Our Brexit brain trust (Clive, Colonel Smithers, David, PlutoniumKun and vlade) have had an extended and very informative discussion of an impending Brexit spat in the Telegraph, over the unresolved sore point of the Northern Ireland protocol, as in the irritant of the promise to respect the Good Friday Agreement. Even though they have important nuances in their views, they are largely on the same page and I hope to give a recap that doesn’t offend any of them. Note that this sighting may prove to be unduly premature. The Torygraph indicated that the dustup was planned to start “in the coming days” which would normally seem to mean this week. It may be that the Government is refining its position. Or it may be that Johnson convinced himself that his Tory conference speech this week would
Yves Smith considers the following as important: Brexit, Economic fundamentals, Europe, Free markets and their discontents, Globalization, politics, The destruction of the middle class, UK
This could be interesting, too:
Yves Smith writes The John Deere Strike: Organized Labor’s Turning Point?
Jerri-Lynn Scofield writes Insurance Focused on Virtual Visits? The Pros and Cons of a New Twist in Health Plans
Our Brexit brain trust (Clive, Colonel Smithers, David, PlutoniumKun and vlade) have had an extended and very informative discussion of an impending Brexit spat in the Telegraph, over the unresolved sore point of the Northern Ireland protocol, as in the irritant of the promise to respect the Good Friday Agreement. Even though they have important nuances in their views, they are largely on the same page and I hope to give a recap that doesn’t offend any of them.
Note that this sighting may prove to be unduly premature. The Torygraph indicated that the dustup was planned to start “in the coming days” which would normally seem to mean this week. It may be that the Government is refining its position. Or it may be that Johnson convinced himself that his Tory conference speech this week would be such a success that he could hold off on his planned EU eyepoking a bit till he needed a new round of good headlines to divert attention from wee problems like petrol and food shortages and warnings about meager Christmas fare.
Johnson decided to blame business for Brexit not going swimmingly, while managing to skip over the nasty particulars like trucker shortages and therefore not have to get his hands dirty by proposing solutions.
True to form, The Daily Mail hit most bases in its headline: Is anyone else laughing? Fury at Boris’s ‘blustering and vacuous’ joke-laden Tory speech vowing to ‘Level Up’ wages and claiming Thatcher would have backed tax rises to bail out the NHS… while UK faces MORE energy cost spikes and ‘stagflation’ threat. And a follow-up opinion piece didn’t let up:
Does Boris Johnson have any real plan to stop empty supermarket shelves this Christmas, fix the threat of rampant inflation, tackle a chronic lack of HGV drivers or deal with the biggest cost of living crisis in a generation caused by a year of lockdowns?
After his speech today at the Conservative party conference, there was only one, very depressing answer: Hell no!
Of course, there were rhetorical flourishes, poetic historical references, nonsensical catchphrases (‘Build Back Beaver, Build Back Burger’), and a collection of optimistic platitudes and obscure jokes.
The Financial Times focused on the scapegoating of businesses for their failure to deliver Singapore on Thames tout suite…as if that would employ enough people, let alone provide for
Perhaps Johnson assumed, given the very low standard set by Kier Starmer’s recent Labour confab sppech, it didn’t much matter what he said as long as it seemed rousing. Ooops. Even ConservativeHome was Not Keen. The subhead to ToryDiary: Churchill, walking with destiny. Johnson, winking at destiny was:
His biggest strength now is that to a mass of people who don’t follow politics he is a Given, A Fact – like Thatcher, Blair or the weather.
Boris Johnson on Wednesday admitted it would be difficult and “take time” to restructure the UK economy, as the prime minister doubled down on his pledge to create a “high-wage, high-skill, high-productivity” society….
Ministers have angered the business community this week by accusing it of over-reliance on cheap foreign labour before the UK left the EU and Johnson introduced curbs on low-skilled immigration….
“The government’s response to labour shortages in some sectors — that this is all part of the plan, we’ll leave it to the market, and wages will go higher — is only feeding these inflationary pressures,” said Mark Dowding, chief investment officer at BlueBay Asset Management.
Boris Johnson is facing a backlash from Brexit-supporting business leaders as they accused him of treating them like the “bogeyman” over labour shortages.
The prime minister used his conference speech yesterday to promise to reshape the country after Covid and Brexit by unleashing Britain’s “unique spirit” and outlined his vision for “radical conservatism”. He said that the present stresses and strains in the economy, which have led to petrol shortages and warnings about empty shelves this Christmas, were part of the transition towards the high-wage, high-skill economy people voted for during the EU referendum. He warned businesses against using Brexit as an excuse for failing to invest in people and said that restricting low-skilled migration would ultimately make the country more prosperous.
Business leaders warned, though, that restricting migration could lead to higher inflation as increased costs would be passed on to the consumer.
Mind you, the Brexiteers did stoke xenophobia, even though the UK then had more non-EU than EU migrants. But even the Ultras never talked much about the idea of turning the UK into buccaneer Britain, to step into the role formerly played by Cyprus, a financial center operating under English law, where parties like multinationals wanting to operate in presumed-not-to-be evenhanded Russia could contract and send funds through Cyprus, assuring that disputes would be heard in English law courts. Oh, and high tech too.
Most who heard of the Singapore on Thames scheme assumed was either ideologues high on their supply, or cover for a plutocratic land grab if Brexit went badly. Johnson apparently regards this idea as a way to depict the UK’s tsuris as simply an inevitable transition period, made worse by lazy businessmen not getting with the program.
So what about the presumably still-in-the-works row over the Good Friday Agreement? An October 4 report Eurointelligence kicked the debate among our Brexit experts off:
The story broke late last night in the Telegraph. According to the paper, the UK now has a legal text to replace the Northern Ireland protocol, and is ready to trigger Art. 16 if there is no agreement with the EU. The proposal will be sent to Brussels in the coming days. Lord Frost will be arguing that it is compatible with the protocol, which under Art. 13(8) can be superseded by superior arrangements. Superior of course from a British point of view.
The UK text leans strongly on what is know as a command paper, sent by the UK to the EU earlier. Proposals are to reduce red tape from Brussels and guarantee frictionless trade of UK goods entering Northern Ireland that are not at risk of crossing into the single market, while exempting medicine completely from the protocol. Another proposal would end the role of the European Court of Justice in disputes related to Northern Ireland. All of these are unlikely to be swallowed by Brussels.
The European Commission is to send a much less radical proposal to London soon. Lord Frost moved first with this nuclear trigger proposal and thus determines the path of future negotiations. He will tell his party today that the EU’s proposal to fix the protocol will not be the significant change the UK needs and that tinkering around the edges will not be good enough. Will he be backed by the party? This confrontation strategy may pay dividends for the Tories politically. The Tories can portray themselves as the saviour of Northern Ireland and promoters of change and divergence from the EU in other areas such as AI. See our separate story on this below. But would an open conflict with the EU be in the interest of the people in Northern Ireland? They are, at the moment, in the unique position of benefiting from the single market and still being part of the UK. They would like to see better arrangements in this post-Brexit world, but not necessarily a conflict that just moves the other way towards their border with the EU.
How will the EU react? Their position was that they will not renegotiate the protocol, and they are unlikely to agree to replace it with a legal text based on the command paper. The way it was played also will irk Brussels. This kind of arm twisting will most likely provoke a retaliatory message from Brussels. The EU had given London some leeway: legal actions had been postponed in this open ended grace period, which the UK unilaterally called for and the EU reluctantly accepted. This move is likely to be seen as the end of that goodwill. Confronting the EU like this is bringing the conflict into the open. It has the potential to rally Brexiteers with misgivings towards Brussels. The potential for escalating rhetoric and action has just increased exponentially. Something has to give.
Chris Grey warned repeatedly that getting a Brexit deal done was not a finishing point but the start of yet more negotiations and adjustments. In his post last Friday, which was about Brexit crisis denialism, Grey turned at the very end to the simmering Irish border issue:
There is a very bizarre contrast between the government’s approach to Brexit in general and to the Northern Ireland Protocol (NIP) in particular. The general approach is to insist that Brexit is having no adverse effects, despite the supply crisis, and that nothing about it is up for discussion, still less change. Yet the NIP, which is in many respects protecting Northern Ireland from Brexit problems, including that of fuel shortages, is treated as an unworkable disaster which must be completely renegotiated. Relatedly, whilst playing down or rejecting any suggestions that the new Brexit barriers are impinging on EU-GB trade, those same barriers are represented as devastating for NI-GB trade.
If there is a sense to be made of it, it may lie in the lingering unionism of the Tory Party and within that guilt about Johnson’s abandonment of Northern Ireland’s unionists in order to ‘get Brexit done’ and perhaps even fear that it will augment the boost to Scottish independence that Brexit has in any case provided. Be that as it may, what has been created by Johnson’s Brexit is something akin to a controlled trial in which the effects of hard Brexit in Great Britain can be compared with the effects of the (relatively) softer Brexit in Northern Ireland. The emergent differences in these effects are very clearly chronicled by Professor Gerhard Schnyder on the Encompass website.
All this might be taken to bolster my recent suggestion that David Frost’s ‘Betamax’ approach to the NIP makes the time ripe for it (and him) to be jettisoned, not least since layering a political crisis with the EU on top of the economic crisis seems foolish for a government that claims to have got Brexit done. But the contrary possibility, outlined by, amongst others, Baroness Jenny Chapman who leads on Brexit for Labour in the House of Lords, is that Johnson and Frost will escalate the NIP row into such a crisis by following through on their threat to invoke Article 16 in order to distractfrom the economic crisis.
If so, it would be deeply irresponsible, and designed solely to whip up the support of the Tories’ leave-voting base and the Brexiter press. That is hardly likely to deter Johnson if he calculates it would be an advantage, but I continue to think it would be a miscalculation. The latest polls show a very sharp change in public opinion over the summer about whether Brexit has been going well (18%, down from 25% in June) or going badly (53%, up from 38% in June) since the end of the transition period. The core leave vote might well see escalating conflict with the EU as a sign of Brexit going well, but that’s unlikely to be so for most voters, including many Tory voters.
Grey has an unfortunate tendency, against evidence, to hope that the Tory leadership will be reasonable. Given that the petrol/food/other supply chain issues in the UK are garnering headlines all over the world, Johnson desperately needs to generate competing news stories where the Government looks like it is driving events.
Johnson might heed the warning of the fictionalized Elizabeth I as played by Cate Blanchette: “I do not like wars. They have uncertain outcomes.”
We’ll give a very short recap of the observations made by our experts; no doubt there will be much more to say if this situation ripens.
Even though the UK may believe it has close to airtight legal grounds for using Article 16 to force a renegotiation of the Northern Ireland protocol, nothing in the real world is ever so neat and tidy. The Withdrawal Agreement included provisions to allow the EU to retaliate if it thought the UK was invoking Article 16 on questionable grounds. Both disputes would likely be adjudicated on more or less the same timetable. And the EU has other ways to retaliate, like messing with Gibraltar, which no one besides Spain cares much about.
The UK’s position is made worse by the fact that is has piss-poor practical ground for trying to force a renegotiation of the Northern Ireland protocol. There was no mystery about what the UK agreed to. And it’s not as if circumstances have changed. Nor is there any serious threat of violence creating a need to act. The Catholics were far more militant and disciplined than the Protestants. And what pray tell would they do? Car bombs in London? That will win a lot of hearts and minds.
PlutoniumKun reports that Dublin isn’t worried, which means the most that might take place is occasional acts of nutter violence, which seems to happen irrespective of the nominal trigger.
In fact, vlade argues the EU would have to retaliate:
The EU assumed – IMO quite sensibly – that if Johnson was willing to sign the WA with the NI part as-was, then he was ok with it. Signing it just so that he moved on with the whole thing only to get back before the ink was dry and say “this won’t do” is not really something you want to do and be treated as a good-will counterparty. Especially when it looks like you signed it to get a leverage by threatening to kick large chunks of it into the long grass pronto….
If the Irish reaction is muted, then it’s easier for the EU to implement retaliatory measures, and it would certainly do some, because as David says, not to do it would be seen as a weakness to be exploited by other parties, which the EU can’t afford (and knows it).
The big reason it is possible that Johnson’s stunt won’t get off the ground it the US will not be on board. During the Brexit negotiations, Pelosi said, close to this bluntly, “Kiss a US trade deal goodbye if you mess with the Good Friday Agreement.” Biden has taken the same position.
The UK is in an even worse position thanks to the AUKUS deal. A close reading of the Biden call to Macron shows that Biden ate a lot of crow, and looks set to eat more when he goes to Europe in October to see Macron in person. India has also made clear that it is mighty unhappy. Since the UK was the apparent winner and probable instigator, and the US is now in a big mess as a result of not having thought things through, it can’t be enamored of the UK right now. Johnson is hardly in a position to presume the US will lift a finger to help him; in fact, the US could conceivably go as far as to tell the UK through channels to back down from any EU spat.
So we’ll learn what if anything materializes in due course. But make no mistake, Johnson is in a heap of trouble with no idea about how to improve conditions for ordinary people in the UK, or more accurately, doggedly determined not to take steps like loosening migration even in a targeted way out of ideological cussedness. Johnson has been fabulously lucky, but he might finally be in a pickle where events fail to bail him out. We may have the misfortune to see what a truly desperate Johnson will do.