Check Mate at Chequers – possible outcomes.

Introduction

It is very welcome that after over two years the British government has an agreed position after Chequers. Of course the agreement may now be in doubt after the Davis resignation and that of Johnson, the next days will be interesting, with some commentators predicting the Tory party may actually split (some good may come of this after all)! Sadly even if the Tory party and government manage to come to agreement, I suspect it is more a case of too little too late rather than better late than never.

Currently the white paper has not been released. Rather a 3 page summary available here.

I can’t say I feel very optimistic and there may well be emphasis by Barnier and the EU of the indivisibility of the four freedoms, talk of cherry picking, cakeism etc. The language used by the EU will be interesting in that there is a range between outright dismissal and a cautious welcome – a step in the right direction, perhaps, but only a baby one.

It is not the purpose of this article to forensically discuss the Chequer’s document. I would however recommend both Prof Chris Grey’s analysis and that of Dr Kirsty Hughes. Rather it is to look at the options in the light of recent events.

The reaction of Rees Mogg and his ERG will also be interesting. Strategists like Gove probably just want to get Brexit over the line on the 29th March, even if it is a Norway like option. They see this as unstable and will push for a harder Brexit over the next decade – possibly a pragmatic Michael Collins like approach. Purists in the ERG want a complete fissure with the EU but going for too much too soon may not be politically possible given the balances in Westminster.

There are a number of possible outcomes from softest to hardest.

The government splits leading to  a Peoples Vote (2nd referendum).

The probability of this is improving. There are increasing worries about the soundness of the result with Carole Cadwalladr’s excellent work and, more importantly perhaps, Robert Muller who is investigating the Brexit referendum in Washington as there seem to be many links with the Trump campaign. Suspicion is growing of Russian involvement and according to the New Yorker:

At this point, it seems virtually certain that Russia did use Banks, perhaps in conjunction with Mellon, as a pass through to covertly finance the Brexit referendum.

It is interesting that the BBC seems to be downplaying this story.

There are also the revelations that hundred of millions were made via currency short trading on the night of Brexit and speculation that Farage had prior detailed exit poll knowledge and talked up the value of the pound with prediction of a Remain victory, when he knew the opposite was the case.

There is also a major campaign at ‘people’s’ level for example the march for a people’s vote on the 23rd June in London attracted at least 100,000 and possibly up to half a million people. Indeed I would have been on the march myself had I not been hosting a Jo Cox memorial party.

Another possible source of pressure is Len McCluskey and the Unite trade Union (McCluskey has major influence with Corbyn). There was hope that Unite might press for a people’s vote and there was considerable speculation last week, that Unite would come out in favour in its July Policy Conference. It seems however that McCluskey keeping its powder dry as indicated in this extract from the  policy conference report:

We are also open to the possibility of a popular vote being held on any deal, depending on political circumstances. Within these principles, the Executive Council has authority to respond as it thinks best to a fast-changing political situation.

The Norway+ Option (Norway + Customs Union)

The advantage of this is that it is the least damaging to the UK with the added bonus that the Irish border problem goes away. The accusation of the UK being a rule-taker rather than a rule-maker, vassal state and fax democracy are however very real and true. This I believe is a non tenable position for a country like the UK, which still believes it bestrides the world stage, and should be telling others what to do. Chris Kendall and Steve Bullock of the Cakewatch team talk passionately about it on their EEA No Way! podcast. Their analysis is that that this arrangement would not survive first contact with any new EU regulations, such as the output power of vacuum cleaners!

The Canada/Korea Option

This allows the UK to go its own way regarding external trade deals. In practice of course this is likely to be worthless, but has huge emotional appeal to many of the Brexit voting public. The major roadblock is of course the Irish Border Backstop. There has been a lot of hysterical nonsense by the DUP and right-wing Tories about an Irish Sea Border. As Seaan Ui Neill comments in reply to a Unionist poster:

There are already different rules and regulations between NI and England and between Scotland and England

As Brendan O’Leary put it regarding “here” in the Dalriada Document:

“ Northern Ireland is neither legally nor geographically part of Britain; it has a separate statute book, and a separate judiciary”…

Effectively this hyperbolic Unionist claim that having a system of trading differences somehow infringes U. K. sovereignty is simply rhetorical nonsense which apparently misunderstands the nature of how the Union actually functions between ourselves and Britain. If you are genuinely requiring a truly homogeneous system across the entire U.K. a good start might just be to begin with demanding same sex marriage…

One interesting paragraph in the 3 page release from Chequers which has been missed by most commentators but not Tony Connolly or Kirsty Hughes is:

Taken together, we noted that such a relationship would see the UK and the EU meet their commitments to Northern Ireland and Ireland through the overall future relationship: preserving the constitutional and economic integrity of the UK; honouring the letter and the spirit of the Belfast Agreement; and ensuring that the operational legal text the UK will nonetheless agree on the ‘backstop’ solution as part of the Withdrawal Agreement would not need to be brought into effect. In this context, we also noted that this proposal should allow both parties to resolve the remaining Withdrawal Agreement issues, including the ‘backstop’.

(Italics mine). The key test is: “The operational legal text the UK will nonetheless agree on the ‘backstop’ solution as part of the Withdrawal Agreement.” And breezily states “would not need to be brought into effect.”

Simultaneously on the EU side the new buzz-word from Barnier regarding the Backstop is de-dramatisation. Northern Ireland is being offered a unique deal to protect the peace process and to support Ireland. The fact that NI only represents around 1.3% of the UK economy means also that it will have minimal impact on the EU. The DUP won’t like it but they are a very small fish in a very large pool and might be bought off with an improved link between Cairnryan and the rest of the UK.

The UK goes for a cliff-edge no deal scenario.

The situation in the UK is unstable and it is certainly possible that there will be no agreement by the 29th March. The consequences of this would be horrific for the UK in the short term, with gridlock at Dover, shortages of food and medicines and petrol within days and thousands of planes grounded.

Summary

I don’t know which is most likely. Certainly to me option 4 has shot up the scale again. There seemed resignation in Dublin among the people I talked to that this was a likely outcome – possibly the most likely.

Comments

  1. Peter May -

    Kicking can down the road appears to have been temporarily suspended. I certainly hope that a ‘people’s vote’ seems, to the powers that be, a good way out. And then of course that we do actually vote to remain!

    1. Sean Danaher -

      Peter
      It is my preferred option also. I suspect that Remain would win, but certainly not by a super-majority.

  2. Ivan Horrocks -

    In this more than almost anything else, Sean, predicting the future is impossible. Ultimately of course all this has little to do with leaving the EU – it is in actual fact about the future of the Tory party and what it has to do to remain in power. Of course, it’s the latter that’s meant it’s taken so long for so many large businesses to speak out: they are Toery supporters through and through and so had not wanted to rock the boat. Unfortunately for them the vacuum this created in the Brexit narrative has been filled by the ERG and its spokespeople and acolytes and is not now that easy to take back. Meanwhile, Carney tries as hard as he can to also throw the Tory government a lifeline with is upbeat predictions based on flimsy data which in normal times he’d be happy to dismiss. Such is the inherent bias of the institutions of the state and big business.

    1. Sean Danaher -

      Ivan
      another issue is tax avoidance and evasion, which will get more difficult within the EU next year. There is considerable suspicion that part of the top 1% support for Brexit is exactly for this reason.

      1. SeaanUiNeill -

        From what I hear from London bankers, the application of GATCA after FATCA has created considerable unrest amongst the wealthy. Interestingly it has hit poor and middle income US Citizens working abroad, but it’s steady erosion of the very “ground” on which the international wealthy rely to avoid national taxation is palpable even well up the economic foodchain. With Switzerland’s primacy in such matters in decline under the spotlight of EU scrutiny, obviously the U.K. economic neo-libertarians are gleefully seeing a gap
        opening up in the market.

  3. Samuel Johnson -

    Quick work! If the country isn’t headed for a breakdown and break-up I wonder if one could tell the difference in scenario planning exercises at this stage. Short of arrests for collusion with Russians I don’t see any prospect of the culture war being short-circuited imminently. Meanwhile, the Orange one is due to arrive and may try to stir the pot.

    Paul Mason thinks the solution is an election and a Labour govt. But they won’t win without Remain votes and I have little doubt there’s some calculated “not interrupting” going on, which they think will deliver the wreckage to them to do what they want.

    Businesses with contingency plans will be accelerating their implementation.

    1. Sean Danaher -

      Samuel
      The arrival of the Orange one will interesting. Of the original 3 Brexiteers only Fox is left, who has very strong links with the murky world of the interlocking think tanks of the American right, through Atlantic Bridge https://www.theguardian.com/commentisfree/2017/feb/02/corporate-dark-money-power-atlantic-lobbyists-brexit
      Ivan Horrocks has written about this in his “power is at its most effective when it is least observed” post.

      There is also a belief I think in some Labour circles that Brexit will be such a disaster that the Tories will be out of power for a generation and a Napoleonic “Never interrupt your enemy when he is making a mistake.”

      I think there is Maoist thinking on both sides; a decade or two of pain will be with it for the ultimate goal of a Socialist Utopia on the Labour side and a neofudal/ultra-neoliberal Distopia on the Tory side. I have no idea what the “landing zone” will be.

      Businesses are worried apart from some of the service/retail sector ones. I heard Tim Martin of Weatherspoons on the Today program yesterday saying that he employed more people than BAE and BMW combined and that WTO was an excellent idea. So maybe a Napoleonic “Nation of Shopkeepers” is the ultimate destination.

      1. Peter May -

        I heard that too! I used have a sneaking respect for him but no longer. A nation of shopkeepers (in fact I think it was ‘commerçants’ who are really only shopkeepers if they are petits, otherwise they are traders, which is really more like it and indicative of a nation that doesn’t actually do much).
        We need a diverse economy for prosperity and a nation of shopkeepers or pubkeepers doesn’t cut it.

  4. Andrew Dickie -

    It’s worth recalling that one of the major reasons the much mocked (mainly for his supremely irrelevant inability to eat a bacon sarnie – choose your shot, and ANYONE will look oafish doing that)
    Ed Miliband refused to countenance an EU Referendum was the 2 years plus uncertainty and potential disruption that would ensue. He wasn’t wrong about that, was he?

    1. Sean Danaher -

      Andrew

      I thought the Brexit Referendum was a crazy idea. One of the largest studies done by a Government was the “Balance of Competencies” reports on EU effectiveness over a whole range of sectors. They were so pro EU that the Brexiteers tried to suppress them; indeed they are very little known among the general public.

      Ed was absolutely correct. I think at best it was a complete waste of time and energy. I saw no possible outcome which would put the UK in a better place. There are serious problems in the UK see for example here http://www.progressivepulse.org/society/the-state-of-the-nation-and-the-labour-manifesto but few if any have been caused by EU membership.

  5. SeaanUiNeill -

    Thank you Sean for a penetrating and insightful analysis of the most recent move in our unfolding disaster.

    I simply cannot see the EU agreeing to anything short of the Backstop. Of course the rhetoric about this infringing U.K. sovereignty is arrant nonsense. Brendan O’Leary, much of whose whose thinking lies behind the Belfast Agreement, made the eminently sensible suggestion of something similar for Northern Ireland and Scotland in his Dalriada Document, where he unpacked the issue of non infringement of sovereignty. But with the DUP claiming they do not want a hard border, but with their hard line rejection of the one thing which would ensure a continuation of the present conditions in Ireland, we are into the territory of the demand that we (as the drunken exercise coach on early morning radio in the USA of the 1950s put it) “lie on our belly with our toes in the air.”

    1. Sean Danaher -

      Seaan
      thanks a nice metaphor. I was also taken by Fintan O’Toole’s

      “The Brexit the British are now officially seeking is indeed miserable. Instead of the Star Trek vision of boldly going where no imperial-nostalgic society had gone before, it would not have enough thrust to get the UK out of the gravitational pull of the European Union. And instead of freeing British businesses from Brussels red tape, it proposes to wrap them up like mummies in layers of staggeringly complex bureaucracy, with two completely different tariff regimes operating side by side. And this, remember, is what the UK is asking for, not what it will get.”

    1. SeaanUiNeill -

      Thank you Sean, I’ll check it all out. It is hard to imagine that private interest plays such a role in what are important public matters with such a capacity to damage us all, but it’s a compelling conclusion if one really looks at this dispassionately.

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