Labour has now lurched twice, first towards the customs union and this week calling for 'full access to the EU’s single market'
Brexiteers, bring out your black suits of mourning. Grieve with private dignity. The quixotic bid for British independence has failed.
There will be no return to full sovereign and democratic self-rule in March 2019, or after the transition, or as far as the political eye can see. Britain will be bound and hemmed until the latent contradictions of such a colonial settlement cause a volcanic national uprising, as they surely must.
The Westminster class is edging crablike towards a double embrace of the EU single market and the customs union, the full EU package but without a veto in the European Council, or Euro-MPs with heft in the dominant blocs of Strasbourg, or judges on the European Court (ECJ) to lean against top-down "Napoleonic" jurisprudence. Both of our great parties are resiling from core manifesto pledges.
Labour has now lurched twice, first towards the customs union and this week calling for “full access to the EU’s single market”. This second step was inevitable once the party chose – for tactical advantage – to fan the flames over the Irish border. Most border checks are linked to the single market not the customs union. If you assert that the Good Friday Accord is in grave jeopardy, you have to accept both in the end and this entails the continued the rule of Euro-judges.
I strongly suspect that the Tories will be compelled by political events and cut-throat pressure from Brussels to opt for much the same formula, whatever they propose next month in their 150-page White Paper. They will discover – as would Labour in power – that the Franco-German axis aims to use its control over cliff-edge nodal points to force near total acceptance of the EU’s legal and regulatory machinery. The EU can evoke the doomsday scenario of a trade crash. It can exploit Britain’s psychological vulnerability on Ireland.
The Government has engaged in foolish bluffs. As I feared, it has fallen into the Greek Syriza trap, issuing hollow threats followed by retreat. It never took the preparations needed to make a "no-deal" walkout credible. The trade infrastructure has not been built. Nothing substantive has been done.
Theresa May has doggedly pursued her "Canada Plus" deal covering goods and services, with the holy grail of "mutual recognition", while insisting on British red lines over immigration and the ECJ. She knows that Michel Barnier has ruled out any such accord a priori, yet she has chosen not to fortify her negotiating hand.
Brussels can conclude with certainty that Britain will not take action to defend itself against a one-sided and discriminatory deal that no normal trading partner would contemplate. It will not walk out and endanger the EU’s €80bn bilateral trade surplus that it so lightly takes for granted, potentially delivering a shock powerful enough to push the eurozone back into recession and set off an existential political and financial crisis. Total capitulation on EU terms therefore looks unavoidable at the October summit.
The EU’s assertions that a "third party" deal on services is impossible, or that mutual recognition is unworkable, are of course disingenuous. Mr Barnier specifically requested both in trade talks with the US in 2014. The dispute comes down to raw power. Britain has unilaterally disarmed itself. It will suffer the consequences.
“The Government effectively has no credible policy and the whole world knows it. By not taking the basic steps any sane Government should have taken from June 24 2016, its ‘strategy’ has imploded,” said Dominic Cummings, the former campaign chief of Vote Leave.
Mr Cummings said Theresa May’s first grave mistake was to trigger Article 50 and set the clock running before developing a coherent plan, akin to “putting a gun in your mouth and pulling the trigger”. Nothing was done to prepare for sovereign trading status. It is now too late to pursue the fall-back option of the World Trade Organisation.
“The Government has irretrievably botched this. Downing Street, the Treasury, the Cabinet Office and the Cabinet have made no such preparations and there is no intention of starting,” he wrote.
The harsh interpretation is that this was sabotage, a "trahison des clercs" in Whitehall, with the acquiescence of Remainers at No 10 and No 11. The benign verdict is that this mess reflects the narrow result of the referendum, the Scottish and Ulster fissures within the Union, and the arithmetic of Parliament. Theresa May and Philip Hammond are under crushing pressure from the big guns of the CBI, the financial press, and the City. You cannot easily take a divided nation into a showdown with the EU.
Personally, I long advocated applying to join the EEA, but only as a halfway house for five to ten years, and precisely in order to stay out of the customs union. This would have preserved good access to the single market while allowing the UK to negotiate trade deals with the US, China, Japan, India, and the rest of the world. Britain would have extracted itself from the EU in safe stages. Cliff edges would have become rolling hills.
Had the Prime Minister opted for the EEA from the start, Brexit chemistry might have been very different. She quashed the idea because it preserved EU migrant flows (with an emergency brake). Brexit was always about borders in her Home Office mind.
In the end we are likely to end up in the EEA anyway – or close enough – but on worse terms, for a different purpose, with the customs union bolted on, and after great political damage has already been done. She will probably have to swallow a high degree of free movement to get any deal at all.
It is clear that Theresa May abandoned defiance and switched to a strategy of emollience at the Brussels summit in December. That is when she stopped repeating that "no deal is better than a bad deal" and quietly agreed to "full alignment" with EU rules if need be. She signed away a large sum of money to secure goodwill.
At the Munich Security Conference in February she pledged “unconditional” support for EU defence regardless of what occurs in Brexit talks. She accepted the sway of the ECJ over crime and terrorism collaboration, in dealings with Europol, Eurojust, and over the European Arrest Warrant. This was a generous gesture since Britain is not a supplicant in defence and security. It remains the EU’s biggest military power. It defends the EU’s Baltic, Balkan, and Polish borders, and helps to anchor the US in Nato.
The post-December shift in strategy makes sense. If the UK is to go into trade talks stark naked, it is better to do so in a friendly spirit of appeasement. How far this will get us is an open question. The EU has taken a pitiless – and illegal – position over the Galileo satellite project. It deems Britain to be a security risk in an endeavour that we largely pioneered and heavily financed (pro-Putin regimes in central Europe are not?).
We have no choice other than to smile, bow, and scrape at this point. We can only trust that Germany, France, Italy, Poland, Holland, Ireland, and fellow nations, will conclude that it is not in their interests to push the punishment too far, whatever EU ideologues might want. They have to live with their near abroad. Do they want to be encircled by a hostile Britain, Turkey, and Russia, in Donald Trump’s dystopian world?
Those within Britain who have pushed so hard for an emasculated vassal Brexit may find that it is a Pyrrhic victory. It is hard to imagine a more certain way to destroy British relations with Europe than to subject this island to foreign and authoritarian rule, and to try to do so on a permanent footing.
Can the Lords not see this? Can the Soubry-Umunna axis in the Commons not see the historical and democratic absurdity of such an arrangement? Is Parliament willing to forgo its ancient prerogatives so lightly for a mess of economic potage, essentially to avoid a short-term shock of no lasting importance in the sweep of time and the life of a nation?
You can make a realpolitik calculus that the political pendulum will swing back as the EU tears itself apart over migration and the rule of law. If Britain waits patiently, the European problem might resolve itself – either because the EU ceases to exist, or because it evolves into a different animal.
One awaits with curiosity to see how the unreformed eurozone is going to weather the next global downturn, with one foot still in a Japanese deflation trap, monetary ammunition largely exhausted, debt ratios dangerously high, fiscal union not remotely in sight, and Italy in open revolt.
For now Brexiteers must fall back silently and weep.