Friday 18 January 2019

TWO OUT OF THREE

My earlier post about trying to find a compromise on Brexit got me thinking. The Holy Grail for the PM is an agreement with the EU which satisfies a triumvirate of leavers, remainers and the EU. In my opinion it does not exist and the hope of finding it will be a forlorn one. You can satisfy any two, but not all three. Even leavers and remainers could probably be united if for example we had frictionless EU trade, an end to freedom of movement, be outside the ECJ and the customs union, without paying any money. This would be to have the run of a cherry orchard with a few physical impossibilities thrown in. But the EU would never countenance it.

At the moment the only deal available, Mrs May's, was rejected by parliament because it satisfies just one of the three, the EU.

To produce an acceptable agreement the PM will need to tack towards the leave position or the remain position and we are back to the old question that has never been answered. Do we remain close to the EU, accepting single market rules and even a customs union with no say (in which case we might as well be a full member) or do we sacrifice our economy, accept what would probably be a recession followed by stubbornly low growth for the foreseeable future?

May tried to find a carefully balanced point to satisfy all three sides and failed. As I say, this is in my opinion a fruitless task and the theory has now been tested to destruction. We are either IN or OUT, forget any fantasy half in-half out solution, it is simply not available. But which way will she go from here?

It must be towards the remain side for very practical reasons.

Firstly, it is what business and industry want. They are the main engines of the economy and without their support the government's revenues will take a very big hit.

Secondly, parliament has shown itself determined to both reject May's deal and prevent no deal. A new vote on Plan B is scheduled for 29th January in what looks like another attempt to run down the clock. At the moment, many commentators expect Plan B to look remarkably like Plan A but I think to get a deal through the House Mrs May will have to veer much closer to a very soft Brexit.  I think we are seeing the beginning of the end of a hard Brexit.

We might think of the House as acting like a non-return valve. Revised deals can pass easily towards a soft Brexit but not the other way. To get a harder or a no deal Brexit the only hope for the ultras is to do what they did in 2016 and by-pass parliament, taking the decision to the country in a second referendum. But I am not sure even this would work the second time around. Voters are not entirely stupid especially where their own jobs are concerned.

I do not see a hard Brexit as more than a very remote possibility and the chances of cancelling Brexit altogether are on the rise. Some Brexiteers may well recognise the difficulty they're in and decide the game is up. A close relationship where we become a rule taker is probably worse than remaining in and helping to shape the regulations that affect us.