Saturday 18 January 2020

Misalignment unparalleled

The big news this morning is that the chancellor, Sajid Javid, has told business, in an act of unparalleled deliberate national vandalism, there will be no alignment with the EU on regulation after Brexit. This emerged following an interview with the FT and an ensuing article published last night: Forget staying close to EU after Brexit, chancellor tells business (£). This comes not long after various industry groups from aviation, automotive, pharmaceuticals, chemicals and food, begged the government to continue to follow EU rules.

It is hard to imagine anything more damaging to Britain.

If true, and it may yet prove to be simply a negotiating ploy, and assuming the government actually follows through on it, the chances of reaching even a bare-bones free trade deal are close to zero.

Many people responded on Twitter where 'Javid' was trending. This was typical:
Yesterday the EU published the result of preliminary discussions on what a future free trade deal might involve. It is at pains to set out the stark difference, as far as the single market is concerned, between membership and being a third country. It explains the general approach they intend to take:
  • As close as possible a partnership with the UK in the future.
  • Should cover trade and economic cooperation as well as other areas.
  • Balanced, ambitious and wide ranging free trade agreement “insofar as there are sufficient guarantees for a level playing field"
  • Balance of rights and obligations and a level playing field
The words 'level playing field' occur regularly and I cannot see the EU27 backing down. For a start why would they?  Protecting the integrity of the single market is of paramount importance and they are tough negotiators anyway. This is apart from the risk of opening themselves to challenge from other nations with EU trade agreements seeking the same terms as Britain and looking weak in the face of British bluster by making concessions.

So Javid's intervention will have been noted in Brussels but it will make no difference beyond perhaps emphasising how right Barnier was to say the EU27 will want to know very early on in which areas we want to diverge and to what extent.  Unless we can answer those questions, it's hard to see the talks going anywhere. If we want the freedom to do whatever we want whenever we like, the talks are likely to end there and then.

In the FT piece Javid has apparently said (I can't read it directly since I don't subscribe but this is according to the BBC) that "there will not be alignment" with the EU after Brexit and insists firms must "adjust" to new regulations.

He doesn't say what these new regulations are so how they are supposed to "adjust" is not entirely clear.  Nevertheless, many will choose to adjust themselves into the EU and out of the UK. To do otherwise for some companies would be commercial suicide. Another reason for the EU to stand firm - they will benefit from it.

The government cannot claim to be unaware of the potential damage. Industry has been making representations for years - since David Davis was at DEXEU - that to wilfully misalign ourselves from our largest overseas market will hamper exports, burden business with extra costs and result in inevitable job losses as companies find themselves even more uncompetitive than they were before.

It is sheer insanity and is the triumph of dogma and ideology over experience.

Lewis Goodall, formerly at Sky News and now Policy Editor on Newsnight for the BBC, reminded Javid that in May 2016 he had said "the only thing leaving the EU guarantees is a lost decade for British Business." He tweeted:
Funny how things change isn't it?  Javid has now made it much worse.
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