Messing Up Brexit

by Andrew Stuttaford

Messing up? Well, this is a family-friendly site, but, believe me, there are other less seemly ways of describing the British government’s current approach to Brexit.

The Financial Times:

Senior ministers have rejected calls by British business leaders for the UK to stay in the EU customs union and single market for a lengthy period after Brexit, raising fears of a bumpy transition to a new trading relationship with Europe.

The CBI employers body raised the stakes on Thursday by proposing that Britain stay inside the EU’s internal market and its trading bloc until a new trade deal between London and Brussels was put “in force” — a process which could take many years and even last beyond a 2022 election.

But Philip Hammond, the chancellor, said on Friday that any transitional deal would not involve Britain remaining a member of either the customs union or single market, even though the government would do all it could to minimise “the shock” to business.

At the same time, Brexit secretary David Davis, meeting chief executives and business groups at Chevening House in Kent, dismissed the idea of Britain enjoying a transition deal that would leave it temporarily like Norway, which is not an EU member but is inside its economic and trading blocs.

According to attendees, Mr Davis told business leaders there would be a political backlash if it looked like Britain had not really left the EU and was engaged in an open-ended transition that continued current economic arrangements.

Mr. Davis would do well to remember that there will also be a political backlash — and one so strong that it will sweep the hard Left Labour leader, Jeremy Corbyn, into 10 Downing Street — if the economy runs into trouble thanks to a bungled Brexit. Neither risk can be wished away. The government is not in a strong position in parliament, Labour is comfortably ahead at the polls, and the first clear signs of trouble are appearing in the economy.

There are good reasons for leaving the EU’s customs union (which stops Britain cutting its own trade deals elsewhere), but very few for quitting the ’single market’ (if the UK can cut a deal similar to that enjoyed by Norway), beyond, so far as I can see it, the satisfaction it would appear to give some euroskeptic ‘ultras.’ One more time: Norway is not in the EU. Norway is free from the EU’s broader federalizing project, and has far more say on the single market regulations that affect it than is generally understood. And, yes, a ‘Norwegian’ style membership of the single market would give the UK more ability to control EU immigration into the country, most importantly (I’m over-simplifying here) by applying an emergency brake.

This ought to be relatively easy to explain — and (polls would suggest) to sell — to the electorate, if the Tory party were not still committed to fighting the battle over the EU that the euroskeptics have already won. What will be impossible to explain to the voters will be the economic consequences of the ‘hard Brexit’ that the government now appears to have in mind, a kamikazexit for which it will be not forgiven but for which Jeremy Corbyn will be very grateful indeed.

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