Why the Brexit Secretary is out of his depth

Jon Danzig |

linked in david davis politics above prosperity

In Berlin this week our Brexit Secretary, David Davis, attempted to give a lecture to the Germans. “Don’t put politics above prosperity,” he said.

That seems rich as the ideology of Brexit means doing exactly that: putting politics above the prosperity of Britain.

But there were other oxymorons in Mr Davis’s speech.

He said he hoped for a deal with the EU that “allows for the freest possible trade in goods and services”.

Actually, Mr Davis, that’s exactly what we have now.

He also said he thought it “incredibly unlikely” there would be no deal with the EU.

But the way Mr Davis is handling the negotiations, that outcome is now looking extremely likely.

During the question and answer session Mr Davis said:

“One of the issues in modern politics is that all governments have periods of turbulence. This is a period of turbulence. It will pass.”

Mr Davis seems deluded. Passing wind is not going to solve anything.

Mr Davis added that the UK was seeking a “deep and comprehensive free trade agreement” of a scope the EU had never seen before as well as “continued close co-operation in highly regulated areas such as transport, energy and data”.

This is also delusional.

Mr Davis also had to gall to tell the BBC that on the EU negotiations the UK has “been offering some creative compromises and not always got them back.”

When asked whether this was the case, EU Council President, Donald Tusk replied:

“I can only tell you that I really appreciate Mr Davis’s English sense of humour.”

Unfortunately, however, none of this is really funny.

Let me quote from a well-known politician, who said only last year:

“It is not clear why other EU member states would give Britain a better deal than they themselves enjoy.”

And just to make the point clearer:

“In a stand-off between Britain and the EU, 44 per cent of our exports is more important to us than eight per cent of the EU’s exports is to them.”

Possibly Mr Davis hasn’t got or understood this message, but he should. The above quote comes from his boss, Theresa May. She said it when she was batting for Remain last year.

Now, the entire Cabinet seems batty. 70% of them supported Remain in last year’s referendum. None of them can properly explain why they so dramatically switched sides, undoing all their warnings of how bad Brexit would be for Britain.

Look at it this way. “It would be a gravely serious mistake to perform this operation,” says the doctor. Then a few weeks later he says, “I am going to do the operation.” Why? “Because you told me to.”

Would you ever trust that doctor again?

Anyway, back to Mr Davis and his pontificating sermon to the Germans (oh, and aimed at the French too) that they shouldn’t “put politics above prosperity.”

Everyone should know by now that Brexit is all about putting politics above the interests of the nation, and our prosperity.

According to experts Brexit will hugely damage Britain’s prosperity.

Yes, experts.

Ok, Brexiters don’t believe experts, because Brexit is a faith – which means believing in something for which there is no evidence.

However, we do have evidence about the impact of Brexit, whether it’s believed or not.

For example, in-depth research by the Institute of Public Policy Research published in December 2016 demonstrated that Britain faces a decade of disruption after Brexit, with low growth, stagnating incomes for the poor, and the public finances at breaking point.

The independent research organisation predicted that by 2030, our economy is forecast to be up to £55 billion smaller than it would have been without Brexit.

Concluded the IPPR, which maintained a neutral stance during the Referendum campaign:

“Brexit will profoundly reshape the UK. It will be a fundamental break in the existing political-economic order. Painful trade-offs are almost certain. Growth is expected to be lower, investment rates worse, and the public finances weaker as a result of Brexit.

“Politically, Brexit underscored the UK’s economic, social and cultural divisions and is likely to be the trigger for a decade of constitutional and political upheaval.”

Another independent report, by the Centre for Economic Performance which is part of the LSE, starkly concluded that Brexit (when it happens) will result in an average loss of income across the board of between £754 and £5,573 a year.

And what does Mr Davis say? Not a lot.

He and his department for exiting the European Union have not been able to publish any Brexit impact reports, even though last month he boasted he had 58 of them covering almost every sector of British industry.

Parliament voted to see them without delay.

Then, um, er, Mr Davis revealed that the reports don’t actually exist, well not as distinct reports, and anyway, if he showed them it would upset his negotiations with the EU

(Trust me, the EU already know everything there is to know.)

The real problem is that Mr Davis knows his Brexit reports will upset us, ‘the people’. That’s because they almost certainly concur with the findings of the IPPR and LSE reports, and many other ‘expert’ reports that have come to the same conclusions: Brexit will damage our country and prosperity.

Anyway, the EU knows whats going on. Whilst Mr Davis has been unable to produce any Brexit impact reports, the European Parliament has already commissioned and published 24 of them.

You only have to read the titles of a handful of these European Parliament reports to know that the EU is far ahead in this game:

The Brexit negotiations: Issues for the first phase

Possible impacts of Brexit on EU development and humanitarian policies

The Impact of the United Kingdom’s withdrawal from the European Union on Scotland, Wales and Gibraltar

The impact and consequences on acquired rights of EU citizens living in the UK and British citizens living in the EU-27

Brexit implications for employment and social affairs

A perusal of just one of the 24 reports reveals just how much better informed – and open – is the EU side of the negotiating table. The report is called: The Brexit negotiations: An assessment of the legal, political and institutional situation in the UK

Its first key finding was:

  • ‘Theresa May has set out her plan for Brexit: the UK will leave the single market and the customs union, and seek a free trade agreement (FTA) with the EU.‘But in Brussels key policy-makers worry that she may not succeed – either because the ‘Article 50’ divorce talks collapse in a row over money, or because the two sides cannot agree on the transitional arrangements that would lead to the FTA.’

Oh, this Brexit report was published last March. Yes, last March. The EU already knew then what Mr Davis doesn’t seem to know now. (He must be pretending, surely?)

It’s worth pasting here the rest of the key findings from that March 2017 EU report, because they are so clear, so open, so accurate, and so bloody sobering.

  • ‘EU officials are pessimistic because they observe the pressure she [Mrs May] is under from hard-liners to take a very tough approach to the negotiations. They see limited pressure on May for a softer Brexit. But several factors could favour a less than-very-hard Brexit: a majority of MPs wants to retain close ties with the EU, as do business lobbies; and an economic downturn (if it happens) could steer public opinion away from supporting a clean break.’
  • ‘In May’s government, 10 Downing St takes all the key decisions. The downside of this centralisation is that decision-taking may be delayed, and particular proposals may be tested on too narrow a circle of experts.’
  • ‘The outcome of the Brexit talks will be shaped to a large degree by the EU governments. They are mostly united in taking a hard line. Worried about the cohesion and unity of the EU, they do not want populist leaders to be able to point to the British and say, ‘They are doing fine outside the EU, let us go and join them.’ Exiting must be seen to carry a price.’
  • ‘The British government has yet to decide what it wants on some key issues, such as: what sort of immigration controls should it impose? What kind of special deal, if any, should it seek for the City of London? What customs arrangements will it ask for? What sort of court or arbitration mechanism would it tolerate? And what transitional arrangements does it want?’
  • ‘Britain’s strongest card is its contribution to European security. The arrival of Donald Trump could help the UK, by making continentals think they need to hold it close; but if the British get too close to Trump, they will lose the goodwill of EU governments. Britain’s other cards are weaker. It regards the City of London as a European asset that should be cherished by all – but that is not how most of the 27 see it. Nor should the UK try to claim that since the 27 have a trade surplus with it, they need a good trade deal more than it does; the reality is that Britain depends more on EU markets than vice versa. Finally, May’s threat to respond to a bad deal by transforming Britain into a low-tax, ultra-liberal economy lacks credibility.’
  • ‘There are only three possible outcomes of the Brexit talks: a separation agreement plus an accord on future relations including an FTA; a separation agreement but no deal on future relations, so that Britain has to rely on WTO rules; and neither a separation agreement nor a deal on future relations, so that Britain faces legal chaos and has to rely on WTO rules.’
  • ‘Once Britain triggers Article 50, it is in a weak position: it must leave in two years, and if it has not signed a separation agreement before doing so, it risks economic chaos. So if Britain wants a half-decent deal, it needs the goodwill of its partners. That means ministers should be polite, sober and courteous. Grandstanding and smugness will erode goodwill towards the UK. As for the substance of the negotiations, the more moderate are Britain’s demands, the more likely are the 27 to offer a favourable deal.’
  • ‘Whatever happens in the negotiations, Brexit will be hard. That is because both the UK and the 27 are placing politics and principles ahead of economically optimal outcomes. In the very long run, once both the UK and its partners have understood that a hard separation is not in anyone’s interests, serious politicians will start thinking about how to engineer closer relations.’

And the conclusion of the report blows out of the water Mr Davis’s pleas that politics should not be put above prosperity:

‘..even on the most optimistic scenarios, the Brexit deal will be fairly hard. One reason is that the British government’s strategy is not about achieving economically optimal outcomes.

‘The prime minister will prioritise restricting free movement and excluding the European Court of Justice, whatever the economic price. For the British government to pursue such a strategy is perfectly legitimate, though it has – unsurprisingly – been shy of admitting the likely economic costs.’

And the European Parliament’s in-depth analysis also openly admitted that the EU27 are also ‘driven more by politics than economics.’

As the report explained:

‘Many EU leaders are rather franker than the British government on this point. They say that the cohesion, unity and strength of the EU count for much more than the loss of some trade with the UK.

‘Neither side seems particularly bothered that even the best possible deal that is feasible will harm the economic well-being of all concerned. Such views are unlikely to shift in the next year or two, especially since the atmosphere in the divorce talks will probably be fraught.’

Mr Davis, it’s clear from reading the above report, published an astonishing 8 months ago, and hearing your speech in Germany, that you are completely and utterly out of your depth.


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