Thursday 7 July 2016

Leavers haven't thought Brexit through - and it shows

Most of you at some point recently have filled a shopping trolley with goods from all around the planet. You see brands you recognise and use regularly and you put them in your trolley without a second thought. You do so in the full expectation that it will not kill you. Society would look very different indeed were there not that base level of consumer confidence. Think about it. Think hard about it. Looks totally different doesn't it? We also make our purchases in the full execution that we may return goods without confrontation or challenge. That is what makes life easy and a good deal more pleasant.

Behind this is a whole universe of regulation, standardisation and inspection. It is connected to policing systems and surveillance systems to ensure dangerous, poisonous or fraudulent goods are kept out of the system. Your health is safeguarded and so is the intellectual property of brand owners. People trading on your brand with bad produce diminishes your business. So we expect and demand from both ends that our rights are upheld.

There are inspections at the local, national and international level with monitoring of every stage of the supply chain. Legions of bureaucrats work day and night to ensure the supply chain is not corrupted or interfered with. We see ever more stringent regulation to ensure those seeking to subvert or corrupt the system cannot. We are increasingly removing opportunities for bribes, theft and substitution. We also look to make these supply chains more cost effective and safer for the people who work with in it. Workers are at risk from hazards in the workplace all the way through to piracy.

None of this functions without policing, testing, documenting and regulating. Some of this is done internally in conjunction with standards bodies and insurers, some is carried out by government. And this stuff is seriously expensive. We do it because expensive though it may be, it is cheaper than the alternatives.

And it works too. The last egregious example of food fraud was the horsemeat scandal. While that is a systemic failure it is the exception rather than the rule. We hear so little of it these days for a good reason. We're good at it.

Now the main business of international trade politics is less concerned with tariffs. They are not easy things to remove. Governments like them because they are instruments of social policy. That is why the tariff removal mission of the WTO has stalled. Tariffs are now inconsequential when compared with the cost of regulatory compliance. And so the main drive of the WTO is now regulatory harmonisation and mutual recognition of qualifications for inspection.

Every effort is being made at the international level to bring about standards on everything from a jar of anchovies to televisions. Every effort is made to take forms and inspections out of the supply chain, to remove red tape and speed up shipping. And in so doing we are now looking at those bottlenecks where decaying infrastructure like roads, airports, ports and bridges create delays and opportunities for hijacks and intercepts.

This is now at the very heart of trade talks. That is why we have seen such a poverty of debate surrounding Brexit where certain individuals believe Brexit is as simple as sorting out a free trade agreement. It isn't. These days when talking about trade, if you are not talking about regulation then you are not talking about trade. And with this freedom of movement of goods must go the free movement of people otherwise you can expect more red tape and more expensive goods. That's right. Immigration is a major aspect of free trade. How can one sell goods and services without the people that make it happen?

And so when I read the blissfully ignorant demands for simple free trade deals, dispensing with technocrats in favour of idealists, I become instantly suspicious. I'm all for idealists if they actually live on planet earth with an appreciation for reality, but the witless naivety that says we can sweep away forty years of EU integration by banging on the table and making impossible demands should be treated with contempt.

Our government has a mandate to leave the EU. Perhaps inside that mandate is a rejection of EU technocracy and a desire to take back control, but we really do need to ask what we want to take control over and why. Messing around with systems for the sake of it to no political or logistical advantage is pointless. We may all rage at "red tape" but we would be quite lost without it.

Moreover, politicians have not been given a mandate to wreck the economy without justification and without an alternative model. And we won't have seen any alternative models because an appreciation of all this has not even landed between the ears of most politicians - or indeed the public.

So yes, Brexit will require than the men in suits with degrees who know about this stuff get together and work out how we do this without shooting ourselves in the foot and how we take back control in a meaningful way to our advantage. In many respects there are no particular advantages to "taking back control". It leads to duplication of research and putting in controls where no control is required or necessary. So yes, we do have to hammer out an agreement as to what should stay in place, how much we pay for it and who regulates it and on what basis.

And in this it means we cannot deliver on what the leave campaign have promised. We won't be having a bonfire of regulations, we won't be spending much less on international cooperation and it is difficult to see where restricting freedom of movement adds any value. At best it just means more automation of low skilled work, requiring highly skilled technicians. Those jobs are not going to go to the impoverished and disenfranchised peoples of Hull, Sunderland and Stoke on Trent. So what have we solved by leaving the EU? Superficially, not very much.

What it does do is give us room to innovate and space to reinvent but in and of itself, leaving the EU solves nothing at all. What replaces it is what matters. In this we are not going to see any material changes to supply chains or employment distribution and we are certainly not going to see any major shifts unless we look at our industrial policy and look at delondonising the economy. That is where we will need some radical thinking. We will need to decide how we bring the rest of the country back into the main economy.

But that is for later. Right now we have a tangled mess to unpick. We do not have the luxury of hacking at it with an axe. We have to do this slowly and carefully and with patience and skill. There is no use at all in repeating empty mantras about deregulation and spending more on the NHS. None of this relates to reality.

And in part we have a bit of a dilemma here. What matters more? Taking back control or ensuring things still work? If it's both then we need a coherent idea of what we want and a plan to get it - and given the marginal differences it will actually make you'd better have something in mind that makes it worth the trouble. This is why we don't want Andrea Leadsom as PM and this is why we need a lot fewer moronic articles from the Spectator. As to invoking Article 50 now, well, good luck with that. You might want to give it a little more thought before you do.

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