Monday 21 November 2022

Is Brexit really dead?

Brexit has been pronounced 'stone dead' by none other than Andrew Neil in a long article in The Mail. Read it HERE. Not just that it’s suffered some setbacks or that it needs medical treatment, no he was quite clear, it has definitely popped its clogs. Last week, he wrote, was “the week Brexit died.” I think some of us knew that a while ago, we're just waiting for the last rites to be performed. Neil claims at the end of his piece that he has “never shown his hand on Brexit” but I think you would need to be blind and deaf to think he was anything other than a Brexiteer, and a very disappointed one now. 

This article from July is typical Neil. He writes “If remainers cast an honest eye across the Channel to their beloved European Union, they’d soon realise it is in an even worse state than we are.” 

So many articles are starting to appear in a similar vein from unlikely sources that I think while it is not yet dead, the writing is on the wall and everyone can see it. Only the die-hards are sticking to the old comforting mantras but even they must be having doubts. When all the polling - including one on GB News this weekend - shows a majority for rejoining it's clear there will be no coming back. 

Neil admits the next two years will be dire and he blames Sunak and Hunt for delivering more austerity which will prevent any 'Brexit dividend' being felt. Of course, as we know this is all rubbish, what we are seeing at the moment IS THE BREXIT DIVIDEND.

In an article stirring the pot this weekend, The Sunday Times claims that "Senior government figures are planning to put Britain on the path towards a Swiss-style relationship with the European Union."

It follows Jeremy Hunt suggesting obliquely last week that the government wants to find a way "to remove the vast majority of the trade barriers that exist between us and the EU."

A lot of Brexiteers suffered near apoplexy at that and Twitter went into meltdown. Cries of Betrayal filled the Twittersphere.

Here is Simon Clarke, former chief secretary to the treasury and Truss supporter:

Ironically, in 2019 we probably did settle the question and once we rejoin I can't see it being raised again - ever.

The Bruge group, a right-wing extreme Thatcherite 'think tank' with a Twitter account operated by a raving Brexiteer, tweeted:

It hasn't quite clicked with these people that voters have changed their minds, as was always going to happen once the lies, misinformation and delusional thinking came up against reality. The public have had a basinful of Brexit and decided they don't like it. Unfortunately, for Brexiteers they are going to get a lot more as time goes on.

Even Nigel Farage is talking about setting off on the campaign trail again:

On the remainer side, The Times' report was widely welcomed as being sensible and pragmatic. However, before you get too carried away you might like to skim-read this piece from UK in a Changing Europe, a pro-EU think tank. 

The EU isn’t happy with the 100+ bilateral agreements they have built up with Switzerland and wants to replace them with a single ‘overarching’ agreement. The two sides have tried to negotiate something but the Swiss wouldn’t accept what the EU has demanded. The talks are on ice at present. 

Brussels has said the agreements cannot be 'modernised' unless there is a new overall deal. Some older agreements are beginning to lapse. In December 2017 for example, the EU announced the equivalence decision for Swiss stock exchanges would be limited to one year. This was then extended by six months to the summer of 2019, after which it lapsed.

In May last year, the EU-Switzerland Mutual Recognition Agreement (MRA) for Medical Devices ceased to apply. Swiss MedTech has said this new third-country status on medical devices will cost the sector an estimated CHF 114 million (£89 million) initially and CHF 75 million (£59 million) thereafter.

In the past, the EU has always maintained they do not want to get involved with another ‘mess’ like Switzerland so any prospect of the UK getting anything like the Swiss can be dismissed.  In any case, Switzerland follows most EU law as well.

This is not to say we won’t reach an agreement on some things but you can bet they will all come under the umbrella of the TCA, will include a role for the ECJ, and will probably require money to be paid into EU coffers. To make all trade ‘unfettered’ as Hunt said will also involve freedom of movement of workers. 

The Times article only confirms what the EU knew in 2019, that we would always be the supplicant and would have to come back to the table but in an ever-weaker position.

And You might also be interested in a Telegraph article by former Tory and UKIP MP Douglas Carswell. It’s another homage to low tax, low regulation as a means of boosting Britain. He blames Britain's "economic mess" on his own Conservative party which he says has "made a number of policy blunders, the consequences of which are catching up with the country."  However, as a mad-keen Brexiteer, Brexit isn't on his list. 

He makes the claim that in the state of Mississippi, where he now lives (after campaigning for Brexit), over the next 12 months, the per capita income ($45,881 in 2021) is expected to overtake that of the United Kingdom ($47,202 in 2021). A generation ago, he says, Britain was roughly twice as wealthy per person as Mississippi. 

The answer, surprise, surprise, is that we need to follow their example and cut taxes and regulations. 

Mississippi has cut income tax (from 7% to 4%) and ‘deregulated’ to spur growth. 

However, when you read his article, the best example of deregulation he can produce is a “far-reaching red tape reduction strategy, giving people with professional qualifications issued in other US states a near automatic right to practice in Mississippi.” In other words, Mississippi became MORE embedded into its own rich and populous home market.  With Brexit, we did the opposite, although Carswell can’t see it.  There is also a federal court system similar to the ECJ where litigants can get satisfaction when things go wrong.

The population of Mississippi by the way is just under 3 million, about the same as greater Manchester, with an economy largely made up of agriculture and forestry. It has no massive financial sector. 

The position he quotes in terms of income is probably much worse because our figure is massively distorted by inequality with a lot of very wealthy bankers dragging the average up to the $47,202 he suggests.  Germany's per capita income is $52,000 while Denmark's is $58,000. Ireland's is $102,000. All in the EU and some with very high taxes.

No the answer in the UK is not cutting taxes and regulations.  But Brexit is in a death spiral.

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