If the public did not vote to be poorer, as a resurgent chancellor suggests, they must be disturbed by the mounting evidence of looming economic damage.
As the true extent of the Brexit farce becomes more apparent, it is now open warfare between the Brexiters, while the rest of the world – with the possible exceptions of Presidents Putin and Trump – look on in sympathetic bewilderment.
One of several satisfactory aspects of the election result was the way that Theresa May and her advisers at No 10 met their comeuppance over their widely leaked plans to sack the chancellor of the exchequer.
Philip Hammond’s sin was to let them know that the warnings of our Brussels-based ambassador Sir Ivan Rogers, whom they sacked, were prescient; that making the country poorer was neither good politics nor good economics; and that our continental partners were not going let us have our cake and eat it.
The way my old friend, exit secretary David Davis, caved in to the insistence from the EU27 that this so-called negotiation be dealt with according to their timetable, not his, was no less embarrassing for being so predictable.
In case anybody hasn’t noticed, I ought to point out at this stage that the buzzword in Brussels and London is now “transition”. The two-year timetable for Brexit is patently absurd. The debate is over how to handle the transition and how long it should be, with influential Remainers hoping that the transition will take several hundred years and that meanwhile we will remain inside the customs union and Margaret Thatcher’s greatest achievement, the single market.
At which point I should like to quote from a recent lecture by Sir Brian Unwin to the Norwegian parliament. Unwin is not only a former Treasury official and chairman of Customs and Excise, but was also president of the European Investment Bank. The EIB has been an unsung hero of the financing of much of the infrastructure investment in this country that our austerity-obsessed government has eschewed, and Unwin worries about what happens after the Brexit that we both still hope will not happen.
But it is not just EIB investment that will be lost. A lot of investment plans are on hold, at a time when, as the City economist Andrew Smithers argues, the short-term culture of modern chief executives is already having a damaging impact on the investment that is key to productivity.
The evidence for concern about Brexit-induced potential loss of trading and investment opportunities is accumulating thick and fast. I was particularly struck by Unwin’s point that, if the UK is forced to follow the hard Brexiters’ path towards dependence on World Trade Organisation rules, “it will find itself subject to substantial tariffs on its exports to and imports from the EU and possibly no deal for finance and services at all”.
As Lord Adonis pointed out in the Lords debate on the Queen’s speech last week, more than 60% of our trade is with the EU or with other countries with which we enjoy free or preferential access as members of the customs union and single market. Leave? What folly!
The Global Policy Institute estimates that leaving could lead to a drop in national output of more than 10%. As Unwin points out: “In order to implement the tariffs the UK would also have to restore customs controls and documentation at the border.”
Most of these were removed when Unwin was chairman of Customs and Excise in the late 1980s, as the single market was implemented. Unwin echoes the warning of Michel Barnier, the EU’s chief negotiator, about potential costs, queues and delays, citing an estimate that “this could quadruple the number of documents needing to be processed – from some 90 to 390 million”. (Nothing like an assault on red tape, eh?)
And why is all this nonsense happening? Largely because of the anti-Europeanism that Lord Heseltine recently described as “the cancer gnawing away at the heart of the Conservative party”.
Heseltine is still fighting. The former “wet” Tory and now Liberal Democrat Lord Dykes told me last week that he was shocked to hear Kenneth Clarke saying he had accepted that we were now leaving the EU. So was I.
Which brings us back to his successor but three, Philip Hammond. Hammond frequently states that the British people (or some of them) voted to leave the EU but not to become poorer. There is a logical problem here: leaving the EU means the nation becomes poorer. Even my eccentric old Brexiter friend Lord Lawson apparently conceded this point recently to a private gathering (I am not betraying a confidence; this was reported in the Evening Standard.)
So did the 37% of the electorate who voted for Brexit know what they were doing? We should be told! As the historian Sir David Cannadine recently reminded an audience at the British Academy, the problem with democracy, according to Plato, is that it elevates opinion above knowledge. Although, as Churchill said, it is better than the alternative.
Can the circle be squared? We need statesmanship, or stateswomanship. It should be possible, at heads-of-government level, for the other 27 EU countries to make a minor concession on the “free movement of workers” front so that parliament (sovereignty!), not the EU, would decide national immigration policy.
Finally, all those Brexiters who advocate a European Free Trade Area solution ought to be aware that it was because Efta was so unsatisfactory that we joined what became the EU. As Adonis pointed out, Efta’s equivalent of the European commission is called the surveillance authority. He added: “I look forward to that Orwellian construct being sold to the Daily Mail.”