Musings on Brexit

All views my own!  17 December 2018

“Addlepated popinjay” and “purulent appendix” - the Bagehot column of this week’s Economist (15 December 2018) on Brexit had me reaching for the dictionary. The sobering conclusion: “The reason Brexit is doing so much damage is not just that it is a mistake. It is a reckoning.”

For the curious, the addlepated popinjay is David Davis, chief UK Brexit negotiator for most of the excruciating process. It is a colourful expression to describe the opposite of a clear-headed realist. One such realist is Sir Ivan Rogers, the UK’s chief diplomat in Brussels until his resignation in January 2017, and the man who ought to have been in charge except that his deep understanding of the issues and propensity to speak the truth proved unpalatable to those in power. 

Sir Ivan’s speech last week at the University of Liverpool on the ineluctable reality of Brexit should be mandatory reading for everyone over the voting age going into a second referendum that must surely happen if disaster is to be averted. (Just a teaser: Baker McKenzie's latest Global Transactions Forecast predicts that a no deal Brexit would cause UK M&A activity to halve by volume and M&A values to decline by 64% next year, while UK IPO values would plummet by 60%.)

Alas, Sir Ivan’s speech is way too long to be read by most but, if it were to be reduced to a tweet, I’d chose the following quote: “We need serious substance, not plausible bullshit.” Or: “Genuinely free trade actually seriously trammels national sovereignty. Hold the front page.”  

The consequence of the Irish border legal “backstop” - namely the UK remaining in a customs union with no freedom to negotiate trade deals with third countries until a solution is found to avoid a hard border between the Irish Republic and Northern Ireland - was immediately apparent upon its announcement back in December 2017. Why does it seem to have come as a surprise to those in Westminster a full year later? 

The political obsession with no borders for goods within the UK is ironic. 

The UK has a large trade deficit in manufactured goods with the EU but a sizeable trade surplus in the services sectors. And yet, to quote Sir Ivan: “...it is the UK services exporters who will face the starkest worsening of trade terms because of the difference between how far services trade is liberalised under even the highly imperfect European services single market, and the very best that is achievable under any other form of free trade or regional agreement on the planet”. 

The backstop is non-negotiable in Brussels. Any border within the UK will be fiercely resisted by the DUP, the Ulster unionists on whom Theresa May’s government depends. Her exit deal seems doomed. Other than some degree of legal stability, there is little to be gained from the mooted Norway or Canada plus type agreements since they entail a total loss of British influence on EU rule making and policy setting.  

There is no doubt that a second referendum would be highly divisive. But the Prime Minister’s statement today that another vote “would do irreparable harm to the integrity of our politics” lacks credibility given the level of disinformation before the first vote and the headlines of recent months. 

A more aware British public should urgently be given the simple choice between May’s deal and continued EU membership. It would be an act of breath-taking irresponsibility to put a hard Brexit on any ballot.