Truce or dare?

With every day that passes the economic case for Brexit crumbles before our eyes. Sensible politicians look on in horror as the zealots pursue a Brexit that satisfies “the will of the people” despite the fact that the Brexit they are proposing is nothing like the one promised almost three years ago. People were asked to vote on where they wanted to go, but not how they expected to get there. As we are now learning, the journey is likely to prove far more damaging than they were led to believe. I, for example, would very much like to climb Everest and would happily cast my vote for someone who could promise to get me there easily and safely. I am less keen on slogging up 8848 metres in the teeth of some of the worst weather on the planet whilst running the risk of hypoxia.

The events of today have made it clear just how the path towards the sunlight uplands of Brexit is crumbling beneath our feet. Let’s start with the politics and the news that seven MPs have resigned from the Labour Party to set up The Independent Group. This is a measure of the sheer helplessness felt by many Labour MPs who see their party drifting away on a sea of left-wing irrelevance following Jeremy Corbyn’s unwillingness to use his position to stand up to the damaging form of Brexit proposed by many on the opposition benches. Let us not forget that in summer 2016 Labour MPs called a vote of no confidence in leader Jeremy Corbyn following the EU referendum, which he lost by 172 votes to 40. However, he remained as party leader by a margin of 61% to 39% following a ballot of all party members in September 2016.

But we have been here before. In 1981 four MPs left the Labour Party as it drifted inexorably to the left, to form the Social Democratic Party. Whilst this was instrumental in forcing Labour to confront its internal issues, it was a multi-year process which succeeded in splitting political opposition to the Conservative Party which remained in office until 1997. As it is, current opinion polls suggest that the Conservatives are marginally ahead and unless the new political centre can rapidly gain significant momentum it is hard to see how this will change the political dynamics, unless it can gain support from Conservative dissidents (which currently looks unlikely).

It is far from sure that this will have much impact on the Brexit debate either. Seven MPs are hardly enough to change the world and there are just 39 days (936 hours) until the default option is triggered which will force the UK out of the EU unless something changes radically. Perhaps they will be able to put forward parliamentary amendments (e.g. attempts to postpone the Article 50 deadline) which will be easier to accept on a cross-party basis as they are seen to come from independent MPs and not those attached to any of the major political parties. But I will not be holding my breath. Nonetheless, as I noted in my previous post, today’s move is a belated recognition that the established political parties are more interested in appealing to the ideologues who form the core of party membership than the interests of centrist voters (something which is true of both parties).

However, it was the news that Honda is planning to shut its Swindon plant in 2022 that really should cause eyebrows to be raised. Local MP Justin Tomlinson noted in a tweet that Honda “are clear this is based on global trends and not Brexit, as all European market production will consolidate in Japan in 2021.” I refuse to accept that it has nothing to do with Brexit but there is a very good reason why Honda might want to consolidate production at home: Towards the end of last year Japan signed a trade deal with the EU that removes the 10% import tariff on Japanese cars and the 3% tariff on most car parts. So they don’t need the UK any more. And don’t say you weren’t warned. I pointed out in 2015 that “international companies already have to carefully balance the net benefits of operating in the UK given that business operating costs are higher than in the EU8 countries. Brexit may make this calculation more clear cut.”

Without wishing to compare the ideologies underlying the two processes or trivialise historical events, I have been struck in recent months by the logistical parallels between the progress of the Nazi invasion of Russia in 1941 and the Brexit process. Both were the product of an ideologically motivated desire to achieve bigger goals (the defeat of Communism/throwing off the yoke of the EU), which were preceded by intense planning but both were under-resourced campaigns (logistically in the Russia case; intellectually in the Brexit case). You can argue that both campaigns started well, achieving many of their initial goals, before becoming bogged down by harsher conditions (weather/economic reality) and the sheer weight of the opposition (Soviet troops/the EU’s economic heft). But the key point is that the military campaign ran out of steam following defeat at the Battle of Stalingrad when the magnitude of the task facing the Wehrmacht became startlingly clear.

I wonder whether the Brexit campaign has yet reached its Stalingrad moment. The Nazis clearly learned nothing from Napoleon’s attempt to invade Russia in the same way the Brexiteers appear not to have learned the lesson of those countries which tried to throw their weight around with the EU. Just to push the parallel further, both campaigns kicked off in June (almost to the day). Thirty two months after the start of the Russian campaign the tide had decisively turned in the Soviets favour, although it was to be another 15 months before the whole episode was concluded. After a similar period since the EU referendum, Brexiteers also appear to be fighting a losing battle and whilst they clearly will not give up, they cannot win. They might force the UK out of the EU without a deal, although I still maintain that they will be prevented from doing so, but they cannot deliver on their promise to deliver an economically brighter future.

Each decision by the likes of Honda or Nissan to scale back production or to abandon expansion plans represents potential jobs that will not be created. Each decision by politicians to abandon the ideological path which their leaders are trying to follow represents a step away from the cliff edge. Rather than fight Brexit battles which threaten to damage the economy, it is time to call a truce.