Home Flexcit Impact Assessments Monographs Contact Archive

Brexit: internalising the issue

2018-10-08 07:55:53

Reporting of the key issue of our times gets more bizarre by the day. The latest contribution to the cacophony is the Telegraph, telling us that Ministers are in talks with as many as 25 Labour MPs "to force through Theresa May's Chequers Brexit deal".

That approaches are being made to Labour MPs is not news, but the idea that attempts to sell them the Chequers deal confounds recent indications that the prime minister is preparing to roll out "Chequers II", with enough concessions to allow the Commission to conclude a withdrawal agreement.

If we are looking at such a new deal, then it cannot be the case that anyone is attempting to convince Labour MPs of the merits of the old deal. And, even if Ministers succeeded in such a task, it would be to no avail. Chequers, as such, will never come to parliament for approval because it will never form the basis of a deal that can be accepted by Brussels.

That should consign the Telegraph story to the dustbin now piled high with incoherent speculation, joining the steady flow of reports which are struggling – and failing - to bring sense to Brexit.

Here, there is no shame or weakness in conceding that one doesn't have the first idea of what is going on. When the situation is in flux, when there are no official statements to work on, and the key players are staying schtum, those who claim to have an inside track (not that many do) are simply deluding themselves.

Interestingly, according to the Guardian (which you can take or leave, according to your own preferences), Brexit is not even on the agenda for the upcoming cabinet meeting, scheduled for this week. Discussion, we are told, will be dominated by preparations for the Budget.

This, of course, could mean anything. At one extreme, it could signify that HMG is engaged in talks so secret and so sensitive that even (or especially) cabinet ministers cannot be told about them. Alternatively, it might be possible that the government is so devoid of ideas, with the talks so lacking in progress, that there is simply nothing to report.

If we're being informed correctly, though, this silence will not last. Ministers are expected to discuss Brexit in a week's time when it is hoped (by some) that Downing Street will have clarified how the UK proposes to handle cross-border regulatory checks, to meet the Commission's revised wording on the "backstop".

Yet nothing seems to be leaking from No.10, with officials saying merely that proposals would emerge "soon". Says the Guardian, these are likely to form the basis of technical negotiations with Brussels "as officials scramble to find a form of words for the withdrawal agreement that the UK proposes to sign with the EU".

Any such timing will, of necessity, rule out any formal consideration by the October European Council. Those who understand the detail will know that, before anything can be considered by the European Council, it must first be agreed by the General Affairs Council, meeting as 27.

Currently, this is scheduled for 16 October (Tuesday week) – a day before the Article 50 European Council which starts its two-day session on the 17th. On the face of it, there doesn't seem to be enough time to factor in any last-minute proposals from London, especially as details must first be circulated to Member State capitals for comment.

This does nothing, though, but confirm that which we already know – that if there is to be a final showdown, then it is going to come at the special meeting in November (if this actually happens), or even the meeting scheduled for 13-14 December.

As an aside, one should note that the next scheduled European Council after that is not until 21-22 March, a week before the UK is due to leave the European Union. Moreover, the next business meeting after that is on 20-21 June, which doesn't augur well for the UK if it is looking for political direction on any "mini-deals" that it will seek in the wake of a "no deal" Brexit.

But, with so little currently to work on, the UK media is doing what it always does – and much prefers to do. It is retreating to its comfort zone, internalising the issue and focusing on the domestic dimension, with special emphasis on personality politics in Westminster.

Thus, The Times from behind its paywall treats its readers to an account of the latest manoeuvres of the "Brexiteers" (it means "ultras"). The diminishing band of people who are actually interested can learn that they have warned the prime minister that "she could keep Britain within EU customs arrangements only until 2022".

In this tedious side-play, it appears that Rees-Mogg has condemned speculation that there might be an extension past 2020 – for as long as 18 months (or even indefinitely) - as a "serious breach" of Brexit.

Some of the concern rests with the perception that this will be unfavourably regarded by the electorate, which goes to the polls in 2022. Sir Bernard Jenkin would have it that an extended period in the customs union would make Brexit seem interminable. The Conservatives would, therefore, be seen to have "botched" Brexit.

That, however, seems the fate of any outcome short of a decisive agreement. If Mrs May agrees to a fudge, with a vague political declaration on the future relationship – thereby kicking the cannery down the road – then all the key decisions will be shunted into the transitional period.

With that, far from Brexit proving to be a watershed, we will find ourselves bogged down in exactly the same sterile debate that has traumatised the nation for the last two years – against an even more urgent deadline of December 2020, with the risk of falling off the cliff edge.

On this, there is still talk of an "evolutionary clause" in in any new deal, although some might suggest it is closer to intelligent design – not that there is much evidence of intelligence in the process.

But this does not address the inevitable difficulties that will arise in trying to telescope into 21 months negotiations which would normally take many years to conclude. And, on that basis we seem to be heading not so much for a "no deal" as a "non-deal" – the deal that never was.

Perhaps the likes of Sir Bernard have a point in worrying about public perception. There must be a limit to the public tolerance of Brexit dominating politics. Soon enough, pressing domestic issues will be demanding attention and if there is no room to deal with them, there will be a political cost.

Meanwhile, the delays and uncertainty are already taking their toll on business confidence. We read a report which tells us that British businesses are the "most anxious" they have been about Brexit since the 2016 referendum, with "more bosses reining in hiring and investment plans".

This comes from a survey of chief financial officers, carried out by the accountancy group Deloitte, which is now warning that worries over the long-term impact of Brexit are mounting. Sentiment is pushing down optimism over future prospects as firms fear their trading relations with customers in the European Union could be disrupted next year.

In terms of detail, the survey – as conveyed by the Guardian found that only 13 percent of CFOs were more optimistic about the prospects for their companies than they were three months ago. That is a sharp fall compared to July, when 24 percent expected conditions to brighten.

Crucially, gloom over Brexit has risen. Some 79 percent of CFOs say they expect the long-term business environment to deteriorate as a result of Brexit. Although this is only a marginal increase on the 75 percent recorded in the second quarter of 2018, it is the third consecutive quarterly rise, to the highest level since the referendum.

Putting a name to the fears, the outgoing chief executive of the insurance market Lloyd’s of London, Inga Beale, told the BBC yesterday that her firm is accelerating Brexit contingency plans to transfer contracts to a Brussels subsidiary, with the risk of a no-deal Brexit rising. "We're accelerating that plan as it seems to me we might be closer to a no deal than we were", she said.

Doubtless, the "ultras" and their fellow travellers will continue to dismiss such reports as part of "project fear", but the sheer weight of bad news must eventually have an effect.

The British Chamber of Commerce, for instance, reports that its quarterly survey of business sentiment found that the percentage of services firms attempting to hire new staff is at its lowest level for 25 years. Only 47 percent of companies said they were looking to recruit, down from 60 percent three months ago and the lowest since 1993.

The BCC also reported a slowdown in the number of manufacturers reporting higher export orders, despite the weaker pound making UK exports more competitive. Dr Adam Marshall, the director general of the BCC, warned that UK businesses are "stuck in limbo" as negotiations with the EU rumble on.

If ever there was an appetite for media tittle-tattle about the Westminster angst over Brexit, this must surely be dissipating. Soon enough, there will be hard-edged expectations of serious progress and less patience for listening to the obsessions of the bubble-dwellers.