Month: August 2017

Brexit: What the hell happens now – Errors and clarifications part three

Right, this is a major error. It’s basically about the role of financial services regulation in the EEA. Yeah, I know. Still your beating heart. Don’t let the excitement overcome you. But still, this is serious stuff. If we pursued soft Brexit, the absence of those rules in the EEA would stop our firms from enjoying passporting, which is one of the major reasons we might chose to pursue soft Brexit in the first place.

It’s by far the biggest I made in the book, taking up nearly a page of material. When I started realising that I’d made a mistake here, I wondered why no-one had pointed it out to me. After all, there have been plenty of ridiculously clever and well informed people emailing me about smaller matters in the book. And then I tried to work out what I’d got wrong and… no-one knew. Eventually I ended up on the phone with someone who had literally helped write the EEA agreement and even he was struggling. Reliable information about Efta is hard to get of. It’s a highly technical, out-of-the-way trading arrangement which is suddenly having a lot of attention thrown on it. There’s a real absence of experts who can authoritatively comment on it.

On page 69 I state that the EEA agreement doesn’t incorporate the three European supervisory agencies on banking, insurance and security markets. This is true, but dumb. It doesn’t incorporate any EU supervisory agency, because it makes its own. This was really sloppily written.

But more important is the central thrust of the argument – whether EU financial regulations have been filtered down to Efta. If they have, we could continue passporting in a soft Brexit. If not, we can’t. I thought they hadn’t. In reality,  EU financial services regulation put in place after the financial crash are currently being filtered through, so some haven’t and some have.

Efta is currently taking sections and figuring out how they would work for Norway, Iceland and Liechtenstein.

There’s quite a bit of political momentum to this now and it is likely to be complete by March 2019, which is the earliest Britain would be joining Efta if it decided to pursue soft Brexit, or a transition in the single market. But financial regulations are sensitive areas so there could be a snag. Either way – the plans are not currently in place, but they are set to be in place by the time we arrived, if we ever chose to do so.

I can’t even tell you how many calls I have had to make to find out about this. It is really hard to get firm information about financial services in Efta. Also, it has been deeply tedious. I am considering this a form of moral punishment for my error.

But the key take-away message is this: Britain’s financial services firms would probably be able to still use passporting if it stayed in the single market through the EEA, but there is a chance they could not. This, like so much else in the Brexit debate, would be outside of our control.

I’ll have a long piece on the practicalities of EEA membership up on later this week which should be able to go into this stuff in more detail.


My role in the great Brexit conspiracy

My favourite online conspiracy theory is that I personally helped secure Brexit and then turned against it so I could make money off a book deal. I like it because it attributes to me foresight, political influence and money, none of which I have.

This conspiracy theory is thrown around by Brexiters on the right and left pretty much equally, along with variations which are slightly less hyperbolic but along the same theme. I specifically didn’t write a piece responding to them because it’s all so profoundly silly. Also, I hate it when journalists start poking around their own belly button like there is something of consequence to find there.

But a couple of non-insane people have suggested recently that it might be interesting for me to talk about my views on this stuff – and anyway it’d be useful to put all those thoughts in one place rather than have them scattered around tweets and broadcasts. Be warned, though. A load of self-important twaddle about weighing up competing principles follows. 

The Twitter conspiracy theorists are certainly right about one thing: I consider myself a eurosceptic, even now. I find it quite revealing that someone would think this weakens, rather than strengthens, my opposition to Brexit.

I don’t criticise Brexit because I am passionately in love with Europe. I am actually very wary of it. I criticise Brexit because I find the EU vastly superior to the moral and strategic inadequacy of British reactionaries. The choice between EU membership and Ukip’s Britain is like a choice between a rainy day by the seaside or a hot date with Freddy Krueger. It’s not a difficult decision to make.

If you asked me to outline my ideal outcome right now, I would want Britain in the outer band of a Europe of concentric circles – whether that is outside the EU in Efta or inside the EU in some sort of associate membership. That seems to me the best solution for Britain’s arm-length emotional relationship with the continent but also the best for Europe. Macron and Merkel are consolidating the eurozone. That decision makes sense now, but if it turned out to be a disaster, they’d do well to have the insurance policy of a looser political arrangement to fall back on.

My euroscepticism is based on an instinctive concern about centralised power. This demands that wherever possible you try to localise decision-making, so that those who are impacted on by a power have a hand in formulating it.  I still think that is a decent principle upon which to think about constitutional issues.

But there’s another principle that I hold dear: freedom of movement. I do not accept that the state has the right to tell people where they are allowed to travel or live.

Free movement in Europe is a first step towards abolishing borders altogether. In, say, fifty years, or a hundred, it is not so hard to imagine great regional trading blocks covering each continent, with free movement within them. Eventually these great blocks could introduce free movement between them and the first steps towards a border-free world would have been taken.

Right now all of this is so idealistic it is little more than sci-fi. But from this vantage point you can see a future where anyone can travel wherever they want on this earth. That is a future worth fighting for. Moderate politics is often portrayed as being in love with the status quo. To me, moderate politics is about having radical ideals, but pursuing them incrementally to a realistic timetable.

For years I had hardly bothered myself about the contradictions between these two principles. It’s easy, I thought. You can leave the EU and stay in the single market. Leaving the former allows you to address the dangers of ever-closer-union. Staying in the latter means you preserve free movement.

But actually it’s a much more complicated thing than that. You’d never have guessed this, but it turns out that the more you read about something, the more nuanced your views become. Now, a year or so after Brexit, I have read more about the single market than any emotionally normal person should have to endure. It makes free movement work on the basis that it has meshed economies together and that demands more interference than I would have countenanced before.

The scales have tipped, in my mind, slightly towards the interference line, in order to preserve free movement. But this is a day-to-day thing, not some sweeping change. Not only do I still consider myself eurosceptic, I wish those who are committed to the European project were also more eurosceptic. If you’re legislating across a continent, you should legislate sparingly. More dialogue between sensible eurosceptics and sensible europhiles, as happens in some parts of the Remain movement, would be welcome (not that anyone in Europe is listening to us right now).

Have there been times in the past that I’ve clearly talked ignorant nonsense on the EU? Certainly there have been. I find this piece, which I wrote during the Greek crisis, particularly embarrassing, not least because many bits of it are wrong. I remember getting quite shouty about it on a Russian radio talk show too. Almost exactly a year later, during the Brexit campaign, my thinking was already more mature. This piece on comparative risk sees me shifting a bit, and I wrote on Brexit as the Trumpification of British politics around the same time. Ten days later, Nigel Farage would unveil his ‘breaking point’ poster and Jo Cox would be murdered in the street by a fascist. By then it was obvious how severe the danger of Brexit was, the kind of forces it had unleashed. It was clear that this thing had nothing to do with constitutional debate about the appropriate level of regulation and everything to do with a nation experiencing a grotesque reactionary spasm.

I expected to have to go down to the polling station and vote Remain with a heavy heart, but Farage and his allies made me proud to do it. When I discovered that these events had not been enough for the British public to kick back against the anti-immigrant lobby, it was heartbreaking.

More than anything, this is a question of priorities. No ideal matters more than protecting immigrants in Britain and ensuring that British liberalism and multiculturalism are not trampled on by reactionaries on the right and left.

Since the vote we have treated immigrants like dirt. The thug end of the spectrum has attacked and insulted them in the street. The civilised end of the spectrum has discussed them as things to be used, chips in a poker game with the EU. Journalists have rarely bothered to talk to them about how they feel or the ways in which Brexit has changed their lives. They are a problem to be fixed, at best. Even those who sympathise with them have been smeared as ‘citizens of nowhere’ or ‘anywhere people’. Now many are leaving and others simply refuse to come.

This is about what kind of a country we want to be. It’s about a country which is kind and open and tolerant, one with a sense of humour, one which does not demand everyone thinks the same way, which respects the individual, which plans cautiously, which is moderate in its politics and wary of those who speak in absolute terms. I miss that country very much. I would like to have it back. And there’s really no regulatory debate which can live up to that.

Thankfully I have this massive swimming pool full of cash in the basement which I made from selling books on trade policy, so I will now go take a plunge in there and it will undoubtedly make me feel better about the whole thing.