To no-one’s surprise, Theresa May got only abuse from the EU this week as Donald Tusk provided us with compelling evidence that he might be the Prince of Darkness himself, with his claims of insider knowledge about lodging arrangements in Hell.
We at BfB are convinced that the EU will wish to do a deal, but not until it is irretrievably obvious to them that the Withdrawal Agreement in its current form is a dead duck. Unfortunately, Jeremy Corbyn’s policy of staying in the Customs Union offers the EU an incentive to stick to its guns until as late in negotiations as possible. It does though remain unlikely that sufficient Tory MPs would support Corbyn’s plan to allow it to pass, given that a customs union would prevent Britain from doing its own trade deals.
The most obvious alternative to the WA is now the Malthouse Comprise based on a Canada-style free-trade agreement and an administrative solution to the Irish border issue. This is currently being worked up in the Cabinet Office with Brexiteer MPs and customs experts, although the PM will doubtless have one more try at getting her WA through parliament.
Mark Carney brought out the Bank of England’s violins once again, cutting its UK growth forecast for 2019 from 1.7% to 1.2%. Even if this lower estimate proves accurate, 1.2% growth sounds suspiciously like good news story, compared to the Bank’s claims for the post-Brexit economy made during the 2016 referendum (or indeed compared to a Eurozone approaching recession and dragging us down with it).
Despite the Prime Minister’s rhetoric in Belfast this week, attacks on the backstop continue to gain strength. Former Northern Ireland first minister and Nobel Peace Prize winner Lord Trimble has spoken about his plans to launch a legal challenge against the backstop, arguing that it undermines the Good Friday Agreement. Leading law firm Herbert Smith Freehills has also raised the possibility that the backstop breaks EU law.
Do listen to our two particularly strong podcasts this week by Professor Ashoka Mody of Princeton University and Lord Maurice Glasman of the Labour Party.
BfB co-editor Graham Gudgin took part in three radio broadcasts on Monday, including one for BBC World Service, in which he argued that Nissan’s reversal of plans to produce its 4×4 car in Sunderland had very little to do with Brexit.
He also sent a letter to the Financial Times, printed on Monday. We reproduce the text of the letter here:
Philip Stephens repeats the oft-made claim (FT Feb 1st) that ‘all other options for the Irish border have been exhaustively explored’. One wonders who has been doing this exploration. The foremost customs experts, Lars Karlsson former head of the world customs association and Hans Maessen, head of the Dutch Association of Customs Brokers both told the Northern Ireland Select Committee before Christmas that no UK Government official had ever asked their advice. Like them the head of HMRC and his Irish counterpart, Niall Cody, claim that no border infrastructure is needed to operate an effective customs operation but have been ignored.
After taking office in mid-2017 Leo Varadkar stopped Irish preparations for a light border. He also stopped the ongoing talks between officials in Ireland and Northern Ireland and prevented contacts with HMRC. It seems more accurate to say that, for whatever reason, alternative ways of avoiding a hard border in Ireland have been relentlessly ignored.
The same theme was followed up in the FT letters on Wednesday by Philip Runacres, who argued that customs formalities on the Irish border could be handled through existing VAT procedures.
Graham has also contributed a short chapter on ‘The Malthouse Compromise’ to an e-book which will soon be released on the Economic and Social Research Council’s UKANDEU website.
On a lighter note, we were delighted to learn that journalistic powerhouse Wetherspoon News has reprinted an article by our other co-editor Robert Tombs. The drinking classes are considerably enlightened.
On the website this week
Repeated claims that Sterling is losing value are fake news, by Matthew Orton Wadhams
Markets lawyer Matthew Orton Wadhams exposes Project Fear once again, with this examination of warnings over the devaluation of the pound. Contrary to claims in misleading graphs, the value of sterling has remained remarkably similar to the Swiss Franc, US Dollar and Euro in the last two years.
“A repeated theme of “Project Fear” is that the Pound Sterling is inexorably losing its value due to Brexit. This is simply untrue.”
In this article, David Blake shows Theresa May’s shortcomings in her attempts to negotiate a robust Brexit. He speculates that her incompetence is in fact willful; she might be in league with an unholy alliance of Corbyn and Juncker to effectively keep the UK in the EU.
“Her heart isn’t in it – and in any case, Olly Robbins won’t let her.”
Economist Robert Lee explains how current Parliamentary thinking about a WTO deal is narrow-minded and short-termist. In fact, he suggests, a WTO deal would increase the UK’s long-term growth rate, as well as encouraging growth in smaller companies, instead of merely the multi-nationals.
“We must look at long-term, not only short-term consequences, and at effects for everyone, not only for a few privileged groups.
Remainers have given the EU the status of a religious cult, by David Blake
Professor David Blake explains how various iterations of Project Fear have been used in the place of rational arguments for remaining, leaving a void filled with absurd headlines. This lack of rational support for the EU stems from the fact that “the EU just doesn’t add up” as it tries to square crony capitalism and bloated welfare budgets.
“Like supporters of a bad religion, [Remainers] use fear and coercion to pressurise Leavers into changing their mind.”
EU economies are faltering, and the costs of Brexit are exaggerated, with Ashoka Mody
Prize-winning Indian economist Ashoka Mody explains why the EU is facing long-term economic decline, and why the economic costs of Brexit have been greatly overstated. Our most popular podcast to date, this really is a must-listen.
“I think that those estimates of long term enduring costs are over-stated and greatly over-stated based on a faulty empirical basis.”
The Labour Party is going to take the UK out of the European Union, with Maurice Glasman
Labour peer Maurice Glasman tells BfB how Jeremy Corbyn’s Labour Party is going to try to take the UK out of the European Union, with the Eurosceptic leadership decidedly keener on Brexit than the rest of the party.
“I think the EU is ruled by fear. It is either us or its Fascism. We are going to wake up on 30th March this year and the World is going to be pretty much as it was before. Just a little bit better.”
The Subscribers’ Views page on the website allows subscribers to submit their own articles. Submissions welcome.
This week saw a particularly enthusiastic Twitter response to Ashoka Mody’s podcast, which was retweeted by various politicians including Jacob Rees Mogg.
On Facebook this week Andrea Jones is one of many to be impressed by the “very interesting discussion” BfB had with Professor Ashoka Mody.
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An Oxbridge PhD Student
Dr Graham Gudgin
Economist, Centre for Business Research, Judge Business School University of Cambridge
Professor Robert Tombs
Emeritus Professor of French History, University of Cambridge