Chuka & the Whip – a Logical Analysis

Who benefits from Labour’s continuing ambiguity on Brexit? The country, or the party?

A few days ago Chuka Umunna put forward an amendment to the Queen’s speech with the aim of securing our place in the Single Market & Customs Union.  Jeremy Corbyn instructed his MPs to abstain on the amendment though 50 MPs “defied the whip” and voted in support.  There’s been much discussion about whether this was foolish, vain, badly timed or actually necessary at this stage, given that the Conservatives are widely seen to be under pressure & the Labour party is trying to hold onto a coalition of pro & anti brexit voters. Much of this discussion however has taken place from a Labour party and not a national perspective.

This blog attempts to look at the position logically from a national rather than purely Labour party view.  Firstly, it’s important to lay out some basic assumptions.

There is no “cake and eat it” Brexit – There is no special deal available from the EU that does not include membership of the Single Market & Customs Union.  Therefore if we do not join both of these the UK will suffer significant economic damage.

Clearly the UK voted to leave & clearly immigration is an issue for the UK.  There is an argument which says membership of the SM & CU means we haven’t really left.  That doesn’t change the facts.  At some point the UK will need to choose between prosperity & “controlling immigration”, or, alternatively, the choice will be made for them by our political class.  But there is no middle ground, no “near exact benefits deal” that excludes FoM.  And all parties know it.  Therefore continued fudging around “the best deal” is a political device used by both major parties which actually does the UK no favours whilst it continues.

Labour’s Pro/anti brexit dualism dilemma is wholly it’s own fault – Yes Labour has brexit seats in the north and remainer seats in the south and therefore it’s played a skillful game of playing to both sides.  But this was a cynical decision it took, no-one forced Labour to play both sides.  Therefore, it’s ultimately up to Labour how it solves this problem because at some point it will have to disappoint 1 of these 2 groups.

The interests of the Labour party & the National Interest are not the same thing – Yes the Labour party has issues and yes it needs to sort itself out however at this time more than ever the national interest must override party interest – country before party.  Getting the Labour party into a majority government may be the single aim of party loyalists but it does not in itself end or mitigate Brexit, nor is it necessarily the best thing for the UK at this time.  In actual fact the most useful government right now would likely be some form of multi-party coalition that had a clear mandate to minimise or stop brexit and a balanced view on how to take the country forward.

The clock is ticking – Article 50 has been triggered and the clock is ticking.  It cannot easily be stopped or pushed back, if it can be at all.  There’s simply no time for Labour or the Tory party to “play the long game” as we should have started negotiations proper with a decent and well thought out plan 3 months ago.

 

So, to summarise, Labour must at some point in the near future come down on  being in or out of the SM & CU, and in doing so accept that it will disappoint its Leavers or Remainers.  The current behavior of both parties (“ambitious trade deal”/”exact same benefits”) is simply designed to delay this point as long as possible however this serves the individual parties interests and not the UK.  On the contrary, whilst this continues the UK economy is being damaged and we are looking increasingly ridiculous to the rest of the world.

If that in/out decision is proving impossible that will only be because Labour was dishonest with its voters at a colossal scale.  Labour activists will say this fudging was necessary however given the levels of dishonesty the British public has been exposed to these past 2 years that is arguably unforgivable and certainly not a “new kind of politics”.

 

So, was Chuka Umunna right in raising the amendment? To address that we need to consider it under 2 separate scenarios, is Corbyn a secret soft brexit/remainer or is he a secret hard brexiteer?  I have my own views on this but others have argued differently so we’ll consider both.

 

Corbyn is a secret soft brexit/remainer

In this instance the argument goes that Chuka has jumped the gun and ruined the long “soft brexit/remain” game that Corbyn & Labour are playing.  However if we examine this we have to conclude that, given there is no middle ground & we are in the SM & CU or we are out, the Labour party is essentially deliberately misleading its Leave voters.  Furthermore it’s doing this not in the National Interest but in the Party’s interest, in order to hold on to leave seats as long as possible.

Therefore, in essence Chuka & the 49 rebels were attacked for not colluding in an ongoing & drawn out evasion with the public in general and leave voters in particular, solely because Corbyn and the Labour party want to keep misleading Leave voters for as long as possible.  It’s important to emphasize this – Labour supporters appear quite comfortable with this “necessary” deceit but this will only create feelings of betrayal and disenfranchisement which will cause significant problems later.  Corbyn was supposed to bring a new honesty into politics.

 

Corbyn is a secret hard brexiteer

This is even more straightforward.  In this instance Corbyn and therefore a large part of the Labour leadership are resigned or happy with leaving the SM & CU, are deliberately misleading their remain voters and so there is no long “remain” game to disrupt.

There is however a long “leave” game to be disrupted which Chuka tried and hopefully succeeded in doing.

 

In summary, the Labour party are leading on either Leavers or Remainers as there is no middle option that satisfies both.  Furthermore by doing this they are putting party before country at a most crucial time and are playing a very dangerous and irresponsible game at a time when the UK is very vulnerable and in desperate need of honest leadership.  The fact that so many Labour supporters accept this cynical “Party first” attitude is worrying.

At best, this misdirection is leading to soft brexit/remain, and Chuka & co have been penalised for interrupting a cynical, self serving ruse which will only create further distrust and anger with Politics, at worst it’s leading to a Labour driven hard brexit, and anyone with any sense should be thanking the 50 MPs profusely.

My own personal view?  Corbyn is a hard brexit supporter, it’s not even really a secret to non Corbyn supporters and as such, Chuka should be applauded for trying to flush him out. 

Brexit – “Liar, Liar, Pants on Fire”

There’s a lot of confusion & mixed messages around hard brexit, soft brexit, open brexit, closed brexit however there’s one very simple trick to cut through the deliberate fog.

If you hear a politician talk about “Access to the Single Market”, “Retain benefits of the Single Market”, “Reform some aspects of the Single Market”, “Tariff Free Access” or in fact anything that isn’t “Stay in the Single Market”, then they’re lying to you.

dunt

It doesn’t matter if it’s Theresa May, Boris Johnson, John McDonnell, Nigel Farage, Jeremy Corbyn or even Kier Starmer saying it, it’s a deliberate lie.  Because these phrases don’t mean anything in practical terms.

There are 4 reasons for this:

  1. “Access to the Single Market” is a nonsense phrase. You’re either a member of the Single Market or you can trade with countries in the EU on much more restrictive terms based on specialist deals that take years to agree.
  2. The EU has been absolutely clear.  They will not agree any deal that is seen as “better” than being in the Single Market, and all 27 countries have to agree to any deal, it’s not a majority vote, every single parliament in all 27 countries have to agree any deal we get.
  3. We are by far the weaker party in the negotiations, and getting weaker all the time as we embarrass ourselves with our hung parliaments and lying politicians
  4. There was very little time to negotiate a new deal, there’s now, practically, no time. Trade deals take 5 years plus and we will have about a year.

If, for example, you cut through all the fluff and actually listen to what the Conservatives have said, what Labour are saying now and take yourself back to what Vote Leave said prior to the referendum – it’s all identical:

We can negotiate a pick & mix, cake & eat it, bespoke trade deal for the UK, without having to accept Free Movement of People

It was a lie when Vote Leave said it and it’s still a lie when Labour or Conservative politicians say it to you now.  In fact this has been the central lie at the heart of Leave/Remain, that the UK is in a position to demand a bespoke deal that suits us without any of the EU stuff we don’t want.  In fact, as far back as March 2016 when Johnson, Gove and their colleagues first started using the phrase “Access to the Single Market” the Institute of Fiscal Studies had this to say:

Any country in the World Trade Organisation (WTO) – from Afghanistan to Zimbabwe – has ‘access’ to the EU as an export destination. Single Market ‘membership’ by contrast involves elimination of barriers to trade in a way that no existing trade deal, customs union or free trade area achieves.

“Access”, despite what Vote Leave said then and what Labour & Conservatives are saying now doesn’t define anything because every country already has it. Vote Leave started the lie, but Labour & the Conservatives continue to support it.  The tragic failure of our media is that Vote Leave, Labour & Conservatives have been able to use this meaningless phrase unchallenged for 15 months or more.

For Labour in particular, they are committed to leaving the Single Market

Given the above, that means hard brexit.  It may come as a shock to hear that the Labour Leadership are committed to a hard brexit but it shouldn’t be.  It’s in the manifesto if you again cut through the fluff & Corbyn and McDonnell have actually been anti EU for most of their political careers.

Ironically, Hard Brexit was dead, or so we thought, the night of the election.  David Davis was retreating from it due to the incoming results:

davis2

However it turns out that Corbyn & McDonnell were happy to apply the kiss of life because, following their support Davis reversed position:

duntx

There’s really no other way to spin this.  Corbyn & McDonnell have deliberately revived Hard Brexit and are now propping up the government position.  This clearly goes against everything people think they know about Corybn, but it’s still the situation.

It should be noted that “leaving EU” does not necessarily mean “leaving Single Market”.  Norway and other countries are in the EEA which sits outside the EU but which maintains membership of the single market, including the freedom to live & work anywhere in the EU.  By saying the above McDonnell and therefore Labour are making a deliberate choice, to interpret the referendum in the most extreme way possible.  This is exactly what Theresa May did.

A “Jobs first” Brexit for example is a nonsense phrase unless “Jobs first” means staying in the single market and customs union.  Any other approach will result in job losses.

Hard Brexit means a massive hit to the economy and likely a recession.  This in turn will make all the good stuff in the Labour Manifesto undeliverable without massive borrowing, which, in turn, will fall on the shoulders of the young in particular over their lifetimes.

That isn’t to say that the things in the Manifesto aren’t worthwhile, many of them are, it’s just that they become practically undeliverable following a hard brexit (which will cost anything from £36 B to £100 B plus per year).  Instead, we’ll likely have a lost decade whilst the country tries to recover.

Which brings us back to the reasons many young people voted for Labour, because they believed Labour was on their side.  Unfortunately, they’re really not, because by exiting the Single Market they are sacrificing the ability for young people to live & work in 27 countries, as well as their financial future, to appease UKIP voters who want to see less foreigners OR to give Corbyn & McDonnell maximum flexibility to create a managed economy like the UK had in the 1970s.

This post explains in more detail but essentially there’s membership of the Single Market, with the 4 freedoms including free movement of people & the Customs Union, or there’s some rubbish, restricted last minute deal that means losses in jobs, impacts on services & removal of the ability to work and live in 27 countries.  There’s nothing really in between.  Anything else is a lie.

 

Materials:

Why the UK has little practical leverage with the EU in negotiations

Difficulty UK will face in replacing lost trade with EU

Study on loss of trade from leaving Single Market

Know your Soft Brexit

Brexit Black hole in May & Corbyn’s manifesto

 

 

 

Brexit & Traitors

One major theme from Brexit was the “patriotism” of the Brexiteers.  They “believed in Britain” whereas Remainers were “traitors” who were “talking the country down”.

May made specific reference to this when she challenged Corbyn’s patriotism.  True patriots believed in Brexit and would “Make Britain Great again”, we would take our country back not only from the EU, but from themake treacherous remainers who were EU huggers that didn’t believe in the UK.  The unpatriotic remoaners would be put in their place and the UK would sail forth to reclaim it’s rightful place in the world.

It was going to be a world of new opportunities, new trade deals and dynamic relationships.  When Trump came to power Theresa May announced that we were going to lead the world hand in hand with the USA.

May lead the world

Yes, she really said that, strange at the time given his campaign but positively bizarre a few short months later, the idea that we would be looking to tie ourselves to the US president. What does that say for our international standing when even the majority of the American people find him embarrassing?

But surely patriotism MUST be about international standing, a nation’s self respect, it’s influence and it’s place in the world and in this regard the UK has always punched above it’s weight. We were considered part of the “big 3 of Europe”, the 3 major players who influenced the direction of the EU

big 3

Not of course by the Eurosceptics.  They hated the EU, they hated the very idea that we might share influence with other nations.  Scratch the surface of a brexiteer and you’ll typically find someone with dreams of Empire.

hannan

(if I can break though the “4th wall” for a second.  Yes, the above is real.  Search “Hannan Anglosphere” and it pops up.  Incredible.) However unknown to most of us the EU raised the UK and was a force projector for our influence.

How could it not be?  We had big 3 status but also we were the bridge between the commonwealth, the USA and the EU because of our historical & cultural links.  In reality the UK had huge “soft power”, something we took for granted.  So, where is the UK now on that world stage?  How is our influence? Are we growing in stature, does the world respect us more?

No. We’re now bundled in with Trump.  Our allies in Europe see us as being unreliable & cut from similar cloth. The political landscape is moving in the EU, but we are not a part of it, for the first time in 40 years.  Prior to that, UK policy was to play off one European nation against another, that simply isn’t going to happen any more.

merkel

As for our outlook, that Brexit booming economy has stumbled, our economic growth has dropped from the top to the bottom of the G7 nations.  Foreign investors are nervous, as of course they will be, as business & investment hate uncertainty. Meanwhile,  Our trade secretary is so desperate to break into trade areas not already dominated by the EU that talks about “shared values” with a dictator in the Philippines.

fox

Consider the above image, and then consider these quotes from Duterte.

Hitler massacred three million Jews. Now, there is three million drug addicts. I’d be happy to slaughter them…At least Germany had Hitler. The Philippines wouldn’t.

I saw her face and I thought, ‘What a pity… they raped her, they all lined up. I was mad she was raped but she was so beautiful. I thought, the mayor should have been first

The world is seeing this.

As for our Foreign Secretary Theresa May (who herself has shown incredible weakness obvious to any external observer), for party political reasons, sends out Johnson to represent us on the world stage, something that’s actually had foreign diplomats laughing in disbelief.  Our Brexit Secretary has flip flopped in his position every few months and displays an utter lack of awareness for his brief.

chartdavis

Our influence in Europe is greatly diminished, the commonwealth by and large think we are foolish and don’t see new trade deals happening any time soon and all we have to fall back on is our fabled “special relationship” with the USA.  Our strongest ally, our greatest international Brexit cheerleader.

Well, no, not really, because size really does matter and, all too predictably, the US is favouring an EU market of 440 Million over the UK.  So much for Mr Brexit.

teleg

The sad, painful reality is, we were a player in the world.  And perhaps it didn’t matter to a lot of us or perhaps we took it for granted.  Nevertheless, we’ve lost our EU influence, and we’ve lost our role as the bridge between other countries and the EU.  And the result is we’re tied to Trump, we have no other options.  What does that mean for for the national interest, for our place in the world?

It means the US can try to implement a racist (and illegal) Travel ban, and we say not our business as long as our citizens are not affected. It means the US can pull out of a vital agreement to fight climate change, and we’re “disappointed”.   It means that when the EU leaders try to create a united front to push the US into reconsidering, our foreign secretary describes it as “tagging along” like it’s some schoolyard follow the leader exercise, thus insulting our allies and demeaning his office.

Tag along

Finally it means this can be sent, in the middle of a crisis, attacking the Mayor of our capital

trump

And then this, when he gives a dignified response:

Trump2

and with the world watching, and with Sadiq Khan working to restore calm, our strong and stable PM says nothing in his defence for 2 days whilst that crisis is being resolved until she’s forced to sneak out the briefest and lightest of condemnations in an off the cuff interview.

Can you imagine a European Leader sending tweets like that? Can you imagine a European Leader not immediately & robustly responding?  This is what it means to “Make Britain Great again” – influence lost, bracketed with Trump and so desperate for his attention that we can’t even respond to insults.

 

But again, does this matter?  Maybe not, maybe all that soft power stuff is for the inner circles of Westminster and whispered conversations in Embassy corridors. But if it matters to anyone it should have mattered to the Brexiteers, who put so much stock on us being “under the cosh” of Europe.

But it clearly didn’t and it clearly doesn’t, because they’re silent.  All those flag waving brexit leaders aren’t stupid (stick with me here), they must know what this is doing to our country?  The EU will not roll over.  The Single Market will be a huge loss.  The new Free Trade Deals are years away.  The Special relationship is like any of the President’s relationships.  Politically and economically the UK is moving away from the EU AND the USA and we have never been more isolated.  Yet not one of the commentators will turn around and say “OK, we made a mistake, this wasn’t the plan”.  Clearly they didn’t love their country all that much.

But of course it does matter.  International relationships matter.  Alliances matter.  Countries having each other’s back over terrorism, foreign despots, climate change, the economy and a whole host of other global issues matters.  And yet here the UK is, more isolated, more exposed & less respected than at any time in our history as a nation.

Patriots? Or jingoists who trashed our reputation and our standing in the World.  A reputation built up over years, destroyed in months.  We will likely never recover the influence we had. To many countries we just look foolish, vain, unreliable, unpredictable and, let’s face it, a little bit racist.  That is the reality of Brexit and the “Patriots”.

 

PS. A note on our political class.  Whatever the public statements Brexit is supremely against the national interest in almost every sphere we can think of.  The first duty of parliament is protection of the nation and without question we are less secure as we Brexit.

So when you consider May, Davis, Johnson, Corbyn, Starmer and all the MPs from Labour & Conservatives, remember that they are not stepping up to be counted as the Lib Dems, SNP, Plaid Cymru and Greens are to a greater or lesser extent.  They are going along with a process that they know, or should know, is significantly damaging to the UK and which directly affects it’s security.

Perhaps when the vote was fresh it was hard for some to fight against it but as the evidence gathers there must surely be an imperative to stand up and say “Yes, I understand there was a narrow vote for this, but as a member of a representative parliament I cannot in all conscience support it.”  The only reason not to do so is a desire to protect their seat or position.

History will not be kind to these representatives of the people.

Paxman & Battle for Nbr 10

Quick jotting down of one particular thought around the “Battle for Number 10” TV Election discussion.

Like many of us I’ve been surprised/annoyed at how the majority of our TV journalists have essentially let Brexit and it’s issues pass them by.  Complex issues have been trivialized and, 10 months later, we’ve still yet to see a proper, adult discussion on TV on the major components.

Tonight however Jeremy Paxman took this to a new level.

Approximately 6-10 times Theresa May answered audience questions with “but everything depends on getting the best deal for Brexit, and only I can do that”.  Everything from NHS, Security funding to Schools depends on the economy and the economy in turn depends on getting a good Brexit deal.

So the deal is clearly important, vital in fact to UK interests.  I know this is obvious but it’s important to state that this was May’s entire position.  It’s fair to say she is running the election in part on how only she can get that best deal.  And we also know that the government have completely failed to cost the impact of a “no deal” scenario (or, possibly, they have costed it but dare not release the figures),

So, in Paxman’s one to one interview he asked her, 4 times, “Are you however prepared to walk away from the EU with no deal?”.

And May said “Yes”

And Paxman said “Thank you, goodnight”.

The obvious, vital follow up question which demanded to be asked was “OK, but what will the impact be on the UK if we walk away?”. Or, the alternative “Then if walking out is an option, why haven’t you costed the impact of that walk out?”.

But neither was even hinted at.  Paxman harried Corbyn over why obscure beliefs of his from the last century were not in the Labour manifesto…but not a single word on what might happen to the UK if this vital deal, that May based almost her entire appearance on, arguably the entire election on, doesn’t actually happen.

Paxman is not stupid, he may not believe the “cliff edge” predictions of a no deal scenario but he must know they are out there.  And the predictions are dire, there are even worst case scenario predictions that we might not be able to feed ourselves when the supply chains are disrupted.  But instead of asking a single question on “what happens to us if we walk out with no deal?” he instead let May go out on a high saying “yes, I’d walk out”.

This is unacceptable, this is a shocking dereliction of duty.  What possible value is there in discussing Labour or Tory manifesto costings if there is the very real possibility hanging over our heads of a chaotic brexit crash out of Europe,  Yet Corbyn’s thoughts on the Monarchy got more attention.

 

This blog talks about the failure of UK journalism when compared to the US.  The author talks about how in the US the failure to take Trump seriously has reinvigorated the US press.  They are now being more critical of themselves and the new administration, to do their job in other words.

In the UK however, as we saw tonight, our journalists continue to let us down.  We will go into the election and into Brexit, and no TV journalist will even attempt to help the public understand the real issues.

Corbyn & Brexit

Perhaps this article is damaging.  Possibly it makes sense to keep quiet and hope for a strong Labour showing.  Maybe Brexit with Labour will be better or at least not so bad.

But we have to be honest, at the head of Labour is Corbyn & behind him are the hard left figures who’ve been there since he was first elected.  So what can we say about this man who displays “integrity, honesty & clarity”?

Clearly, the key to Corbyn’s appeal is that he is an honest, decent, different kind of politician.  A man of integrity.  Yes, he may not be polished or media friendly but he means what he says.  He’s someone you can believe in.

corbyn integrity

However, there has also been the persistent rumour that he wasn’t really a Remainer at all but a secret Leaver who fronted a lackluster Labour Remain campaign.  This is particularly important as many of his supporters were young, ardent Remainers who have the most to lose from Brexit.

This rumour has been dismissed by these same supporters as agitation by bitter “Blairite” MPs. Lets consider some of the evidence:

We now have the Labour Manifesto, and this comment from Ian Dunt on it’s contents:

corbyn

Is this fair? Has Corbyn always been in the 3rd anti-single market camp?

jceu

This was a comment from Sept 2016 made by a Corbyn aid.  It’s a confusing message (not least because it fundamentally misunderstands the single market) however it clearly mentions Corbyn’s issues with State aid & nationalisation with regards to the EU & the Single Market.  He was “campaigning against” these “aspects” of the EU in the middle of a campaign to stay in the EU.

How can you be for the EU if you have always wanted to engage in significant nationalisation & state aid programs?  If Corbyn believes that the new Manifesto would be incompatible with these aims, then how could he be a remainer?

 

We need to cast our minds back to September 2015, when Corbyn had his first surprising leadership win.  His historical anti EU stance was well known & the PLP knew the referendum was coming so they all met him to question him on his plans and thoughts. He’d been elected by a significant number of new Labour supporters however these supporters were overwhelmingly pro-remain & he had no support in the PLP.

If it became clear that he was still as anti EU as he had been his entire political career, what impact would this have had on his new support base?

However, following the meeting almost all of the PLP were convinced (or let themselves be convinced) that he really had adjusted his views on the EU (they quickly changed their minds after the result but that’s another story).  One however, Chuka Umunna, wasn’t.  He resigned the bench, saying this:

It is my view that we should support the UK remaining a member of the EU, notwithstanding the outcome of any renegotiation by the prime minister, and I cannot envisage any circumstances where I would be campaigning alongside those who would argue for us to leave; Jeremy has made it clear to me that he does not wholeheartedly share this view

But OK, perhaps he’s seen sense since that point nearly 2 years ago, perhaps he did learn to embrace the EU?

Well, lets look at this tweet:

Corbyn

And lets consider the 3 major campaigns we’ve seen him in, 1 leadership, 1 General Election and 1 for remain.  We know that against considerable hostility, in his leadership campaign & the GE we saw him get his message out and show real enthusiasm and be passionate, even inspiring.  Huge crowds, great oratory, even genuine leadership.

However, on the campaign that wasn’t about his own personal success, Remain, he was barely seen.  Few TV spots, lackluster performances.  In fact if you go back and watch his 2 TV appearances for Remain you’ll see him being glum, qualified, tired.

And now he’s the strongest voice in Labour for a complete break with Europe. He’s whipped his party to an unconditional Article 50 passage and his manifesto is full of economic nationalism.  His speeches about British Steel show his deep commitment to state aid and a managed economy, impossible under the EU.

So no-one can seriously, honestly compare & contrast the last few weeks of the election with the Remain campaign and say he was equally passionate for Remain as he was for his own personal success. At best, he didn’t care, at worst, well.

 

So, did Jeremy Corbyn really change his mind on the EU in 2015 (whilst maintaining all of his other 40 year old beliefs, including those on state aid & nationalisation but on this one issue lining up with his new supporters), lose the referendum with sadness, ask for immediate Article 50 invocation “by mistake” and then think “well, there’s no chance of staying in the SM so we may as well put in place all the nationalisation & state aid programs the EU was stopping us doing”?

a50

Or was Chuka Umunna right?

Because if he was right, then Corbyn was never really a Remainer.

And if he wasn’t, then he misled all those thousands of new supporters at the worst possible time.

And if that’s true, then the whole persona of a “decent man of integrity, not like all the other politicians” comes crashing down.  And ultimately that’s all he has.  He’s not politically skilled, he’s not particularly brilliant and he’s certainly not worldly wise.  The whole pitch is a simple man of honesty & integrity.

Of course I can’t look inside his head and see if it’s got “Leaver” or “Remainer” running through it, I can only consider the evidence.  Barring a few speeches he gave off camera to the faithful there is little proof that he was actually for Remain and, as mentioned, the contrast between the 3 campaigns is frankly startling.

But if he really was always a leaver, and if you’re a Corbyn supporter (as opposed to perhaps a Labour supporter) then surely you have to re-examine this.  Because if Corbyn really is a true Leaver it will be seen as one of the greatest political betrayals in British history, a committed Leaver supported by an army of staunch remainers, who worked to move us away from the EU in order to implement a 40 year old socialist program.

And who was also, by the way, careless or disinterested about the effects it would have on the people he’s supposed to care about.

Brexit Fantasies – They need us more than we need them

Summary

  • Around 60% of our trade goes to or through the EU
  • Around 10% of EU trade comes to UK
  • In the event of a “No Deal” exit from the EU, EU-UK trade will not cease but it will significantly reduce
  • From a UK point of view a reasonable estimate of a 25% reduction in trade creates a £75 Billion trade gap or 15% of our total trade
  • From an EU point of view the reduction could be 2% or less of total trade for many countries, several could see little or even no loss of trade
  • All countries however get a veto on the final deal and so therefore the UK is in the weakest possible position in terms of negotiations
  • We need them far more than they need us

 

 

As Brexit continues there still appears to be a significant thread of thinking which maintains “they need us more than we need them”, in other words, the EU is bound to cave in because they sell far more to us than we do to them and therefore a “no deal” scenario would hurt the EU far more than the UK.

If this is true, we have a strong hand.  If not, we’re bluffing, and we will be caught out.

So let’s examine this, step by step.  Many figures, quotes taken from fullfact.org

EU/UK Trade position

It is true that there is a large trade deficit between the EU & UK:

The value of trade to the UK and the rest of the EU—we exported about £230 billion worth of goods and services to the rest of the EU in 2015, according to UK data, while the rest of the EU exported somewhere around £290 billion to us.

It is this £60 Billion deficit that drives much of Leave thinking on why they need us more than we need them.  However, If you look at that deficit on a country by country basis March 2017 Trade with other European countries RB

it becomes clear that the deficit is hugely skewed towards Germany.  Only 5 in 27 nations have a surplus of more than £5 Billion.  Germany may need a deal but for most countries it’s much less of a concern, if it is a concern at all.

This becomes even clearer when we look at relative market sizes (thanks to  for charts)

asymmetry

44% of our trade goes into the EU, only 7% (admittedly some figures put it higher) of their trade comes to us.  More importantly, only one country (Ireland) has more than 10% of its trade with the UK.   This is important to understand as every individual country gets a veto on the final deal so all 27 must be convinced it’s in their best interest.

However, the EU also has existing FTAs with 53 countries and is close to completion on an additional 41 FTAs.  Existing FTAs cover approximately 13% of our trade and the new 41 FTAs a further 4%.

So.  44% + 13% + 4% = 61% of our trade going through the EU. And given the argument over exact numbers let’s say EU trade to UK is 10% of their total.

In other words, we need them for 60% of our total trade & they need us for 10% of theirs.

Let’s run through a “no trade deal” impact scenario.

Impact of no deal

The following is greatly simplified but, as the government has failed to estimate the impacts of the no deal scenario it’s probably as good a picture as any.  The day after March 2019, if no deal is in place we lose access to the Single Market, the Customs Union, the 50 additional trade deals the EU holds and the 41 close to completion.

  • UK – Trade will not cease with the EU and the other 50 countries, but it will reduce.  Let’s assume a reduction of 25% loss of trade from UK to EU
  • EU – The EU has a surplus and therefore it will lose more trade than we do, however, it will likely still have access to those 50 trade agreements.  But we’ll say 35% total loss of trade from EU to UK.

This is a simplification as we don’t know the exact mix, what sectors will be affected more or less etc. however 25% loss for UK, 35% loss for EU seems reasonable in the event of a no deal scenario and on the face of it shows they need us more than we need them. However:

  • For the UK – 25% of 60% total trade is 15% – a loss of 15% of our total UK wide trade.  This is significant by any stretch, its about £75 Billion.
  • For the EU – 35% of 10% is 3.5%. EU losses are a fraction of ours.

However that isn’t the whole story.

That 25% UK trade loss will create a demand gap in the EU, a £75 Billion market opportunity for the other 27 countries in Europe.  Cars that are no longer sold to Italy by the UK can be sold by France or Germany.  Every EU country will have 26 other single market EU countries (and 4 EEA ones) to sell to and all will be perfectly placed to go after that £75 Billion in available trade. If they capture even half of it their losses shrink to 2% or less.

As an illustration, Spain would lose 35% of its trade for the UK under these figures. However its UK trade represents only 7% of its total trade and therefore a loss in real terms of about 2%.  If Spain is able to capture some of the market opportunity vacated by Britain it can reduce those losses to perhaps 1%.  Not ideal, but not catastrophic.

How about the UK? Well, we will have no markets available to us after March 2019 that we don’t have today.  There is no new opportunity or opening in our markets that we can use to fill this £75 Billion gap.  Any new trade deals will be several years out and no-one, not even the Leave Leadership, now expects us to sign deals of any size on the day we leave.

Different % figures can be used however in any scenario the impact on the UK of no deal is magnified in comparison to the EU as they are 4 or 5 X more important to us than we are to them, as a proportion of our total export economies.  And as mentioned, we are even less important to most of the 27 who barely trade with us but who also get a vote on the final deal.

However even that isn’t the whole story.

The country with the single biggest surplus is Germany who have huge reserves & will support the EU.  We are running at a deficit and can’t even afford our NHS.  We don’t have a Germany in our corner.

To answer this, Brexit supporters will say “yes, but look at the deficit the UK has with Germany – the German’s will insist on a deal”.  They won’t, because the UK isn’t their biggest market:

german-export-shares

The EU is.  Germany exports nearly 7X more to the rest of the EU than it does to the UK. That market is far more important to Germany and it will preserve EU stability above all else.

Conclusion

It is simply wrong to say the EU needs us more than we need them, or that we can handle a 15% loss in total trade whereas they cannot absorb a loss of 2-3.5%.  Brexit supporters are guilty as always of taking a UK centric view which is based on a misconception of our actual bargaining power.

This is not helpful as clearly the UK needs a good deal with the EU, and fooling ourselves that we can simply wait for the EU to come to us does not help the UK at all.

Many will respond “ahh but of course we’ll get a deal” – that isn’t the point.  The point is we need a deal far more than the EU does and we cannot walk away without one, to do so would cause us far more pain than the EU.  Therefore, we will take what we are given or we will walk away with nothing.

The more we tell ourselves otherwise, the greater the chance we will walk away with nothing.

 

Simplistic Leave Arguments

Leave arguments on Twitter are reducing down to a fairly limited set of options. Possibly a level of desperation setting in.  For my personal sanity it’s easier to record them here as it saves typing the same responses in 6 times daily.

  1. “we knew what we were voting for” – this is ridiculous as a) people voted leave for a wide variety of reasons, there is no “we” and b) almost no-one even imagined, much less voted for the deeply damaging hard brexit we seem to be heading for.  Leave supporters in particular appear to have an ability to rewrite history, however the reality is just prior and after the vote leave supporters were all over the place.
    pollsimple
  2. “you lost, get over it” – this is clearly an affront to democracy. By the time things shake out there could be 3 years between the vote and knowing the deal. We’ve had 2 GE’s in less time in the past. Yes, remain lost, just as most people “lose” in every general election however this argument is as pointless as saying to someone complaining of Conservative neglect of the NHS “well they won the election 2 years ago fair and square, there’s no point whinging now”.
  3. “Stop talking Britain down/we all just need to pull together” – this just puts the blame and/or responsibility for a badly thought out and implemented Brexit on the people who opposed it rather than those who pushed it forward.  We’re starting to see a tendency to see Brexit as a “Blitz” like event, in which if everyone just pulls together and shares out the powdered egg rations we’ll get through it. But this a fake narrative, put in place by leave supporters who don’t want to take responsibility for their vote. Brexit is a self inflicted crisis brought about by a tiny majority.  The path of Brexit is not an act of faith, everyone thinking nice thoughts won’t make any difference in the negotiations that are starting.