Month: June 2019

Is Britain heading for a no-deal exit?

The biggest complaint about politics from people who run businesses is not Brexit itself, where opinions are divided depending on the depth of relationship with other EU countries, but on the uncertainty. We don’t know exactly what shape Brexit will take and when. One businessman explained to me, last February, that it was impossible to prepare for the impending departure date of 29 March because he didn’t know what he was preparing for. That date has come and gone and the uncertainty has just got worse.

The new crunch date is 31 October, and attention has moved on to the contest for the Conservative leadership, as this will almost certainly determine who will be our next Prime Minister. Both contenders, Boris Johnson and Jeremy Hunt, maintain that achieving Brexit on this date is their main aim. What is less clear is how much of a rupture either man would be prepared to risk to achieve this goal.

Mr Johnson is the strong favourite but his campaign is not going smoothly. Mr Johnson has never presented himself as being a slick operator, so this is not particularly damaging of it itself. But his strategy to date has been to say as little as possible, to allow a wide spectrum of Conservatives to project their wishes into the vacant space. To hard Brexiteers he has promised to take Britain out on 31 October come what may. Those who would rather delay than suffer a full rupture detect some flexibility. Attacks on Mr Johnson both on his private life and his Brexit stance have forced him increase the level of press exposure in order to help recover the initiative. That has forced him to reveal more of his thinking, but this has not helped us very much.

What he has shown is a breathtaking optimism. He says both that a new deal is perfectly feasible in the time, and that a no-deal does not mean all that much rupture in fact. This sheer candy floss, sweet-tasting but disappearing on contact with anything solid. For his main audience, the Tory membership, this is fine. They are fed up with the consistent pessimism they hear from critics of Brexit, and appreciate the ray of sunshine that Mr Johnson provides. But what does it actually mean?

Commentary on the various Brexit strategies coming form the Conservative leadership candidates is relentlessly negative. I largely share this scepticism, but I don’t feel there is much point in repeating it. Critics of Brexit tend to programme out more optimistic scenarios. But if we are to understand more clearly what might happen we should not dismiss the optimistic gloss so easily.

The first possibility is that a Withdrawal Agreement will be agreed by 31 October, and that it will get through parliament. The first problem is that both leadership contenders say that it needs to be changed from its current form, but that the EU side has said that it is unchangeable. The second problem is that there is very little time to agree and implement something different. But the EU fears the full rupture too, so something might be done that saves face on all sides. This might pass parliament because Brexit supporters realise that trying for the no-deal alternative leads to further delay, which plays into the hands of the Remainers. The deal cannot be much different from what came before, but there may be more Conservative solidarity, and Labour discipline might start to crack. This seems to be Mr Hunt’s game-plan. It could work. But the odds are against it. It has been tried before, by Theresa May, and the EU called the British bluff successfully. They will be tempted to do so again giving the British prime minister very little to play with.

The second possibility is what might be called a no-deal no-rupture Brexit on 31 October. This seems to be Mr Johnson’s big idea. At first sight it is nonsense. Any kind of no-rupture, with a transition period where little practical changes, requires a deal of some sort. But what of a small-deal small-rupture Brexit? This would involve the transition period as specified in the original Withdrawal Agreement, the target of a Canada-style free trade agreement, with WTO arrangements as a fall back. The other details. such as Ireland and the money, will be worked out later. What’s in it for the EU? There would be no rupture, or at any rate a delayed one, which would remove a big headache, especially in Ireland. The UK would no longer pollute EU institutions such as the European Council and the European Parliament. They would get at least some of the money envisaged in the original Withdrawal Agreement.

Would the EU buy it? Of course it is a renegotiated Withdrawal Agreement by other means, with the Irish backstop removed from it. And there is not much time to negotiate it. That’s a big problem. The more of the original agreement is grandfathered into the new arrangement to save time, the more of a humiliating climbdown it would look for both the EU and the Irish government. There needs to be a large dollop of something from the British government to compensate. At the moment I really can’t see what this would be. Mr Hunt’s plan looks a much better bet.

But the question remains how far Mrs May’s successor is prepared to risk a full no-deal rupture. This still seems to scare a lot of people. The threat of large agricultural tariffs on exports to the EU, including over the border in Ireland, is a big deal for people that Tories care about. And there remains the chance that parliament could sabotage it by bringing the government down.

That leaves a wide spectrum of possibilities, from remaining in the EU after all, with or without a further referendum, all the way towards a full no-deal rupture. And each of these possibilities has a significant probability. Meanwhile the opinion polls show four political parties each with about 20% of the vote, something that would make the outcome of any election highly unpredictable. There is no relief in sight for Britain’s businesses.

A divided nation is bad news for the Tories

The two televised debates between the contenders for the Conservative leadership served at least one useful purpose to those of us who have no role in the process. They showed how divided the country is and how different sections of the public live in different and irreconcilable worlds.

Brexit is the problem.The contenders hunted for a reasonable centre-ground on other issues. They deplored the failings of public services after years of cutbacks; they thought tackling climate change should be a top priority; they celebrated multiculturalism. None of these are a given amongst pro-Brexit hardliners. The Brexit Party’s Nigel Farage happily focuses on tax rather than services, says climate change is a hoax and deplores multiculturalism, drawing inspiration from Donald Trump. There is polling evidence that such a combination of views is commonplace amongst Conservative Brexiteers.

But this moderation amongst the leadership contenders counts for very little. They are overwhelmed by Brexit and the candidates take one thing as a given: Brexit must be achieved by 31 October (or perhaps a shade later) at virtually any cost. Arguments about whether or not this is a good idea are redundant, because, they agree, public confidence in politics and democracy would collapse otherwise. Implementing the letter of a three-year old referendum decision is a decisive test for democracy in this view, otherwise the liberal elite will have succeeded in thwarting the will of the people. The only argument is over attitudes to a no-deal Brexit, and even there only Rory Stewart (now eliminated) suggested this should be ruled out, as much because parliament is against it as that it is a bad idea in itself. All other candidates agreed that a no-deal Brexit was a bad thing, but said that the prospect of delaying Brexit was even worse. They tried to reconcile this awkward stance by saying that it was crucial for the country’s negotiating position to present a credible threat of no-deal, as if negotiating a complex and long-term political relationship was like Tesco trying beat down its suppliers on the price of cheese.

To people like me, who may now be in the majority of the country as a whole, this is utter lunacy. We should do Brexit because it is good for the country not solely because of a three-year old referendum. And just what is so undemocratic about going back to the country in a further referendum if parliament cannot agree on a deal? And yet that last option is so beyond the pale amongst the leadership candidates that it wasn’t even discussed. And as for keeping no-deal “on the table”, it looks like an effort in pointless self-harm that will weaken the county’s negotiating position in the long-term yet further.

And yet the leadership candidates are not stuck in a Westminster bubble. It is the reverse: they know full-well that this is how the party’s core supporters feel – and that is why they deserted en masse to The Brexit Party (TBP). If the new Conservative leader does not take this tough line on Brexit, the party could very well melt down. The leadership contest must be fought in the world-view of the hard Brexiteers, with the rest of us acting as helpless spectators.

But that is climbing out of the fire and into the frying pan. The main reason that the Conservatives did so badly in the European elections was defections to TBP. But there was another reason: many others defected to the Liberal Democrats. I know quite a few of them. These people do not inhabit the world of the hard-Brexiteer. To win the next general election, the Conservatives will somehow need to get these people back. The contenders left some clue as how they hoped achieve this. The first was they want to avoid a general election for as long as possible. They all agreed on that, notwithstanding the government’s lack of a majority, and their protestations about democracy. Second they hope that by achieving Brexit they can move on, and change the subject to stopping Jeremy Corbyn.

That could work, but it depends on passing something that looks very like Theresa May’s deal, allowing departure on 31 October, or even before. This will soften the Brexit transition, and, crucially, make the argument over a further referendum redundant. Brexit will still be an issue, as the future trading relationship has to be negotiated, but on a level that makes it much easier to push down the political agenda, though there is a danger that the end of the transition period gets tangled up with the next general election.

But it is much harder to see this working with a no-deal. Such an event would rank alongside Black Monday in 1992, when Britain dropped out of the European Exchange Rate Mechanism, destroying John Major’s newly reelected government’s credibility – a position from the Conservatives were unable to recover for nearly two decades. Furthermore it would create a series of future crises that would mean that the government would be unable to control the agenda. The sunny post-Brexit uplands, that leadership contender Michael Gove hopes for, will be very hard to usher in in time.

Can a new Prime Minister succeed where Mrs May failed three times? There is hope. Labour MPs, especially those in heavily Leave-voting areas, are getting twitchy and discipline may be starting to break down, to judge by Labour’s failed attempt to move against a no-deal last week. The EU may be able to offer a token something to cover the retreat. Some of the contenders correctly understand that the key will be the Irish Republic’s government, as a no-deal would create huge problems there. English Tory understanding of Irish politics is woeful, but something may be achieved.

Meanwhile the non-Brexit supporting half of the country will have to endure some further weeks of public debate amongst Conservatives conducted in a world that looks completely unreal to them. In due course there will surely be an anti-Brexit backlash, for which Conservatives will be utterly unready.

The astonishing rebirth of Boris Johnson

The rebirth of Boris Johnson’s political career is astonishing. He has secured the backing of enough Conservative MPs to ensure that his name will be one of the two that go forward to party members to choose as party leader. And the party leader will, according to now well-established precedent, become the next prime minister. He is expected to win. I am only beginning to digest this.

Mr Johnson’s main personal political achievement to date (as opposed to his role in the 2016 referendum, which may have been decisive) has been securing two terms as London’s Mayor. This was hardly the triumph that his boosters claim. His principal opponent (Labour’s former Mayor Ken Livingstone, well past his sell-by date) was weak, and scrutiny from the media and elsewhere proved easy enough to evade. He had little or nothing to do with the achievements touted on his behalf (such as the 2012 Olympics, the public bike scheme, and an improvement in London’s state schools), and there were a series of ill-conceived vanity schemes (new double-decker buses, the “Garden Bridge”, water-cannon for the police). His one role in senior politics was a disastrous stint as Foreign Secretary. The spectacular implosion of his previous bid to become Conservative leader in 2016 would have finished most political careers. Most of his fellow MPs don’t like him. He is, however, one of the few modern British politicians with personal charisma, and he is as different in personality from the current leader, Theresa May, as it is possible to conceive. Given Mrs May’s failure, the demand for the next leader to be different is understandable. Mr Johnson, who has managed to accrue a significant personal income, has bought in professional advice, and it is working wonders. There are parallels here with that other reborn political power, Nigel Farage. Political advisers (or “strategists” as these tacticians like to be called) had a bad name after the failure of Mrs May’s 2017 general election campaign, but they’re back with a vengeance. In addition to good quality tactical advice, he has also had the benefit of an excellent parliamentary whipping operation – one observer detects the influence of former Chief Whip Gavin Williamson, who proved a gaffe-prone Defence Secretary and was sacked by Mrs May, but who was very effective in his former role.

Is his rise to Prime Minister inevitable? There are two obstacles. The first is the members’ ballot. Such polling evidence as there is suggests that he has a commanding lead. But as it starts his opponent is likely to have some momentum. Two of the potential candidates might give him trouble. Jeremy Hunt, his successor as Foreign Secretary, oozes a smooth competence, and could harvest a move for a safety vote if the wheels start to fall off the Johnson campaign. That is not impossible; many have noticed that his advisers are trying to keep him out of public scrutiny. This is how things went so badly wrong for Mrs May in 2017: he will have allow for a bit of rough-and-tumble.

The other candidate that could be trouble is rank outsider Rory Stewart. He is the only other candidate with a personal charisma that matches Mr Johnson’s, and he has fought a quirky but effective campaign. He is not a safety candidate, like Mr Hunt, but he might be able build the same sort of unlikely momentum that Jeremy Corbyn did when he was elected as Labour leader.

But Mr Stewart is unlikely to be given that chance by MPs. And Mr Johnson probably has the skills to keep Mr Hunt at bay. Which leaves the second obstacle to the premiership: parliament. Labour, quite rightly, plan to launch an immediate vote of no confidence when the new Conservative leader takes up the PM’s role. The government’s majority (with the DUP) is thin; a handful of Tory MPs could fail to back him, and that would be that. This would be messy, but a general election is the most likely result, which Mr Johnson might lose.

But the odds are that Mr Johnson will survive any challenges posed by party members or parliament. What then? Most predict a chaotic and short-lived premiership, but we really don’t know. His leadership campaign shows a certain steel and political competence. The parallel his backers would like to offer, no doubt, is Donald Trump. He is at least as lazy and vague on detail as Mr Johnson, but he is lasting the course and might well be re-elected.

That parallel is rather an alarming one, as Mr Johnson is clearly taking Mr Trump as a role model (as is Nigel Farage). Mr Trump has achieved much of his success by a process of steadily undermining his country’s governing institutions and conventions. And Britain’s institutions are long on convention and weak on legal enforceability. One example is now much talked about: the idea that parliament might be suspended to prevent it from blocking a no-deal Brexit. Mr Johnson has not ruled this out.

But there is an important difference between Trump and Johnson. Mr Trump was reasonably clear about what he wanted to do, and by and large he has followed the agenda set out before he was elected, love it or loathe it. Mr Johnson has said as little as possible about what he wants to do and how, allowing his supporters to project their wishes into the blank space. He wants to achieve Brexit by 31st October, but to some audiences he suggests this will be negotiated with the EU, to for others he suggests complete breakdown.

But as PM he will have to take the hard decisions that nobody else wants to take, and Brexit, whichever way it goes, will provide a steady stream of such decisions. And then there is government finances: he can’t keep everybody happy without creating a bust-up about finances. He is bound to lose people, which matters given his shaky parliamentary position.

My guess is that he will be tempted to risk an early general election, hoping that his charisma will thwart Mr Farage and crush a by now rather tired Mr Corbyn. British politics is volatile and it might well work.

It is just as likely to bring the house tumbling down on him and his party. British politics is about to get much more exciting.