I have just sent this letter to my local MP Nigel Adams, a Conservative whip, Brexiteer and close friend of BoJo. I'll let you know if I get a response.
Dear Nigel,
I think it's now clear the mixture of tragedy and fiasco known as Brexit is fast becoming the greatest foreign policy mistake and act of economic self harm any modern western nation has ever knowingly inflicted upon itself.
I wrote to you more than a year ago and received no acknowledgement or reply and I do not write now with any more hope of a response but I hope you, or someone in your office, will at least take the trouble to read this letter.
It was obvious before the referendum that those advocating Brexit had no plan for executing it despite thinking of little else for twenty years or more. Here we are 19 months later, with the two-year clock ticking away, lurching blindly onwards with a blank where a plan should be. We have had to make concession after concession to the EU because of the absence of any coherent strategy. Any doubt as to where the balance of power advantage is to be found has long since been dispelled.
The negotiations are going badly, whatever you might say to defend the government. I think you know yourself that this is true. And the really difficult issues, the absolute mountain of real and detailed problems ahead of us, have yet to be recognised, let alone faced. We are in the planning and preparation phase where ministers can still pretend it will all turn out well in the end. It will not. Brexit is a national disaster in the making.
Vote Leave, the official campaign, on its website before the referendum specifically ruled out leaving the single market saying:
“there is a European free trade zone from Iceland to the Russian border and we will be part of it. The idea that Britain will be the only country in Europe not to be part of this zone is silly”.
This “silly” idea is now official government policy.
When we entered the EEC in 1973, the negotiations involved a trade off between losing some sovereignty and gaining prosperity and security. There was compromise involved. Now we are reversing the process, there seems to be a belief that we can avoid compromise, gain sovereignty and gain prosperity. This is impossible.
The prime minister is coming under mounting pressure from business (the CBI, the BCC and the Japanese) as well as the EU to provide clarity about the end state we are looking for but this seems completely beyond the present cabinet. It almost looks as if Brexit was sprung on them yesterday without any fore warning.
Only recently Manfred Weber, the German MEP and close Merkel ally says Germany does not know what Britain's objectives are, echoing Michel Barnier's call for clarity while David Davis says it’s perfectly clear what we want. One could be forgiven for thinking the two lead negotiators have never been in the same room together.
Mrs Merkel herself ridicules the PM in private for telling the German chancellor apparently to “make me an offer”, as though she was trying to offload a dodgy second hand car rather than negotiating Britain’s future. The Times recently reported one friendly EU diplomat saying when Theresa May speaks about Brexit; they hear the “captain of The Titanic talking about an iceberg that works for everyone”.
We are being reduced to an international laughing stock make no mistake about it.
The YouGov series of polls, now at the 57th since August 2016, asking in hindsight if voting to leave the EU was right or wrong, shows an inexorable shift towards a majority believing it to be wrong. It would surprise me if this did not continue until a very clear and consistent majority come to the same sadly inevitable conclusion.
This may be not all be due to the changing of minds but more perhaps to the demographic shift in the electorate. Young people are around 3:1 in favour of the EU and this will tell sooner or later.
By the time we leave, at the end of the transition period there will almost certainly be a majority against Brexit but the Conservative party will own it 100% and will be nailed to the mast, unable to free itself of the catastrophe. The last Labour government under Gordon Brown was at least able to deflect criticism of it’s handling of the financial crisis by saying no one saw it coming. This excuse won’t work with Brexit. No government in history could have had more notice about the damage engulfing us from it’s own flagship policy including, according to the leaked economic assessment, from its own civil servants.
The Evening Standard said recently that governments often do harmful things by mistake or ignorance but Brexit will be the first time in modern history and perhaps ever, that a British government has deliberately and consciously harmed the nation’s well-being for ideological reasons and nothing more. A businessman, following a meeting at DEXEU described Brexit as bad things, being done by bad men, badly and this sums it up perfectly.
The Tories at the moment make Hugo Chavez look like a pragmatist. It will take several generations for young people to forgive the party, if they ever do. When the IoD and the EEF welcome statements on the customs union by Jeremy Corbyn you must know there is trouble ahead.
And no party has ever succeeded anywhere by alienating the youth vote and the business vote. It might be possible without one or the other, but not both. Yet in Brexit the party has managed just such a perfect storm. The sadness is that it is quite clear, at least to me, Brexit will one day be reversed but between now and when that day comes, the cost to the country will be counted in the £trillions.
The idea that we will somehow transform ourselves into a global trading colossus is risible.
I note the frequent references to 90% of the world growth coming from outside the EU by 2020. It is odd that this forecast by Pierre Moscovici, an EU Commissioner, in 2016 is taken as accurate while predictions of a slow down by our own Treasury are “always wrong” according to Steve Baker. But leave that one aside.
I would be prepared to gamble that EU countries will take far more advantage of this growth from inside the single market, than our exporters will manage outside. The idea has gained traction that one cannot trade properly from inside the EU as if Germany's £200 billion balance of trade surplus was all smoke and mirrors. They have over 6000 Authorised Economic Operators (AEOs) compared to the UK’s fewer than 600.
As the CBI noted recently, there is huge potential to increase trade and take advantage of that 90% of outside-the-EU growth. Germany already exports 4.7 times as much as we do to China for example but oddly isn’t thinking about leaving the EU in order to increase it further. This should be a lesson to us. If we had products and services of the right quality and price we could easily boost trade by several hundred percent from inside the bloc. Instead, we are planning ten years of Brexit related disruption to our governance, institutions, legal and regulatory framework, trading patterns and goodness knows what else. Business is crying out for certainty and stability but Brexit is only about to deliver turmoil and reduced trade.
Boris Johnson’s recent call for us to totally isolate ourselves from “intolerable” EU regulations seems to be based on a misunderstanding. Regulations make international trade easier not more difficult. If every country decided to copy Britain and devise their own standards, laws and regulations we would be back to where we were in the inter war years. It would cut trade overnight to a fraction of what it is now. Think about it. Increasingly, EU rules are adopted internationally because they are seen to be good, the gold standard, and Brexit is cutting us off from their drafting and development.
Even David Davis in his Vienna speech has cottoned on and, contradicting the foreign secretary, tells us, "The future of standards and regulations – the building blocks of free trade — is increasingly global".
In 2013, EFTA reported that "more than 90 percent" of the EU's single market rules now come from UN and other global bodies, such as the OECD, the Food and Agriculture Organisation and the United Nations Economic Commission for Europe (UNECE), all of which is faithfully transcribed into EU law. We will have to do exactly the same whatever happens.
But this is just one of the many contradictions at the heart of Brexit.
It is not clear to me why Dr Fox places so much weight on striking trade deals with other far away countries, even as far as the Pacific rim for TPP, when he and many more on the Conservative benches are quite happy to see us exit the EU without an FTA with the world’s largest, closest and richest market and our largest trading partner. The ERG’s “ransom letter” to the PM even seeks to pressure the government into accepting WTO trading as some kind of Utopia. It would be calamitous.
This is like living in Selby but insisting on shopping at Tesco in Inverness. It is insane ideology but dressed up as a desirable and considered policy.
Our preparations are starting to look amateurish. David Davis gave everyone the impression last year that impact assessments had been carried out on 58 sectors of the economy only to admit when forced to produce them they were a figment of his imagination. He gives the impression of understanding virtually nothing of what he is doing, often appearing like a bewildered Mr Pastry figure alongside Michel Barnier. On social media he is a laughing stock. On Conservative Home he is openly derided. I venture that nobody has any faith in him.
The Conservative party is riven from top to bottom over Brexit and must eventually split, dividing the right while the left are becoming strangely more united under Corbyn.
Party membership is said to be below 70,000 and this does not surprise me when it seems to have been captured by people whose Euro sceptic ideology runs totally counter to that of most young people. The youth of this country are lost to Conservatism and will be for a generation at least. Divisions on Europe have split the party for years and Brexit, far from healing them, has allowed the fractures to spread to the nation as a whole and even threatens the break up of the entire kingdom.
In spite of your colleagues Steve Baker and Jacob Rees-Mogg trying to cast doubt on Treasury forecasts, and on The Treasury itself, it is clear the economy is going to be affected by Brexit uncertainty as even the OBR confirmed last November. Mark Carney told MPs recently he expects the economy to be “a couple of percent” smaller by the end of this year than it otherwise would be. It is not that the economy is not growing, it is not growing at the rate it was expected to before the vote. This is and will be the impact of the drag anchor of Brexit for many years to come.
If we leave the single market and the customs union, as seems official policy at the moment, we will do immense damage to our industries, especially those in cross Channel supply chains. Even with a free trade deal, according to the leaked DEXEU figures, the economy is expected to take a 5% hit. This is about £100 billion annually in lost output and perhaps £35 billion in lost tax revenues, dwarfing our payment to the EU. And ironically, the areas voting to leave most heavily are likely to be worst affected. Trust me, they will not thank you for Brexit.
The CBI are forced to plead with a Conservative government to retain the customs union and the BCC resort to writing open letters demanding clarity because patience is running out. I am shocked I am actually writing this about the so-called party of business.
The government is looking increasingly beleaguered. Japanese investors like Nissan, Honda, Toyota, Nomura and others were presumably making these very points more forcefully in Downing Street when they met the PM on 8th February. It speaks volumes when our friends have to patiently explain why Brexit will be a disaster for our economy and our influence in the world.
Chris Wilkins, former director of strategy at No 10, in a recent paper said the EU referendum was a proxy for voter’s anger about public service failure, a decade of wage stagnation, job insecurity and the threat from terrorism. And the common thread between them all: the belief that UK politics and politicians had ignored these concerns for far too long.
This has always been obvious to me. The underlying reasons for Brexit are quite unconnected to the EU. The British government is wholly responsible for housing, health, education, infrastructure, industrial policy and a host of other matters but Brexit, and the diverting of political and civil service resources to it, coupled with a hit on our economy will only exacerbate every single one of the problems.
I follow debates and occasionally watch Parliament TV, especially the Select Committees. One cannot avoid being struck, not only by how little MPs know about the practical impacts of Brexit and trade policy, but how little they want to know. Experts are humoured and their testimony is ignored or dismissed as scaremongering or project fear. This is especially prevalent among Brexiteers and usually inversely proportional to the degree of enthusiasm for leaving the EU. Faisal Islam at Sky News told us recently a cabinet minister had to have RoOs (Rules of Origin) explained by a visiting businessman. I despair.
The Trade Select Committee heard in December from Hosuk Lee-Makiyama, Director of the European Centre for International Political Economy. It was a salutary lesson in the reality of international trade. The leaked figures from DEXEU in early February show that a US/UK trade deal would at best add 0.2% to our GDP in the long term and will never replicate what we have at the moment with the EU. This is almost certainly optimistic. Trump is trying to close the huge US trade deficit and would never permit the UK to benefit more than American suppliers.
And China doesn’t need any trade deals since it already has more trade than it can manage while India is highly protectionist and won’t conclude FTAs for domestic political reasons.
Against this we will need to spend years renegotiating the 60 or so FTAs the EU has at present along with many of the 759 bilateral agreements, listed on the EU treaty database, concluded by Brussels and from which we will cease to benefit after we leave. Korea has already raised issues with a simple grandfathering of their EU FTA.
These problems are ignored, especially if they cast any doubt on Brexit being less than a glorious success. It is as if evidence based policy is being substituted by policy based evidence. Brexit is like religious fundamentalism where heretics are attacked as remoaners or saboteurs or enemies of the people. The truth is we are rudderless and directionless and relying on nothing more than blind faith and ideology. No one knows what our future is.
And unlike Peter Lilley, no one now believes a trade deal will be negotiated in “ten minutes”.
Most experts think we will still be negotiating a FTA well after the transition period. As for having the deal agreed and ready to “implement” by March 2019 – as people like Jacob Res-Mogg and Peter Bone still seem to think – this is pure delusion. It is quite likely the UK will still be a “vassal state” by the time of the next general election and the Conservative party, assuming it is still in existence, will suffer a backlash which will make John Major’s 1997 defeat look like a victory.
Surely one of the most bizarre aspects of Brexit is that most FTAs exclude services and deal only with goods. Yet our economy is 80% services focused. We are leaving the world’s largest, richest and most developed single market for services in order to sign FTAs with non-EU countries that will almost certainly exclude services. In other words we will gain no advantage over our present position but lose the huge benefit (and trade surplus) that we enjoy now. It makes no sense whatsoever.
The vital Irish border question is still unresolved and for all anyone knows, will remain so. The draft withdrawal treaty is the only document setting out a workable plan for the border, with the PM rejecting an option that she herself signed up to only in December last year. Our 2017 position paper talks about “high level principles” and “highly streamlined customs arrangements” while the crucial sanitary and phyto-sanitary (SPS) measures are to “considered in depth at an early stage”.
This is not serious.
The recent EU paper by Lars Karlsson for the European Parliament, cited by many on the leave side as the answer to the conundrum, claims to avoid a hard border by using mobile phone technology, ANPR and an automatic “gate” on each of the 300 crossing points. In other words the solution to “avoiding” a hard border is itself a hard border. One could laugh if it were not so serious.
Avoiding a hard border and being outside the customs union and the single market is a deluded never-never land. Johnson himself is now backpedalling on his assurance that the border will remain “absolutely unchanged”. It is a circle that will never be squared.
A recent poll in December showed 48% of people in Northern Ireland would now vote to unite the island of Ireland in the event of a hard Brexit compared to 45% wishing to remain in the UK. Under the GFA this might lead to a referendum and the break up of the United Kingdom. The SNP in Scotland will inevitably force another vote and may well win it. What a fitting epitaph this would be for the Conservative and Unionist party.
Once we have entered the transition (and we have no choice but to accept almost whatever terms are offered as is clear with the recent citizens rights concession) what incentive will there be for the EU to expedite a bespoke trade deal, especially a unique one including financial services? We will be in a lose-lose situation. Either we lose a little, financial and other services plus non-tariff barriers on goods, or we lose a lot by resorting to WTO rules on everything. No other outcome is possible.
Industry needs certainty and a transition will not give it, only reduce uncertainty for a short period. The final deal, as a mixed agreement, will need ratification by all the national and regional legislatures and this will not take place until the very end of the transition, however long that is. And until ratification is complete there will be uncertainty. The EU can only benefit and there is a risk companies will migrate into the single market. At a minimum, investment in the UK will be stalled for years.
And if the proposed cabinet solution of managed divergence comes about, uncertainty will stretch on forever. No investor will ever know at what point a future UK government would choose to diverge and trigger the end of our trading agreement with the EU.
We are never going to prosper until we are prepared to become serious about education, infrastructure and investment. Brexit is an attempt to avoid the hard work, the long years of co-ordinated step-by-step progress to raise productivity and innovation. There is no easy way. Cutting regulations and standards cannot do it and trade deals only work if you have something competitive to trade. All too often we do not.
Brexit is a typically British answer. It is an attempt to shirk the hard decisions and become more competitive through a low regulatory environment, a quick fix. Our European competitors will continue to invest in people and productivity for the long term and in a few years we will find ourselves even further behind than we are now. We will look with envy across The Channel at people who are wealthier, more content and less socially divided.
Let us be frank. The referendum was a travesty of democracy. During the campaign people on both sides had free reign to promise or threaten anything that came into their mind. We had everything from a full-blown recession to Turkey joining the EU in weeks and an extra £19 billion for the NHS. It was a cacophony of misrepresentation, falsehoods and downright lies. I do not believe a single front line politician felt constrained by reality in any way. The result was a narrow win for leaving. All that though is now in the past. But a day of reckoning will come at the ballot box in the future.
At least as a remainer, I knew in “excruciating detail” what I was voting for. It was the status quo plus the renegotiated terms that Cameron came back with. Leavers had no idea and still don’t. I know, as a former salesman that you can easily sell a fantasy, reality is far more difficult. But after the sale is won, the positions are always reversed. The fantasist has to make good on the fantasy and cannot do it. This is where we are now.
Although Brexit is being portrayed as the will of the people it will slowly dawn on even the most Euro sceptic leave voter that it was a con and a colossal mistake. But the voters will not blame themselves. The Tory party will carry the responsibility.
That narrow win is now being used as a carte blanche to isolate us from Europe in the hardest possible way seemingly oblivious to the economic damage it will do. The 48% are called remoaners and treated by the press as saboteurs, traitors and enemies of the people in a way reminiscent of revolutionary France or pre war Germany.
Conservative Euro sceptics succeeded in splitting the party once before, with extremists like Farage forming UKIP, which was never more than a party within a party. The chronically divisive referendum campaign succeeded in sowing division in the country and even now threatening the union itself. Next, with the tone of the negotiations becoming more rancorous there will be divisions between Britain and Europe. This country will be remembered for creating and exporting only division.
We were promised so much. Yet now David Davis is only able to suggest we will avoid the complete collapse of civil society and a kind of Mad Max world. What have we come to?
I believe it is clear that Boris Johnson has no ideological attachment to Brexit. Indeed his decision was so finely balanced he had to write two polar opposite versions of his pre referendum Telegraph column to see which sounded better. Brexit was simply a means to a personal end for him. As the full horror of the disaster becomes clearer, someone on the Brexit side, a key figure, will come to the conclusion that the price of exiting the EU is far too high for a majority of ordinary decent working people as well as the Conservative party. The slow and painful economic decline coupled with a diminishing of British influence in the world and potentially an end to the United Kingdom itself.
Eventually perhaps all of the leading Brexiteers may change their minds. After all, it takes a special kind of stubbornness to continue with a belief that is patently wrong in the face of rising evidence. But anyone can follow where others lead.
If Johnson was the first to come out and admit it has all been a dreadful mistake, that the costs and consequences are far higher and more far reaching than anyone on the leave side had ever imagined, and that we should halt the negotiations and withdraw the Article 50 letter he could probably become prime minister. Of all the Brexiteers he is the only one who could do a total volte face and still carry a large part of the leave vote and the Conservative party with him and win an election.
It is not too late. But it soon will be along with his chance of the top job.
Yours Sincerely
