As the resident contrarian my short answer is no, Britain is highly unlikely to leave the EU.
I resisted the urge to write about Brexit because the debate surrounding British withdrawal was so biased and the reporting was so shallow that I knew it would be a long piece as I would have to explain everything.
For instance, for two years people debated the so-called
Norway Plus arrangement with a straight face even though no such option exists or could exist. It requires membership to the European Free Trade Association and its dominant member Norway ruled out any such membership from day one.
It also calls for a strict adherence to EU rules and regulations (as Norway does) which is anathema to prominent Brexiteers.
Such ignorance is typical of the Brexit process and I believe at the root of the idea that Britain would be better off outside Europe lies a deep misinformation about European institutions.
I know you are scratching your head. Ok, we know this guy is supposed to be a contrarian but this is stupid, you say. With a month-old political party Nigel Farage got 34 percent of the vote in the recent European elections.
More importantly, there is the new PM Boris Johnson who affirmed that deal or no deal the UK will leave the Union at the end of October.
Allow me to explain my reasoning.
Removing the Social Safety Net and Deregulation
There are several misconceptions about Brexit. The first one is the widely shared view that the Tories were caught unawares by the results of the referendum.
I don't believe that for a second.
To me the referendum and Brexit make sense in the context of a long process that began with Margaret Thatcher.
You see, following the 1960s, which was a decade of prosperity and full employment, British businesses began to resent the power of the trade unions. A parallel movement on both sides of the Atlantic was put in motion to implement the same blueprint. Thatcherism on one side and Reaganomics on the other.
First step was to crush the unions which was easier to do in the US and much harder in the UK. Still,
Thatcher managed that nicely, as we all know.
The next step was rolling back the welfare state and chipping away at the social safety network. Again successive governments and administrations patiently reduced unemployment benefits, healthcare and education spending.
The US was much more successful in turning their working classes into impoverished and helpless people. They employed a variety of wedge issues like culture wars, gays, abortion and lately immigration as misdirection while they took away their money and gave it to the one percenters.
As a result, the US is now "
a country where an estimated 40% of adults don't have funds to cover an unexpected $400 expense."
While subduing its workers and reducing their wages, the Republicans opened up new horizons for the corporate elite by deregulating every possible constraint they were facing.
They
could pollute, resell
junk mortgages as AAA bonds, disregard
food safety or
charge exorbitant prices for incredibly cheap drugs like insulin.
Sky was the limits.
In the UK, Tories also started a massive upward income redistribution by introducing
austerity policies at a time of contracting economy.
They also cut social services available to low income families to make them more vulnerable in the labor market. They
defunded NHS, reduced
unemployment benefits and made hiring and firing very easy.
This phenomenon is called economic insecurity.
And on both sides, they blamed this new state of affairs
on the immigrants.
As a result, the UK has the highest
Gini coefficient (showing income inequality) in Europe.
According to a
Nobel winning economist, it will get worse.
Which was by design, as I suggested above.
But there was one glaring difference between the US and the UK: The EU prevented British companies from lowering food standards, ripping off consumers, polluting at will, drastically reducing labor compensation and removing regulations they don't like.
The Common Market is a huge and affluent market but it is also highly regulated. You cannot do anything you want.
And that bothered the British companies.
That's why you had a sustained media effort to frame the EU institutions and their activities in a negative way. Brussels has always been presented as a money-wasting, over-regulating, intrusive and completely out of control institution.
Stephen Clarke, a British humorist,
has a long list of phony Brussels crimes. These are actual headlines from British press.
- Brussels to force farmers to give toys to pigs
- EU to ban singing in pubs
- According to the EU’s animal waste directive, it is illegal to bury dead pets unless you have pressure-cooked them at 130°C for half an hour
- EU to ban Scottish bagpipes
- Brussels will give in to French pressure and force Britain to rename Waterloo Station and Trafalgar Square
- Smoky-bacon crisps to be banned by Brussels
- Brussels rules that oysters must be given rest breaks during transport to market
- Kilts to be re-defined as women’s wear
- Brussels will force lorry drivers to eat muesli
- According to a new EU law, the Queen will have to fetch her own cup of tea
- Brussels wants to ban British barmaids’ cleavage
- EU to force British fish-and-chip shops to use Latin names for fish
- God Save the Queen must be sung in all immigrant languages
- No alcohol sales during the week, says Brussels
- EU will force cows to wear nappies
- English Channel to be renamed "Anglo-French Pond"
- Great British banger to be outlawed by Brussels
- British toilets to be replaced by “euro-loos”
- EU wants to measure how badly workers smell
- New Brussels law: worn-out sex toys must be given back to retailers
- EU wants all condoms to be of uniform size – small
- EU bureaucrats decree that Britain is not an island
You may laugh but a large portion of the British public actually believed these lies and made up stories. Because no one has ever contested them.
You chuckle, roll your eyes and wink, wink, nudge, nudge, "them continentals" discourse.
By the way, as an aside, do you know who instigated this campaign?
Boris Johnson.
He landed a job in 1989 as the Brussels correspondent of Daily Telegraph.
The son of a former Eurocrat
and member of the European parliament, he made a lasting impression as
the inventor of the “Euromyth”, a journalistic genre now termed fake
news. With the backing of his editors it seems, he eagerly
misrepresented events or even completely made up stories to portray the
European commission as a bureaucratic monster making absurd proposals.
As he once explained to me, aged 28 and dressed as ever in a rumpled
jacket, his shirt spilling out in typically English manner: “You mustn’t
let facts get in the way of a good story.” Among other yarns,
he claimed there were plans to establish a “banana police force” to
check the fruit was the right shape, that coffins would be standardised
and prawn cocktail crisps would be outlawed.
By all accounts,
he was simply shameless.
But it was not just a conservative media campaign.
You also had decades of politicians claiming that the UK was putting too much in and and getting not much in return.
Which is total rubbish even when you look at budget numbers. But if you look beyond,
the EU was an amazing bonus for the UK.
But without that constant whining, fewer people would have believed the Leave whopper about the UK sending £350 million every week to Brussels.
They did because of the echo chamber that was created by the conservative media and politicians.
What these business wanted was to have access to the EU market without abiding by its regulations. When they launched the referendum, they assumed that the Europeans,
eager to sell Prosecco to the UK market, would find a way.
“He [Boris Johnson] basically said: ‘I don’t want free movement of people but I want the single market,’” he told Bloomberg. “I said: ‘No way.’ He said: ‘You’ll sell less prosecco.’ I said: ‘OK, you’ll sell less fish and chips, but I’ll sell less prosecco to one country and you’ll sell less to 27 countries.’
This was simply not possible given the current rules of the EU. The so-called four freedoms are a package.
Yet, to my knowledge no one has seriously explained this to the British public. Everyone, including Labour politicians, assumed that the UK was too important for the Union for them not to give in to its demands.
This is, of course, ludicrous but many people genuinely believed this. And the conservative British media did nothing to dispel this.
So now the British companies are faced with a situation where they will lose access to their biggest export market. They are beginning to realize that their assumptions were incorrect and their knowledge of the EU institutions was deficient.
Moreover, losing access to the EU market is not the only problem. There are others and they are simply insurmountable. They couldn't have been solved in two years and it is simply impossible to solve them in three months.
The Irish Border and the Backstop
To begin with, there is no way a solution can be found to the Irish border issue. I am genuinely surprised why this was not brought up in a massive way during the campaign.
If there is no hard border between the South and the North, how could Brexiteers claim that they have taken back the control of their country? All you need to do to get into the UK is to fly to Dublin or catch a ferry to Rosslare.
But if you establish a hard border between the Republic and the North, you would be inviting a return to the good old days of the "
Troubles."
You know the IRA and hunger strikes and young British soldiers dying.
It is already starting.
Yet, charismatically-challenged Brexiteers like Jacob-Rees Mogg simply shrugged it off.
His position is that establishing a hard border between the North and the South
to inspect people would be fine and would lead to no new problems.
Sure, and
Lebensraum just meant "living spaces" for blond people.
Let me repeat it,
there is no workable solution for the Irish border issue.
If there were, you’d have heard of them by now. The details of this
technological masterpiece would already be a double-page spread in the
Daily Mail with Rees-Mogg mocked up as Alan Turing under the headline
“Enigma cracks Enigma – spirit of Bletchley takes back control”. If an
alternative arrangement that worked actually existed (or was likely to
exist in the next couple of years) Brexiteers would have already
accepted the backstop, knowing they could easily replace it with their
idea during the transition. The fact that they won’t bet on themselves
tells you all you need to know about what they have in the locker.
Curiously, during the referendum,
the Leave campaign had no idea about the Irish border issue.
Oliver Norgrove, who was a staffer on the official Leave campaign, recently recalled in the Irish Times an awkward moment about a month before the referendum of June 2016. A request came in from the BBC’s Newsnight.
Would the Leave campaign send a representative to debate the effects of
Brexit on the Irish border? “Nobody in the office,” recalled Norgrove,
“was keen to take up the request, with even our more polished and
experienced media performers rejecting the opportunity on the grounds
that they simply lacked real knowledge of the issue. I remember quite
vividly the feeling of unease and discomfort about the prospect of us
talking about something we just didn’t feel needed addressing.”
They simply ignored it and no one confronted them.
Ironically, one of the consequences of a no deal Brexit
could be a united Ireland.
And possibly the end of United Kingdom if Scotland decides to go independent.
Disastrous Consequences for British Economy
A no deal Brexit, which was previously known as hard Brexit, would be a disaster for British industry and trade.
Besides the need to negotiate everything, including the right to land planes on European cities or reviewing drug patents and certification norms, we know that in a no deal Brexit, the current Just In Time system of manufacturing would collapse spectacularly.
A while ago,
Ian Dunt explained what it would be like just for the food industry.
The UK produces 60 percent of its food, the rest comes from (mainly) Europe. Everyday there are 10,000 containers bringing in food items to the UK. You know, burger meat from Poland, France, Roumania or Hungary.
Currently, inspections and certification processes are done at the source and nothing is done at the border.
With Brexit that will take place at the border.
A study estimated that if clearance of paperwork in Dover moved up from 2 minutes to just 4, within 24 hours there would be a 20 miles tailback. And it would continue to get longer as days go by.
Food inspection takes 36 hours on average, which means that the UK will have two options. Continue as before and let any food shipment coming from the EU in with no inspections.
But
as Ian Dunt points out, that would open the door to anyone sending substandard or even contaminated items as they would know that there will be no inspection. Also it would not solve the issue of British food exports to the EU as member states are under no obligation to reciprocate the British move.
Another solution is to import food from the US.
There are two difficulties with this.
One is the distance, food goes bad quickly and transportation is expensive.
The other is the difference between
sanitary and phytosanitary standards.
Years ago Nasa developed something called Hazard Analysis and Critical Control Points (HACCP). It was an extremely systematic approach to guaranteeing quality control on foods, primarily for the reason that it is very, very problematic if an astronaut gets diarrhoea. The EU adopted this very high standard in 2006.
The US, on the other hand, has much lower standards. The EU rejects US standards on the levels of pesticides residue in fruit, for instance, hormone injections in beef and chlorine wash for poultry. It has strict and very welcome requirements on the excess and routine use of antimicrobials in agriculture.
Which means to get out of Europe, Britain will have the accept to import more expensive and lower quality food stuff.
Then there is the issue of tariffs.
In a no deal scenario, agricultural products will face an average of 22 percent tariff. This would be disastrous for the British producers who sell mainly to the European market.
OK, you might say, the UK could unilaterally lower these tariffs to zero hoping that the Europeans might reciprocate. Well, they are under no such obligation and if you know about their signature
Common Agriculture Policy you know that such gestures would be unlikely as it was designed to protect the domestic producers.
Even if they did, under WTO rules, the UK would be obligated to apply the same zero tariff to every country. This could open the floodgates of cheap third country food exports.
You know, the dreaded
Turkish exports from Boris Johnson's
original homeland.
Either way British agricultural producers would be very negatively impacted.
There is one more problem.
There are not enough veterinarians in the UK to handle food certification to continue to deal with the EU. 95 percent of these vets working in the British food processing centers are from Europe and apparently, they are leaving
fast at a pace of 20 vets per month.
And, in an added irony for anti-immigration Brexiteers. there are no British vets to take their place.
Please note that this is just one sector.
Even in non-disruptive cases like aviation, the UK will be the losing side.
Brussels offered to maintain the current bilateral system in a no deal scenario but the UK would lose the right for intra-EU flights and will not be able to open new routes or add new flights to existing routes.
What Will Boris Do?
In short, since it is impossible for Boris Johnson to negotiate a deal that would satisfy hardline Brexiteers and that would also be acceptable for 27 European member states, come 31 October, he will have to choose between a no deal exit and Remain.
British businesses would never allow the former and they would put a lot of pressure on Johnson. There is also a majority in Parliament against a no deal exit. Even DUP would vote against it as they are aware of the
severe economic consequences for Northern Ireland.
There is also the possibility of a legal challenge.
The EU Withdrawal Act, passed at Westminster in 2018, states that
nothing in it may “diminish any form of north-south co-operation
provided for by the Belfast agreement”.
This is UK law – and an official mapping exercise identifies 142 policy
areas of north-south co-operation, 51 relating to the operation of the
north-south ministerial council established under the agreement. A
no-deal exit or a ditching of the backstop would break that law.
But you might say, Boris Johnson was categorical about leaving on 31 October deal or no deal.
Well,
Boris is an inveterate liar and like Trump he has no qualms about making a U-turn when he feels like it.
We will see in due course, but my money is on Remain.
______________
UPDATE
In case you were wondering:
Boris Johnson’s ruthless reshuffle makes one thing very clear: Brexit is about giving the right wing of the Tory party “the chance to finish the Thatcher revolution”.
Johnson filled his government with ultra-free market ideologues such as
Priti Patel, Dominic Raab, Liz Truss and Kwasi Kwarteng, who in 2012
vowed to give a good kick to the great British public, who they
described as “among the worst idlers in the world”.
Their plan to “unchain Britannia” by declaring war on the “bloated
state, high taxes and excessive regulation” is actually a plan to
unchain big business, which they believe, astonishingly, has suffered
from masses of overregulation on the part of successive governments from
Tony Blair to David Cameron.
Right at the ideological heart of this group is Liz Truss, founder of the Free Enterprise Group
of Conservative MPs. Truss is a turbo-charged Thatcherite who has now
replaced Liam Fox as international trade secretary. She has repeatedly
spoken of her desire to drive down taxes, cut back public spending and
strip away regulations on everything from housing, to education, to the
workplace. In Truss’s mind, it would be a “complete contradiction of the Brexit vote”
if it isn’t used to impose “fiscal discipline and economic
liberalisation … [to] give people power over their own money and their
own lives”.
It was about regulations and the Thatcher revolution.
Good luck with that, as they as in the US.
