Tag Archives: Brexit

Why hard Brexit is a damaging fantasy

Martin Woolf in yesterday’s online Financial Times https://www.ft.com/content/939c7ed0-8e32-11e6-a72e- hit the nail on the head:

“Formal sovereignty is not power. The UK government announces its intentions. The reaction of others determines results.

“By a thin margin the country voted for some kind of Brexit. But the government has no mandate for the rather extreme version it is choosing. Triggering Article 50 without parliamentary approval might be impossible. It surely ought to be impossible. Moreover, Brexiters insist that their goal is to restore parliamentary sovereignty. Why then does the government plan to ignore parliament when these decisions are taken?”

It’s actually worse than that since Government Ministers also seem to be ignoring their officials, taking the Leave side’s contempt for “experts” to a new low. Brexit Minister David Davis is now accusing Treasury civil servants of trying to undermine Brexit negotiations as part of a “desperate strategy” to keep Britain in the single market. http://www.telegraph.co.uk/news/2016/10/11/david-davis-accuses-treasury-officials-of-trying-to-undermine-br/

 The redoubtable Mr Davis whose capacity for fantasy is on an exponentially upward leap, is understood to believe that the warning is part of a “succession of treasury briefings that are damaging negotiations”

Whatever Mr Davis thinks, the Treasury is not making this up. Why would they? Surely their lives would be easier if they went along with the Government and threw the well-being of Britain to the winds. Instead, the much derided officials are doing their duty, warning , amongst other things, that according to leaked draft Cabinet papers, if Britain leaves the Single Market without a new deal it will cost the Treasury £66billion in tax revenues.

Meanwhile the City of London, one time cheer-leaders for the Conservatives, are increasingly worried about the impact tougher immigration controls and departure from the single market could have on their revenues. Miles Celic, chief executive of the influential industry body TheCityUK is on record as saying: A “hard Brexit” that takes Britain clean out of the single market, and leaves the U.K. to trade with the EU under WTO rules, will do “significant” harm to the financial services sector.”

Back to Martin Woolf: “What drove Leavers was, we are also told, “the principle that decisions about the UK should be taken in the UK”. The currency markets demonstrate the emptiness of that principle. Britain’s EU partners are about to do the same. The premise of the Leave campaign was false: a host of decisions that affect the UK will always be taken outside it.”

It would be comic if it wasn’t so serious. We are not talking about cosy sofa politics or even the Oxford Union debating society. This is about people’s lives, their quality of life, their health, their education and just about everything else which relies on government to deliver it. Ultimately, it’s about today’s young people and future generations.

 

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What exactly was the Brexit manifesto?

The European Parliamentary Labour Party (EPLP) has raised concerns over the future of Britain’s immediate involvement of the European Membership and our current membership following the referendum.

There are, the EPLP warns, “two unpalatable options”. These are currently being contemplated but both of options are problematic. Some believe we can exit the European Union but retain membership to the European Single Market. The issue with this is that in order to gain full access, Britain must accept the common rules, and this means it will no longer have a say over future changes. A further consideration is that one of the central points of many leave campaigners was the issue of free movement of labour.

The free movement of labour, is part of the strict criteria which members must sign up to if they are to enjoy membership to and trade in the single market. It is very likely therefore that the UK would need to accept free movement as part of the terms.

The other alternative advocated by some ‘Brexiteers’ was to leave the single market entirely. In this scenario the damage to the economy will be significant, not least because we would face tariffs on exports to the EU.

In addition, many current trade agreements we have in place globally will need to be replaced because these deals were agreed as part of our relationship with the EU. They were made centrally by the European Union. So the UK would need to rapidly re negotiate trade agreements to replace these.

Although the result of the referendum was to end our membership of the European Union, there is no explicit mandate for what happens next as my colleague Richard Corbett MEP has pointed out.

The problem with the Brexit campaign, as we now know, is that there was no clear plan offered for life post Brexit. Neither was there a clear manifesto and as a result the next steps are muddy and unclear. A full debate in the British Parliament is therefore essential.

Richard Corbett said yesterday: “The idea that the recent referendum has completely settled the issue is surely dead. Referendums are supposed to settle issues. But does the UK look settled and calm?”

The new Prime Minister has a huge task ahead of her (or him) and how s/he directs the narrative and the first stage of negotiations is crucial, but first Parliament must hold a full and in depth debate about the future of negotiations.

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Lord Mandelson sets out his ‘Better In’ argument to the City:

Delivering a speech in the City of London yesterday, the former EU trade commissioner, Lord Mandelson, warned of the implications for Britain’s ability to trade in favourable terms with the EU in the event of a Brexit.

He explained how our ability to trade freely would be hindered not only in the European Union but also that it would have wider ramifications affecting our position in the global community and could impact our position as the fifth largest economy.

In his speech, Lord Mandelson pointed out that renegotiating the terms of trade would take a significant amount of time to arrange if we voted to leave. “What is at stake are the terms on which we would trade, especially for the financial services that are a vital part of UK trade. And just how long it would take to negotiate these terms,” he told the audience.

He also pointed out that Britain would have no say in the terms and conditions of trade agreements and would have to comply with European terms in order to get full un hindered access. “In Europe we will only get full, unhindered access if we re-accept all the regulatory rules and standards of the Single Market. Period. It’s a binary choice.”

He explained his experience in trade negotiations (he was the EU Commissioner between 2004-2008) meant he understood just how complicated trade policy is, far more so than the ‘Brexiters’ suggest.

Clearly, by exiting Europe Britain would not be in a strong bargaining position, “a politically-charged negotiation of a free trade agreement with the EU would, in reality, be much harder than this argument suggests,” he said.

Lord Mandelson also pointed out that as a result of the major disruption caused by leaving the single market “there would be a loss of the favourable access our exporters have in other parts of the world as a result of our self-exclusion from the EU’s common trade policy and its international trade deals would have more profound consequences than the Brexit argument admits.”

Recovering from these profound consequences would be difficult, Lord Mandelson warned. Developing a new set of British global deals “will be hard to obtain and won’t even come close to compensating for either of these two setbacks”, he said.

He reminded the audience that the European Union is Britain’s largest market, thousands of British SME businesses join cross-border supply chains and production networks. The effect harmonization and standardization has on businesses means impediments, such as tariffs, to doing business are removed.

You can read more on Lord Mandelson’s speech here:

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Ed Miliband is right to say that a Brexit would endanger lives

The spectre of the UK leaving the EU is, unfortunately, rearing its ugly head again. In a question and answer session last week, Ed Miliband draw attention to the many benefits Britain gained by its membership of the world’s largest trading bloc. Focusing on the downside of a British exit from the EU, Ed stated that “jobs depend on it (the EU), families depend on it, businesses depend on it…I just think we are much, much better working within the EU than not”. Speaking at Stevenage in Hertfordshire, Ed Miliband said that, economics aside, there are other drawbacks. “Just think about countering terrorism. We are much better working across borders to do that”.

In the light of this speech of Ed’s, it is worth reiterating that it appears the Conservative Party has not yet understood that in the 21st century terrorism, along with organised crime and trafficking, is transnational in nature, and shutting ourselves off from our neighbours and allies only serves to encourage the extremists and weaken our position. Under the Lisbon Treaty, the UK had the option to reject all the measures adopted prior to its entry into force.

The Tory-led coalition did, in fact, do this, and then selectively opted back into some of the provisions, meaning that law enforcement can rely on its European counterparts sometimes, and sometimes not. The Tories have determinedly kept us out of Justice and Home Affairs measures, weakening the opportunities of our police forces and security services to effectively neutralise threats. Once more the ideology has trumped the practicality, although this time with potentially fatal consequences.

As if that wasn’t enough, it has also meant that the other Member States are becoming more rigid in their attitude to our picking and choosing; meaning that the era of the UK having its cake and eating it is coming to an end.

As I have stated before on this blog, the almost schizophrenic stance of the Tories leads to unpredictable results, lengthy court cases and difficulties in practical enforcement. It will be interesting indeed to see how they justify this to the British people in the run-up to the general election.

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