Notes from the front of 24-10-2017
Tory fantasists being forced to confront reality
The course of the UK-EU negotiations on Brexit are at deadlock, according to both chief EU negotiator Michel Barnier and EU Commission President Jean-Claude Juncker, while the denial by EU Council President Donald Tusk is clearly designed to relieve some of the political pressure on Theresa May.
The pressure continues to build because the fantasies that the Tory leaders have been peddling, and some even seem to believe, are being met by the harsh reality of Brexit. The EU has ruled that it cannot open trade talks as there has been insufficient progress to on its three key issues, citizens’ rights, the Irish border and the divorce bill. Last weekend the press carried a wide variety of estimates of what the eventual divorce bill might be, with even Brexit-supporting media suggesting various multiples of the £20 billion that has so far been offered.
Other issues remain. Citizens’ rights was the first item tabled by the EU at the end of May, along with detailed proposals that the UK is opposing. The Tory government has no intention of allowing a Brexit of guaranteed rights. The Irish border question is even more intractable. With one part of Ireland in the Single Market and the other outside, the sole workable solution that has been proposed is to set the border in the Irish Sea, which would be a major impetus to Irish reunification and is therefore also unacceptable to the government.
The pressure is intensifying because big business and finance have made it clear they are unwilling to invest, and will consider relocation even in the short-term if there is no agreement on a transition phase of at least two years. Five major employers’ organisations have written to Brexit Secretary David Davis saying that time is running out to reach a transition arrangement before they begin to budget and plan for the 2018-2019 period. This follows the tweet of the head of Goldman Sachs saying he ‘was going to be spending more time in Frankfurt.’
The reality is that literally millions of jobs currently depend on the UK’s membership of the Single Market. According the OECD 2.8 million UK jobs are directly dependent on trade with the EU. A much larger number will be indirectly dependent on it. In addition, the EU has trade agreements with over fifty countries. Liam Fox’s assertion that these deals can just be ‘cut and paste with Brexit’ is meaningless nonsense. This would be a unilateral decision by the UK to allow imports. None of the fifty countries would be obliged to accept those same terms from UK exports once Britain left the Single Market. 6.6 million jobs in total are directly dependent on exports.
Theresa May reportedly used the ogre of the waiting Boris Johnson in order to try to wring concessions from the EU leaders. This highlights the wider point that all along that the Tory party has been a seething mess of factions, splits, and personal ambitions. The political divide contains diametrically opposite positions on the EU. If the current paralysis continues, it would lead to crashing out of the Singe Market on WTO terms, much higher inflation, company relocations and huge jobs losses.
Labour has been right to increasingly distance itself from the Tories’ Brexit debacle. It has said it will not vote for the EU withdrawal bill without a parliamentary vote on the terms of Brexit as well as a minimum 2-year transition period, the devolution of powers to the elected parliaments and assemblies, along with legal guarantees for citizens, workers, consumers and for the environment. Importantly, it will work with Tory rebels and others to achieve this.
This is the Labour party acting as the government-in-waiting on the decisive issue of Brexit. Many previous Labour leaderships would have been acting to prop up the Tories in time of crisis. Instead, Labour is intervening to maximise the splits in the Tories to its own benefit and to the benefit of the overwhelming majority in Britain. It continues to rise in the polls as a result.