Brexit, like employee relations, politics and much else in life, is all too often driven by magical thinking. Magical thinking is the belief that there is a formula, a magic formula that, if it only can be found, will allow all sides to have all they want, all of the time. It is only ill-will and bad faith on the part of some that gets in the way of the formula being found.
Magical thinking believes that hard choices do not have to be made, that tough decisions on resource allocation can be avoided. Conflict arises from a lack of communication. If only we “listened” more to one another a way forward could be found. It refuses to accept that what you want and what I want may simply be incompatible. Everything can be “aligned” if we just believe and work hard enough. It is at the heart of the belief that there is a “win/win” solution to every problem.
Of course, no one expresses things in this way or consciously thinks in such terms. But look at the meaning of what is being said rather than the words being used, and you find magical thinking in play. When, at a dinner in Downing Street in 2017 Theresa May said to Jean-Claude Juncker that the UK and the EU should work together to “make Brexit a success” that was magical thinking.
Before coming back to Brexit, let me give some examples from my world of labour relations of what I mean.
The gig economy: the belief that it is possible for workers in the gig/platform economy to have all the entrepreneurial freedom and flexibility they want, at the same time as having benefits that come with full-time employment inside an organisation. This is just not possible.
Remote working: as we transition for “emergency working from home” necessitated by Covid19 to “remote working “ as a part of our future employment model, we can find a way of combining the social togetherness of the office with the greater work/life balance that remote working offers that avoids tradeoffs. We can’t. Trade-offs have to be made.
Data privacy: somehow or other we can have global data transfers, critical to our economies, with complete and total data privacy. You can’t, as the successive failures of the EU/US Safe Harbor and Privacy Shield accords more than demonstrate.
Globalization: globalization can be delivered in such a way that there are only winners and no losers. The winners include those who now have cheaper consumer goods, manufactured in China. Not to mention the global knowledge-worker professionals, able to benefit from global markets for their services. The losers include the manufacturing working class who have seen their jobs disappear to China, Mexico and Central and Eastern Europe. Try telling a manufacturing worker in Indiana who has just seen their job disappear south that globalization is good for them.
Restructuring: Business restructuring generally leads to job losses. Restructuring is unpleasant for all involved. But trade unions appear to believe that there is always an alternative to the restructuring being proposed by management that will avoid such losses.
For example, as recent statement from the European Trade Union Confederation on restructuring includes the following demand:
“…enough time and resources to run an in-depth assessment of the information provided with the support of experts to work on alternatives to negative measures, such as redundancies or closures.”
Sometimes, there just are no alternatives to redundancies and closures, no matter how hard you look or how many experts you consult.
I use these examples from my day job to make the point that the desire to avoid hard choices, to believe that you can have it all, is not particular to Boris Johnson with his “cake and eat it” mantra. We are all prone to “magical thinking” in both our professional and personal lives. We are often just not aware of it.
Which brings us back to Brexit.
At the heart of the 2016 referendum campaign was the simple slogan: “Take Back Control”. Brexiteers wanted the UK to take back control from the EU of the UK’s money, laws and borders.
When she became prime minister, Theresa May promised that taking back such control could be done at the same time as continuing frictionless, free-flowing trade between the UK and the EU. At one and the same time there would be a border between the UK and the EU, but that border would only bring controls on the movement of people, not goods and services. And so, Brexit magical thinking took root.
May struggled to find the magic formula. Of course she struggled, the formula does not exist. When you build a border, you put border controls in place, just as night follows day. If you do not want to put controls in place, why build the border in the first place?
May thought she had found the formula with her “Chequers proposals”, a complex arrangement which would have (almost) kept the UK in the EU’s customs union and single market until such time as a future deal between the UK and the EU was agreed. Like many things in politics, it was a very messy compromise but would have had the benefits of preventing sudden disruptions in trade between the two parties. While the EU rejected “Chequers” it did agree to a “backstop” formula, more favourable to the UK that many EU political leaders were comfortable with at the time.
However, by the time May’s “backstop” deal was done the thinking of Brexiteers around the notion of sovereignty had hardened. Sovereignty now came to mean that the UK had to be free to do anything it wants, anytime it wanted when it came to deciding on laws and regulations. Anything that constrained the British government was now regarded an infringement of sovereignty.
The recovery of “lost sovereignty” became the driving force behind Brexit and it was what brought Boris Johnson to power as UK prime minister, replacing Theresa May. Johnson went on to win a general election on the slogan “Get Brexit Done”. And he did. The UK left the European Union on January 31, 2020. However, the reality that comes with being a “third country”, outside the EU, has been hidden by the “transition period”, which runs until December 31 next, during which time the UK continues as a de facto EU member, even if de jure it has left.
Other than the Withdrawal Agreements, which covers the UK’s financial obligations to the EU, citizens’ rights and Ireland, the UK currently has no agreements with the EU on anything. The present negotiations between the EU and the UK, even if they were to come to a successful conclusion, which I doubt, will at best limit the economic costs of the UK leaving the EU by providing for a tariff- and quota-free deal on goods.
What it will not do is to prevent border queues for trucks full of agricultural produce and manufactured goods, and new, invisible barriers to the export of services. The border queues and invisible barriers will happen because, outside of the single market and the customs union, new paperwork, processes, procedures and personnel will be required to manage the border.
As a National Audit Office (NAO) report on UK border preparedness, published last week makes clear, there will be “significant disruption” at the end of the transition period, because of inadequate infrastructure and IT systems, as well as lack of preparation on the part of businesses. Though how businesses are expected to “prepare” to enter into a black hole is never made clear.
Not to mention the fact that the 50,000 new intermediaries, people who can do the new customs paperwork on behalf of businesses, are nowhere in sight.
However, it is doubtful if the negotiations under way between the EU and the UK will succeed. There does not appear to be a ZOPA – zone of possible agreement – available to the parties.
The inability to find a ZOPA, common ground, a landing zone, call it what you will, arises from the UK’s decision to define Brexit as a quest to recover lost sovereignty.
The issue can be simply stated. The EU has made it clear that if the UK wants tariff- and quota-free access for goods to the EU’s internal market then the UK has to respect EU standards and regulations, which include product, environmental and social standards. The EU calls this “maintaining a level playing field”.
But the UK cannot agree to this because the very raison d’etre of Brexit is the freedom for the UK to diverge from EU standards and to go its own way. The Sunday Telegraph (08/11/20) quotes a UK government spokesperson as saying that the EU “can’t expect us to agree to a treaty under which we can’t move away from EU norms in important areas”.
Or, as Lord Moylan, a staunch Brexiteer, puts it: “But of course we’re not really seeking to do a trade deal with the EU. We’re in the unusual position of undoing a trade deal.”
These two quotes capture the “Brexit paradox”. The UK had a trade deal with the EU: membership of the customs union and the single market, the best deal that there is. What the UK is now doing is “un-negotiating” that deal, which means that the outcome must be lesser terms, worse terms, that it has now.
There is no evidence that the EU has ever challenged the UK’s right to leave the EU and, having left, its right to diverge from EU laws and regulations. What the EU has said to the UK is that the more you diverge the less market access there will be. “Here are our terms and conditions for market access. Your choice whether or not you accept them.”
There is no “magic formula” which will allow the UK tariff- and quota-free access to the European market and at the same time allow it to diverge substantially from EU regulatory standards. No matter how long and “intensive” the talks are, they will never discover something that simply does not exist. “Magical thinking” cannot conjure a solution into existence.
While the headlines may say “Negotiations continue between the UK and the EU” negotiations are not conducted by “governments”. They are conducted between people, real live people, with their own ideas, emotions, and agendas.
Seen this way, the person who has to make the key decision is UK prime minister, Boris Johnson. Why? Because it is the UK that has left the EU and now wants a new deal with it. From the outside. As an ex-member. The EU is as it is. It does not need to change to accommodate the UK and it is not going to change to accommodate the UK, a country which has left. The EU will not back down and will continue to insist that a trade deal will require continued UK respect for, and alignment, with EU regulatory standards.
Johnson has to decide if he can politically live with a deal on those terms, for that is the only deal that will be on offer. There is no alternative magic formula. To use Johnson’s own words, no “cake and eat it” deal.
It has long been my view that he cannot cut such a deal. There are just too many Conservative MPs who won’t buy it because they see the very essence of Brexit as regulatory freedom from the EU. Why leave, they will ask, but still continue to be bound by rules over which you have no say?
Further, the real disruption, the queues of trucks at ports and the rest, results from exiting the single market. Even if Johnson cuts a deal with the EU it will do nothing to avoid such disruption. Because it will be his deal, he will own the disruption. He will own the chaos at the ports.
But if there is no deal he can blame it all on the “intransigent EU”. Which will also keep his Brexiteer-ultra wing onside. Of course, none of this will be good for the business community, but nothing about Brexit was ever good for the business community. But the business community has no votes in either the Conservative Party of the House of Commons. Which is all that matters to Johnson.
Will an in-coming Biden presidency in the US change the political calculus? Not in my opinion. The late, great US politician, Tip O’Neill, is often quoted as saying that “all politics is local”. Well, all Brexit politics are Conservative Party politics. And the election of Joe Biden as US President will not change those politics.
What the Biden presidency will do is to make certain that the UK government will not try to walk back the Irish commitments in the Withdrawal Agreement. In any event, any deal between the UK and the EU will have to be done before Biden assumes the presidency in mid-January.
No matter what happens between now and the end of the year, there will be very significant disruption to trading relations between the EU and the UK from January 1 next. That is already written in stone. How does the UK government sell a deal that brings such disruption, but with no visible benefits? Better to live with “no deal” and blame it on the EU.
This is where magical thinking leads.