Forum Topic

The fatal flaw with Brexit?

The leak of the Government impact assessments that show economic growth will be significantly lower under any Brexit scenario isn't really going to change much. Most Leave supporters have been honest enough to accept that there will be some economic pain but believe this is worth it due to the gains they perceive in increased national sovereignty.Let's assume that these reports are wrong and that they drastically underestimate the potential of a post Brexit Britain to strike trade deals that will more than compensate for reduced access to the single market and that ultimately leaving the EU will make us all richer. The problem here is that although overall in this scenario there would be more winners and losers, the losers will be announced before we know who the winners are. The economic adjustment that needs to take place, even in an ultimately positive change, will first require industries who rely on single market access to retrench. There will be a lag before the positive impact of all the new trade deals feed through as it can take months and years to build up supply chains and penetrate new markets.The more access we want to the single market the less flexibility we will be allowed in determining our own trade policies. If Theresa May had got the majority she wanted last year she would still have had problems pushing through a Brexit deal that delivered lots of upfront economic pain due to a desire to conduct more independent trade deals. Now with the majority of her own MPs in favour of a softer Brexit and her grip on power tenuous she doesn't seem to have any choice but to move towards a deal which delivers the kind of modest changes that Philip Hammond described. The small rump of hard core Brexiteers led by Jacob Rees-Mogg will make a lot of noise but they won't force an election.So it looks like we end up with situation that nobody wants. We will be out of the EU but with a trading arrangement that looks little different to what we have now. We will almost certainly be required to adhere to EU standards but now will have no say in what they are. Freedom of Movement may end but there will be a modified system of preferential access for EU citizens that will look a lot like it.The only thing that could be said for the new situation is that it will reunite the nation as everybody will be able to agree we are worse off than we were before. We will be economically poorer, we will have lost many of the benefits of EU membership, our sovereignty will actually be diluted rather than enhanced, we will have given away control not taken it back and we will have little or no more control of our borders than we had before.

Andy Jones ● 2835d15 Comments

The view from Robert Peston and why Theresa May has managed it well so far!! But now is the crunch!!There is one big thing on the agenda of the Brexit war cabinet today and tomorrow: it is to give legal form to Schrodinger's border."Schrodinger's border" is a senior Tory's name for what the government has to create between Northern Ireland and the Republic: a border that both exists and doesn't exist at the same time.Or to put it another way, there has to be enough of a border so that after we leave the EU, the rest of the EU isn't fearful that goods failing to meet their standards leak from the province into the EU single market.They don't want US chlorinated chicken polluting EU coq au vin, for example, which might happen if we succeed in doing a trade deal with Trump's America and there aren't border checks.But the border can't be so real that it stimulates the kind of smuggling and crime which in the past has funded terrorism.So the border somehow has to exist and not exist.Now the reason Theresa May and her top ministers have to agree a text that would enshrine Schrodinger's border into law is that without it the rest of the EU says we won't get a 21-month transition to full Brexit - which so many businesses say they desperately need, if they are to have the faintest chance of adjusting to the realities of Brexit.If at this point you think that Schrodinger's border is a logical impossibility and that therefore there won't be a transition, and we'll be crashing out of the EU on 29 March next year, well there is something to that fear.But the government in December agreed, in a non-legally-binding text, that if Schrodinger's border can't be created through a technological miracle, there would be a regulatory solution - viz that we would commit through "high level alignment" between our regulations and the EU's that we wouldn't sell shoddy goods and products to the EU.But turning that statement of intent into a binding promise brings huge risks for Theresa May - because it would be seen as enshrining forever the possibility that our business laws and regulations could be determined in Brussels, and many who voted for Brexit would see that as a betrayal.Jacob Rees-Mogg would spontaneously combust at the very idea.So please pity Theresa May and her top ministers, because in the next 24 hours they need to come up with the words for a Schrodinger law - a text relating to the border between Northern Ireland and the Republic that is seen by the rest of the EU as legally binding and is viewed by Jacob Rees-Mogg as a worthless piece of paper.And by the way, if you think that's a challenge, it is as nothing to the task for May of formulating what our future trade relationship with the EU should be, such that EU government heads regard her position as clear enough to publish guidelines in March for meaningful negotiations on a trade deal, while being sufficiently vague to prevent a lethal schism in her cabinet and party.What she needs is Schrodinger's trade plan, a proposal that is simultaneously seen by the rest of the EU as guaranteeing that all their rules and regulations are being followed by British exporters of goods and services, so that those exporters have lowest cost access to the EU single market, while Brexit-supporting Tory ministers and MPs see it as repatriating to the UK the ability to set our own rules and regulations."Ce n'est pas possible!" you might be tempted to say - echoing what I've already heard from Mrs May's Brussels interlocutors.So if you fear that when it comes to politics, Schrodinger's concept is a figment with a whiff of bad eggs, and that Theresa May is chugging inexorably towards the mother of all political crises, you might hear the great thinker's elusive cat miaowing her agreement.

Peter Chadburn ● 2826d