Sunday 12 June 2022

Brexit, disappointment and EEA membership

Lord Heseltine, a man I have always had a lot of respect for, has an article in The Guardian noting what is increasingly obvious, namely the right wing press is starting to carry reports about Brexit not going well - to put it mildly. It echoes my own thoughts. Daniel Hannan had his piece the other day, followed by Iain Martin and more recently The Mail told its readers "UK plc is set to flatline next year - performing worse than every other G20 country except for sanctions-crippled RUSSIA!" Even the Daily Express is now reporting Britons are 'turning against' Brexit.

Iain Martin's contribution in The Times a few days ago: Painful as it is, we need to talk about Brexit was one of the articles cited by Heseltine. I posted about it on Friday.

It's worth a read while contemplating the fact that in 2016 Martin was urging people to vote for Brexit and getting cold sweats before TV appearances at the thought someone would ask him which EU laws he wanted to ditch. He didn't know personally but thought someone else did! We now know that he was mistaken. The minister responsible, Rees-Mogg, has had to ask Sun and Express readers to help.

What was surprising to me were the vitriolic comments below the Martin piece. When I last looked there were over 2,000 of them - and almost universally negative about Brexit and it's malign impact on trade and the UK's reputation in general.  A couple of years ago the comments would have been about 50:50, perhaps 60:40 against Brexit. Clearly, people willing to argue in favour of leaving the EU are getting scarce or becoming very quiet indeed.

There is definitely a change of mood and if more mainstream outlets start to carry reports like ITV did last week with credible reports of the economic damage being wreaked on this country, anti-Brexit sentiment can only increase.

Some commentators seem to think this means we will soon be re-joining the single market.

However, such talk will, in my opinion, only serve to highlight the problems of a huge economy, the fifth or sixth largest in the world having its regulations set by an external body over which it has little or no influence. Britain becoming a rule taker in other words. It is just not feasible.

Someone who agrees with Martin (and who is not alone) is George Peretz QC, a prominent remainer. He doesn't believe there can be a closer relationship with the EU while the Tories are in power and I think that's true, but afterwards he thinks a future government will try that route.

Peretz suggests we should move towards, "deep cooperation of a kind that could smooth customs and border friction (from exchanges of information to agreement that British goods need not be inspected) is likely to require some agreement in some areas to follow EU law and (ultimately) its interpretation by the ECJ."

I fear this is simply more unrealistic cakeism, a search for something that doesn't exist, a position which delivers most if not all the benefits of single market membership without being a member. It is asking the EU to negotiate itself out of existence by providing third countries with virtually the same status as first and second countries or at least blur the dividing lines between them.

It's true we could attempt to work towards something closer but nothing short of EEA membership is going to 'smooth customs and border friction' and if once Britain gets to that stage, full membership would have to be on the cards.

Heseltine also mentioned a recent column of Sunday Times economics editor David Smith in which he notes from the latest ONS figures:

"....three of the regions which voted most heavily and enthusiastically for Brexit, the West Midlands, the East Midlands and the northeast, had economies at the end of last year which were smaller than at the time of the vote. So was the northwest. Scotland, which did not vote for Brexit, also had lower output at the end of last year than in 2016, though London was well up.

"The West Midlands has suffered particularly because of the woes of the motor industry. Globally, the industry is in trouble because of supply-chain problems, particularly for microchips. But the UK appears to have particular problems, and a debate and a battle is under way over whether Jaguar Land Rover will manufacture its electric vehicles in the UK or in Slovakia."

A few more years of an economy 'flat lining' and failing to keep up with London or the EU will tend to focus the minds of leave voters in the regions which supported Brexit most enthusiastically. You can only hold back the tide of reality for so long.

Incidentally, while drafting this post I noticed a Tweet from Mujtaba Rahman, a former Treasury and EU insider, who is of the same mind as me and he says Iain Martin's current position is "just as untenable as his more absolute positions 6yrs ago" which is more or less what I said on Friday.

The thread is interesting. 

Rahman ends with this, which I agree with 100 per cent:

"So while it is certainly welcome that there is clearly (and finally) a shift going on in Brexit attitudes among some Brexiteers, their analysis continues to be plagued by hypocrisy and obfuscation."

The notion that the UK could either negotiate something which approximates EEA membership (or the EU would agree to it) or become an actual EEA member, without the advantages of full EU membership being explicitly recognised is for the birds in my opinion.

I am surprised that apparently smart remainers think there is some 'goldilocks' position for the UK where we can just about bear the pain of the added trading costs with our closest overseas market in return for losing more and more of what Brexiteers call our 'sovereignty'. And even if this were remotely feasible, that it would remain the chosen position of all future governments.

We can't go on forever negotiating and renegotiating closer or more distant relationships with Brussels. EU membership is like a marriage, for better or worse, you have to fully commit to it to make it work.

And as I wrote on Friday, the instant we officially ask for things (anything) from the EU our position immediately becomes weaker. Member states don't spend all their time thinking about better access to the UK market, because they don't need it, they are big enough to manage without us.

As a salesman in capital equipment, you often deal with projects over months (and even years!) before an order is placed. At the start you make all the running. It is you making telephone calls, or dropping in 'while passing' to see what the client is thinking, always worrying he (or she) will place an order with your competitor. But there comes a point when you start to know you are going to win.

The customer begins calling you, and more and more frequently, asking detailed questions, wanting to know if your system can handle certain pack sizes or types and so on. And once that happens it reduces the prospect of big discounts being offered. It strengthens your negotiating position - especially if you have some unique or even patented features. So it must be with the EU and the single market.

In any case, this isn't going to be some quick fix. I sometimes think the whole idea of the near constant antagonism Johnson and the UK government is creating with Brussels - expect more this week with the law breaking NI protocol legislation being published - is to create such a toxic relationship that it will take the next government years to rebuild trust sufficiently to even think about agreeing anything closer.

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