Tuesday, 17 December 2024

Kier Starmer will face a reality check on his EU reset next year

Watching this government’s rather timid attempts at resetting our relationship with the EU, is like seeing a rerun of virtually all of the hubris, dishonesty, bumbling miscalculation and sheer refusal to recognise or accept any serious adverse impacts, which characterised the Tory party’s approach to Brexit from start to finish. Talks with the EU are set to start in the New Year and you can’t help but feel Kier Starmer is in for an early reality check. Whether that will make a lot of difference to Labour’s irrational Brexit policy remains to be seen.

Vote Leave started it in 2016, saying there is "a European free trade zone from Iceland to the Russian border and we [the UK] will be part of it."  That ridiculous claim is still up on their website HERE.

During 2017 the British government published a whole series of position papers that failed to capture what leaving the EU actually entailed. David Davis thought the German car industry would ride to our rescue. Mrs May convinced herself that the EU would agree to a common rule book, essentially subcontracting EU law-making to a former member and soon-to-be third country. Plenty of Brexiteers thought (and still do) that Brussels would agree to recognise UK standards as ‘equivalent’ to their own and readily acceptable to them.  Errrr... No.

The final delusion was the fatuous announcement by Boris Johnson on Christmas Eve four years ago, just after the TCA was concluded, that the deal would somehow “allow our companies and our exporters to do even more business with our European friends.” How daft can you get?

Many of us would have been far more likely to accept the referendum result had the leave side been honest. But no, to get the victory required a lot of dishonesty or plain ignorance.

After all that b******t I had expected Labour under Kier Starmer to at least be honest about the damage that Brexit is doing to the UK economy. After all, they had no vested interest in defending it. But the policy of not relitigating the whole thing has meant, wittingly or not, that the entire government front bench has been forced into a curious sort of omertà.

After all, how can you rationally claim that the flagship policy of the previous administration is a complete disaster if your own policy is to steadfastly refuse to put it right?  Hence, ministers are left with nothing to say about a policy that is a drag anchor on the economy (it shrank again by 0.1% in October) and on tax revenues and therefore on everything the government is trying to do.  They have to pretend that more negotiations with the EU can recover lost trade.

Most commentators think that even if this Labour government achieves all of the modest improvements it seeks it won't make very much difference and certainly not in the short term. Meanwhile the EU, in the 19-page draft memo seen by the FT, concludes there are “limited” economic gains on offer as a result of Labour's own self-imposed red lines ruling out rejoining the EU’s single market or customs union or accepting free movement of people.

Also, they want Britain to actually implement the agreements already signed and settled. The Commission is having to take legal action in the European Court of Justice to force us to do what we solemnly agreed to do. You can see their reluctance to enter into new deals.

And to illustrate the issue of trade, a government announcement on Britain's formal accession to the Pacific Rim CPTPP trade bloc appears to be trolling Brexiteers. The title is: £2 billion boost to growth as UK joins major trade group and makes it clear in the sub title that even this vanishingly small figure would come “in the long run.”

Leaving the SM is costing us 4% of our GDP or around £100 billion a year!  Obviously, some civil servants wanted to make a point. Good for them. 

David Gauke, in Conservative Home makes several important points about the current economic problems in the EU widely used by Brexiteers to defend their project. First, a slowdown impacts us even if we aren’t a member. If Europe stagnates or suffers a recession, the EU is still the destination for the majority of our exports and it's going to hurt. The CPTPP deal will never replace it.

Whatever their travails the EU single market is a very large and very rich market on our doorstep and will always be so, whether or not it's growing quickly or slowing down. The fate of the EU matters to us.  And this:

"A legitimate response to many of the issues that Europe faces would be closer integration not further fragmentation.  EU competiveness would benefit from more integrated capital markets and making it easier to provide services cross-border.  The military isolationism of President Trump should encourage greater cooperation at a European level (not necessarily at the EU level) on defence matters.  Tackling illegal immigration is most effectively done on a multilateral basis."

In short, what he is saying is that even in bad times membership of the EU is a good thing overall.

When Starmer's destiny with reality comes about - as it will eventually - let us hope he comes to the same conclusion and begins to make the case.