Brexit; a British Farce at the Old Westminster

     

 Brexit; A British Farce at the Old Westminster

                  By

         Dr. Michael Sakbani

From the Referendum to the Deal

Prime -Minister May started on 5/4/2019 to do what she should have done two years ago. All along, she has been more interested in keeping her party from splitting than serving the national interest by reaching a deal across the Parliament. A lukewarm remainer, she caught Brexiters` fire when she became Prime- minister. To tighten her grip on the Party and country, she called for a snap election whose result was to lose her slim majority in the House of Commons and to depend for survival on 10 MP`s from Northern Ireland whose political Guru is the late reverend Ian Paisley, one of the Unionist hard nose politicians who thrived on sectarian politics. Ever since Mrs. May has been busy catering to the 40-50 hardline Brexiters and the 100 Euro-skeptics in the Tory Party by repeating the empty tautology Brexit means Brexit. If you listen to her, the 52% mostly misinformed voters who voted to leave in the Referendum were then, now and forever, the voice of the majority in the land. The campaign of the referendum was on one vague question: to exit or to remain. The exiters were goaded by deliberately misleading statements and false promises while the remainers were blind-sided by ignoring the capital issue of immigration and control of the border. It has been lost on the Prime-Minister that referendums are often dictators favored device to have an uninformed public vote on things they do not understand. Substituting doggedness for political common sense, she ignored the opposition and dedicated herself to avoid a rupture in her Tory Party by trying to please both the remainers and the Brexiters.

After a year and a half trying to square the circle, Mrs. May came out with her Checkers plan as a basis for negotiating with the EU. Her method was to ask the Europeans for concessions without showing them a parliamentary agreed plan of action. In the event, she got an EU-agreed withdrawal agreement with back-stop clauses for handling the question of how to keep the border between southern and northern Ireland open, while the UK, including Northern Ireland, has a hard border with Europe !!!! This backstop was a problem for the UK as well as for the Irish republic, but it is a desideratum for the Unionist and for the hard Brexiters.

The Failed Voting Strategies

The deal was presented to the House for the first time in late November 2018 with the idea that the Tories will all vote for it and perhaps some Labor MP`s and the Unionists will also do so. The rejection was overwhelming; 240 votes margin of defeat, the largest in modern history. Some two months later, Mrs. May again submitted the plan with few retouches hoping this time that the Brexiters will back it as the only exit plan possible. She got the EU to say that there is no other exit plan. Again, the vote was negative. The fact was that some 50 hardcore exiters plus the Unionists wanted to exit without the backstop, without a deal and without even the Prime-Minister being in charge of the future negotiations with the EU. Mrs. May now proceeded to throw her trump card: a promise to resign before the next elections. Mrs. May wrongly calculated that this concession will secure her entire party`s backing. For the third time, the plan was rejected because there were some 30 Brexiters from the ERG for whom leaving the EU has become an ideological obsession. Mrs. May gambled that they will vote for her if they see the danger of no Brexit. But she lost her bet.

The failure of the executive to pass any legislation through the House of Commons prompted the latter to move to wrestle control of the matter from the Government. The House then voted on twelve indicative -voting motions to show what it wanted. All the twelve motions were voted down. The impasse clearly showed what the legislature does not want, but did not reveal what it wants. The only positive vote was to kill the idea of crashing out of the EU without a deal. So, Mrs. May saw that she has to reach across the aisle to the labor leader to pass her deal with Labor`s demanded modifications,

The conversation started between a Tory centrist and a leftist Labor leader who is fundamentally a Brexiter for entirely different reasons than the right-wing Tory Brexiters. Mr. Corbyn exit inclinations are about building a society away from the liberal and globalist business thrust of the EU. He has seen the globalist firms relocating jobs to places without the ILO norms and without environmental safeguards. Business firms have done so in full dedication to their bottom-lines without considering the unemployment problems they created in the land. To be sure, his Labor Party has exit constituencies, but still, it has a majority which stands for a customs union and a second referendum, two things that Mrs. May said are red lines. To get a deal with soft exit, they both have to abandon previous positions and do so in a matter of two weeks!!!.

The crux of the Prime Minister problem is that she invoked two years ago article 50 without having a Parliamentary agreed plan for how to exit without damaging the economy. She kept repeating that she wants to deliver Brexit as a democratic imperative without much reference to the opposition or to what the EU might agree to, given her multiple red-lines. She is not the first Tory politician to draw wishful red lines in the sand and make predictions without a timeline. David Cameron called for the referendum to avoid splitting the Tories with the belief that the remainers will win. The Chancellor of Exchequers George Osborne made predictions about the economy that are true only in the long run forgetting that economists`Achilles heel is exactly timing; they would all be multi-millionaires if they were to get the timing right. That was a scare tactic which the protest exiters did not look at.

Facts and Problems

The televised debates in the House were confusion in full swing, totally out of character with the history of British statecraft. The islanders knew in the past what they wanted and were super clever getting that by guile or action if need be. Now, uncertainty rolled up its shadow over all decision-making circles. The exit politicians seem to want a return to the good old days of the empire, where 10% owned everything and the rest dreamed of being bottlers in some Lord`s household. And why not? So many of the MP`s went to the same schools and are scions of the 300 families that, according to historians, have ruled the UK for centuries. Their menu has trade deals with former colonies (including the United  States) and turning their country of 60 million into another Singapore. This exotic notion ignores several facts.

Despite a marked decline in UK exports to Europe from 65% two decades ago to 52% in 2018 and lower than 45% in 2019, the EU remains the biggest buyer of UK exports. In imports, which are much larger, it is even worse: the UK imports 28 % of its food from the EU, in addition to other imports of machinery, chemicals, cars, precision tools, medical drugs, wines, and other spirits. With the decline in the exchange rate of the Pound, there will be higher domestic prices and shortages facing UK consumers if no deal comes about. Moreover, some EU legislated subsidies will not be replaced by the UK after exit, therefore increasing the plight of UK farmers.

In the areas of security cooperation, the EU is a major provider of security data on criminality, terrorism and espionage. Here the loss is two-sided but it is tilted against the UK.

British scientists will be cut off from their joint efforts with European colleagues (e.g. Erasmus Program) and from the EU funds for research done by the outstanding British institutes of higher education. British academicians have expressed gloom about British science and universities if the UK separates from Europe without a deal. A brain drain might ensue from Brexit.

The UK has been by far the most successful receiver of foreign direct investment in Europe. For a variety of reasons, it is the EU member best suited for the location. If it exits from the EU, there is no basis for this location preference. One has seen in the last year that so many international firms moving to the Continent or canceling their plans of production and expansion in the UK. In addition, the City of London is and has been the most important financial center in Europe, and for some market segments, in the world. Leaving the EU would affect this sector, a crucial revenue sector for the Government and a provider of tens of thousands of jobs. There have been significant bank-personnel moves from the City to the Continent last year.

 The remainers are not unqualified EU supporters either; they do not like the close-knit European idea of integrated Europe dominated by the German-French couple, but hope to dilute the EU into a free trade zone. The UK had been the biggest promoter of EU expansion to the East with the hope that the new entrants would not go for close integration and would dilute the union. From this prism, De Gaulle was right that the British do not belong in the EU, but Edward Heath was also right in that the EU with the British in it is in the national British interest in our time.

Mrs. May has set up a straw figure on the hill by claiming that to ask people again to vote on any deal, is a major democratic sin. If one goes by a referendum of binary choice, the specifics of the exit deal are indeed more critical to democratic choice than a binary yes or no referendum. That is why the House of Commons was fundamentally against exiting without a future path.

A complete discussion of Brexit must, however, answer the question, why did a significant body of the British public want to exit from the EU in protest against it despite all the benefits listed above.

The EU has suffered from a top-imposed the notion of one speed Europe. Between Germany along with the Scandinavian members and the Balkan states and between the former and the Southern European countries there are differences in economic power, in culture, in language and in sociological orientation. The Eurozone has added to this problem of one speed EU by imposing a currency union on new entrants. The crisis of the Euro demonstrated that the business cycle is not synchronized throughout the EU and that the intra-European payments balance will produce debtors and creditors beyond the Democratic tolerance of the tax-paying public. The EU fails in important respects to be an optimal currency area because the movement of people is not perfect and because there is no fiscal centralized compensating mechanism and it does make a difference who gains jobs and who loses them. Moreover, the EU financial institutions do not follow one law and one set of regulations.

Another problem is the way in which regulations and binding laws are applied. The European law should trump the local law only in areas considered critical to the survival of the EU and the maintenance of its integrity. In all other aspects, the subsidiarity principle should apply. That makes people feel that they, and not non-elected bureaucrats in Brussels, are in charge of their affairs. Reducing the scope of unified regulation is an important democratic breathing space even when the EU regulations, like the environmental standards, are admirable. A case in point is immigration. For immigration from non-EU countries, a country should be able to decide the size and type of immigration it wants. EU immigrants up to a certain number can be given work permits with fixed time limits. There is no need for the EU Commission to regulate all that.

The rate of growth of the EU economies has been anemic. The OECD “ interim economic outlook projections” projects an EU growth of  1.8 % for 2018, but for 2019, growth is projected to go down to 1.0. For the UK, these projections were 1.4 for 2018 % but for 2019, they were brought down to 0.8 %. These unsatisfactory figures are a combined result of the impact of uncertainty of Brexit on investments and the macroeconomic interaction of the UK with the EU low growth; policy stances among close trading partners have spillover effects. The austerity policies inspired by Germany and the Nordic countries have resulted in severe crises of living standards in Greece, Spain, Portugal, and some other countries. There should be generous bounds for fiscal policy convergence with appropriate arrangements by the European Central Bank for extending short term credit lines with macroeconomic conditionality.

The Reform Challenge of Brexit

These are all areas of needed reform in the EU where the UK would have been very helpful and effective. The EU leaders should heed the protest vote of the UK because it finds echoes in the populist -right-wing movements in various European countries. Great leaps of history, of which the EU is one, often come with great imperfections in design. Europe should address the needed reforms of its institutions and accept multiple speeds for its significantly heterogeneous constituent countries.  It is a loss to Europe as much as the UK that Brexit vote took place in 2016 as the escape route for dissatisfied Britishers whose leaders were jostling upper-class politicians cut off from the concerns of their common people.

The process of exit is now facing short deadlines and it is unrealistic to think that a grand compromise can be reached in London in a few days. It is realistic that the UK demand extension beyond the 12 th of April. Mrs. May has already addressed a request asking for an extension to 30 June coupled with accepting to hold the European Parliamentary elections on 22 May (another fallen red line). The Europeans accepted on 11/4 to give her a six-month extension till October 31, 2019, with the proviso that the UK shows concrete proof of a possible parliamentary acceptable exit deal and guarantees that the UK members of the Strasbourg Parliament would not be disruptive as promised by the demagogue Nigel Farage and some eccentric conservative back-bench Brexiters, e.g. Jacob Rees- Mogg.  

Our times do not seem to be good ones for liberal Democracy: we are seeing its failings in the UK in the USA, in Poland, Hungry, Austria, Italy, Turkey, Brazil, and India, to name a few salient examples. But we complain while enjoying its benefits and blessings.

(Geneva, 13/4/2019)