Britain: A World Power Again, if by Accident?


Britain: A World Power Again, if by Accident?
Sean Gabb
(22nd December 2018)

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In London, and it seems elsewhere, the political and media consensus is that Britain is in its weakest international position since the late summer of 1940. Because we have a government of fools, we are at the mercy of the French, the Germans, the Spanish, and even the Irish. If we accept Theresa May’s Withdrawal Agreement, we become a colony of the European Union. If we withdraw our notice to quit, we suffer a different though probably equal humiliation. If we leave without any deal, we face some degree of economic disruption. Which of these options is worst may have some bearing on the lack of agreement within our political class – though which brings more or less advantage to any of the individual groups in Parliament also has much bearing.

I disagree with this consensus. I still regard Theresa May as our most incompetent and possibly treasonous Prime Minister in at least living memory. At the same time, we find ourselves with the greatest power to shape our destiny since 1938. It needs only minimal work from our diplomatic establishment, and minimal cooperation among our leading politicians. Let me explain.

I will not discuss the two first options before us. It would be a mistake to accept the Withdrawal Agreement. It would be a mistake to withdraw our notice to quit. We are left with the third option, of leaving without any deal. What outcome should we want from leaving in this manner? The answer is obvious. We should want several years of reasonably privileged access to the European Single Market – so that next April arrives without any disruption to our trade in goods and services. We should want an advantageous trade deal with the Americans, the Chinese and the Indians. We should not want to pay anything to the Europeans for this access. We should not wish to fall into the American orbit. We should not wish to make any concessions to the Chinese and Indians – on immigration, for example. These are maximal desires, and all of them can be had.

No one outside Europe likes the European Union. On the one hand, negotiating a trade deal with Brussels gives access to the largest single market in the world. On the other, trade deals come with many disadvantages. The Americans and Chinese would generally prefer to deal with the European countries as individuals. Giving full support to British withdrawal weakens the European Union at a time when it is already internally divided and therefore weak. The Russians are of little account economically, but they would rather not face a united Continent, able to interfere in places like the Ukraine. Their diplomatic help should be taken for granted. Because these countries are themselves not in agreement with each other, they can be played against each other. We should extract favours with limited reciprocity.

Faced with what ought to be an easy diplomatic coup, the Europeans should be brought back to the negotiating table, this time to agree something better than Theresa May has managed during the past thirty months of bungling. Everything was in place to achieve this in June 2016. Everything remains in place – even if achievement will now look more like accident than policy.

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All it requires is some degree of cooperation in Parliament. Let us agree, for the sake of argument, that leaving without a deal would involve considerable disruption. No one is sure how much disruption there would be – but there would be some. But the risk must now be taken. Theresa May must be made to swallow her pride, and to start serious planning for a no-deal exit. This will involve some degree of state management of private business – perhaps temporary nationalisation, probably subsidies and tariffs and other trade barriers. The idea should be to cushion those sectors most likely to be damaged by spreading the costs. For the avoidance of doubt, my own preference is for limited government and free trade. However, bringing about the conditions in which these become possible may require messy compromises in the present. I suggest this observation to my fellow economic liberals in Parliament.

Jeremy Corbyn should play the statesman and offer moderate cooperation. His price can be a general election next autumn. He should have some chance of winning this, though the Conservatives – freed of their present split, and with a different leader – should also be less rudderless than they presently are. It goes without saying that those Conservative politicians who are now threatening to bring the Government down is no-deal becomes actual policy should close their mouths. Everyone who is calling for a second referendum should also shut up.

Will a pact be negotiated during the Christmas break? I hope it will, but am not holding my breath. If one is negotiated, we can go back to something like politics as normal. Our political and diplomatic establishment will at last have proved itself fit for purpose. If not, it will find itself in the same shaky position as the French Monarchy did in 1788. How this can or should end I prefer not to say, though I agree it would be an undesirable position.

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So, here is the great test our governing institutions will face during the next fortnight. Are they really just about fit for purpose? Or must we all start thinking again? As in the August Bank Holiday Crisis of 1914, the whole decision lies in the hands of a few dozen named people at the top. The Eyes of History are upon them.

And let me add for my foreign readers, that what happens in London has considerable bearing on the viability and nature of the New World Order that emerged after 1991. Again, and now for reasons purely of length, I will leave this more implied than discussed.

Though I said I am not, let me confess – I am holding my breath. Those Eyes of History are very cold, and they have never been known to blink.

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3 comments

  • “On the one hand, negotiating a trade deal with Brussels gives access to the largest single market in the world” We shall have access to EU markets with or without a trade deal. Ask the Chinese. The only difference is that, without a trade deal, the EU will be fee to levy tariffs on their imports from the UK. But under WTO rules, these tariffs will be very low, and if we were to subsidise our exporters to compensate, we would still be better off financially compared to the money we currently pay to the EU for membership of the Single Market (not to mention the £39 billion we shall save, plus the savings we shall make from no longer having to apply EU tariffs to our imports from the rest of the world).
    I disagree that Mrs May is an incompetent Prime Minister. She has played a blinder, given that the ultimate goal of the Conservative Party has, for the past half century, been to lock us into political union with ‘Europe’.

  • No Treaty can ever make us a ‘colony’ of the EU or of anyone else.

    I think in this context the writer means ‘Vassal State’. But a Treaty can’t make us that either. The Crown in Parliament is sovereign and we can withdraw from Treaties any time we like.

    Until the Lisbon Treaty came into effect, there was, for example. no Treaty provision in existence empowering us to Leave the EEC or EU But no one doubted we coud. In fact we had Referendum in 1975 to determine whether or not we should.

    Neither is there any provisions in the Acts of Union empowering either Scotland or England to leave the United Kingdom without the consent of the United Kingdom Parliament. But we can.

    International Law, which is the only way of policing and enforcing any Treaty, is a ‘consent based’ system. When we cease to ‘consent’ to a Treaty that’s the end of it.

    In any case even International Law offers provisions for States to unilaterally withdraw from Treaties.

    In its’ short history the US has signed but not ratified, signed and then unsigned, and even refused to sign after pushing everyone else to sign, umpteen Treaties.

    Numerous countries including Germany (twice in its’ own less that 150 year history) has defaulted in its’ National Debt. In fact the UK is one of the few major States that hasn’t.

    The EU’s own No ‘Deal’ Brexit plans (see link) taken alongside the existing deals we’ve already concluded (which the BBC hardly ever reports), notably the ‘The Common Transit Convention’ and ‘The Facilitation of Trade Convention’, are already sufficient to make a ‘No Deal Brexit go not with bang. but with whimper.

    Then there’s the WTO rules.

    And there are still nearly 100 days to go to conclude more deals, and then plenty of time after we’ve left to either negotiate more or extend the existing EU ‘No Deal’ provisions,.

    On top’ of that there’s still the Common Travel Area with the Republic of Ireland and there have been declarations by both the UK and the Republic that there will NEVER be a Hard Land Border. The ‘Hard Border’ being talked about is one which the EU will attempt to force on the Republic.

    Let’s see how that goes if they try. Both Nationalists on both sides, and Unionists on the UK side would unite to tear it down.

    Yet further the Isle of Man and the Channel Islands will still be in Free Trade agreements with both the UK and the EU offerein an open door for goods in and out of the EU.

    If anyone has anything to fear from a ‘No Deal’ Brexit it’s the Republic of Ireland which is wholly dependent on the UK for physical access to the rest of the EU both by a port coming in to the UK, and a port going out and then at continental ports which won’t be able to tell whether goods coming from a UK port have originated from the UK or from Ireland.

    These ports and the (at least 4) countries in which they are located will be competing for the trade. Two of them Netherlands and Denmark are highly friendly to the UK. And the other two France and Belgium aren’t exactly hostile to making money either.

    But the EU itself isn’t very secure either, because it sells £60 Billion a year more to us than we do to it. We can get all those things elsewhere cheaper.

    The vital thing for the UK is for us to be formally and legally out of the EU. There noting to sipo us agreeing with the EU to behave as of we were de facto members voluntarily until we get the details sorted out. That’s basically what ‘Managed Brexit’ or ‘Blind Brexit’ means.

    With the spectre of Remaining gone these negotiations will become much easier and will be conducted as an when we have mutual self interest in reaching permanent agreements or in diverging from the existing EU Laws , all of which will still be in force in law in the UK by virtue of the Brexit Act.

    At the moment however both EU and Remaianiacs in the UK have strong potential mutual self interest in making the negotiations fail.

    It’s not entirely correct that Russia is of no consequence economically. Germany is wholly dependent on Russia supplying it with Gas.

    ‘Temporary nationalisation’, ‘subsidies’ ‘tariffs and other trade barriers’ are the LAST thing we need.

    Business are owned by their shareholders and the State has no business seizing them. And why it can be thought that employees of the State who’ve never run a business in their lives would be better at running a business than people who have is a mystery.

    We didn’t even need that during the war!

    Forcing us to pay tariffs (import taxes) on what we buy and businesses pay import taxes on their imported inputs, is also the road to ruin.

    If there’s a ‘No Deal’ Brexit the Pound will likely fall sufficiently to have a much more powerful effect on competitiveness than any State meddling in import prices.

    As the great libertarian Ronald Reagan once said:-

    ‘We’re in the same boat with our trading partners. If one partner shoots a hole in the boat, does it make sense for the other one to shoot another hole in the boat? Some say, yes, and call that ‘getting tough’. Well, I call it stupid.”

    When we leave the EU the UK would be better off scrapping all its Non EU tariffs unilaterally.

    If someone will sell you something for less than you can make it yourself you are ALWAYS quids in. If he sells it to you for less than it costs him to make better still.

    Save, possibly on certain defence related items. No country with its own currency ever needs tariffs. The exchange rate itself takes the strain and ‘spreads the costs’, more efficiently than the State ever can, and with no bureaucracy.

    In a competitive world some cost is also borne by foreign based suppliers who have to sell at less profit or even at a loss into the UK market in order to keep their cash flow going.

    That’s exactly what happened after the Pound fell following the Brexit vote itself. The effect on inflation of the big drop in sterling was distinctly muted, and was FAR less than Remainiacs predicted. Businesses in the Republic of Ireland went bust under the fierce competitive pressure.

    Corbyn has no means of forcing an early General Election. Under the Fixed Term Parliament Act, he needs 434 MPs to vote for one.

    So even if he got all the opposition MPs on his side, he still needs the 10 DUP MPs (who say they won’t) and a further 107 Tory MPs on top, to vote to hold one.

    It’s impossible. The only people who can force an early General Election are the Tories themselves.

    If the Commons votes down the ‘May Deal’ when the vote is held just before January 21st and doesn’t come up with majority for any other ‘Deal’ which can be agreed by March 29th the existing law says that we Leave the EU with ‘No Deal’ automatically by operation of both UK and International Law at 11pm March 29th.

    Thanks to the Gina Miller Supreme Court judgement it would require a full Act of Parliament and the Repeal of the Brexit Act to withdraw the Article 50 letter.

    Even postponing the leaving date requires a Statutory instrument to pass through Parliament. Given the controversial nature of it, t would take as long as full Act.

    And Jacob Rees Mogg etc know full well how to make use of the procedures. By the time any of this became relevant there would only be about 20 sitting days (and even that includes Fridays), left in the House till March 29th.

    Fast tracking legislation like this requires near unanimity in both Houses. And there definitely isn’t any such unanimity.

    The longer Mrs May plays this. the less chance there is that the law can changed in time for the leaving date so the stark choice by Mid February will be between ‘Her Deal’ or ‘No Deal’.

    That suits me because either way we’d be out, and even if the Commons votes to accept her deal, Parliament will have to pass the necessary legislation to bring it into law in the weeks after we’ve left. Some of the legislation might not even be completed until the end of the year.

    So Hard Brexiters can always vote against the detailed provisions then.

    http://europa.eu/rapid/press-release_IP-18-6851_en.htm

    • A superb summary, Mr Baird. If it is going to be Hard Brexit, then the gloating is going to be delicious. Don’t think I won’t be passing up the opportunity either. I’m not above it. There are good few websites I will be visiting for gloating purposes on the 29th. March 2019, should that be the outcome. But we’ll see.

      The only quibble I would have with you is that I do not entirely accept your view that the EU is based on treaty law. I think over time it has developed into a political and constitutional status of its own, especially given that from at least the 1980s onwards, the then-EC institutions already had supranational competences. Simply abrogating from treaties might be enough at the moment, but there will come a point – if we’re not there already – when we can’t do that, and I think that was what was behind the inclusion of the voluntary exit procedure at Lisbon. It was an acknowledgement of the EU’s pro se identity – not just that it is a legal personality with dealings outward and inward, but that it is an emergent federal sovereign in its own right based on an evolving political reality. Article 50 is the safety hatch. I’m quite glad they put it in, actually, as there may have been more trouble without it than with it. It has given a direction to the whole process.

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