Therssa May’s little Brexit away day in Chequers seem to go well, at the time of writing, nobody’s thrown their toys out of the pram yet (save the odd grumble of discontent). As before, with the brexit bill we were told “the party won’t wear it” that there would be mass resignations, a leadership challenge, rebellion,
destruction of the death star, fire & brimstone, etc.
However, instead, nothing. When push comes to shove, the brexiters have about as much backbone between them as an English adder. Although that said, what May is proposing, just doesn’t go far enough for the EU. They’ll likely turn her down and force her and the brexiters to concede more ground, which probably will result in some push back eventually.
As I mentioned before the brexiters have to oppose a soft brexit of any kind because they know demographics are against them. Sometime over the next decade a significant number of those who voted leave will have died….likely in a pool of their own piss an a dirty hospital floor because the UK can’t hire nurses anymore (thanks to brexit) to treat them. Already recent polls have shown a majority in favour of remaining in (or rejoining) the EU. Hence why the brexiters have to go for a brexit that’s as difficult as possible to unpick or reverse. Its basically what they did with rail privatisation.
So like I said, I suspect some sort of push back will come at some point. However, outside of Chequers there’s been a number of worrying developments over this past week which would give anyone, leave or remain good reason to be concerned and be looking to either halt the brexit process or go for the softest brexit possible.
Firstly there’s the issue of future trade deals. One of the assumptions the brexiters are making is that they can get “exciting” trade deals in “emerging” markets. However in order to qualify as “British” as part of any future trade deals, said goods, such as cars for example, then the majority of the parts and materials have to have been made in the UK (and yes I know that sounds obvious, but the brexiters don’t seem to get it). Currently many UK made products, most notably cars, are mostly built out of parts coming in from overseas (notably Europe).
Hence if for example Trump gives the UK this much vaunted trade deal (and that’s a big if, you honestly think he’s going to screw America just to do the brits a favour?), that won’t matter, UK made cars will still count as “European” when they arrive in the US. In fact UK based car companies will be in the worst of both worlds in the event of a hard brexit. They’ll have to pay a tariff on parts imported from the EU into the UK and then pay a further tariff on the car when its exported (and 75% of the UK’s vehicle production is for export, as in they roll off the production line in right hand drive!).
I would note that this scenario is not unusual. Many car makers, particularly in places like China or Mexico, face the same problem. However, they have the advantage of much lower labour costs. If you’re paying half what it costs to make a car in the UK, do you really care if someone slaps a 20% tariff on you. Yes you’ll try to get a trade deal to eliminate that, but ultimately, its not going to break the bank. However for the UK this could immediately render UK car production uneconomic. Further, in order to avoid similar problems, European car makers might stop buying UK made parts as well.
But what about Nissan, didn’t they invest in brexit Britain? Well yes, but only because the government effectively bribed them. Further it was pointed out to me this week that basically Nissan far from being naive, actually played May and the brexiters like a fiddle. Car makers chance their car models about every five years or so. But it takes the best part of several years to actually do that. Hence Nissan’s board had probably already decided to continue production in the UK prior to brexit, under the assumption of a remain vote. Aware that it would be several years before any of the aforementioned tariffs actually hit them (when production of the planned models will be winding down) and that shutting the plant now would mean throwing away a lot of money, it is not surprising they decided that this was a hit they could absorb, particularly if they could scare a kick back from May in the order of a few billion.
Now the problem is that sometime around about 2020 Nissan and other car makers are going to have to make the more important decisions about future car production. As things stand many will have to look at introducing hybrid or all-electric version of their vehicles and the UK doesn’t make a lot of that hardware and, for reasons noted earlier, they might not sell such parts (or vehicles in the UK post-brexit). So in the absence of any comprehensive trade deal with the EU, its all but certain that at this point Nissan et al will take their multi billion pound cheque from the government, tuck it in their back pocket, fire a few thousand British workers and ride off into the sunset.
A is for atom, C is for chaos
Secondly, we have news about Euroatom and the UK’s supposed replacement for it. As I pointed out in a prior post, the brexiters assumption that they could leave Euroatom, but yet still somehow be part of it (or just gate crash future meetings) was bollix. Well it seems that message got through eventually (kudos to Barnier for somehow getting that into Dave2’s thick skull!). So they scuttled away and prepared to set up their own version of Euroatom. Whose job it will be, much as I warned, to basically google and then plagiarise all of those pesky EU regulations the brexiters hate and implement them in the UK.
Well a recent audit judged the UK’s preparedness for brexit (with around 8 months to go) as regards nuclear regulation and rated the UK at red in all five categories. And just to be clear to the brexiters, no this isn’t something you can fudge or make do and mend at the last minute. WE ARE TALKING ABOUT RADIOACTIVE MATERIAL! You know the stuff that glows in the dark! If the UK isn’t up to speed on this by March 2019 the consequences could be pretty serious. Nuclear plants might have to shut down, hospitals could run short of isotopes, factories could be forced to shut. Hell, even your average smoke alarm has a small quantity of radioactive material in it. So leaving the nuclear industry unregulated isn’t an option.
I know people who work in the nuclear industry and while they will be quick to point out that, they’re name isn’t Homer Simpson and they do take safety very seriously. Unfortunately, they are also the first to admit there’s a good few jackasses in the industry (typically upper class twit’s who went to the right school and have been overly promoted as a consequence) who are only one mistake away from a Darwin award. The many foul ups over the years at UK nuclear facilities are testament to the fact that the UK nuclear industry needs regulating.
And this isn’t a matter the UK government can simply fudge. Private companies might not play ball, if they fear losing their insurance cover or line of credit (quite apart from the consequences if several of their workers ending up glowing in the dark!). And the IAEA has to sign off on everything. And if come March 2019, the UK nuclear regulator consists of a port-a- cabin at Sellafield with a few clueless trainees inside frantically googling what is a Geiger counter?, odds are they’ll shut the whole thing down.
Thirdly, a poll has come out regarding Irish reunification that would have Ian Paisley rising out of his grave….and likely going off to beat the DUP leadership to death with a crucifix. Prior to brexit you’d struggle to even get a majority of Catholics to support re-unification, polls (both catholic and protestant combined) typically ran at 65% no, 30% yes (the rest don’t know’s). Well that lead of +30% has now been slashed to just 3% with 45% no and 43% yes (the balance again undecided). Need I point out but 3% is within the margin of error for an opinion poll, but also easily within the margin of what can be overturned in an actual referendum campaign.
And again, the really bad news economically as a result of brexit hasn’t struck yet. In short, the odds of NI (and recall the DUP campaigned for brexit) becoming part of the south are probably in the order of 50/50.
Reacting to this poll, the Irish PM did point out his best guess that the North probably won’t vote for reunification. However, his comments have to be put in the context that his main rivals politically are Sinn Fein and that the NI economy is much weaker than in the Republic, with a GDP about 20% lower. Hence there would be a price to pay for reunification and I’m not sure if people in the south appreciate that (or are willing to pay that price).
Personally, I’d argue that in a soft-brexit scenario (particularly where it was pretty obvious that a 2nd referendum and the UK rejoining was a likely possibility in the medium term) Varadkar is probably right. However, in hard brexit scenario I’d argue its very likely he’s wrong and NI would in fact join the south. But either way, if this isn’t setting off alarm bells and having unionists wake up in a cold sweat, I don’t know what will. The DUP backing brexit was a historic mistake for the party.
Vote leave’s illegal campaign
Finally, we have the not so small matter of the legality and legitimacy of the brexit vote being called into question (again!). As I’ve pointed out before on this blog a couple of times, questions have been asked about the tactics and funding of the vote leave campaign, not to mention undisclosed links to hedge funds, the misuse of personal data and links to both US far right groups and the Kremlin.
Well a leaked report suggests the electoral commission is going to find that vote leave broke UK electoral law during the referendum. And this “leak” came from none other than the vote leave camp themselves, suggesting that they wanted to get the news out in advance because the actual report is going to be so much worse. Indeed, they submitted a 500 page rebuttal (the lady doth protest too much me thinks!).
Now leave voters will likely shrug their shoulders at this and say “fake news” (buddy, its an official independent investigation, the very opposite of fake news!). However, you might want to consult the small print of the Vienna commission, which both the UK and US (among others) have signed. Under this, the referendum result should now be annulled and the vote re-held. And there are a number of precedence’s set across Europe where similar votes were annulled and then re-run (most recently in Austria).
But of course the UK isn’t Europe or the US. With no proper constitution, under British law, the UK government can just ignore this inconvenient little fact….until a court ruling goes against them! At some point they are going to face further legal challenges to brexit. And this ruling from the electoral commission means they can’t hide behind “the will of the people” any more (i.e the 37% who voted for brexit, closer to 25% if we consider those who were denied a vote or leave voters who’ve already died since the vote).
And its not the Gina Miller types I’d be worrying about. Its corporations and businesses who will be able to show how brexit has caused them real and serious economic harm. And they can hire high priced lawyers to fight their case. And recall some of these cases will be fought in court rooms in Europe or in the US, meaning it doesn’t matter diddly squat what laws the UK government passes to try and wriggle out from under it.
Such legal cases could get pretty nasty. We are kind of into uncharted legal territory here. The lawyers will start subpoenaing government documents left right and centre, and who knows what will come out from that (nothing good I suspect!). Ministers will be hit with summons to testify in court under oath. Think about, if Boris Johnson ends up in the dock there are three possible outcomes, A) he lies under oath, is found to have committed perjury and gets hauled off to jail. B) He tries to make a joke out of it with a latin quote and gets done for contempt. C) He cracks under cross examination and fesses up to everything, then gets arrested for obstruction of justice and electoral fraud. Or D) knowing Boris, he manages to do all three!
The smart legal advice to the government (well unless they want to hold the next cabinet away day in Wandsworth scrubs!) would be to just settle these cases out of court. Take the lawyers aside, offer them whatever amount of money it costs to make them go away (which is basically what they did with Nissan after all) and hush the whole thing up. Of course once word gets out and you have corporate lawyers queuing round the block, at the same time the public are seeing their taxes going up to pay for brexit, it will probably get to the stage where they’ll have to have another referendum at some point….
…..Or maybe, they won’t. In theory if a pro-EU government were to come to power at some point in future, they could argue, not unreasonably, that brexit was an illegal act undertaken by corrupt ideologically driven bigots, power hungry fifth columnist and traitors in the pay of a foreign power. Rather than have a 2nd referendum, they’d could simply vote to annul the result and proceed with EU membership without even bothering to hold another referendum. So the seeds in brexit’s downfall might have already been sown.
But either way, there’s enough red flags starting to go up that only a fool would ignore them. But unfortunately the brexiters, like captain Ahab, are committed. Brexit is the hill on which they’ve chosen to die on. They can’t back down now, if they do they are finished. It would be the end of Tory party, the DUP and Corbyn.