I haven’t done a note for a while, partly because I was waiting until I had a meaningful signal to add to the cacophony of noise to which we are currently exposed. So here goes: I don’t agree with the current consensus we are being offered up in the media, and there are finally grounds for hope a Brexit deal will emerge soon.
The current Conservative consensus goes like this: Boris Johnson might be causing chaos, but he has delivered a 5-10% jump in the polls (to an average of 33%); this will be vindicated at an election; but we are currently headed for a No Deal, or what the Brexit Party calls a “clean” Brexit; and when the election comes, he will win a majority.
Remain supporting commentators are no less certain in their projections, claiming the Prime Minister is cornered and has no way out.
The People vs Parliament makes no sense
Tune out, if you can, from the constitutional and legal upheaval the Prime Minister is indulging. This whole Parliament vs the People narrative is just political rhetoric, with emotional purchase, but based on several incorrect assumptions. While it is democratically bizarre that the 2016 referendum result has yet to be implemented, that does not mean the later 2017 election result is invalid. It was a more nuanced result, delivered by the same electorate which collectively decided that the Conservatives deserved to have their wings clipped. And anyway, the legal position is Parliament is supreme. No contest. End of.
Labour MPs for a deal
The 2017 Parliament and the electorate are not inflexibly divided between No Dealers and Revoking Remainers. The Brexit vote was delivered by 5m Labour voters. This is the swing number. A significant number of Labour MPs went on to say and vote repeatedly in the House of Commons that they are committed to implementing the 2016 result, but they will not accept a No Deal outcome. Depending on which vote you look at, some 12-25 Labour MPs are in this camp.
Some of this group helped deliver the Brady Amendment, which theoretically passed the Withdrawal Agreement in January by 16 votes, as long as the Irish Backstop was “replaced by Alternative Arrangements”. The seven Labour MPs who voted for the amendment were vital in overcoming the eight holdouts from the Conservative European Research Group who voted against it.
Kinnock rides in
Which leads me to the next omission in the consensual analysis. People keep talking about the Hilary Benn Bill, which will force Boris Johnson to request another delay to Brexit if he has not found a deal after the next European Council Meeting of 16-17th of October, but they fail to recognise that this Bill was fundamentally changed, to mean that such an extension will only occur in order to implement a deal.
The amendment, put forward by the shop steward of pragmatic Labour leavers, Stephen Kinnock MP, and signed by 24 MPs, of whom 17 are Labour or ex-Labour (including respected names such as Frank Field, Dan Jarvis, John Mann and Caroline Flint), puts into law various critical points:
• The purpose of any extension should be to consider and pass a new Withdrawal Agreement Bill based on the cross-party talks held in June (which can be amended, this is critical)
• The Government should seek to conclude Alternative Arrangements to the Irish Backstop by 2020
• If the Backstop does come into force, Great Britain and Northern Ireland should remain aligned
• Commitments to remain aligned with EU workers’ rights and environmental protections
• A commitment to seek as close as frictionless trade as possible (an important change to the May Government’s unrealistic commitment to absolute frictionless trade)
• A vote in the House of Commons whether to have an approval referendum or not
Tomorrow, Mr Kinnock, will follow up by launching a new group called “MPs for a Deal” with Rory Stewart MP.
So, in other words the Government is legally committed to submitting a Withdrawal Agreement Bill for approval in the last two weeks of October and that process is supported by the 26 swing-voting MPs in Parliament.
Prosperity-UK Alternative Arrangements Commission
How will the EU respond? Will there be anything realistic in such a Bill? Quite possibly, yes. Why? Simply because there have been interesting shifts in EU rhetoric and positioning in the last few weeks, especially in relation to the Backstop. The UK may not have proposed anything official, but the conversations have been lengthy and serious.
Boscobel has been supporting the Prosperity-UK Alternative Arrangements Commission, co-chaired by Greg Hands MP and Suella Braverman MP. I cannot say, nor am I privy to, how much genuine progress we have made. But I can say Prosperity has put “Alternative Arrangements to the Irish Border” at the heart of conversations between the UK and the EU and in Parliament.
A deal, but another hung Parliament?
It is therefore possible that we should at last start to shift, cautiously, our central Brexit planning expectation towards a deal but with a short technical extension. We do not do this lightly, as the Boscobel position was the original Withdrawal Agreement would fail from September last year.
The forex market may be on to something, lifting sterling by nearly five cents in the last week to close to $1.24 today.
How does this revised view fit the political strategy of the Government and the outlook for a General Election?
We can only guess at this, but one effectively has to plug into existing assumptions how public opinion would evolve in the event of such a “New Withdrawal Agreement with Short Extension outcome.” In particular, the two wild cards of any election forecast, the Brexit Party and the Liberal Democrats, could see their current platforms (No Deal and Revoke), overtaken by events.
Where I have serious doubts about the Government’s current strategy is that it too seems well calibrated to miss the opportunity this potential change in circumstances may present. Brexit Party supporters will have their hopes and expectations of a No Deal Brexit dashed, and new Lib Dem supporters will continue to be turned off by the behaviour and conduct of Ministers, especially in relation to issues such as character, values, lawful conduct and the Prorogation of Parliament.
In addition, last week’s Spending Review is another reminder that the Conservative Party continues to fall short in its response to the genuine consumer concerns which have resulted in the apparent popularity of Corbynomics. All they have come up with so far is their own, mildly watered-down version. Cons-bynomics is a sort of high-spending, high labour taxes corporatism, which fails to take account of the economic and market dynamics of ordinary middle-class life upon which Conservative success has historically been built. To give one example, the usurious Student Loan system remains unreformed.
We live in a time of political volatility. It may be that the next, post-Brexit Parliament is not much different from this one, except with a few Brexit Party MPs, a few more Scottish Nationalists and a couple of dozen extra Liberal Democrats, all sharing in common the implied proposition: “Vote for us, the two established political parties are useless.”
If it is not going to fall into this trap, the Government will itself have to change course, especially in regard to the economy. One thing is for certain, things will not stand still and if, for instance, the speculation that Boris Johnson will resign as Prime Minister rather than allow any extension or compromise comes true, our calculations will have to change again.