A Social Democratic Future

Policy paths towards equality and efficiency

A Month Like No Other

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Johnson concocted his game plan with Dominic Cummings – his Svengali-like adviser – in August: prorogue parliament for five weeks until 14 October, squeeze the time available for MPs to prevent a 31st October No deal EU exit, then a ‘Brexit done’ election before the economic and social impacts of a No deal exit were fully felt or exposed.

If  his opponents in the Commons finally found the wherewithal and unity to legislate for an extension beyond the 31 October, the Plan B was to engineer an October election on a populist platform that parliament, by cutting the ground under the feet of his government’s negotiating position, had ‘surrendered’ to the European Union (EU) and ‘betrayed’ the ‘people’s’  2016 referendum decision.

But before the first week of September was out, six Commons defeats in six days shredded that twin-track strategy.

The opposition parties, contrary to expectation, successfully and effectively combined with 21 resolute Conservative rebel MPs – who lost the party whip for their pains – to take control of the Order Paper to allow parliament to legislate an extension to Johnson’s ‘do or die’ Brexit 31st October exit date, and to reject his motion for an election to take place before the next and crucial 17 October EU Summit.

Unless the House of Commons approves (and the Lords takes note) by the 19 October of either (a) a Withdrawal Agreement (WA) deal with any changes to the accompanying political declaration or (b) a No deal exit, the  European Union (Withdrawal) (No.2) Act 2019 (the Benn Act) requires the government to seek an extension to 31 January 2020 from the EU.

Johnson declared a preference to ‘die in a ditch’ than do that. He continued to proclaim with cabinet colleagues into October that the government would, come what may, exit on 31 October while ‘observing the law’ to ‘get Brexit done’, without explaining how his government could do both without a deal.

The Supreme Court ruled unanimously on the 23 September that the proroguing of parliament by Johnson was null and void ‘as it never had happened’ on the core constitutional ground that it prevented parliament exercising its central role in our democracy to hold the government executive to account – something likely to recorded as a constitutional landmark for decades, if not centuries, ahead.

By the time his party conference had convened in Manchester, Johnson had unmistakably put a Trumpian-populist stamp on the Conservative Party,  sacrificing and subordinating policy, values, and convention to the single purpose of getting Brexit done, regardless of its consequence or consistency, undermining the same institutions that Brexit was to restore sovereignty to.

Labour united?
Yet polling indications strongly suggest that Johnson’s reckless and divisive actions could still be rewarded with electoral victory, as were Trump’s in the US; one early in September gave Labour a puny 21% share of the vote; almost incomprehensible for an opposition facing such an incompetent and divided government, flouting established constitutional norms and conventions in an unprecedented – even revolutionary – way.

Sure, such polls taken in isolation are to taken with a pinch of salt as a guide to future voting in an actual general election.

Labour is banking on a similar bounce that it achieved in 2017 in the face of unpromising prior polling.

That said, an aggregated Poll of Polls time series produced by Politico starkly shows an unmistakable post-April trend of a Labour party led in opposition by a leader unprecedented in his unpopularity with the wider electorate, losing vote share to the Conservatives and a resurgent Liberal Democrats (LD).

In short, Labour remains stuck between the rock of a majority Remain party membership and the hard place of not alienating Brexit-supporting voters in many marginal constituencies, concentrated in, but not confined to the north and midlands.

Labour campaigning for Remain, attached with a logical commitment to revoke Article 50, risks failing to engage with voters who prefer a negotiated deal in preference to No deal, or to another referendum, or to revocation: quite possibly the silent majority who simply want Brexit washed out of their hair.

That a new Labour government would alternatively negotiate with Brussels to secure the best available Brexit deal for the UK but then campaign for its rejection in a promised subsequent referendum, however, comes across as faintly ludicrous.

A significant segment of the population supporting Brexit is likely to treat any such referendum as rigged, risking future and lasting damaging political and social effect.

Seeking to straddle that divide, Jeremy Corbyn resisted not only demands from his deputy Tom Watson and some erstwhile shadow cabinet supporters for a referendum to take place before the next election, but strong and growing grassroots pressure to morph further into a commitment for the party to campaign to Remain in a soon-expected election.

The party conference began inauspiciously with the architect of the party’s successful 2017 manifesto, Andrew Fisher, announcing his resignation, his letter shedding doubt on Labour’ electoral prospects and the ‘professionalism’ and ‘human decency’ to boot of his leader’s inner team.

But in the end, Corbyn succeeded in securing a narrow (and disputed) Conference decision for Labour electoral neutrality, but only after some old-fashioned backroom machinations and after making it, in effect, a personal confidence vote that alienated some of his bedrock Momentum support-base.

Labour was fortunate that the Supreme Court landmark decision distracted attention from its own Brexit discord and perhaps from some of its more half-formed policy decisions, such as ‘abolishing’ private schools and ‘expropriating’ their assets, that appeared to appeal to the party’s own populist gallery than demonstrating a carefully thought transformative programme – whether ‘socialist’ or ‘social democratic’ in preferred label – in practice capable of commanding the sustainable wider majority support that effective and lasting execution requires.

Most seriously and ominously, in the short-term, the party in general continues to lack a convincing fit-for-purpose unified Brexit narrative that can withstand the heat in and scrutiny of a general election, during which opponents will inevitably highlight previous claims ‘to respect the 2016 referendum’ as hollow and dishonest.

Indeed, the victories won in Parliament won during the first week in September risk proving Pyrrhic in electoral terms for remainers generally and for Labour especially, as indicated by the polling indications outlined above.

What next?

Some greater stirrings are reported of cross-party support to put in place subsequent to an October no confidence vote in Johnson’s government, a Jeremy Corbyn-led caretaker government with the remit simply to ensure an extension, which, once achieved would be followed by a November election with uncertain result.

Although the SNP are reported to have warmed to the prospect, the LD are most unlikely to want to make Corbyn prime minister – even for barely a month – unless it was the only possible – albeit messy and amenable to accident – means to avoid No deal.

Given that the Benn Act – despite Johnson’s bluster – is considered watertight by most experts, and is now underscored by the SC judgement, it is not.

Corbyn would probably be right to continue his cautious and maligned wait and see strategy to leave Johnson to come back empty-handed from the EU or with a negotiated deal that will inevitably be at odds with the ‘clean Brexit’ that the parliamentary Conservative hard-Brexiteers – many of whom act as a party within a party within the European Reform Group (ERG) – and the party members that propelled him to the premiership back in the summer, demanded and expected him to deliver.

Johnson can now safely ignore the party members who voted him into the leadership and effectively the prime ministership, but withdrawing the whip from hardcore ERG members is likely to shatter his party into fragments, providing manna from heaven for a Brexit party waiting in the wings to take votes and even seats off the Conservatives on a single issue Brexit betrayed’ platform.

As The Brexit Swamp Deepens  and previous posts, explained, the EU will not remove the WA backstop unless Johnson reverted to the original EU proposal to create a single island of Ireland economic zone protected by a regulatory and customs border in the Irish Sea between it and Great Britain, once the transitional (implementation) period contained within the WA ended in December 2020.

Johnson appears to have realised the need to persuade the Democratic Union Party (DUP) and the ERG likewise to pivot towards it.

But even if Johnson could bring back a WA sufficiently re-packaged to get some of the Conservative rebels to support him in the lobbies along with DUP and ERG support (an unlikely but possible combination), he is unlikely to secure a parliamentary majority, unless he attracted sufficient Labour MPs representing Leave areas to support, in effect, a deal less close to their party’s requirements than his predecessor’s.

An alternative way to seek a parliamentary majority would be for his government to pivot towards a continuing Customs Union (CU,) and a large measure of regulatory alignment, certainly across environmental and social standards, with the EU.

That would be more in line with the final iteration of the May Deal that she would have likely to have offered had she not been forced out of the leadership, but anathema to the ERG, and contrary to the commitments Johnson has made as prime minister, let alone as leadership candidate. A technical extension at least to Johnson’s ‘do or die’ 31 October deadline would also be required.

Finally, but not least, it would need whipped Labour support to pass the Commons, which would not be forthcoming without a delaying ‘confirmatory’ referendum, whatever that might mean.

Conclusion
Whatever the new twists and turns that October will inevitably bring, the current parliament cannot break the continuing Brexit deadlock, unless MPs agree either a negotiated deal or another referendum. The chances of both appear next to nil.

The Benn Act, especially since the Supreme Court judgment underscored the illegality of the executive attempting to run counter of the expressed intention of an Act, should prevent a No deal exit, although the opposition parties should prepare for every eventuality, including Johnson resigning late into October as a way to secure a No deal exit by ‘accident’.

It cannot and does not, however, lay out a roadmap to a negotiated deal or, indeed, any way out of the Brexit deadlock.

Parliament is not in accord with the government executive; unless both compromise, a new Commons has to be elected to produce a government with an effective working majority to implement its chosen Brexit path – but that is an outcome far from certain with a 2019/2020 election.

Another hung parliament appears a more likely scenario than either an outright Conservative or Labour victory, but who knows.

What is more certain, however, is that for Labour to maximise its electoral chances, it needs to unite around what was decided, if not agreed, at its conference, and focus attention that a Labour negotiated exit would best protect the Union, the continuing frictionless trade with its largest trading partner and thus the manufacturing supply chains that many northern and midland towns rely on, pointing out that the future economic and social prospects of the families of ‘the many’, as well as their patriotic instincts, are best served by continuing close links with Europe, not the chimera of trade deals requiring the UK to shed much more sovereignty for much less economic benefit.

It should also integrate that Brexit message to its domestic policy agenda, exposing the superficiality and dishonesty of the Conservative slogans on investing more in infrastructure, and core public services, by linking a coherent and inclusive vision to radical, but prioritised and thought-through supporting policy programmes, not ‘goody-bag’ giveaways that the electorate is likely to view in a similar cynical and opportunistic light to that of its opponents.

Speeding towards the Cliff Edge

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Since the publication of The Brexit Swamp Deepens last week, Jeremy Corbyn has confirmed that Labour will require a second referendum and will back Remain against either a ‘Tory deal’ or ‘No deal’.

Meanwhile Boris Johnson – almost certainly the next leader of the Conservative Party – has stated that he will not tolerate the N.Ireland backstop staying within the Withdrawal Agreement(WA) , even if it was time-limited: a new hardline position endorsed also by Jeremy Hunt.

His position, taken at face value, effectively rules out a negotiated alternative to No Deal: the EU is not going to cave-in during September to rip out the heart of a WA that it has consistently confirmed as the only deal on offer; in contrast to revising the accompanying Political Declaration (PD).

The prospect of No deal has increased; and, if the UK does exit on the 31 October, Labour’s position will become irrelevant overnight.

Committed Conservative opponents of No deal if they are to prevent a No deal outcome will have to agree a common course of action themselves and with Labour, and vice versa.

Whether that is requiring a referendum, or an amendment to a no confidence vote ruling out No deal, or even a successful no confidence vote, to provide EU leaders with some unanimous and compelling cause to grant the UK a new extension, it really needs activation prior to their Summit on the 17/18 October.

It is unlikely that a referendum, which would be opposed in any case by some Lexiteer Labour MP’s, especially if designed to simply produce a Remain result, would prove that unifying factor.

A straight-forward referenda binary choice between Remain and No deal might have more chance of securing parliamentary support if the cliff-edge was all but reached, but then possibly too late, and still unlikely.

Parliament, even if given the means,  and it did vote to prevent No deal, without a referendum, would still need to agree an alternative; it, however, appears irretrievably split between members seeking a negotiated deal and others wanting both a second referendum and to Remain.

Possibly, Johnson aims to increase the negotiating pressure on Brussels during September while also playing to the Tory membership and the European Reform Group (ERG) gallery; and, when his stance proves unsuccessful (while hoping that the EU will blink or splinter), he could change tack, just as the sand runs out.

Well, lets hope so, for the sake of the UK Union and its economy. In which case, as Andrew Duff of the European Policy Centre  recently proposed, extending the transition period to December 2022 or beyond, so allowing time for a Canada-style free trade deal to be progressed in line with a revised PD, while in the meantime retaining the benefits of frictionless trade with the EU making the backstop unnecessary, could offer him a way out, at least within Parliament.

Johnson could well – given his party backing – instead go for broke: exit with No deal, seek a fresh mandate, say, in Spring 2020, and bank on Jeremy Corbyn’s unpopularity with the wider electorate to carry him home.

The Brexit Swamp Deepens

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The political environment becomes ever more unedifying and inauspicious. Last week Boris Johnson confirmed his intention for the UK to leave the EU on 31 October: “do or die”.

So did Jeremy Hunt: that is, unless a deal was in sight at the start of October, in which case he would allow ‘a few days grace’ beyond the 31st, before pulling the plug on UK membership. Earlier, he had, when pitching to Conservative MPs rather than to the membership, advocated the pursuit of a negotiated deal, unbound by such a fixed unrealistic deadline.

Both these contenders not only for the leadership of the Conservative party but for the Prime Minister-ship of the United Kingdom, also confirmed that they were willing for people working in the trading sector of the economy to lose their jobs and livelihoods as a result of such a No deal exit.

Why? Ostensibly to discharge the democratic mandate of the 2016 vote, but in practice to win the most votes from a rump electorate of around 160,000 mainly elderly and well-off Conservative party members, in the process normalising and sanitising No deal outcome within not only the Conservative Party, but much of the mainstream media.

The capacity and willingness of this Parliament to prevent No deal appears to have receded in step.

According to John McDonnell, the remaining “mechanisms in terms of formal procedure” to do so have become ‘difficult to spot’, while Nick Boles, who last spring resigned the Conservative whip over Brexit, at an Institute of Government seminar early this month advised that the means and the numbers ‘might not be there’, going on to warn that the country might have to ‘eat the pudding’ of a No deal Brexit to understand its consequences, before pivoting towards EEA membership.

Although Conservative MPs, such as Sam Gyimah, suggest that around 30 MP’s like them will vote to prevent No deal, and  current Cabinet heavyweights, Philip Hammond and David Gauke, argue that ‘ a way will be found’ to do so, by what parliamentary mechanism remains unclear, however. Gauke, himself, conceded on this week’s Andrew Marr Show that it will rely upon the Speaker innovating such an historic opportunity to block legislation coming into force at the last moment, against the wishes of the executive.

Although both Johnson and Hunt have said that they would prefer a negotiated deal in preference to No deal, the EU will not agree to remove the NI backstop from the November 2018 Withdrawal Agreement (May Deal), or to time-limit it, or to render it redundant through the agreement of ‘alternative arrangements’, at least in a legally certain way by the beginning of October.

Slightly more conceivable is a fudged last moment deal made with an EU anxious to avoid the economic consequences of No deal impacting on their side of the Channel. It would be one largely dependent on semantics to cloak the Brexit Trilemma: May deal re-wrapped with, perhaps, some baubles added.

But even if the new Conservative leader – almost certain Johnson – flipped-flopped on their avowed campaign rejection of any iteration of May deal, losing their credibility in the processand right at the beginning of their premiership, a May Mark 2 or Johnson deal could not win the combination of ERG hardcore support and Labour whipped support for it to pass this Parliament.

A pared-down May deal would not attract whipped Labour support. It would need to include an equivalent Customs Union(CU); continuing regulatory alignment for goods;  workers’ and environmental standards; and came attached with a commitment to a ‘confirmatory vote’ – anathema to most Conservative and some Labour MPs.

What about the official Opposition? Its current position that it ‘respects the 2016 referendum decision’ with any deal subject to another ‘confirmatory vote’, will remain meaningless: unless this Parliament votes for both a deal and a ‘confirmatory vote’ on it, which, as noted above, is unlikely in the extreme.

Even hard-headed Labour Remainer MPs, such as Hilary Benn, who indicated in a Newsnight I July interview that not only would Parliament not allow a No deal exit, but could require a public vote between a revised May deal and Remain, at the end of October, seem now to rely on wishful, not considered, thinking.

The Labour leadership will almost certainly bend to irresistible pressure at its forthcoming September conference to adopt a ‘Referendum and Remain’ position, if not before.

But that would allow the new Conservative PM to paint Labour as the party that all along wanted to reverse the ‘will of the people’, as expressed in the 2016 referendum, and risk alienating its Brexit-supporting voters as well as a segment of its own MPs representing Brexit-voting constituencies; given the lack of a majority for a second referendum in this Parliament, it could make a UK no deal exit more likely than less, making its prevention reliant on a general election (GE) interruption.

The electorate would probably recoil from the prospect of a referendum coming hot on the heels of a GE. It also would make little or no sense for the party to campaign on a Remain and Referendum (with the latter the means to secure the former) platform, and subsequently securing a working majority, then attempt to negotiate a revised deal with Brussels, simply to present that as the alternative choice to Remain.

Any change in its Brexit position really needs hitching to a political narrative that emphasises Labour’s efforts to secure a parliamentary compromise, the absolute priority now to avoid No deal in the here and now, and not a belated conversion to the Remain cause in pure principle.

Revocation of Article 50 offers a more consistent Brexit policy platform, but comes attached with even more political and electoral risk.

How likely is an autumn general election? The current parliamentary session is due to end on 25th July, assuming that the newly elected Conservative leader, following his election by his party’s membership, is invited to form a government by the Queen on the recommendation of Mrs May, and that Labour immediately does not table and win a no confidence motion in the new government.

Such a vote, before the new PM is given a chance to put their campaign words into action by negotiating and bringing back a revised deal to Parliament in October, is less likely to succeed than one tabled when No deal is imminent without parliamentary intervention.

On the other hand, leaving it to the wire well into October, will prolong uncertainty and wasteful expenditures on No deal preparations with its attendant high cost to economy and society, and, as  above, would risk the UK falling over the No deal cliff at the end of that month.

Only a handful of Conservatives need to vote with Corbyn to precipitate a government defeat; three have already joined Change UK, and Nick Boles has resigned the whip and become independent: others, including former Cabinet Ministers, Kenneth Clark and Dominic Grieve, when confirming their commitment to oppose No deal, have not ruled that possibility out.

Yet it would be a huge step, however, for them to sign-off their long careers by torpedoing their own party out of government. In truth, estimating the numbers is simply staring into a contingent crystal ball.

A more likely scenario is that a group of current Cabinet Ministers, including David Gauke, Philip Hammond, and David Lidlington – all of whom have been consistently steadfast in their opposition to No deal – pitched out of power by the new PM, and, perhaps, supported by ex.PM Theresa May, will add their not inconsiderable heft to Conservative MP pressure on the new PM to pivot towards a negotiated deal.

Of these, David Gauke has already confirmed that he would not vote against his own government (in a confidence vote), and there is little or no reason to suppose that either Lidlington or Hammond would do either. Some former junior ministers, such as Sam Gyimah and Dr Phillip Lee, might take up the threat on their behalf, even if for only tactical reasons, noting that a Labour no confidence motion, even if passed, under the Fixed Term Act would not immediately result in a GE, but only after a 14 day grace period if no alternative government was approved by the Commons.

This could give some possible scope for the new PM to backtrack from his commitment to No deal, on the basis that it had been adopted to primarily to ’stare down’ Brussels and to get the ‘best deal for Britain’ in response to democratic pressure within the country.

Both Gyimah and Lee, however, resigned, like Jo Johnson, Boris’s brother, from Mrs May’s government to support a second referendum and against May’s deal. It is that, in a likely diluted form and with a political declaration this time tilted towards a Canada-style free trade agreement , would be on offer, which would not secure whipped Labour support; because it would retain the NI backstop and involve an extended transition period it is also unlikely to carry the Tory ERG faction either. Back round the circle, then.

Even if Parliament was accorded the means to vote against No deal and simply did that alone, that vote would not determine what happened next. A negotiated deal would take us into 2020, if the EU, under its new management, was willing to grant a further extension, without a GE or a referendum called, allowing another circuit of the UK Brexit circle with no necessary end in sight. This, is far from certain, to say the least.

A parliamentary vote in favour of a second referendum on a binary choice between Remain and No deal, or as an amendment to a motion proscribing No deal, if allowed, would offer the most logical – albeit dangerous way, to escape the deadlock, but the means and numbers for that are not currently there, as Conservative and Labour opponents of No deal are deeply divided on how to avoid it.

That will need to change by October. Committed Conservative opponents of No deal will have to agree a common line with themselves and with Labour to succeed; and vice versa.

Otherwise both will be reliant on Boris Johnson seeking and obtaining parliamentary approval of a GE to secure a mandate for No deal, which would not only split the Conservative parliamentary party, but be uncertain in outcome.

The Labour leadership, wishing to rid itself of the Brexit albatross sitting on its socialist transformational agenda, could – at least on a Trotskyist reading – be content for No deal under the watch of Johnson to happen, whatever the official policy might proclaim, and wait – in Nick Boles words – for the pudding to be eaten to its subsequent electoral advantage, but the economic and political consequences on the UK economy and Union can only be expected to prove calamitous.

An Open letter to the 26 Labour MP’s that wrote to Jeremy Corbyn on 19th June stating that Brexit must happen

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Dear Signatory

On 19 June you wrote to Jeremy Corbyn, demanding that Brexit proceeds without ‘further undue delay, as the UK ‘must leave’, warning that holding out for a ‘perfect deal’ risks rather a No deal exit, and that ‘fighting for a Brexit for the many not the few, is best fought for at Stage 2, after we have left’.

As Labour MPs representing Brexit-voting area, your prime fear appears to the threat posed by the Brexit Party to take Labour working class votes in your own constituency.

The worst of all worlds is, indeed, where we seem to be stuck at present. Continuing uncertainty is damaging the economy, starving it of the investment it needs to escape stagnation,  while the(current) Chancellor is preparing to spend £26bn to mitigate the immediate impact of a No deal exit, the Union with Scotland and Northern Ireland is threatened to the point of impending demise, and political discourse has become polarised and polluted, sometimes to a point where a whiff back to the push to political extremes of the thirties, is discernible, as any middle ground between Remainer and Leave positions is hallowed out.

Think, think, what £26bn could do to transform the housing and education environments in Brexit-voting areas and elsewhere, while relieving the pressure on health and adult social care.

We must escape this mess, but how? The Conservative Party has been captured by the Hard-Brexiteers, eschewing evidence and common-sense, in favour of a reactionary fetish.

Your party’s position is confused and conflicted, only (vaguely) comprehensible – like that of the governing party – if the trouble of studying its internal machinations and perceived electoral calculus is taken. But why should the electorate be required to do that?

It is not surprising that there has been a populist surge.

Yet your intervention is misjudged and follows the same self-interested groove. Most importantly, it is likely to be counter-productive, even when taken on its own terms.

It will strengthen the opportunistic and hubristic hand of Boris Johnson, if he becomes Prime Minister – as it will the ERG faction within the Conservative party regardless – to pursue the threat of a No deal exit.

The idea seems to be that the threat of No deal will induce Brussels to blink and give concessions on the Withdrawal Agreement (WA); linked, perhaps, to a commitment to enter into an interim side (or WA replacement) agreement involving tariff and quota-free EU-UK trade, as a precursor to a long-term Canadian-plus-type free trade (FTA) deal, all done and dusted with parliamentary approval secured before October 31st.

That simply is not going to happen.  The unnecessary hiatus that will follow will only heighten and prolong uncertainty, fuelling the risk that an economically and socially disastrous No deal exit occurs by default.

An event that is likely to let the populist genie out of the bottle in real earnest, probably fragmenting voter behaviour well into the future, quite possibly permanently.

Even taking a longer time-frame, and a further extension beyond 31st October, Brussels will not be induced to make concessions, other than to repackage its earlier iterations on the N.Ireland backstop, set out in the  Joint 24.1 letters of Tusk and Juncker, to make it appear more ‘temporary’ than ‘indefinite’, and/or revert to a NI-specific customs union and regulatory alignment: back round the same circle.

Besides, the Brexit trilemma will not dissolve with any change of the deckchairs in 10 Downing Street:  it is possible to secure two, but not all three, of the following: UK single market and customs union exit; a whole-UK Brexit; and no Irish border.

Or, put another way, without continuing UK-wide customs union and regulatory alignment with the EU, for, at least, goods, either NI will need to be subject to different customs and regulatory arrangements than the rest of the UK, or a border within the island of Ireland will need to be reinstated in some form or other: hence the backstop; and why time-limiting it in a legally certain way constitutes a contradiction in terms.

The retention of an open border in Ireland, without the separate regulatory treatment of NI, requires the UK to continue within an equivalent CU with the EU combined with some measure of continuing dynamic regulatory alignment for the currently foreseeable future.

A future freestanding FTA with the EU that allows the UK to negotiate bespoke trade agreements with the Rest of the World (ROW)  – likely to take at least six years or more to negotiate, taking the Canadian precedent – is inconsistent not only with an open Irish border, but with continuing frictionless trade between the EU and the rest of the UK.

We would also have to kow-tow to President Trump and follow US regulatory food standards (disastrous for farmers across the UK) and quite inconsistent with an open Ireland border, and open up the NHS to American health care providers. Protecting patriotism and sovereignty should not be confused with Brexit.

Tariff-free and quota-free UK-EU trade will also not by itself lead to frictionless trade without continuing UK adherence to the EU customs code, the common external tariff, and commercial policy, which then would rule an independent UK trade policy.

The government’s own evidence backs up that of independent economists that the economic benefits of future possible free trade agreements with the ROW will prove puny compared to loss the benefits of such frictionless trade with the EU 27: our closest neighbours.

It is incumbent on you to explain otherwise, with reference to evidence and facts, rather than assertion.

Alternatively, unless you wish to sink to the depths of ERG posturing, blind to facts and arguments, you should recognise that you are prepared to swallow the dismemberment of the Union and the infliction of lasting economic damage to the UK.

You could reply that I accept all of that, but I must respect the June 2016 vote in line with existing party policy, in line with democratic principles, respecting the majority who voted Leave, regardless of consequence.

But three years ago, people did not vote for No deal; and the real economic, political, and social consequences of leaving have become much clearer.

With respect to the interests of your working class constituents, it is difficult to discern how becoming poorer (the impact of disrupted and often sundered previously integrated manufacturing  supply chains, will be most severe on constituencies in Wales, the North and Midlands, dependent on them), weakened public finances, and restricting the migration of young economically active EU workers (urban areas, such as Sunderland, would likely suffer consequent population loss), will improve their lot.

That is not to say The Dangers of a Second Referendum should be under-estimated, or avoided if at all possible.

But, as explained above, your intervention reduces the prospects of a negotiated deal most attuned to the interest of your constituents, while raising the risk of No Deal.

One of you, Caroline Flint, confirmed last Sunday that she would vote for No deal, in preference to revoking article 50 or for a second referendum.

Each of you should make your own position on that clear.

Some of you have already stymied efforts to prevent No deal by voting against the combined Labour, LD, SNP, and Green-supported motion, presented earlier this month to the Commons.

In that light, do you agree with Caroline that it would weaken the government negotiation position to threaten a No Deal exit, or with Jim that we will have opportunities to do that ‘sometime later’?

The best way to avoid both a No deal exit and a second referendum is to work with your Labour colleagues and Conservative One Nationers to legislatively prevent a No deal exit by executive action or default.

If that is not possible, your constituents should be provided with an opportunity to choose between Remaining and No deal, if that is what is left on the table.

Meanwhile campaigning that raising local educational horizons and expectations, inward investment, greater transport connectivity, and housing choice and opportunity (and the means to realise them), as well as improving public safety, is what is needed, not Brexit, would, undoubtedly, best support your local constituents and secure their lasting respect and allegiance.

Making Public Investment Smart

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The level and quality of public infrastructural investment must meet macro-economic and social requirements and be efficient in selection and execution.

The establishment of the Infrastructure Projects Authority (IPA) in 2016, and the National Infrastructure Commission (NIC) in 2017, was a move in the right direction in line with that. It provides potentially a stronger institutional footing for the effective planning, funding, selection, and execution of infrastructural projects, which, hopefully, is associated with a better shared political understanding of the role that productive public infrastructural investment must play in underpinning a future sustainable productivity-driven growth economy.

Yet the fiscal and institutional environment for the funding, selecting, and delivering of infrastructure, remains, unfortunately, unfit for purpose.

The need to change that, and how, provided the tread for the Submission that A Social Democratic Future made this month in response to HM Treasury’s Infrastructure Finance Review, which closed on 5th June, (the Consultation).

The Consultation sought views on securing private finance in support of productive infrastructural provision in such a way that the ‘benefits brought by private finance must outweigh the additional cost to the taxpayer of using private capital’, (para. 1.9), and on the future institutional options for delivering government support for infrastructural finance, including establishing a new operationally independent institution in the expected post-Brexit environment, when the UK will no longer benefit from access to the European Investment Bank (EIB).

Continuing under-investment in both productive economic and social infrastructure will retard the achievement of the step-increase in growth and productivity required to escape continuing stagnation. That is the prime issue.

This means fostering and reaping the potential productivity gains that follow the agglomeration of specialized economic activities in the largest urban areas and other concentrated clusters, including improved matches of jobs and people, the sharing of information, knowledge and innovation, as well as facilitated market access.

Bigger and more people-dense high-productivity cities, in turn, will depend upon high quality transport, digital, and social infrastructure in housing, education, and, to a degree, cultural services.

In the UK context, that means supporting primarily the densification of London, and other high-productivity clusters that could potentially conflict with regional spatial and social equity and cohesion aims, and, certainly, is in tension with them.

The post-Brexit referendum environment has further highlighted that tension, and underscored both an economic and social imperative to support and foster the recovery and rejuvenation of ‘left-behind (or neglected) Britain’  for choice of a better descriptive phrase. Coastal and smaller cities and towns, especially in sub-regions located north of a line drawn between the Humber and Wash and in Cornwall spring to mind. They have borne the brunt of decades of de-industrialisation and/or relatively stagnant or declining service sectors – the same areas that tend to the most exposed to the future loss of EU Structural Funds.

Both these strategic policy drivers put an added premium on moving to a reformed and inter-linked fiscal and institutional environment that can best deliver efficient productive infrastructural investment.

Take a sustained increase in affordable housing investment to a known broad steady-state level, planned and meshed with the targeted and planned expansion of apprentice and training opportunities to indigenous workers: although it should help to secure structural change in the construction industry and a step-change in its productivity, it is presently prevented, however, by the operation of the current public expenditure system, where housing capital allocations are constrained by rigid fiscal limits.

The current unitary cash-based public expenditure system lumps together recurrent revenue and lumpy investment expenditures producing future financial, economic, and social benefits into the future.

The construction and provision costs of providing new dwellings is consequently front-loaded  as public expenditure contributing to the deficit into the short-term, leaving public investment, and the housing programme in particular, disproportionately prone to cuts during periods of fiscal stress or austerity (generally when increased counter-cyclical investment is required, as was the case in the wake of the-GFC, nut when it was by cut by 40% in the 2010 SR), and, more generally, constrained below optimal economic levels by undiscriminating unitary fiscal targets, such as when Parliament in January 2017 committed the government to reducing the cyclically adjusted deficit to below 2% of GDP by 2020-21 and having debt falling as a share of GDP in 2020-21.

In contrast, homebuyers budget to meet their recurrent mortgage costs, not the full value of their mortgage; nor are they double-counted.  Nearly all first-time buyers could not purchase if the same accounting treatment was applied to them.

The Fiscal Remit imposed on the NIC by HM Treasury – itself constrained by that same  discrimination against investment expenditure, intrinsic within the current cash-based unitary public expenditure system – sets a gross public investment funding envelope or limit of between 1.0% and 1.2% of GDP in each year between 2020 and 2050, within which NIC recommendations for economic infrastructure must adhere, after taking account of existing funding commitments, including HS2, CrossRail 2, and Northern Powerhouse Rail. This is even though that existing commitments – combined with expected maintenance spending on existing assets – will consume an estimated 1.1% of GDP between 2020 and 2025, and 0.9% between 2025 and 2030.

Very limited fiscal space, over the short-to-medium term, therefore, will be left for the NIC, by its own reckoning, to recommend new and additional projects, such as the upgradations and new additions to the intra-and inter-urban transport network needed for the posited benefits of HS2 for London and other urban conurbations to be substantively harnessed.

Likewise, projects that could step-up the productivity of under-performing urban agglomerations such as the West Midlands, currently held back by congested and inadequate public transport connectivity, closer to European average levels, will almost certainly be stuck on the drawing board or stillborn.

Its constrained Fiscal Remit will also undermine any effort of the NIC to select, rank, and sequence projects – given their lumpiness and interdependency – efficiently.

For example, it is unlikely that the London transport system could cope with increased HS2 numbers without the prior of completion CrossRail at the London Euston terminal end.

Most HS2 passengers arriving and departing at Birmingham will still also need to get to the terminus station by public transport, unless they can walk to a central destination or get a taxi to a poorly connected destination within the West Midlands conurbation.

Already, productive infrastructural projects have been pared back due to fiscal constraints linked to the achievement of short-term fiscal targets. Trans-Pennine Rail provides a recent example with likely significant sub-optimal economic effect on the Greater Manchester and West Yorkshire economies.

Another problem with the current fiscal rules is that debt raised by Public-Private Partnerships (PPP)’s to construct assets – within the current cash-based public expenditure planning system (if it meets defined accounting tests) – is not recorded as public spending or debt.

Unless public procurement and PPP’s are put firmly on a level playing field, the ‘fiscal illusion’, as the Office of Budget Responsibility (OBR) in 2017 described the Private Finance Initiative (PFI) programme, which Budget 2018, PF1/2 curtailed, risks repeat.

Private finance will then continue to be used to meet the infrastructural funding gap, even where it involves net higher public costs and hence public debt and borrowing over entire project lifetimes.

Alternatively, private financing of new water and energy assets under the current Regulated Asset Base will rely upon their ultimate funding on hidden subsidies and higher charges on consumers, with resulting regressive incidence on household budgets.

The effective development of the NIC’s proposed analytical framework for comparing the whole life costs and benefits of private financing and traditional procurement on an objective whole-life project basis, accordingly, and in addition, also depends upon inter-linked fiscal and institutional reform.

The Submission recommended integrated reform across three primary areas: the fiscal rule framework; the institutional environment governing the selection, ranking, and delivery of productive economic and social infrastructure projects; and tackling the root causes of the rising relative real cost of providing of such infrastructure.

Fiscal Rule Reform

The 2019 Spending Review (2019SR) should increase the NIC’s current Fiscal Remit funding envelope and disentangle it from unitary cash-based fiscal targets, while the NIC should provide evidenced assessment of the future volume need for public investment, and its sequencing, to the Treasury.

Capital spending on both conventional and PPP’s should be freed from year-to-year financial cash-limits, but their modelled future revenue liabilities included in future government debt projections used to assess future debt sustainability.

And the IPA and NIC should ensure that choice of procurement route for future publicly supported or regulated infrastructural provision should strictly and wholly be determined by relative whole-life project efficiency, taking account of the cost of finance, according to the best-available tools and evidence-base.

The selection, ranking, and delivery of productive economic and social infrastructure projects.

It is not apparent that the impact of future technological change on the economic value attached to shorter journey times between Birmingham and London, nor the actual scope potentially available in the future for existing networks, such as the Chiltern line, to increase capacity and average journey times, were adequately addressed during the original HS2 decision-making process.

At any rate, a fully transparent evidence-base does not seem to be available to convincingly rebut rising doubts, currently raised within and outside Westminster, concerning the vfm and the ultimate economic utility of the project – attached with an expected price-tag of over 55bn – relative to alternatives.

The Thames Tideway project – a 25km tunnel, currently in the process of construction, to upgrade and expand London’s Victorian sewer network will cost an estimated final c4.2bn at 2014 prices. A Special Purpose Vehicle (SPV) bears primary construction and execution risk. That feature and an innovative patchwork of public guarantees and retention of high impact but low likelihood risks, designed to avoid expensive and inefficient risk pricing, has led many to tout it as an emerging PPP model, but the business case need for the project relative to cheaper alternatives, such as improved maintenance and repair of the existing network to prevent leakages, has been questioned.

Ultimate project risk will rest upon the consumer and the taxpayer, with its costs mainly met by increased consumer water bills. The construction of the project will both foster and pre-empt engineering and tunneling resources.

All that said, the optimal ranking of the relative macro-economic worth of competing projects is difficult to achieve in practice for many reasons.

These include the complexity of the wider policy environment in which the selection and prioritisation takes place; the related need to balance competing multiple objectives; the existence of contingent political pressures favouring some projects for reasons other than their economic and overall worth, as well as capacity constraints within the public sector to apply effectively project appraisal methodologies, which like all economic tools are also only as robust as their underlying assumptions allow them to be.

It is vital, nevertheless, that the institutional environment in which both economic and social infrastructural projects are planned, selected, and delivered is improved in step and consistent with fiscal reform.

The NIC should, therefore, be empowered to assist each government department to publish a required annual Departmental Investment Plan (DIP).

Each DIP should prioritise projects according to their estimated economic and social return, incorporating auditable information on the methodology applied to rank projects, according to their expected whole project-life return.

The IPA should also be specifically tasked and resourced to expand the pool of personnel skilled and experienced enough to conduct the project appraisals underpinning DIP’s.

Partnerships with universities and the private sector should develop the methodological base and to enlarge and deepen the skill set of appraisers.

Progress towards such an improved fiscal and institutional environment should foster efficient public planning and programming of projects and a greater degree of partnership planning between the public and private sectors.

Improved growth and productivity outcomes, balanced in income and spatial distributional terms, should follow.

But, even with their adoption, the sheer scale of future infrastructural funding requirements requires alternative and innovative public funding mechanisms.

Tackling the root causes of the rising relative real cost of providing of productive economic and social infrastructure.

The costs of providing infrastructural investment have escalated much faster than general inflation: the public investment relative price effect. The escalating cost of land as a component of housing investment since 1955 is a striking instance of its operation and effect.

The true fiscal crisis should also be recognized: the demand and need for productive public expenditures across both current and capital budgets will inevitably outstrip public willingness to pay through efficient and salient sources of taxation, at least within a current competitive political system focused mainly on the electoral short-term.

Overcoming that crisis, therefore, requires further concerted and systematic institutional and policy reform. Lateral, radical thinking across the political spectrum, capable of fostering an overlapping consensus, is required, as much as is incremental reform.

In that light, Sectoral and Departmental infrastructure strategies should identify, address, foster, and integrate joined-up policy efforts to make public investment less costly in net public expenditure terms.

Housing provides a case-in-point example where market failure and rent-capture unnecessarily increases the cost of provision. These should be identified and addressed directly, along and innovative public funding mechanism,  within the DIP process.

The most direct and effective way of reducing the public cost of affordable provision is by deflating its land value component. This could be done by a mixture or combination of measures focused on ensuring that the land value of affordable housing sites are limited to existing use value plus an agreed premium of, say, 30%, backed up by stronger compulsory purchase powers and an affordable housing obligations system that is more robustly, transparently, and uniformly applied than at present.

In parallel, the future long-term rental income and sales of a steady-state affordable housing programme could be securitised to provide collaterised backing for its public funding.
At an overarching level, a dedicated funding intermediary that could take equity stakes in economic and social infrastructure, where long-term returns (for example, linked to revenue streams, such as rents rising with inflation, interest on loans, profit-shares) could be realized and recycled across the lifetime of the project.

Links follow to the  A Social Democratic Future‘s full  Response to Treasury consultation June 2019, its Appendix Table 1, and a summary of the Recommendations.

The major issues that will need to underpin future assessments of the whole-life project efficiency of conventional and PPP projects are outlined in Table 1.

Will Brexit High Noon be settled by a Shootout, or a Nod-and-Wink?

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The UK will exit the EU on the 29 March by legal default without a deal (No deal), unless the Commons agrees on one, or a combination, of the following five options.

1. May deal revised by Brady amendment
The Commons by a margin of 16 votes on the 29 January mandated the Prime Minister (PM) to seek ‘alternative arrangements’ to the Northern Ireland (NI) backstop, included in the Withdrawal Agreement (WA) she had negotiated and agreed with the EU back in November.

Only a fortnight earlier MPs had rejected that WA and its accompanying Political Declaration (PD) – The May deal– by a record 230 votes.

Despite the PM’s previous implacable insistence that her deal – backstop included – was the best and only one on offer, her acceptance of the Brady amendment was not totally unexpected.

It had already become clear that May would to continue to court support from the hard-Brexiteer (HB) faction of her party by promising to go back to Brussels to get concessions on that backstop.

She seems to have calculated – on the advice apparently of her husband, Philip, and in accord with her Chief Whip, Julian Smith – that seeking broader cross-party support for a softer Brexit, as was preferred by her chief of staff, Gavin Barwell, would have split her party more certainly and quickly.

She needed something to take back to Brussels with parliamentary backing. Essentially, however, the can was kicked down the road yet again. The notion that the PM could bring back to the Commons a revised deal that eliminated or at least time-limited the backstop in a legally certain way was illusory from the onset.

Alternative ways to prevent a hard border in Ireland, such as the technological fixes that the July 2018 Brexit White Paper mooted are not feasibly available, at least within the foreseeable future.

As EU’s deputy Brexit negotiator, Sabine Weyand, put it pithily earlier in February, they simply don’t exist. A time-limited backstop, in turn, is a contradiction in terms.

It simply is not in the interests of the EU, either strategically or tactically, to re-open the WA.

Strategically, it would lose Brussels the agenda-setting control it has exercised over the negotiation process. The UK could press for the adoption of alternative trading arrangements of its own choosing sooner, rather than later (outside a common EU customs territory).

Such premature arrangements could either cause the return of a hard border within Ireland, or through smuggling and the back-door dumping of goods through an open (NI) back door, undermine the EU’s own common customs territory and the single market(SM).

Tactically, the EU possesses no incentive to alter its red lines, at least until the last possible moment, to avoid No deal.

Many HB European Reform Group (ERG) MP’s are wedded to a No deal exit. They voted on tactical grounds for May to do their bidding while the No deal cliff edge becomes ever-closer.

Their – always lent and conditional – support will be withdrawn in the absence of a demonstrable capitulation by the EU to their demands. Given that, any concessions offered by the EU to May to placate them would prove futile and probably counter-productive in outcome: taken by ERG members as a willingness to bend.

Yet a No deal UK exit would itself activate the risk of the re-imposition of a hard border within the island of Ireland – the outcome that the backstop is designed precisely to prevent.

For that reason, Brussels has shown some willingness to offer May something ranging from a letter(s) of comfort to a codicil or supplementary protocol to the main body of the WA, as indicated in the 24 January Letters of Presidents Tusk and Juncker to Prime Minister May<

Their content, subject to sympathetic interpretation, could allow May to claim that the backstop would be ended with reference to some defined process, providing her ERG faction some residual assurance that it would not be permanent.

Such assurances will almost certainly call upon  the beholder to make  a semantic differentiation of temporary and indefinite,  open to future interpretive dispute. Subordinate to the main legal body of the WA , such a protocol or codicil will not be legally certain, but will rather rely on the good will of both parties, as was the case previously.

2. Extension of Article 50 agreed or imposed by Parliament.

The essential dilemma that the PM continues to face is that tilting towards a Brexit soft enough to attract cross party support will split her party, while relying on ERG support to secure a parliamentary majority is a chimera.

Boxed-in a corner of partly her own making, her forlorn hope is that by running the clock down close enough to the 29 March exit date will frighten enough hard-Brexiteers to pass her deal, with or without a last-minute EU concession on the NI backstop.

The stick that she apparently thinks that she can hit them with is that if they do not, an extended, rather than an operational, extension to Article 50, on the EU’s terms as long as one year, will follow.

The Commons would then increasingly likely vote for a softer Brexit, or, if it remained deadlocked, as the only last option left on the table, apart from voting to revoke Article 50 or for a general election, or for a People’s Vote (PV) that could reverse Brexit.

Such a strategy was always an inordinately dangerous, uncertain, and risky one, both economically and politically. That Parliament would allow such brinkmanship with so much at stake, beggars reasoned belief.

Yvette Cooper’s amendment to set out a statutory process for MP’s to require the government to seek an Article 50 extension from Brussels will be re-tabled on the 27 February, this time with Sir Oliver Letwin, a Conservative ‘one nation’ grandee appealing to its middle ground.

A similar amendment fell on the 29 January. This was largely because 14 Labour MP’s, plus the unwhipped Frank Field and Kelvin Hopkins, voted against it, while 12 abstained, including eight members of the current Corbyn-led shadow cabinet: Tracy Brabin, Judith Cummins, Gloria de Piero, Yvonne Fovargue, Mike Kane, Emma Lewell-Buck, Jim McMahon, and Melanie Onn. A full voting inventory is provided here.

Another month has elapsed since then. Barely a month is now left before a default No deal proceeds by default. This time, therefore, the Cooper amendment is more likely to attract increased support from ‘agnostic’ Conservative MP’s who desire Brexit to be delivered through an orderly negotiated deal without further delay.

Consistent with that, the convenors of the Brexit Delivery Group, Simon Hart and Andrew Percy, wrote on 21 February to Julian Smith, the Chief Whip, warning them that its members were inclined to vote in favour of the Cooper amendment to avoid No deal by extending Article 50. If their 50-odd members support the Cooper-Letwin amendment it would likely pass on the back of majority Labour support.

Even more significantly, Remainer Ministers, have put pressure on the PM to rule out No deal before 27 February, some apparently threatening resignation. This weekend three cabinet heavyweights, Amber Rudd, Greg Clark, and David Gauke, expressed, in clear and unambiguous terms, their support for an Article 50 extension.

Others, including the chancellor, Philip Hammond, and the PM’s and hitherto steadfastly loyal deputy, David Lidlington, are probably keeping their powder dry, at least until next month.

If May still does not concede an Article 50 extension, they might well activate that threat, deciding that the time for them to finally bark had come, and by supporting the amendment help to defeat the government they had just left. Such an act of desperation would be to the almost certain likely detriment to their future political careers, which, of course, does raise a question mark over its likely scale and significance.

But to head it off and to prevent a split that potentially could even prove more portentous than that involving the ERG, May could well bow to the inevitable and rule out No deal. A short extension might even suit her as that would tend to concentrate ERG minds on the risks of continuing to reject her deal.

But it is also possible that May will try to persuade her Remainer Ministers and MP’s to give her until 12 March to come back to the Commons with a revised proposal subject then to a meaningful vote: one last kick of the can, before the day of reckoning, when Parliament finally has to decide whether to take control or not of the Brexit process to prevent No deal, finally comes.

3. Second referendum or PV
MP’s are riven into factions, each banking on a result – whether that is No deal, Norway-plus, or a PV – coming to pass as ‘the last one standing’ before the No deal curtain comes down, rather in a bar-room brawl fashion.

Two large segments of MP’s within the Conservative and Labour Party’s demand something that most MPs within the Commons generally, do not want: on the Conservative side, a No Deal exit; and, on the Labour side, a PV.

Without compromise from a substantive number within either or both groups, any alternative to No deal cannot command a stable majority within the Commons.

Apart from only a handful of ‘hard’ Remainers, of which three, Anne Sourby, Sarah Wollaston, and Heidi Allen, have already defected to The Independent Group (TIG) of MPs, most Conservative MM’s oppose a PV.

A larger group of Labour Remainer MP’s do support it as providing a channel to cancel, rather than mitigate, Brexit. The original seven party defectors to TIG, cited Jeremy Corbyn’s failure to support a PV as a catalyst for their decision, accusing him of enabling Brexit, contrary to the expressed wishes of most party members and voters.

Further such defections could follow, if an amendment by Hove MP, Peter Kyle, is not supported and whipped as official party policy. This, intriguingly and tantalizingly, trades acquiescence to May deal for the government allowing a second referendum choice between it and Remain.

But May could not accept it without splitting her party. It appears to be designed to put pressure on Corbyn to accept the principle of a PV, sooner, rather than later.

This website has clearly set out the The Dangers of a Second Referendum, and understands the reluctance of Corbyn and many Remainers including Yvette Cooper – to embrace it.

It very likely would suit Corbyn, and many in the shadow cabinet, for the May deal to pass as the result of Labour abstentions – witness the lack of disciplinary action taken against the eight shadow cabinet ministers who defied the Labour whip to abstain on the 29 January Cooper amendment vote.

Labour could then focus on its domestic transformative agenda, while still blaming any adverse economic consequences on a Tory Brexit.

But if Parliament continues deadlocked, a PV could become the only (but elongated, indeterminate, and quite possibly counter-productive) way to move the log-jam.

An element of chicken and egg, however, is present. A primary reason why there is no parliamentary consensus for an alternative to No deal is the refusal of the proponents of a PV to endorse such an alternative: a going for broke mindset, mirroring that of the ERG on the other pole of the Brexit spectrum.

And Parliament could well still remain deadlocked, this time on determining the, and the order of, the questions, included in the PV ballot paper.

4. Alternative Norway-plus
Norway-plus, involving both an equivalent Customs Union (CU) and continuing UK membership of the Single market (SM), provides the closest possible fit to Labour’s previous six tests, ostensibly designed to secure the same benefits currently obtained by EU membership.

By allowing continuing frictionless trade in goods along with the minimisation of non-tariff barriers for services between the UK and EU, it would best mitigate the economic damage of leaving both long- and short-term, lifting the economic deadweight of uncertainty that currently is depressing business sentiments, investment, and the wider economy. It could be negotiated within the existing WA and transition period timetable.

And, as pointed out in a A Week in December , Norway-plus would meet the requirements of the overarching December 2017 NI backstop, rendering the WA backstop, with its separate regulatory treatment of NI, redundant.

But as also explained, it is unlikely to secure a majority in this Parliament – at least, a sustainable whipped one, in the event that the Commons was allowed to vote on alternatives to May deal.

The Labour leadership can be expected to shy away from whipping its MPs to support Norway-plus, fearing that MPs, at both ends of the party Remainer PV and Brexiteer spectrum, would rebel.

Its official adoption could, and crucially, also allow May to paint Labour as the party of Brexit-in-name-only (Brino) driving a potential parliamentary and electoral wedge between the party’s divergent Brexit constituencies.

Norway-plus, is more likely to muster an unwhipped majority; more so, if MPs had already voted to reject a PV.

Yet, May, as PM, then would be unwilling to progress Norway-plus as head of the government. Not just because of her fixation on migration and ending freedom of movement, but because she could not carry her own party in negotiating it with Brussels.

That could possibly change if she decided to resign, but her potential replacements, even if they willing to tack towards it – would also face heavy internal ERG and party resistance.

A new government with Hunt-Javid-Gove-Rudd at its centre of gravity might at a push take the plunge, but probably only by presenting the option again as a temporary rather than permanent arrangement.

Another general election would appear increasingly unavoidable. If that did come to pass, Labour’s Brexit manifesto stance is likely to be that it would negotiate with Brussels a new deal, broadly in line with its six tests.

If a majority Labour government was subsequently elected, something very close to Norway-plus is most likely what its negotiators would come back from Brussels with to ask the new Parliament to approve.

The burning issue as to whether – and in what form – that agreement should be ratified in a fresh referendum would still need to be settled, if that had not been defined in a fresh 2019 party Brexit manifesto.

5. Revised May deal merging into Jersey

The 6 February Corbyn letter to the PM demanded that the government should change its negotiating red lines within the PD.

This was with reference to five ‘negotiating objectives’ to be enshrined in law before the UK leaves the EU ‘to provide certainty for businesses and a clear framework for our future relationship’, including:

• a permanent and equivalent CU involving UK adherence to the EU customs code, the common external tariff, and commercial policy – subject to the UK having some ‘say’ in the detail of future trade deals; and continuing UK:
• ‘close alignment’ with the Single Market (SM); and,
• ‘dynamic alignment’ with EU worker, environmental, and consumer rights and protections, ensuring that such UK standards, as a minimum, keep pace with evolving standards across Europe, while providing scope for the UK to ‘lead the way’.

The letter fell short, however, of demanding full and continuing UK dynamic alignment with SM rules for goods. That, as a minimum, if full frictionless trade in goods between the UK and EU is to be maintained, would have to be combined with the equivalent CU that it did set out. The combination defines the Jersey option.

Its adoption, if sought within a revised PD, would then depend upon the EU further softening its core red-line on the indivisibility of the four SM freedoms. A very big ask.

Yet, to avoid a No deal exit that would itself would risk the re-imposition of a hard NI border, the EU could possibly bend at the last negotiating moment. It could even offer concessions, providing some prospect an independent UK trade and migration policy sometime in the future. That is far from certain, however.

Downsides of the option for the UK, in any case, include the economic cost of the loss of EU market access for services.

Norway-plus would also achieve frictionless trade in goods, much more surely and seamlessly.

More pertinently at a domestic political level, the adoption of full Jersey would require May, not only to merge with the official Labour Party position on the CU, but to dynamically align with EU regulations concerning goods, splitting her party. Is official adoption does not, accordingly, appear to be a runner, at this stage.

More likely is some government tweaking towards it in substance, if not stated intention. A longer transition period could be agreed that with an Article 50 extension extending beyond a May 2022 election date; keeping the UK, in effect, within a CU and SM until then.

A revised Political Declaration (PD) could also offer some genuflection to Labour’s position, particularly with dynamic alignment on standards.

The PM will need to delimit the precise offer required get enough added Labour abstentions and Conservative votes to offset the official Labour, Scottish Nationalist, and TIG opposition, which will joined by ERG hardcore rebels, numbering in all likelihood between 30-80.

If their number settles closer to 30, she could have a chance. The Private membership lists of the different ‘tribes’ of the Conservative Party, recently obtained by the Financial Times, suggests that if the existing Conservative payroll and existing Brexit group are joined by unaffiliated MP’s, such as Oliver Letwin, the government would harness just short of 220, requiring it still to capture a substantial mix of ERG returnees to the government fold with Labour votes and abstentions.

Even if a majority reliant on cross-party unwhipped votes is secured by a whisper, it would be an unstable one to base the piloting of the Withdrawal Bill and associated legislation through Parliament.

The WA backstop with its separate regulatory treatment of NI would also continue to hang over subsequent negotiations with the EU as a Sword of Damocles, perhaps, ruling out the DUP support.

It is, accordingly, quite possible that if a bare parliamentary majority was obtained for such a tweaked May deal, it could then be offered for ratification either through a general election or a yes/no binary referendum choice.

But if that principle was conceded, pressure would be intense for it to include Remain and No deal options.

Is there a way out?

With Brexit, the only certainty is uncertainty. The 60’s puppet show, Thunderbirds, always began with the clarion call that ‘anything can happen in the next half hour’: true for Brexit also, especially if the period is extended a bit.

Most MPs believe that a disorderly No deal should be avoided, but no majority exists as to how.

At one pole, hard-Brexiteers committed to what to they consider is a ‘clean’ No deal Brexit, are concentrated into the ERG faction within the governing party.

At the other, a similar number of hard-Remainers, wedded to a PV reversing Brexit altogether, are concentrated within the main Labour opposition.

Some MP’s representing often marginal constituencies, concentrated in the North and Midlands, that voted to leave, often by a large margin, will vote against any official backtracking on the 2017 manifesto commitment to respect the 2016 decision.

This polarisation within the parties between No deal and a PV has prevented a convergence towards a soft Brexit compromise that could secure a stable parliamentary majority, sustained by cross-party whipping.

The PM chose not to court cross-party support out of the real fear that would split her party; the Labour opposition, in turn, has resisted actually promoting a soft Brexit alternative to the government position that could best meet its six set tests, for fear that it would be accused both of supporting Brino – with continued EU control over UK migration and trade policy – and of betraying the 48% of who voted to stay, upsetting two key electoral constituencies that it will rely upon to secure power.

Both parties agreed to trigger Article 50 and to ‘respect the decision of the electorate to Leave’ in the 2016 referendum.

Subsequently neither Front bench has been honest about the trade- offs involved between taking ‘back control’ and protecting future UK economic prospects. A failure not unrelated to the fact that many of their respective supporters voted to leave out of ‘gut’ or ‘populist’ instinct, not ‘rational’ economic calculation.

Certainly, the parliamentary and mainstream media debate has seldom focused on evidential realities. The retention of an open border in Ireland, without the separate regulatory treatment of NI, requires the UK to continue within an equivalent CU with the EU combined with some measure of continuing dynamic regulatory alignment for the currently foreseeable future that cannot be time-limited.

Or the limited – at best – prospect of the UK negotiating free trade deals with the rest-of-the world could compensate for the loss of frictionless trade with its nearest trading partners, especially within a globalized world where regionally-based trading bloc agreements  have become predominant.

That failure contributes to continuing deadlock.

This spring, a deal tweaked towards a continuing CU and regulatory alignment in substance, if not stated intention, if combined with a limited Article 50 extension to May, seems to provide the politically most feasible route to secure at least an unwhipped parliamentary majority for a revised PD to be taken back to Brussels for negotiation linked to some tinkering of the wording concerning the NI backstop.

If that majority proved too unstable for the withdrawal legislation to be piloted through Parliament, the cliff edge would return. If Article 50 had to be extended again, a second referendum with all of its attendant dangers as well as opportunities, would appear inevitable.

Not Norway-Plus for Now: perhaps later

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Often when the police appeal for information to solve a notorious crime they make the point that circumstances, allegiances, and loyalties change.

It has turned out to be true also for parliamentary support of the ‘Norway’ option: shorthand for continuing and permanent post-Brexit UK membership of the European Economic Association (EEA).

Hardcore Remainers, seeking the softest of Brexits, initially promoted it: for example, Labour Campaign for Single Market.

That changed last autumn when Conservative MP, Nick Boles, founder of the influential Policy Exchange think-tank and a close confidante of Brexiteer but latterly loyal Cabinet apologist for May’s deal, Michael Goves,  in an attempt to provide an escape from parliamentary deadlock moved it mainstream.

The twist made was that the UK should rejoin the EEA on Brexit day – but only for three years – and enter a ‘temporary’ customs union with the EU that day also, without a transition period. Its new moniker, Norway for Now, reflected its expected transitory nature.

This website in  Jersey rather than Norway-Now dismissed it as a red herring. This was for three main reasons.

First, it proposed a temporary holding pen or a marriage of convenience to provide breathing space for a former EU (but now an EEA) member that wanted to put into place a comprehensive replacement bilateral free trade agreement with the same trading bloc that it had just left. This was not the purpose of the EEA.

Second, the EU’s Northern Ireland (NI) backstop red-line meant that it could not be time-limited.

And, third, the mechanism identified for the UK to join the EEA applying to become a member of the European Free Trade Association (EFTA), on the face of it, appeared also incompatible, or, at least, inconsistent, with the UK remaining in a Customs Union (CU) with the EU.

Nor could it be expected that special arrangements for the UK for a temporary and time-limited period of membership, in contrast to one offering a continuing and progressive template for a long-term replacement trading relationship, could be agreed with the EU.

The ground shifted during November, however. Boles addressed the above flaws, at least in general, if not specific, terms.

The proposed arrangement was made indefinite or even permanent, not temporary and time-limited. It contained an continuing and equivalent CU with the EU that could obviate the need for rules of origin checks on goods passing between the UK and EU. Special status and related derogations capable of reconciling continuing UK participation in a CU with the EU with that of the status of EFTA as a dedicated free-trading bloc outside it was recognised as necessary.

Norway-for-Now morphed into indefinite Norway-Plus (as termed hereafter in this post). Its main selling point was that it could offer the economically least damaging Brexit.

This was a product of its retention of the four freedoms of the single market (SM): free movement of capital, people, goods, and services between the member states.

The other side of that same coin required the UK to become an indefinite rule-taker of the EU with only limited say in framing future SM rules, including those impacting upon its financial sector, unless, in the unlikely event, that special additional provisions could be negotiated during the reinstated transition period.

Nor could the UK progress and implement an independent trade or migration policy. Substantial budget contributions to Brussels would also continue.

Early in 2019, ait was repackaged – or, at least re-labelled – it as Common Market 2.0 in a pamphlet jointly authored by the Conservative MP for the Essex town of Harlow, Robert Halfon – often portrayed as the parliamentary champion of ‘white van’ Conservatism – and, Lucy Powell, centrist and staunch Remainer Labour MP for Manchester Central, a northern 2016 Remain-voting redoubt.

No doubt this confluence of political backgrounds was chosen to court support from both Leave and Remain supporting MP’s from both main parties, especially those representing Leave-voting constituencies.

Its title was also emblematic, heralding a return to the commercially led principles of the original common market – in effect, CU – of the European Community (EC) that the UK had joined back in 1973, a decision endorsed by a wide margin in the 1975 referendum. It also conveyed an accompanying antipathy to the progressive political integration of member nation states within an enlarging EU since progressed by Brussels.

The authors made efforts to explain how UK membership of the EEA could possibly provide mechanisms to control free movement from the EU in certain defined circumstances, additional to the actual implementation of powers that are (were) available to the UK as an EU and SM member, such as requiring migrants to obtain work within a stipulated period, but unused by the May and previous governments.

They also highlighted that the UK could reduce its budget contributions to c50% of the current level. The prospect that ‘sometime in the future’ it could negotiate its own independent trade deals was also held out.

The revamped version still struggled, however, to grab the parliamentary and media limelight. The 29 January mandation by the Commons of the Prime Minister to renegotiate the NI backstop element within the Withdrawal Agreement (WA) suggested the prospects of Norway-plus attracting a majority in this Parliament, never high, would recede further.

The reasons for this are explored further below.

Opposition of Hard-Brexiteer (HB) Tories
The parliamentary HB bloc is broadly coterminous with the European Reform Group (ERG) faction within the Conservative party. The 117 MP’s who voted no confidence in Mrs May during that momentous week last December are a broad proxy for that HB tendency. It will not vote for the softest of Brexits.

And it is difficult to see how Mrs May, given how completely and tightly that she has chained herself to the mast of ending free movement, her reddest of red lines, could stay on as Prime Minister (PM) to preside over Norway-plus.

Besides, it has become quite clear that her over-riding priority is to prevent an epochal shattering of the Tory party, not minimising the economic damage of Brexit: the main advantage of Norway-plus.

Supporting it would serve as a red rag to the HB parliamentary faction on the Conservative benches, and alienate the majority of Conservative party members who support a No deal exit. It is their political pulse that she has have always prided herself on understanding.

It is that rump and increasingly elderly membership that will choose the next Conservative leader. Possible future leadership contenders will need to take account of their HB worldview: pace Savid Javid’s and Jeremy Hunt’s expressed recent ambivalence towards a No deal outcome. This reflects their need, as potential candidates, to triangulate against their grassroots party-pleaser and Brexit opportunist rival, Boris Johnson.

In such a context, they are likely to calculate that it is not in their personal political career interest to tilt towards Norway-plus.

Fragmentation of Soft Brexit support into opposing factions
The weakness and incoherence of the government’s Phase 2 negotiating strategy and then its subsequent and related inability to garner anything even approaching a parliamentary majority for the deal it negotiated with Brussels (the May Deal), induced confidence among a growing number of Remainer-inclined Conservative and Labour MPs that a second referendum could provide a means to cancel Brexit together.

Soft-Brexit variants, Norway-plus in particular, designed to mitigate its economic damage, were rendered less appealing, even redundant, as a consequence.

Individual examples include, on the Conservative side, Anna Soubry. She, as noted in Sourby’s Norway-plus Approachback in February 2018, had been an early and pioneering proponent of Norway-plus, but during the course of the year changed instead into an ardent ‘People’s vote’ proponent. So did some prominent Conservative Remainer rebels, such as Dominic Grieve, former Attorney General, and Sarah Wollaston, chair of the powerful Common’s Liaison Committee.

On the Labour side, prominent soft-Brexiteers, previously sympathetic to permanent EEA membership, such as Chuka Umunna – a founder member of the Labour Campaign for the Single Market grouping, became more and more lukewarm in support, perceiving that continuing SM membership lacked a parliamentary majority.

They, too, became leading lights of the People’s Vote campaign, encouraging colleagues, such as Mike Gapes, to dismiss ‘Norway-plus ‘as a ship that has already sailed’.

Ben Bradshaw, another Labour Campaign for Single market founder member, and vocal critic of Jeremy Corbyn, perhaps encapsulated that tendency when, during the first 14 January Commons debate on the May deal, he declared that he preferred to ‘bet’ on a second referendum to reverse the June 2016 Brexit decision, to secure, in effect, a full glass Remainer victory, not a glass half-full or-empty Norway-plus soft Brexit compromise. Such a ‘worst of both worlds’ compromise was as ‘pointless’ by ex-PM, Tony Blair, a view echoed by many other ‘People’s vote’ champions.

Labour opposition to continuing freedom of movement (FOM).
Some MPs representing Leave-voting constituencies where immigration was touted to have been a major factor, many of which are Labour-held marginals in the North and Midlands, will oppose an option retaining, to all intents and purposes, FOM.

For related reasons, the Labour front bench can be expected to resist whipping its own MP’s to support Norway-plus as the ‘something’ that Parliament will need to prevent No deal, extension or no extension to Article 50.

Whipping, not only could alienate much of the party’s hardcore Remainer membership base, wedded as they have become to the perceived lifeboat escape from Brexit that a ‘People’s vote’ potentially offers, but could enable the PM to partially unite her party behind her by painting Labour as the party that supports a Brexit-in-Name-Only (Brino) and continuing FOM in particular.

Gravitation of the Agnostics towards May-deal.

The amendment that Yvette Cooper, former Labour Cabinet and shadow Home Secretary, supported by Nick Boles, moved on 29 January, requiring the PM to seek an Article 50 extension, was defeated by 23 (321 to 298) votes. Instructively, despite winning Labour whipped support, it fell because of Labour votes against and abstentions that included no less than eight Corbyn shadow cabinet members.

17 Conservatives supported the amendment and three abstained, including the erstwhile and hitherto indefatigable, Norway-plus supporter, Nicky Morgan. She pivoted to support the Brady amendment, while promoting the so-called ‘Malthouse Compromise’.

It suggests that although the ‘agnostic’ group of MPs, as the No Deal cliff-edge becomes ever-closer, could well grow, such members will tend to gravitate towards a May-deal variant in preference to Norway-plus.

Perhaps later: When?
Here and now, Parliament will need to agree to ‘something’ by early March, if an economically and socially disastrous No Deal exit is to be avoided.

That ‘something’ could be nothing more than to ask the EU to extend Article 50 into the summer. That would only delay the day of reckoning, however. It is, for that reason, unlikely to be granted by Brussels without conditions that might well include a timetable for Parliament to resolve on an agreed option.

In that event both Front benches might well conclude that the best way to avoid No deal, whether disorderly or partially managed, without splitting their parties, leaving a dangerous electoral hostage of fortune for them, would be to provide leeway to MP’s to vote according to preference, lifting party whip.

That might open-up a refreshed window of opportunity for Norway-plus.

To muster a parliamentary majority would presuppose, not only added support from Remainers – many of whom are wedded to a second referendum – but also from the MPs across both parties, who – above all and anything else – desire to see Brexit delivered without further unnecessary and prolonged ado and damage. As noted above, the numbers of this ‘agnostic middle’ can be expected to rise as the No deal cliff edge approaches ever-closer, but will not necessarily gravitate in favour of Norway-plus.

But, besides, Norway-plus cannot realistically be taken back to Brussels for re-negotiation, if it is simply the product of an unwhipped vote that will not or cannot be sustainably supported and progressed by the executive. It will continue to be led by Mrs May or a Conservative successor, unless a general election or a change in government subsequent to a successful no confidence vote occurs.

Back around the same circle, then?

Perhaps. The most feasible scenario in which Norway-plus could become the successor arrangement appears to be one where Labour formed a parliamentary majority, following a snap general election precipitated by continuing parliamentary deadlock, and as the government it promised to go back to Brussels to negotiate a deal aligned to its six tests. Some variant of Norway-Plus was what it then could best come back, to be ratified by a second referendum.

In such circumstances, the referenda choice conceivably could be between Norway-plus and Remain, but such a restricted choice would provide a dangerous and uncertain political path to navigate.

A Week in December

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On Monday 10th December, cabinet ministers confirmed on breakfast-time radio that the scheduled Commons ‘meaningful vote’ on the Draft Withdrawal Agreement  (WA) would proceed the next day.

By lunchtime that vote had been pulled. This was to prevent its defeat on the floor of the Commons by a large enough margin to topple the Prime Minister (PM).

By Wednesday evening, May had faced and won a confidence vote in her leadership, albeit with 117 of 317 of her own MPs voting against her.

By Friday, her attempt to persuade EU leaders to provide sufficient comfort to the Ulster Democratic Unionist (DUP) members and the 80-100 Conservative hard-Brexiteers and European Research Group (ERG) MP’s within her own party to time-limit the Northern Ireland (NI) backstop provisions within the WA, or, at least set out a route map with legal standing as to how it could be escaped, had demonstrably failed, notwithstanding some vague assurances that its activation was not desired and that ‘further clarifications’ could follow.

On Monday 17 December, the PM confirmed that the meaningful vote will take place in the week of January 14. Debates on her deal would restart in the week of January 7, when MP’s return from their Christmas break.

Her 2018 December Summit line was reiterated: political and legal assurances on the WA Northern Ireland (NI)backstop line would be sought from Brussels.

The reasons why the WA backstop is futile and misconceived and contrary to the overarching NI backstop that she agreed to in December 2017 are set out and discussed below.

Her game plan still appears to go to the wire to put pressure on MP’s of both parties that simply want done with Brexit, avoiding both a second referendum and a No deal departure.

After the inevitable defeat in parliament, the government will have 21 days to report back as to how it intends to proceed, providing opportunities for MP’s to debate, put forward, and perhaps even secure majority support for one of the alternative options, discussed earlier. That period will end in mid-February.

That process is likely to be interrupted by an opposition no confidence vote in the government. Jeremy Corbyn will table a vote of no confidence in the PM today (Tuesday 18th December), but whether it will take place is uncertain.

Understanding the NI Backstop
This was defined in Section 49 the UK-EU December 2017 Joint Agreed Report on the Phase 1 Negotiation process, as follows.

The United Kingdom remains committed to protecting North-South cooperation and to its guarantee of avoiding a hard border. Any future arrangements must be compatible with these overarching requirements. The United Kingdom’s intention is to achieve these objectives through the overall EU-UK relationship.

Should this not be possible, the United Kingdom will propose specific solutions to address the unique circumstances of the island of Ireland.

In the absence of agreed solutions, the United Kingdom will maintain full alignment with those rules of the Internal Market and the Customs Union which, now or in the future, support North-South cooperation, the all island economy and the protection of the 1998 Agreement’

It is that commitment in the last paragraph of that provides an overarching NI backstop.

Coupled with the government’s (and widely supported) blood-red line ruling out an Irish Sea regulatory border and/or specially agreed other arrangements for NI, that NI backstop meant and continues to mean, in effect, that the UK would need to: (i) stay in an equivalent CU with the EU; and, (ii), cede continuing regulatory alignment with the EU for goods, at the very minimum, for the foreseeable future.

As explained in The May Agreement, the WA backstop, if activated, would not allow frictionless trade between the EU and UK to continue. The WA relies instead on the operation of a separate regulatory treatment regime for NI.

For that reason alone, it is difficult to discern how it could never be accepted by parliament without jettisoning the overarching principle of the December 2017 NI backstop.

Any reliance that a future trade deal will render that WA backstop unnecessary is a mirage.

Close to unanimous agreement exists among informed commentators that the time-frame for putting in place an alternative trade deal would extend far beyond 2020. Recent EU trade negotiations have taken far longer to negotiate and ratify. The Canadian Free Trade Agreement (CETA) took over six years.

To expect the UK to conclude an agreement with the EU, more comprehensive and deep than the Canadian one, in less than two years is widely unrealistic.

And that is after taking on board heroic assumptions that all the negotiation stars are all aligned to produce a treaty within, to all intents and purposes, 18 months.

It then has to be approved by the EU national and, as required, by some regional parliaments, such as Wallonia in Belgium, without, as the UK Trade Observatory recently put out, any quibble and delay.That proved not to be the case with both the recent EU Canada and Ukraine agreements.

Cutting to the chase, a future UK agreement is not going to finalized and approved soon enough to render the WA backstop, or an extended transition, unnecessary. Full stop. To assume otherwise is either dishonest or self-delusional.

Besides it remains unclear how a replacement Canada-style agreement could ever avoid the re-imposition of a hard border within Ireland. Technological fixes that could allow the UK to levy differential tariffs on imports depending on their ultimate destination will not come to the rescue in the foreseeable future, if ever.

In that light, Parliament’s unanimous December 2018 Brexit Select Committee report re-affirmed that a Canada-style agreement with the EU would not, on its own, ensure the type of friction-free trade with the EU that many UK companies with just-in-time manufacturing supply chains need, concluding that it is not a viable option, insofar that:

‘the commitment to avoiding a hard border enshrined in the Withdrawal Agreement will continue to shape the future relationship between the UK and the EU because it will not be possible for the UK to decide on customs and regulatory arrangements which negate that commitment’.

A time-limited NI backstop is a contradiction in terms, therefore, and can never be accepted by the EU in a legally tangible form within the current or any amended WA..

What should happen next?

The Hard-Brexiteers who voted no confidence in the PM on Tuesday, in any case, will not be persuaded to support the WA. They seek instead a disorderly no deal exit occurring by default, regardless of its impact.

The WA can now only pass Parliament with some measure of Labour support. The PM to secure it will need to tilt at the very least the Revised Political Declaration  (PD) towards a more permanent Customs Union (CU) and greater on-going regulatory alignment with Single Market (SM) rules.

But she continues to be boxed-in by the malign influence on the government that the hard-Brexiteers can exercise. This is through their power to determine the parliamentary selection of the two candidates to be submitted to the hard-Brexit-leaning rump party membership for the next Conservative Party leadership contest.

If either No deal or a second referendum is to be avoided, she must break out of that box and find a way to secure cross-party support for an option acceptable to the majority in parliament, with or without Labour whipped support, that will preserve an open border within Ireland.

Her difficulty is that could risk the break-up of the Conservative party in parliament, rather like the Liberals did over Irish Home Rule in the nineteenth century.

But, if she doesn’t, Tory Remainers are quite likely to jump ship at the prospect of a rigid, and, ultimately, an unelectable government beholden to the hard-Brexiteers and their accompanying neo-liberal economic and social policy agenda.

It did not help that some EU leaders were indicating post-December summit that they would still like to give Mrs May some comfort concerning the application of the WA backstop to help her to secure a parliamentary majority. That is a forlorn hope that will encourage May to extend the impasse or the agony, rather than to cut her losses and strive to strike a deal with MP’s.

The Labour front bench needs now to act in the national interest and hold Mrs May to account properly by highlighting her capture by – in the words of her own chancellor – extremist hard-Brexiteers, who are wedded to a no deal exit that would cause at very least considerable short-and longer-term damage to the economy, household incomes, and the public finances, undermine and even destroy the foundations of the Good Friday Agreement, before ushering-in a neo-liberal race to the bottom inducing greater inequality in market incomes amid further welfare state retrenchment.

May messed up by going back to Brussels in a self-defeating exercise to secure concessions bending to that destructive faction, living the lie that an alternative deep and comprehensive trade deal consistent with her December 2017 NI backstop commitment is negotiable with the EU within a time-limited period.

The only way, indeed, that a border within the island of Ireland and separate treatment of NI to the rest of the UK can be avoided and the industry supply chains integral to the protection of UK manufacturing industry and employment can be protected and fostered is by the maintenance of frictionless trade between the entire UK and EU.

That, in turn, as this website has consistently argued, requires an equivalent CU with no rules of origin checks along with continuing UK regulatory alignment with SM rules for goods  – at least until institutional and technological means can be identified and implemented that will allow the UK to levy differential tariffs on imports, depending on origin and destination.

The real impact of Brexit and the actual choices that are available continue to be obscured in the mainstream media Brexit debate, reflecting not only the government’s, but also Labour’s failure to demonstrate through forensic precision and focus that:

  • The current WA backstop, whether time-limited or not, is incompatible with the December 2017 overarching NI backstop;
  •  A comprehensive and deep economic partnership with the EU cannot be achieved in the short-to-medium term through the agreement of a Canada-style FTA;
  •  The future benefits of any future UK trade deals with the ROW will be miniscule compared to the economic damage inflicted by loss of frictionless trade with the EU;
  •  Frictionless trade, in turn, depends upon the maintenance of an equivalent CU with no rules of origin checks and continuing UK regulatory alignment with SM rules for goods into the foreseeable future.

The time for tactical posturing is over if either no deal or a divisive and, for the reasons discussed  in The Dangers of a Second Referendum quite possibly destructive second referendum, are to both avoided.

The Labour front bench needs to be up-front and hammer home each of the points above – evidenced by the government’s own published documents and supported by the mass of independent expert opinion – not only in the national interest, but for its own wider electoral and strategic political purposes.

Each potentially commands a majority in parliament, and could be subscribed to by at least a significant minority in the cabinet.

Informed political and media focus on them will help to drive a wedge between the sensible majority in parliament and the hardline ERG faction, who continue to peddle their no deal exit vision by falsehood and misrepresentation – for example, it would be feasible for the UK to unilaterally declare tariff-and quota-free access to EU imports.

Such a wedge would assist the government to tilt towards the Labour position and at least increase the likelihood of an agreement acceptable to the parliamentary majority being agreed that could then be taken back to Brussels.

It would also help to define the dividing lines for any second referendum process in the event that transpired as the only alternative to no deal, and would begin to set them also for the next general election, whenever that happens.

The Dangers of a Second Referendum

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The ‘People’s Vote’ campaign has steadily built some momentum – at least within the rank of Remainers – for a second referendum to include an option to Remain. Their clarion call is that details and impact of Brexit were unknown in June 2016 and the electorate has the right to decide anew, now that the implications and impact of Brexit has become clearer, at least in broad terms.

A second referendum has been consistently rejected by the government, however, pointing out the people in the first referendum voted by a clear, if modest, majority to Leave, and that its job is to effectively execute that decision.

It would certainly be problematic in design and indeterminate in outcome. Referendums involving a politically contentious nation-changing decision really need to offer a binary choice between two options.

They are employed ideally to legitimize a once-and-for-all complete change or revolution in governance or social practice arrangements, such as the transformative move to democratic majority rule in South Africa, or the introduction of divorce in countries, where previously it was prevented.

The 2016 referendum, however, was convened mainly to manage internal Conservative party dissension, and was to all intents and purposes, unnecessary.

The actual vote in that referendum was found to be correlated with age and education. It undoubtedly was also influenced, not only by such social-economic factors, such as inequality and perceived social and political exclusion, but also cultural factors linked to community and class, not necessarily related to EU membership,  including immigration and refugee dispersal.

Any second vote would also be influenced and probably decided by such proxy factors, sometimes only loosely related, if at all, to the pros and cons of each ballot paper choice.

Non-binary choice referenda become complicated, producing results that can reflect tactical voting, the order or permutation of the questions, or the intention of the framers of the questions, rather than indisputably the actual preference of the majority.

Leaving aside for a moment that hard-Brexiteers oppose the idea of a second referendum on the ground that the issue has already been decided, but, if it was conceded by parliament, they, for example, can be expected to agitate for a choice between No Deal and the May Deal, because that is the permutation most likely (but uncertain) to deliver victory to them.

By the same token, Remainers relish a binary choice between Remain and either no deal or the May deal, as current polls suggest a Remain majority over both.

If an alternative vote (AV) system was used, where voters are asked to make a first-and second- preference, with their second preference votes counting if no option obtains more than 50% of first preferences and their first preference option is eliminated, the May Deal could win, even when both Remain and Leave options were able to secure more first choices but more than 50% of the total vote. Polls can change, of course.

Most MP’s reject No deal. They could decide to exclude that option as simply too damaging and thus not in the national interest option to offer the people in a referendum, and decree that choice should be between the May deal and Remain.

Logically, however, that is little different to parliament taking the entire decision on behalf of an electorate, not trusted to make the ‘right decision’ because it could decide in favour of No deal, notwithstanding its expected dire economic impacts. That decision could be the result of the electorate placing a higher weighting on sovereignty (perceived or actual) or be the product of the proxy factors discussed above, or a mixture of both.

A second referendum undoubtedly would be divisive. Committed Remainers and some Brexiteers, as noted above, now increasingly see it as a ‘going for broke’ option, where their best outcome, cancellation of Brexit for the former, and ‘No deal’ in the case of the latter, can be achieved.

As Daniel Moylan, a former adviser to Boris Johnson, noted at an Institute of Government seminar last week, its proponents tend to promote it to solely to secure a desired outcome rather than because of their commitment to the process itself.

It is not surprising therefore that there has been little evidence of either camps engaging with the arguments of other. A simple re-run of June 2016 would be a bit like a referendum in Belgium being convened to decide if the national language should be Flemish or French, after a narrow victory of one or the other could not be translated into actual arrangements that were politically acceptable and sustainable.

Nor would a simple binary choice between Remain and Leave, if Leave was subsequently confirmed, settle the terms for the UK’s departure: back to square one minus x, then.
On the other hand, a flip-over in favour of Remain would induce claims of betrayal by up to 49% of the electorate who voted to Leave across both referendums, risking the further estrangement of a huge number of people from the political process and associated political and social instability.

Many Cabinet ministers and MP’s across the party divide share that concern and for that reason have hitherto been most reluctant to go down the route.

Moreover, no guarantee exists that any alternative option to the May Deal that required re-negotiation of the Withdrawal Agreement (WA) would be accepted by the EU in the form envisaged, giving rise to the prospect of a third vote becoming necessary when the detail of any final negotiated revised deal became available.

The details and impact of other possible Leave options, such as a stand-alone trade deal would also not be known.

Framing and finalizing the actual details of the referendum questions would be as, if not more, contentious, and as likely to be deadlocked, as the current parliamentary impasse has proved to be.
Logistically, its organization and delivery could take up to six months. Parliamentary business would continue to be gridlocked by Brexit, and the economy further undermined by uncertainty.

The majority of MP’s could conclude that the fundamental interests of the four nations of the UK required the cancellation of Brexit, and then act on the courage of their own convictions as elected representatives of the people and resolve to revoke Article 50 and the withdrawal legislation already on the statute books.

In that case, they would, however, be accused of ignoring the expressed will of the people as expressed in the first referendum. Undoubtedly some who voted Leave would feel betrayed and robbed of their Brexit by the distant Westminster establishment, leading to an even greater risk of political and social instability.

That danger could, however, possibly be mitigated by a concentrated communications exercise explaining their decision was taken, accompanied by a strategy to tackle the causes of Brexit, such as the upskilling of indigenous workers: things that need to happen anyway.

It is not really conceivable a simple revocation of Article 50 to cancel Brexit would be taken up by either the Conservative or replacement Labour government, without prior recourse to a referendum, although they could ask the electorate to ratify the revocation after the event: an uncertain outcome.

Facing continuing deadlock, May could ask the electorate to approve or the WA agreement. Hilary Benn at the same IOG seminar indicated that it might be convenient for both front benches for May to take her agreement direct to the country.

If the point was reached where her deal was rejected by the Commons and the lack of majority parliamentary support for any alternative option threatened No deal by default, and a no confidence motion had been defeated, most bets are on the Labour front-bench swinging in favour of a second referendum.

That would not necessarily translate into a parliamentary majority for a second referendum, but given the looming reality of a no deal exit and with other options exhausted it might become difficult to identify an alternative outcome, save for MP’s to vote in a temporary Government of National Unity to go back to Brussels to re-negotiate a revised May Deal more in line with majority preferences of both parties, but the prospects of that appear dim.

An understanding of the dangers of the drawbacks, uncertainties, and risks involved in a second referendum might help to concentrate parliamentary minds in mapping out a process to an agreement that that could be sustained in Westminster and Brussels, however.

May’s Contradictory Deal

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The Draft Withdrawal Agreement (WA) The Draft Withdrawal Agreement was published on the 14th November accompanied by a  Revised Political Declaration on the 22nd November (the May deal or agreement).

The Northern Ireland and Ireland Protocol of the legally binding Withdrawal Agreement (once approved and ratified) provides for a NI backstop that diverges in both principle and spirit from that defined in December 2017.

It is thus termed, here, the WA backstop, to differentiate it from the overarching NI backstop.

A common customs territory is created, where no quotas or tariffs would be applied on goods circulating between the UK and EU. It is not comprehensive, however, failing, for instance, to make express provision for road haulage or agri-food movement (services), the absence of which would result in bottlenecks and delays at the UK-EU border.

Even more crucially, the WA backstop does not provide for continuing regulatory alignment at the UK-level for goods, which is also necessary if continuing full frictionless trade between the UK and EU is to be maintained.

In order to maintain an open intra-Ireland border additional provisions are made within the WA that will apply to NI only and not to the rest of the UK.

These include NI’s full adherence to the EU Customs Code and its continuing regulatory alignment with SM rules with respect to the technical standards of goods, to sanitary and phytosanitary measures relating to animal, plant and food safety, to environmental protection, to agricultural production and marketing, and to rules relating to VAT and excise in respect of goods, and to state aid.

The European Court of Justice (EJC) will continue to exercise direct jurisdiction over the application and interpretation of these rules.

NI, in effect, would be treated differently to the rest of the UK under the WA backstop, making it impossible for the DUP to support the agreement.

It will become operative at the end of the transition period on 31 December 2020, until when the UK will continue to apply full CU and SM rules, unless alternative other arrangements that are consistent with an open intra-Ireland border are put in place.

Otherwise the transition period is extendable by mutual agreement for up to a further two years until December 2022, subject to the government requesting an extension by 1st July 2020 and then its subsequent approval by the Joint Committee that will be set up to oversee the WA.

The government’s expressed intention is that the WA backstop would be rendered unnecessary by the UK entering into a subsequent agreement with the EU that would establish a future ‘deep and special future economic partnership’ between them.

To that end, the WA shoulders a joint ‘best endeavours’ duty on both parties to finalise such an agreement.

More specifically, Article Two of the Ireland and N.Ireland Protocol within includes provision for specific ‘best endeavours to reach a future agreement which supersedes the WA backstop by December 2020’ to be made.

When activated the WA backstop arrangements would then, according to Article One of the same Protocol, continue indefinitely “unless and until they are superseded, in whole or in part, by a subsequent agreement”.

The current draft of the WA does not include any time-limit on, or for any right for the UK to unilaterally exit the backstop after it comes into operation; nor does it define in which precise circumstances when it would no longer apply.

The UK commits to continue to adhere to EU State Aid and Competition Policy, and not to dilute existing EU social, labour, and environmental standards – the so-called non-regression clause, with provision is also made for both parties to jointly agree to raise them.

No provision is made in the WA for services at either the NI or the UK level. Nor is provision made for the UK to benefit from existing and new trade agreements with third-party countries.

Turning to the accompanying non-binding PD, no mention of frictionless trade is made, even though the original version published on the 14th November did, indicating the fluidity of the document and the PM’s tacking to her party’s hard-Brexiteer faction in response to their initial hostile reaction.

It, however, does air the possibility of using technological fixes and ‘trusted traders’. This suggests that government may hope to resurrect the Facilitated Customs Arrangement (FCA) included in the 2017 Brexit White paper to build and improve on the barebones customs union set out in the WA.

That FCA was considered and ruled-out as unworkable by the EU during the WA negotiations. For reasons explained in https://www.asocialdemocraticfuture.org/2018-brexit-white-paper/and little has changed since then, other than the political environment within the Conservative party.

The PD gives emphasis to the development of an independent trade policy with reference made to a future (trade?) agreement ‘that will obviate the need for checks on rules of origin’.
Such an outcome, however, assumes either the maintenance of the EU’s Common External Tariff (CET), or undue reliance on a future technological fix that would allow the UK to levy differential tariffs without border formalities.

The government conceded in Section 181 of its  November  Explainer on the Draft Withdrawal Agreement that, indeed, ‘The (WA) text reflects the UK’s commitment to align with the EU’s Common External Tariff, and with the Common Commercial Policy on trade in goods with third countries to the extent necessary give effect to these (WA backstop) provisions’. But to do that would probably prevent the UK negotiating, and certainly bringing into effect, its own trade deals with the Rest-of-the-World (ROW), save for services.

The government has been, therefore, caught facing in different incompatible directions, when explaining the WA. It will continue to do so, thus undermining its own position, until that it is made consistent and fit for purpose.

Such basic confusion, reflecting the conflicting internal party pressures within the Conservative Party, hardly augurs well for any expeditious trade negotiation process that can culminate in a 2020 trade deal. That, of course, in any case, assumes that the May deal is approved by the House of Commons next year, which it won’t, at least in its current form.