Now that Jeremy Corbyn’s radical new populist approach is revealed – agreeing with the Conservatives on Brexit and immigration and promising that Labour would give the £350m of EU payments that never existed to the NHS – whether one of the 48% or the 52% all of us need clear answers to the question we’ve been asking since last June: What the hell happens now?
Set aside a couple hours to read Ian Dunt’s analysis of the Brexit mess in his aptly-titled book Brexit: What the Hell Happens Now? and you’ll get some answers. Unfortunately, they’ll scare the living daylights out of you. The question of whether we (that is, the government) know what we want, and whether we have enough people with the degree of negotiating skills to get it are key questions explored in Dunt’s book which ought to be required reading for everyone. The issues he raises are ones that should have been uppermost during the referendum, but which were hardly voiced by the lacklustre Remain campaign.
Ian Dunt, who is editor of politics.co.uk and writes for several national newspapers, works in the press gallery of the House of Commons. He has explained the purpose behind his book as:
I wanted to write a book which could be read in a few hours. This is the biggest story of our lifetime, but the debate around it is filled with sloppy thinking, half-truths and self-interested speculation. It’s almost impossible for people to find one single, readable account of what is really going on. Hopefully this book will address that.
It’s certainly needed. In October, writing in the New York Review of Books, Simon Head nailed the situation in a succinct and dramatic opening sentence: ‘It is hard to exaggerate the scale of the disaster the British people have inflicted upon themselves with their decision to leave the European Union’. And when Ivan Rogers, head of Britain’s negogiating team in Brussels, resigned two weeks ago, he stated that we still have no idea what will be the government’s negotiating objectives for the UK’s relationship with the EU after exit. Furthermore, his resignation letter insinuated that the team he headed – one of the few bodies with a working knowledge of EU procedures – is being ignored by Downing Street, with only three months to go before arguably the most important negotiations in Britain’s history begin.
Provocatively, Dunt has consulted experts to help him write his book – experts in constitutional law, business and trade, some 30 or so of whom are listed at the end of the book, while many more in Westminster, Whitehall and Brussels ‘preferred not to be named’.
To be clear: this is not a book which looks back to the try to explain June’s referendum result, but one which faces forwards to examine the challenges which will face the UK once Article 50 is triggered in March and negotiations with the EU begin.
While Theresa May and government ministers suggest that a deal can be made within the two years of negotiation that article 50 allows for, Dunt argues that the government’s approach to Brexit is likely to be a catastrophe for the British economy. Two years is not long enough, but the May government shows no signs of seeking a transitional deal to avoid a financial cliff edge in 2019, which would seriously damage the City and manufacturing.
In his opening chapter, Dunt imagines the worst: what things might be like on 31 March 2019 if Brexit is mishandled:
The UK is in a position of unique and historic vulnerability. Its economy is facing the most significant shock since the Second World War. It has no time. It has no negotiating capacity. But Washington wants to help. It is prepared to rush a trade deal through Congress. It could take less than two years. But for this to be achievable, the UK needs to accept all of its demands. The Americans slide a piece of paper across the desk. The British team read the demands: they are horrendous. But they have little option but to capitulate. The only way to protect what remains of the British economy is to sell off British sovereignty. The control wrested from Brussels is now sold off to the highest bidder, behind closed doors, in a conference room in Washington.
That’s Dunt’s fantasy. The rest of the book is not like that, presenting a more reasoned set of scenarios based on his in-depth research and consultation with those experts. It is still, however, a scary read.
He begins by demonstrating what is daily becoming more obvious: that there are now choices to be made which were barely mentioned during the referendum campaign, a campaign conducted ‘in broad, colourful, almost childlike terms’.
So he gets stuck into the meaning of Article 50 and explains the difficult issues that will arise once it is triggered. With the aid of diagrams, explains the difference between membership of the EU, the Single Market and the customs union – and what going it alone in the hardest of Brexits and trading under World Trade Organisation rules actually means. He sets out clearly and succinctly the different models of relationships with the EU adopted by countries such as Norway, Switzerland and Turkey – how they work, what advantages and disadvantages each model would offer for the UK, and why they may not be available to us.
He’s particularly good at explaining – with chilling clarity – how monstrously difficult it is going to be for the UK to extricate itself from the mass of EU regulations which have been incorporated into British law during the past four decades, and what a huge task it will be – particularly if we end up having a hard Brexit, where we leave not only the EU, but also the Single Market, and possibly the customs union, too.
To sort this all out, he says, we need an (expensive) army of trade negotiators – and fast. We barely had any when we voted to leave, since the all of our trade relations with the rest of the world had been negotiated via the European Union. Now Whitehall is on a massive recruitment drive, and the costs are painfully high.
Dunt also makes a critical examination of the government’s plan to transfer all EU laws into British law by means of a Great Repeal Bill, a ‘simple’ piece of legislation (say ministers) which will fix the problem ‘by taking a legal snapshot and insisting everything stays the same’ unless the British government decides to change something. He explains in graphic detail how difficult this seemingly simple act will be.
The problem is that not all EU law is in the European Communities Act 1972 which enshrined EU law in British law. Dunt offers the example of the Equalities Act, passed by the Blair government which banned discrimination in the provision of goods and services on the basis of age, disability, gender, marriage or civil partnership status, race, religion or belief, sex or sexual orientation. It did so not just by incorporating four major EU Equal Treatment directives into British law, but also by ‘stitching together’ several bits of UK law like the Equal Pay Act 1970 and the Race Relations Act 1976. It’s a messy mixture of EU and UK legislation, and it’s the same in every area of law. But the origin of a law is not the only pertinent fact. What matters even more when trying to figure out whether something is British or EU law is the chronology: which came first?
For those who voted Leave in order to ‘take control’, Dunt offers this caution: as the government, over time, gets rid of or amends the bits of EU law it dislikes, it will do so mainly through secondary legislation – statutory instruments – which get little Parliamentary scrutiny.
Dunt gives some striking examples of the impact of Brexit on areas of life you would never have thought of. Example: EU law insists on an independent veterinary presence in abattoirs. The problem is that 95% of the vets doing this job in Britain are European – most of them from Spain. British vets study for years, he says, to cure family pets, not watch cows being slaughtered. Europeans are less squeamish, and are also willing to accept the lower wages involved. If Britain doesn’t train up more vets for the abattoirs – and fast – it won’t be able to sell meat to Europe or properly check it for disease. (That’s also just one example of why free movement of labour is crucial for many businesses. Dunt offers a particularly clear and convincing explanation of why immigration is beneficial – indeed essential – for the UK: reducing immigration will simply make us poorer.)
Here are a few more insights Dunt’s book offers:
- If we leave the Single Market and instead negotiate a bilateral trade deal with America, standards will fall. America has lower consumer standards than Europe on pretty much everything, from chemical safety to data protection. A bilateral trade deal will see them demand we lower our standards so their products can enter our market more freely. Given how desperate we’ll be, he says, we’re likely to comply.
- Banks in the City of London need to ensure continued access to EU markets in financial services. To avoid losing passporting rights in Europe, they will have to register an office with regulators on the continent – a process that can take years. This means they are likely to start doing this soon – meaning lost jobs in London.
- In her speech to the Conservative party conference, May promised that Britain will be able to control ‘how it labels food’. But, says Dunt, food labelling rules have nothing to do with the EU. They come from a general code agreed at the World Trade Organisation. There is only one country which does not follow these rules – North Korea, consequently totally isolated.
- If we go for a hard Brexit and leave both the EU and the Single Market, to ensure stability during the transition to independent membership of the WTO, the UK will have to replicate all the EU’s tariffs because if we changed any tariff, it would trigger an avalanche of trade disputes and lobbying operations. For example: if Britain was to raise tariffs on ham, it would trigger formal disputes from not only European ham producers, but those all over the world. Such disputes can take years to resolve.
- If you want to sell pharmaceuticals in Europe, they must have been approved by European regulators. But what happens after we leave? In a hard Brexit scenario will we set up a British regulatory system? If we did, it would take time to establish. In the meantime, pharmaceutical companies would not be able to get their products authorised for the UK market.
There’s a lot more in this readable book. Ian Dunt is good at making a difficult subject clear. The book boasts a list of experts consulted and is fully referenced. You just have to read it: with the prospects as dire as Simon Head predicts in his NYRB article, every one of us should make sure we are better informed than we were on 23 June 2016:
Britain and its economy could face a decade or more of debilitating uncertainty. This is the amount of time it could take to negotiate a new trading relationship with the EU, which absorbs approximately 44 percent of UK exports and is by far its largest market. The British government knows that in a little more than two years Britain will lose its access to the European single market, the price it must pay for its hostility to immigration from the EU. But it has no way of knowing what trading regime with the EU will take its place.
It must now embark on a series of marathon negotiations with its EU ex-partners, certain only in the knowledge that the trading regime that will emerge from them may be far less favorable to business located in Britain than the one that exists now. It is hard to imagine a set of circumstances more likely to convince foreign businesses in Britain that they should act on their warnings to leave the country or reduce their presence there, and instead take up residence within the secure confines of the Single European Market. The British economy and the British people will suffer the consequences.
And finally… from a (grimly) entertaining review by Richard Elwes at Medium:
I couldn’t have imagined, six months ago, voluntarily reading any book spending more than a few lines on the subject of tariff-rate quotas. But there is a certain grim entertainment in Dunt’s revelations of elephant traps within the fine-print of international agreements, and the remorselessness with which problems proliferate. A major takeaway is how, as things stand, Brexit is set to fail, even on Leavers’ own terms.
- Twenty reasons why Brexit will be even trickier than we thought (Ian Dunt, Guardian, 6.12.2016)
- The Death of British Business by Simon Head (NYRB, October 2016)