This blogpost was written on January 27:
It has been one of those weeks when you have to stop and ask yourself just exactly what is Brexit, given that the UK government and the wider political community seem incapable of agreeing on an answer.
Certainly, Brexit means the UK wants to leave the EU, but on what terms? When does it really want to leave, and what happens afterwards? Reading about the way UK politicians are approaching Brexit I am often reminded of the hassled parents who, patience worn thin, tells the kids to “get in the car, we are going for a drive”. When the kids demand to know “where are we going” they are told to “just get in the car, we’ll decide on the way”. As soon as they are in the car the parents start arguing as to where to go, all the while the kids creating a noisy racket in the back.
This image sums up Brexit as I see it: a family in the car, pulling aways from the house, parents with no idea as to where they are going, with the kids fighting among themselves.
In this Blog we have never made any secret of the fact that we are not convinced that Brexit is in the best interests of the UK economy, or of the many large companies with which we work on a daily basis.
But we have also argued that political communities do not always make decisions just for economic reasons and that criteria, other than economic criteria, are just as valid when it comes to making decisions. This also seems to be the view of the highly respected and influential director of the Institute for Fiscal Studies, Paul Johnson.
Speaking to Business Insider in Davos this week, when asked if “there anything good about Brexit” he answered “It’s hard to think of one.” Some agriculture reforms perhaps, or tinkering around the edges of Britain’s financial regulations, he said. But that’s it. To quote:
“What Brexit is essentially about is making trade more difficult with our nearest, biggest and richest neighbour.
That in the end, that is the economics of Brexit. We are withdrawing from a Single Market, presumably, and withdrawing from a customs union, presumably, and that just has to make us worse off.
How much worse off we don’t know. It might be a relatively small amount. Hopefully a good deal less traumatic than the  financial crisis.
All economists, with one or two very ideologically aligned exceptions, all economists take the view that from an economic point of view Brexit is going to be damaging.
There’s a lot of uncertainty about how damaging.
If you think a sovereign state should have control of its borders — and it’s not unreasonable to think a sovereign state ought to have control of its borders — then you need to be outside the EU.
But there is a cost to that, an economic cost… What both sides are wrong about is suggesting you can have your cake and eat it, to coin a phrase.”
One man who fully grasps the economic costs of Brexit is UK Chancellor, Philip Hammond (pic), who also said in Davos this week: “We are taking two completely interconnected and aligned economies with high levels of trade between them, and selectively, moving them, hopefully very modestly, apart.”
Hammond gives the appearance of the guy at a meeting who says: Carry on without me. I’m just slipping outside for a smoke. I won’t be gone long, even though he knows that smoking is a bad for his health and he should give it up.
More seriously, if the “moving apart” is going to be very modest you have to ask, why bother, given the massive disruption and costs involved.
As we have commented before, we can guess the price of Brexit in terms of diminished trade between the UK and the EU, not to mention the costs involved in building the regulatory and physical infrastructure that will be necessary to trade with the EU from outside the EU.
Set against this is the assertion, for it can be no more than that, that what is foregone with the EU will be more than compensated for by the surge in business that will result from a plethora of trade deals between the UK and non-EU countries such as the US, India, Brazil and elsewhere.
What is never explained is why membership of the EU is holding back trade between these countries and the UK, when clearly it is not holding back such trade on the part of France and Germany, to mention just two. Nor is it ever made clear just how long such trade deals will take to put in place or, critically, where the UK is going to get the people to actually negotiate the deals.
There also seems to be an assumption that trade deals in themselves will generate an increase in trade. They won’t, if there are not the businesses in place to take advantage of the opportunities created by the deals, with products or services that people want to buy. Putting business deals in place with close neighbours is one thing. Trying to put deals in place on the far side of the world is an entirely different matter.
If economics is not the driving force behind Brexit then what is?
What follows is just speculation on my part, but then that is the purpose of a Blog like this.
It seems to me that the answer lies in the phrase “Taking Back Control”. Now for many people who voted for Brexit taking back control means taking back control over immigration into the UK, ending the free movement of people from elsewhere in the EU. But, so far, immigration has figured little in the post-referendum debate. Compare the number of column inches about trade deals to the number about controlling immigration.
For the most part, Brexit appears to be the overriding concern of a large part of the Conservative party, probably of a majority of grassroot members. Yes, there are members of the Labour party who want to quit the EU, but they are very much in a minority. Ironically, the pro-Brexit, left-wing leadership of Labour seems increasingly out of touch with the attitude of the vast majority of party supporters on Brexit, who want to stay close to the EU, if not within the EU, if recent polls are to be believed.
So, why the obsession, which is not too strong a word, on the part of Conservatives with Brexit?
First, it has to be remembered, that in one guise of the other, the Conservatives have been the natural party of government in the UK stretching back several centuries. Conservatives are used to governing, indeed feel they are entitled to govern.
Second, alone among western European countries, the UK has a “winner take all” electoral system. You can win a majority in the House of Commons with a minority of the vote because of the first-past-the-post system. And with a majority in the Commons a UK government can do pretty much as it wants.
In reality, there are few checks and balances in the UK political system, not even a written constitution setting out the framework within which the country is to be government. Even in the US, the power of the Executive is counterbalanced by the powers of Congress and the courts.
Other than in times of war, UK governments in the 20th century were single party, majority governments. No need to negotiate messy coalition agreements, as is the norm elsewhere in Europe. No need to sacrifice “principles” to be in office.
So… and this is again conjecture on my part… at the core of its being; a large part of the Conservative party believes that it alone is entitled to govern the UK, without being constrained either from within the country by coalitions with other parties, or from outside by the rules and regulations of the EU’s legal order, an order necessary if 28 countries are to work together.
Sharing power will always grate if you believe that you have an inherent right to rule. For the hard Brexiters “Taking Back Control” means taking back control to govern the UK in the way it used to be government before 1973, when it joined the old Common Market: No constraints on a majority government to govern as it alone saw fit. The realists, on the other hand, sense that those days are gone.
To borrow some language President Trump used at Davos this week: For the ultras, it is Britain First; for the realists, it may be Britain First, but certainly not Alone.