Brexit: an epic act of national self-harm

05/06/2017

To judge from some of the detail in his latest article, Will Hutton has been picking up on some of the themes raised by this blog.

Every day in Britain, he writes, 14,000 trucks come from and head to the European Union. He then asks: If there is no Brexit deal with the EU, is every one of those trucks going to be inspected as they bring vital food and goods into the UK to see that the right tariff is being charged and correct regulation observed?"

Actually, Hutton hasn't quite got the point. Assuming food produced in the EU Member States remains subject to the normal regulatory regime, then it will be produced to the same standards that currently prevail in the UK (and presumably will continue to apply after we have left). Thus, the need for inspection on entry to the UK should be minimal.

He's on firmer ground when he notes that a quarter of British exports with the EU pass through one single port, Calais – £3bn a month – with zero border controls or inspection.

Who in Calais, he asks, "is going to inspect these goods to see if they correspond to EU rules if we crash out with no deal? Has France any interest in investing quickly in the customs structure to keep British exports flowing?"

Hutton goes on to assert that the M20 and M2 will become gigantic truck parks as drivers wait to be inspected. You might think, therefore – he adds:

… that just as a precautionary measure, as the prospect of the exit talks collapsing is less than two years away, the UK government would be investing in customs inspection depots in our great ports and along the land border with Ireland and also offering to build similar structures in France to ease the inevitable congestion on UK roads. Surely someone, somewhere might have asked these questions?

Such questions have, of course, been asked. They've been asked frequently on this blog and by Booker in his column. But, to Hutton, as one might expect, we are invisible – except when he wants to "borrow" precisely the points we, and only we have made (up to press).

But, just because he has only just discovered what we and many others outside the legacy media bubble have been talking about for months and years, that doesn't make Hutton wrong.

"Nothing is being done at all", he writes. "Mrs May and her breezy lead negotiator, David Davis, offer platitudes about Britain embracing the globe and no deal being better than a bad deal, but even the most innocent negotiator in the EU team can see this is vainglorious posturing".

Thus does Hutton speculate that: "They are betting on a deal being struck – negotiators with few cards, nor making sure they hold better ones". Nonetheless, he correctly divines that: "As matters stand, the consequence of no deal would be calamitous". By way of explanation, he adds:

For there are multiple areas where the same logic applies. It could be landing rights at EU airports or the export of drugs, suddenly to be treated as needing regulatory approval because they will come from a foreign country. There is the vast trade in dealing in euros in the City of London, surely certain to be repatriated to an EU member state. British universities will be barred from bidding for research grants.

Some 55,000 EU nationals work in the NHS: are they to return and who is to replace them? An estimated 5,500 firms in financial services hold 330,000 passports to allow them to sell financial products across the EU – one of our few successful exports – with no questions or inspections asked. Again, this privilege is about to go in under two years. Companies with multiple operations around Europe, including Britain, will find that freely moving parts, people and data suddenly cannot be done.

If he knew more about the subject, though, he would know that many of these problems arise from the EU leaving the Single Market. With or without a deal, we still revert to "third country" status, when customs controls and much else kick in. The "no deal" scenario is simply icing on the cake.

Even with a deal in prospect, though, Hutton recognises – years after we first came to that conclusion – that the necessary arrangements "simply can't be done within the time". Nor, he says, is any network of replacement deals going to be superior to the ones we already have.

One cannot therefore entirely disagree with Hutton when he declares that the Conservative manifesto commitment to leave the single market and customs union and seek a trade relationship outside any of the EU's frameworks – not the EEA or even Efta – is a declaration of economic war upon ourselves.

But he spoils it with his comment on the customs union. As always – in common, seemingly, with the totality of the chattering classes – he seems incapable of understanding that, when we leave the EU, staying within the customs union is not possible. But then, to understand that would require an understanding of the nature of the EU – and that is not within the grasp of that breed.

Nevertheless, we are not going to disagree with his concluding overview, that we are heading towards a first-order economic debacle. To this, though, Hutton appends an interesting codicil, telling us that, in Whitehall, morale is at rock bottom. Any civil servant who dares brief the prime minister or her inner circle on these realities is frozen out.

We have heard the same thing from a number of different sources, and even that senior (and well qualified) civil servants, in anticipation of the Brexit disaster, are seeking career moves which put as much distance as possible between them and any function which involves participation in the Brexit process.

If this is the case – and the reports are too pervasive and persistent to be entirely without substance – then this does lay the foundations for disaster. In the hands of ideologues and the inexperienced, we are setting ourselves up for a fall.

Hutton's big problem, though – shared by us all - is that if the Conservatives are removed from the negotiations, we end up with Keir Starmer, Emily Thornberry and Barry Gardiner, together with Angela Smith, the current leader in the House of Lords. It is a measure of the desolation of Labour's position that these people are considered to be "talent".

However, there is no denying that the Labour Manifesto makes far more sense than Mrs May's effort, recognising that "leaving the EU with 'no deal' is the worst possible deal for Britain and that it would do damage to our economy and trade". Says the Manifesto, "We will reject 'no deal' as a viable option and if needs be negotiate transitional arrangements to avoid a 'cliff-edge' for the UK economy".

If the Conservative Manifesto said the same things, there would be no contest, but not only does it endorse the "no deal" strategy, it also fails to mention transitional arrangements.

Short of a "walk out", the only option available to UK negotiators after settling the three preliminary issues (difficult in themselves), is to abandon any attempt at settling a free trade agreement and to focus on a tolerably acceptable transitional agreement.

While Hutton thinks Britain will have to accept whatever the EU offers at whatever price, this was always going to be the most credible option and, provided that we have actually left the EU, that gives us our best chance of avoiding caving in to the EU.

Much of the leverage available to the EU stems from the "cliff edge" time limit, and once that is removed, the EU loses most of its power. If we can keep trading with EU Member States on tolerable terms long enough to extend our regional and global reach, then Brexit does not have to be that "self-harm" that Hutton predicts.