Jeremy Warner
Compromise is all well and good, but the only deal worth having is the full English or the Continental
Jaw-jaw, it is said, is better than war-war. No doubt this is true. Yet the problem with the political compromise of jaw-jaw is that almost inevitably it ends up in messy, suboptimal outcomes that don’t properly resolve the pre-existing standoff.
So it has already proved with Theresa May’s Withdrawal Agreement, a textbook example of a compromise that satisfies no one, and so it proved with this week’s indicative votes.
As if straight out of Alice Through the Looking Glass, MPS simultaneously managed to vote for Brexit and against virtually every conceivable form of Brexit available. The exasperation in Brussels is at least understandable.
Yet the votes were not entirely meaningless. The no-deal option failed by an overwhelming margin, so we can therefore be fairly certain that MPS won’t allow that. The motion that failed by the least, on the other hand,
was Ken Clarke’s call for a customs union Brexit.
Logically, then, this would seem to stand the most chance of an eventual majority. Unfortunately, it also makes a mockery of the “Take Back Control” rallying call of the Brexit campaign, rendering the UK subject to customs arrangements it is powerless to influence.
For the world’s fifth largest economy to make itself beholden to rules set by and for the benefit of others, with no compensating trade-offs, would be an act of extraordinary folly, and would actually be no better than Mrs May’s hated backstop.
The only redeeming feature of a customs union Brexit is that it might conceivably get through. But it would also be a sham. One of the supposed economic upsides of Brexit is that it ought to allow Britain to do its own trade deals on terms that specifically meet the demands of British business and agriculture, rather than having to accommodate the vested interests of 27 other economies. If Britain remains in a customs union with the EU, that freedom is lost.
On the positive side, it should also allow for the continuation of tarifffree, relatively unencumbered trade in goods with the rest of the EU, thus preserving just in time, integrated supply chains for the auto, aerospace and other manufacturing industries that have become dependent on them. And, of course, it would help defuse, though not entirely solve, the Irish border issue.
None the less, it would be a rum old place to end up. Being in the customs union but outside the single market would at least allow the UK to end free movement. Any other benefits are much more difficult to see. Chained to European supply chains, the opportunity for significant divergence in standards and other forms of regulation would be limited. What is more, customs union membership does nothing to help our financial and business services industries, which wherever they trade are dependent on permission access, and therefore stand to lose much of their European market once outside the single market.
The Clarke proposal partially mitigates the damage to manufacturing, but denies any positives from opening up alternative markets while simultaneously throwing our financial services industry under the bus. Nissan’s 7,000 employees in Sunderland are implicitly judged to be more important than the similar number of jobs JP Morgan maintains in Bournemouth and Glasgow, never mind the mighty tax dynamo of the City of London. This makes little economic sense.
Why would someone as apparently experienced and measured as Ken Clarke think such an outcome even remotely desirable? This, I suppose, is the answer. He’s already voted twice for Mrs May’s deal, believing it to be the least worst option for a Remainer reconciled to some form of Brexit. His motion is basically the same as May’s deal, but has the great merit politically of not actually being her deal, making it potentially more acceptable to Labour MPS. It’s also not so far from Labour’s stated position on Brexit, only without the fantasy notion of having some kind of a continued voice at the customs union table when decisions are made.
From the start of this process, the EU has always, as the more substantial economic power, held all the cards. Despite the myriad mistakes made by Theresa May over the past three years, I do not believe a different negotiating style or leader would have achieved a notably better outcome. The trade-offs would have been the same; the closer we remain to the EU’S single market and customs union the higher the price we pay in sovereignty transferred. It may well be that a different leader would have been better capable of selling these tradeoffs to MPS and the wider public, but this is just a matter of communication, not of substance.
Rising above the paralysis of Parliament, the overarching choice has always been the same; the full English or the full Continental – a hard, no-deal Brexit, or no Brexit at all. Anything in between is just not worth the candle. Despite all the jaw-jaw, this is a war whose eventual victor is still far from clear.