried this trick in 2017 and failed dismally. She will need a two thirds majority of MPs, and it is possible that her party from Brexiters to Remainers would not follow her. She could also decide to call the whole thing off, but I suspect even imagining she might do that is wishful thinking.

Which leaves a referendum. She has ruled out “under any circumstances” a second referendum, but she also ruled out a general election before she called one in 2017. I would be surprised if the EU did not agree to extend Article 50 if a second referendum was called. But if she did go down that route, I would be incredibly surprised if the two choices she would propose were not No Deal or her deal. This is where parliament would need to act. But it would require the Conservative rebels on the Remain side to step up and be counted - something that they have often failed to do.

In addition, would the Labour ("We can't stop it") leadership vote to put Remain on the ballot, and even if they did how many rebels would defy any instruction to do so? It seems to me that any attempt to get Remain on the ballot by parliament would be a very close call. Added to that would be the further problem of how Remain appears on the ballot. Does it replace No Deal, which some might feel (not me) is anti-democratic? If not, someone needs to come up with a more complex referendum choice (e.g this suggested by Chris Giles) that a majority of the House will support.

The more I think about the option of going for a deal or No Deal referendum, the more attractive an option it looks for May. She will be fighting on just one flank, rather than multiple flanks. If parliament fails to get Remain on the ballot, it seems almost certain that she will get the popular vote for her deal she wants. Remainers and Labour might talk defiantly of boycotting the ballot, but that would only increase the chances of No Deal winning, and I doubt they would carry many voters with them, as it would be a futile and dangerous gesture. Parts of the press would push No Deal, but May would hope enough ‘sensible leavers’ would unite with ‘fearful Remainers’ to defeat them. MPs would not dare to vote against a deal backed by a referendum victory.

That way, May turns a disaster (losing the vote in parliament) into a triumph. Which is why I really hope that behind the scenes certain key MPs are planning for exactly this scenario. The executive have a huge first mover advantage over parliament, and leaving this planning until after May’s deal with the EU is voted down would probably be too late. Advanced planning in some detail is needed, something that the other Mr Johnson can fill his newly found spare time doing perhaps.

The day Theresa May lied in parliament about something I wrote

When I became part of John McDonnell’s Economic Advisory Council I knew that would put me in the political spotlight. I write about what I helped achieve in that role in my forthcoming book. I left over Labour’s support for Brexit in part because my clear and public anti-Brexit views could be used to attack Labour, when the people driving Brexit were Conservatives. I found out yesterday that at PMQs the Prime Minister was carrying on regardless, although in this case it was over Labour’s 2017 manifesto.

In reality I was strongly supportive of Labour’s overall fiscal stance in 2017. I wrote a lot in my blog before the election, and a summary of my views are in a chapter in a book of essays by various authors published by Verso and edited by John McDonnell. The point I wanted to stress was that it didn’t matter if the IFS were right that the numbers didn’t add up, because the fiscal stance was good for the economy, and could well satisfy Labour's very good Fiscal Credibility Rule.

The paragraph that says all this in the book starts

“Let us suppose the IFS was correct, …”

and I go to argue in that case that the ex ante deficit would have boosted the economy and it might not have added to the deficit ex post.

Unfortunately she said, holding a copy of the book in her hand

“In an article by an economic adviser to the Labour Party, he says about their manifesto, “the numbers did not add up”. That this was a “welcome feature” and “largely irrelevant”Well it may be irrelevant to the Rt Hon Gentleman and the Shadow Chancellor but it’s not irrelevant to the people’s whose taxes go up, whose jobs are lost and whose taxes pay Labour’s debt”

Nowhere in the article did I say I thought the numbers did not add up. I was clearly misquoted. If you say otherwise, imagine I write an article that says ‘suppose austerity is expansionary’ and go on to explain how that generates consequences that contradict reality. It is called a proof by contradiction, and that is similar to the structure of my argument. To report that I said “austerity is expansionary’” would be ridiculous. If it was done to score political points you would conclude it was a lie.

Was this an unfortunate case of misreading? It seems extremely implausible. I’m certain that when the PM or more probably some adviser misquotes someone in a draft PMQ response, someone - possibly even the person themselves - checks that the quote is correct. You have to have serious comprehension difficulties to misunderstand the meaning of “Let us suppose”.

So I tweeted this

“Apparently the Prime Minister quoted me saying about Labour's 2017 manifesto "the numbers did not add up" In fact I said "Let us suppose the IFS was correct" and examined consequences. I have never taken a view on whether they did/didn't add up. If that is what she said, she lied”

I later looked at a recording of PMQs and she did indeed say that. Now maybe I am wrong about a deliberately lie told to gain political effect. If it was an honest mistake she or someone who works for her can explain to me how that mistake was made. I asked CCHQ for an apology, but I am not holding my breath.

The Mirror picked it up here, as did the BBC in their PMQ factcheck. In the scheme of things the issue is very minor, but the Prime Minister lying whatever the context should be important. But the sad thing is that no one is surprised by this kind of thing any more. We in the UK look at Trump’s lying with horror and think this is something uniquely American. But this government has been pulled up countless times (e.g. here) for misleading the public by misusing statistics and of course the lies of the Brexiters are shameless. The majority of press titles will ignore or play down any criticism of Conservative ministers or the PM (unless it is over Brexit), and the BBC is timid to say the least. It is asymmetrical of course: any mistakes the other side makes are examined in great detail. If you do not have the media to call out lies, they will pass as the truth and democracy dies.

Theresa May has qualities, but negotiation skill is not one of them

One of the important criteria I used in selecting posts for my new book out this November, The Lies we were Told, is that each chapter (collection of posts) must tell a coherent story. (It can be ordered at a 20% discount here, rising to 35% if you join the publisher’s mailing list.) So, for example, the chapter on austerity had to contain at least one post that covered each of the mistaken arguments made for rapid deficit reduction, as well as discussing the real reasons the government pursued this policy long after it was obviously damaging the economy.

Those criteria, plus the need to avoid writing too large a book, inevitably meant that I had to end my discussion of Brexit with the EU referendum. It is still impossible to say which of the many things I have written on Brexit after the referendum will be part of a coherent story and which will be tangential. But if I ever do have to select which posts were important, this talking about the qualities of Theresa May as a person would be one. The reason is largely because it contains this quote from a discussion by David Runciman in LRB of Rosa Prince’s biography of May.

“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.”

If you want to know why the Salzburg meeting was such a failure for her, you need only read this paragraph. May invests far too much in whatever plan she puts forward, and presents it as the only possible way forward. She is in that sense the embodiment of Thatcher’s TINA (There Is No Alternative). She did that with her Chequers plan at Salzburg, and yet she is surprised that the EU showed no inclination to offer anything new as a counter proposal. Maybe the EU never will offer anything new, but you will never find out if you give no hint of flexibility yourself.

If being a hopeless negotiator is not bad enough, the last two years have also shown that whatever political knowledge she has does not extend beyond understanding how the Conservative party works. Her closest advisers, who she relies on a lot, may be little different. After she became Prime Minister she made a series of terrible decisions that have turned a bad situation for the UK into a terrible position. The most important of course was invoking Article 50 without any plan about what might happen next, for no better reason than the Brexiters were anxious people might change their minds. As I wrote in November 2016

“Anyone who actually wants a good deal from the EU when we leave should realise that the UK’s negotiating position becomes instantly weaker once Article 50 is triggered.”

There are plenty of other blunders: choosing a prominent Brexiter as her chief negotiator, fighting the need for parliamentary approval for triggering A50 in the courts, forcing Ivan Rogers out, her red lines and so on. Her focus on keeping the Conservative party together meant that she failed to understand and continues to fail to understand how the EU works. Above all else she has failed to see that the A50 process is less a negotiation and more like agreeing a terms of surrender.

Does this mean, as Stephen Bush among others suggest, that No Deal is a more likely outcome? In reality all Salzburg and May’s subsequent ‘statement to the people’ mean is more time has been lost. (The statement could mean nothing more than she has a party conference coming up.) As Martin Sandbu explains, there is concession the EU could make that is worth playing for, and that is extending the NI arrangement (in CU and SM for goods) to the rest of the UK. At the very least, she needs the EU to say in the Withdrawal Agreement that they would entertain some trade arrangement that negated the need for a border in the Irish Sea but fell short of staying in the complete single market. Unfortunately May’s lack of negotiating skills and knowledge means she is less likely to get either.

If she does not get those things, will she take the UK out with No Deal? As the quote from David Runciman suggests, many of the positions May adopts with apparent rigidity are inherited, and the EU referendum result is one of that type. She is not a conviction politician, and her primary interest is always going to be her survival. We can also take comfort in her knowledge of her own party, which means she must know her future lies with MPs who are not Brexiters. Enough of this group knows, to use Corbyn’s words, that no deal is not an option. They might tolerate May pretending it is as part of the negotiations, but they will do everything they can to stop her actually going through with it. May is useful, or indeed essential, to that group only so long as she does not give the Brexiters what they want, which is No Deal. All these things point to May being prepared, at the end of the day, to accept the backstop with just warm words from the EU on future arrangements.

If you still think May has recently drawn a line in the sand so deep that she couldn’t possibly cross it without falling, a good exercise would be to list all the other red lines she has drawn but then crossed over. If you doubt her capacity to survive come what may think of the 2017 election. But of course I may be mistaken. One of the nice things about the book was being able to look back at what I got right and got wrong using the device of postscripts. If I ever write up my best posts on events after the referendum two of my mistakes stand out: not understanding the key role Ireland would play until September 2017, and not seeing how May’s inevitable split with the Brexiters could change the dynamics on voting over any final deal. I hope a third mistake will not be in misjudging May’s character.

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.

Trump and Brexit

As Trump makes clear, the UK can choose US rules or EU rules. Brexit is about having no say in either.

Of course every Leave voter is an individual with their own motives. But if you had to broadly characterise the two big issues that gave the Leave side victory in 2016, it was fears about immigration and a wish for greater sovereignty. Both were based on lies.

Immigration

You would not know it from the media, but people in the UK have been developing a more favourable view of immigration over the last six years. Here is a table from the latest National Centre for Social Research Social Attitudes survey on Europe.

In 2017, for those who expressed an opinion one way or the other, nearly three quarters thought immigration had a positive impact on the economy, and 65% thought immigrants enriched our culture.

Given this trend in attitudes, how did we vote to Leave? I keep going back this poll on EU immigration published in June 2016 which I wrote about shortly after it came out.

You can see it is consistent with the numbers above: people on balance think EU immigration is good for the economy and for British culture, and even for themselves personally. So why would they want to reduce EU immigration? Because they overwhelmingly thought EU immigration was bad for the NHS (and by implication all public services).

This, after all, is the line that Conservative and even some Labour politicians have consistently pushed, as have parts of the media with no comeback from most broadcasters. Before the referendum there were few stories about EU doctors and nurses, but plenty about migrants using the NHS. This concern was emphasised by the Leave campaign with the combination of the £350 million more for NHS claim and the prospect of being ‘overrun’ by Turkish immigrants.

The only problem with these claims that immigration reduces access to public services is that we know, with almost certainty, that the opposite is true: immigration creates net additional resources for public services. This is not complicated: they pay more in taxes than they take out because they tend to be of working age. But the myth that politicians and the media promulgate is that immigrants are somehow the reason access to public services has become more difficult, and they do this in large party to cover up the impact of austerity.

There was a final issue during the referendum that may have encouraged people to vote Leave. Even if they were positive about the EU immigrants that were already here, it just seemed sensible that the government should control their number. After all the government had set a target for net migration, and were having great difficulty meeting it. Yet the media never talked about the positive aspect of freedom of movement - the ability of UK citizens to live and work anywhere in the EU - and how that would end if we left.

Sovereignty and trade

I still talk to Leavers on both right or left who are convinced that the EU has taken away major elements of the UK’s sovereignty. One talked about “accountable democracy, sovereignty, independence, autonomy and freedom”. Yet when I ask for specific instances of a law or somesuch where the EU has compromised all these things, answer comes there none. There is a simply reason for this, beyond the propaganda, and that is that the EU is about harmonising regulations, and this harmonisation has brought benefits rather than pain to UK citizens.

International trade involves a form of cooperation with other countries, and international trade is good for both sides because it allows more efficient production as well as consumption of a greater variety of goods. The more we cooperate on rules and regulations, the more trade will happen. This harmonisation of regulations is like marriage: each side loses a degree of individual autonomy but we gain much more in return.

The thing about regulations governing networks of trade is that there cannot be too many of them, just as there cannot be many operating systems for computers. The whole point about harmonising regulations is to reduce their number of regulations, so firms do not have to produce lots of different goods which differ only in the different national regulations they meet. Which means that, if the UK wants to really benefit from the gains to trade, it has to choose one standard to match UK regulations with. And given existing patterns of trade, the UK only really has a choice between two: the EU and North America (NAFTA). Neither is likely to abandon their regulations in favour of what the UK may happen to do. (Equally third countries will never choose to harmonise on UK regulations rather than EU or the US.)

Translate this into Brexit, taking back control is like divorce, except in this case divorce from a partner you are still happy to be with (we happily trade with). To be honest, however, I’m not sure many Leave voters needed convincing of all this. As this poll shows, only 22% of Leave voters thought we would lose full access to the single market. Instead they believed the propaganda they were fed, that somehow their lives were being influenced in a negative way by the EU, and that they would therefore be better off after Brexit

Brexiters and Trump

While most voters were not very interested in regulations, many Brexiters certainly were. Most Brexiters are not very interested in immigration, but are interested in removing us from EU regulations and adopting much looser US standards. Of course they talked about ‘global Britain’, but it never made sense for the UK to set its own regulations for trade independently of both the EU and US. What they wanted was to get rid of EU regulations on labour or the environment which did not fit into their ideological framework.

To say, as I did here, that the Brexiters hijacked the EU negotiations, to make them about their own concerns rather than the people who voted, is not quite right. I think it is another example of deceit: getting what they want indirectly because what they want is not in itself popular. EU labour and environmental regulations are popular with most people. So the Brexiters could only achieve their goals through deceiving Leavers, and once more through our partisan or pathetic media they succeeded. After all, the first significant deceit, which was reducing the size of the state by making a fuss about the deficit, had been a big political success.

Normal US politics would want none of this. The US traditionally values the UK as part of the EU, and a jumping off point for their own corporations. Trump is of course not a normal POTUS. He is part of a right wing plutocratic elite that has captured the Republican party, and a good part of the Conservative party. Their aim is to spread his kind of authoritarian right wing politics as far as they can. Trump’s retweeting of Britain First islamophobic materials was no accident. One of his ambassadors has lobbied on behalf of former English Defence League leader Tommy Robinson!

I remember writing sometime back that Trump’s election was a big blow to Brexit. I thought, perhaps naively, that at least some Brexiters would think twice before becoming cheerleaders for Trump. I thought some might be concerned that far from doing trade deals, they would be concerned that Trump seemed more interested in destroying trade by placing tariffs on imported goods. If any have showed any concern I have not noticed. It seems instead that the Brexiters, along with the right wing press, really are the Republican party in the UK.

Theresa May

Stage one of the Brexit endgame that we saw less than two weeks ago was Theresa May at last standing up to the Brexiters in her party. I think she could and should have done this from the very beginning. That she didn’t do so reflects naivety about Brexit rather than strategy on her part. There are many clues that this was so, some of which are spelt out by Jonathan Lis here: getting rid of Sir Ivan Rogers was a huge unforced error that conclusively shows that she and her immediate advisors did not understand the task they had taken on. But it would be suicide for her to turn back from her new path now..

Trump’s attacks on her are another sign of how important her Chequers document is. Of course it is not a plan the EU can accept, but it represents her choice to finally stop the Brexiters turning Brexit into their ideological, Republican orientated plaything. She must know that her new opponents will not be appeased, and do not do compromise. I hope that Trump’s humiliation of her will help her see that global Britain was always a myth, and that the UK has to choose the EU rather than the US. She will need resolve as she is forced to compromise further to get a deal, although she will try to push at least some of that into transition.

Perhaps I am wrong about the final situation being BINO plus face saving for the UK: perhaps the EU will offer serious concessions for the first time in these negotiations. But it is foolish to believe that these concessions will in any way be advantageous to the UK, and somehow make Brexit worthwhile. What gain is there to be outside the single market for services, when exports of products from financial and creative industries to the EU is one of the UK strengths? What gain in there in restricting EU immigration, when most people now agree that immigration enhances our economy and culture, and economists know also enhance our public services. Yes, we would have more sovereignty: the sovereignty to make our lives worse with no compensations.

Whatever deal May finally does with the EU, and at whatever time, it remains the case that Brexit will do for UK sovereignty the opposite of what it claimed. It is better to follow EU rules than US rules, but with Brexit we will be following, with no say in how these rules are changed. It is a huge indictment of our political system that our Prime Minister and a majority of our MPs feel incapable of saying to people you were lied to, and following this course gives you less sovereignty than you had before June 2016. All we can hope for is that the Brexiters, in their new found position of Brexit rebels, will vote against the deal and let parliament, directly or indirectly, kill the whole thing off. The Brexiters will have caused enormous damage, but it would be poetic justice if they helped bring an end to Brexit.