Yet again, we have an electoral
event triggered by the needs of the Conservative Party rather than the needs of
the country and, yet again, it looks as if the outcome will be disastrous.
The Labour party has buried its head
in the sand. They’re promising to tax the rich people who won’t be there any
more, because everyone will be poor after Brexit. The Scots are trying (again)
to take their ball and go home. The Liberal Democrats are a hardly audible
voice out in the wilderness.
And the Tories? The Tories are
asking for a blank cheque to pay for something they can’t explain, describe or
predict – a Brexit ‘deal’ that’s still as unclear now as it was a year ago. My
grandmother would have called it ‘a pig in a poke’.
So we need to think about what the future's going to look
like. And what’s the best way to vote to prepare for it.
Firstly, don’t be fooled into
complacency by the fact that the Brexit chaos is taking a little time to get
under way. We’ve already seen the impact on sterling of just the intention to Brexit. And (in spite of
the boost to growth of a weak Pound) living standards are starting to be hit,
without the formal negotiations even starting.
The important question is what we’re
likely to face in two years time when Brexit actually happens. Brexiteers
insist that there will be a deal and
that it will be better than retaining
EU membership. Both these contentions are open to serious doubt. To reach any trade
deal, every EU state has to agree, before anything can be signed. EU nations are
not allowed to negotiate separately. It’s all or nothing.
That means that (just two examples) Spain
could feed some conditions regarding Gibraltar into the negotiations or that it
could be contingent on accepting a reunification of Ireland. With countries
lining up to take over Britain’s services sector (80% of the economy) why, for
instance, would France agree to allow British financial services free access to
European markets? And it isn’t just countries that have to be satisfied.
The recent Canadian trade agreement with the EU was held up because a region of
Belgium didn’t approve it. The idea that a Brexit trade agreement can be signed
at all is optimistic and that it can be signed quickly is pure fantasy.
Britain still has very little to
offer in exchange for a trade agreement. To revisit the arguments of a year
ago, The EU accounts for more than forty percent of UK exports. EU member state
exports to the UK account for only eight percent of theirs – and that’s more
than fifty percent of British imports. If there’s no deal – which will probably
further weaken Sterling – the UK can threaten to tax imports from
Europe. Result? The British consumer’s hit by a double dose of increased
prices, currency and tax, on half what they import and Europe probably losing
some (unknown) proportion of the eight
percent of exports this affects.
Nothing there to drive the unanimous
acceptance a trade deal needs! And even if, say, Germany would like a deal, how
would they convince Lithuania, Romania, Latvia, Estonia, Croatia, Cyprus,
Slovenia and the others who have relatively little trade with the UK, to
approve it too?
And if, against all probability, a
trade deal actually is on offer, what sort is it likely to be? The answer’s
simple. A bad one. We’ve already mentioned the French desire to move financial
services from London to Paris. The same thing applies to manufacturing. Again just an example: German motor manufacturers will be less competitive in the UK but they'll welcome reduced
competition from the big UK factories in the rest (90%) of Europe.
Add in political desires to prevent
further EU exits and to show that ‘any deal needs to be inferior to membership’ (that’s the Maltese Prime Minister
as President of the EU) and the ability to add any condition, however
peripheral, to the negotiations and, if we want a deal, we'll just have to take whatever's
on offer.
In short, in two year’s time the UK
will have to choose between a bad deal on Brexit and no deal at all. And the
present election seems principally designed to ensure that, when that happens, the
government doesn’t have to answer to the current (predominantly anti-Brexit)
parliament or to the electorate.
Nevertheless, given all this, we
still have to decide how to vote on 8th June, a difficult
question which, as I said, may not have a right answer.
