U-turn if you want to: Part 1

The disastrous performance of the Conservative Party in last week's election has prompted a rethink of policy on both Brexit and fiscal austerity. This is recognition of the fact that the government has been spectacularly wrong on both – as I have long pointed out – and the scale of the U-turn reflects a certain degree of chutzpah. In this post I will focus on Brexit-related issues and leave the fiscal issues for my next post.

Whilst hopes have been awakened that we will see a softening of the terms on which the UK seeks to leave the EU, it is just as likely that we will end up instead with a chaotic Brexit which would be the worst of all worlds. I have always maintained that the Brexit referendum was an unjustified gamble with the national interest and it feels even more like that today.  Those politicians who advocated this course of action deserve all the opprobrium that is heaped upon them, and in order to highlight why Theresa May’s government is not fit to negotiate the exit, it is worthwhile recalling the series of miscalculations which has characterised Conservative policy in recent years.

First, the decision to hold the referendum at all was reckless. This was compounded by the failure to specify the terms which would make it easy for David Cameron to achieve his objective of winning. For example, the 1979 Scottish devolution referendum required that a winning margin be obtained from 40% of all eligible voters. In an uncanny echo of the Brexit result, whilst 51.6% of those who turned out voted in favour of devolution, only 32.9% of all eligible voters did so (the corresponding figure in last year’s referendum was 37%). Then there was the failure to set out ahead of the event the terms on which the UK would leave. Had voters known exactly what a hard Brexit entails, some may have thought twice. To cap it all, Theresa May gambled that the electorate would back her view of a hard Brexit. This proved to be a second successive failed gamble by a Conservative prime minister which has made the process of trying to find a Brexit deal far more complicated. Given this litany of errors, you will forgive my scepticism that the government is best placed to resolve the difficulties we now face.

Theresa May, described by George Osborne at the weekend as a dead woman walking, has to find a balance between those MPs in her party who wish to push for hard Brexit and the large number of MPs who wish to see it take place on much softer terms, if at all. I was thus somewhat gratified to see that my idea of a cross-party approach to Brexit now appears to have become a mainstream idea (you heard it here first).

But we simply should not even be having this debate. A hard Brexit is a ruinously stupid economic idea. And to compound the negotiating difficulties by calling an election AFTER the Article 50 process was triggered, thereby eating up valuable preparation time, tells us all we need to know about the Conservatives preoccupation with domestic politics rather than the wider interest. Although the government says it is ready to go ahead with the start of Brexit talks with the EC next week, it's not clear to me that this can credibly happen. Technically we do not yet have a government. Nor is it clear what the UK's negotiating position is, yet they will be facing a European Commission team which has had months to prepare its case. And just to make life even more difficult, two of the four ministers on the UK’s negotiating team have departed just days before talks are due to begin. This raises the chances that the disorganised shambles which passes for government may well crash out of the EU without any deal. The Conservative manifesto might have said no deal is better than a bad deal, but that is a level of economic illiteracy which suggests whoever wrote it has no idea how to conduct international trade negotiations.

Now you may have spotted from the tone of the post that I am a tad annoyed. Damn right! Pretty much every key decision that has been taken on Brexit has been wrong. There is no sense that those responsible for making decisions are capable of thinking strategically about how to get a deal which maximises British interests. We should be in no doubt that failure to do so will make everyone poorer and despite the talk which suggests that immigration is the biggest single issue, in the long run what people care about is their wallet. We are now hearing indications that business is becoming much more vocal about their needs post-Brexit. So it should. And If the government does not know what it wants from Brexit, it should not be entering talks with the EU. Instead it should rescind the Article 50 notice until such times as it does.

This may annoy the Brexit nutters such as Nigel Farage, who has threatened a comeback in the event that the government backslides. I say let him. Farage was a useful dupe for those who wanted something to protest against in 2016 but he would require the powers of Lazarus to restore UKIP to the position they were in last year. I also sense that some of last year’s anger has dissipated somewhat and he would find it difficult to whip up an anti-EU frenzy in the same way. I do not want Brexit to happen and nothing would please me more than if the government were to back down. But in the spirit of accepting the will of the people (even if the referendum is not legally binding) I accept this is unlikely to happen. But if it has to, then let us work out what we want first rather than trying to make it up as we go along.  That is the path to disaster.