Monday, 9 July 2018

Another Suitcase in Another Hall

Theresa May has now gained a Brexit policy, at the expense of losing David Davis and Boris Johnson.  On balance, this seems like a fair exchange.

Here are some thoughts on what happens now.

The leadership question

Lyndon Johnson once said that the first rule of politics is to learn to count.  There are currently 316 Conservative MPs, 48 of whom are needed to trigger a motion of no confidence in the leader.  Jacob Rees-Mogg and his hard core of fellow headbangers amount to around 50 MPs.  The biggest Europe-related rebellion in recent years was in 2011, when 114 MPs supported something that Cameron told them not to.  In 2016, a total of 140 Conservative MPs backed Leave.

What this means, in short, is that the headbangers have sufficient numbers to force a vote of confidence but not enough to win it.  If they do force a vote, it is difficult to see how Theresa May will not win comfortably.  This is especially the case given that the vote will be seen as a proxy for Boris Johnson's leadership ambitions - and Johnson's reputation is at a low ebb at present among his colleagues due to a combination of his clumsy resignation, his antics over Heathrow, "fuck business", and general weariness with the man.  In all, a vote of confidence in May is likely to be a repeat of Major v Redwood in 1995, an exercise which left Major strengthened and his Eurosceptic opponents marginalised.

This brings us on to a point which has not generally been noticed.  As far as the Conservative Party is concerned, the events since last Friday have seen a return to normal.  There has been a return to the usual dynamic that has prevailed in the party since Edward Heath fell in 1975: a somewhat Eurosceptic leadership which is harrassed by a diehard right-wing fringe.  This is the default position of modern Toryism.  It happened when Cameron was in power.  It happened in the Major years.  It even happened to Thatcher, who was tepidly pro-EEC for most of her career and had to face down little-Englander rebels from time to time.  The difference today is that the referendum result has pushed the "moderate" position from "Remain with opt-outs" to "soft Leave", and the headbanger position from "soft Leave" to "hard Leave" (the likes of Bill Cash and Bernard Jenkin used to see nothing wrong with EFTA membership).

There is a further lesson from history for Mrs May.  She did right to steer the Cabinet towards a relatively soft Brexit, not only because it's the right thing for the country but also because nothing good ever came from Tory leaders granting concessions to the headbanger faction.  These people are nihilists and fanatics, and they cannot be appeased.  Major and Cameron would no doubt be happy to explain this to the PM if she falters.

Hamlet without the prince

Brexit is an essentially narcissistic project, and one of the must stunning proofs of this is the way that so many Conservative politicians are treating the negotiations as if the only participants that count are in Westminster.  What about our real negotiating partners?

All the rumours that I've heard are that the EU saw the Chequers proposal coming a mile off and decided privately months ago that it wasn't good enough.  There is still some goodwill for May in Brussels, and a desire not to break her Government.  But the policy as currently formulated crosses the EU's red lines.  It is possible that the EU27 will be prepared to fudge certain things in the end - for example, agreeing to an end to free movement if the substance of it is preserved under a different name - but we're not even close to that space yet.

Norway v no deal

As the hard-right cranks on the Tory benches have realised, the Chequers policy isn't an end in itself.  No-one expects that it will be accepted wholesale by Barnier, and further concessions will have to follow - ideally accompanied by parallel face-saving gestures from Brussels.  The fate of the services sector is the obvious gap in the proposal as it stands, and the 80% of the British economy that is made up of service industries will have to be catered for somehow, probably though an arrangement involving budget payments (badged as something else) and free movement 2.0 (dressed up as "attracting talent").  In short, what the policy does is to set up a dynamic whereby, after a few months of difficult negotiations, we might end up in something broadly similar to an EFTA/Norway arrangement.

The alternative is that the EU is so annoyed with the continuing special pleading from the Brits - 16 months into the Article 50 period, when the EU has plenty of other important things to worry about - that they smack down the Chequers policy without seriously considering it.  This is still entirely possible, and it could force a change on May - either because it would extend the desire for a new leader beyond the Rees-Mogg fringe into the mainstream of her party, or because she genuinely believes in her plan and will react badly if it's rejected out of hand.  The second possibility is perhaps less likely, as it has never been clear that May believes very strongly in anything.  At any rate, if Barnier is merciless about the Chequers proposals, "no deal" moves to the top of the agenda.

If we end up facing "no deal", there are basically three choices.  It's anyone's guess which of them will prevail.

The conventional wisdom is that the Government would fall.  Someone would trigger a vote of no confidence, either in the Tory Party or in the Commons, and May would resign to avoid losing it.  The Tories would replace her with an empty suit who could reassure the party mainstream (Hammond? Hunt? Williamson?) and who would be just about tolerable to enough Labour MPs to override the 50 Commons votes of the headbangers.  The lucky fellow would gently rub out May's red lines ("purely as an interim measure, of course") and agree to some fudge like EFTA-under-another-name or a permanent transitional period.

The second option is that May decides that she isn't ready to stop being prime minister just yet and calls a second referendum.  The last two Europe referendums have been held in order to resolve internal party conflicts, and it's possible that another one will end up being held for the same reason. Again, May would need enough Labour MPs' votes to override the headbangers.  But May is probably in no hurry to ask the voters what they think again after last year.  She could not be confident of getting the result that she wanted.

The third possibility is that we really do leave without a deal - or with an absolutely minimal deal, which the EU agrees to in order to keep the planes flying and in order not to get blamed for cancer treatments suddenly stopping.

What definitely won't happen

There is one thing, and one thing only, that we can be confident won't happen; and that is that the EU will suddenly fold and say that actually we can have our cake and eat it after all.  This was always unlikely, even if we'd started off with a strong government that played its cards skilfully.  At this stage of the game, it is inconceivable.

From the EU27's perspective, the worst outcome isn't no deal, it's the unravelling of the single market, a development which would have prohibitive economic and political costs for them.  They will make some compromises to keep post-Brexit Britain as an ally, but they won't compromise on that.  There is also the huge issue of the Irish border.  One of May's biggest mistakes so far was to rule out Northern Ireland staying in the single market and customs union.  This would be a neat solution to a unique problem which affects a Remain-voting country.  But May immediately dismissed it - and not reluctantly, letting us think that she was forced to do so by the DUP, but with strident "no prime minister..." rhetoric.  A completely unnecessary error, to add to all the others.

What is the best outcome?

If we crashed out of the EU without a deal, Brexit would fail and would be plainly seen to fail.  Economic growth would rapidly shift into reverse, inward investment would plunge (taking the pound with it), unemployment would shoot up, and we would be reminded of what Donald Trump really thinks about trade deals.  The thesis that everything would still be fine because we would recoup our losses through unilaterally embracing fundamentalist freemarket policies is a fantasy even by Brexiter standards.  Not only would the pain of an ultra-hard Brexit enrage the Leave faction who thought that they had voted to return to the 1950s, it would be perhaps the only thing that would make affluent middle-class voters consider voting for Jeremy Corbyn.  The Brexit cause would be discredited for a generation, and at a minimum we would come crawling back for a Norway-style deal.  Not a bad outcome in the long run from a Remainer perspective - as long as the backlash didn't result in a genuine neo-fascist movement coming along.

The only other plausible outcome is Norway-under-a-different-name.  It has been said that the one thing that both dedicated Brexiteers and Remainers fear is this kind of very soft Brexit.  Both sides realise that once we are in that relatively comfortable position, there will be no great incentive for us ever to leave it.