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How Philip Hammond became the prisoner of Brexit

Michael White on the silencing of the Chancellor - Credit: Archant

If you locked Fox and Hammond in a room which of the two would you expect to emerge as the other one’s pigskin bag?

This week’s big news so far is not that the US and North Korea are still at peace at the time of writing.

Nor even that Philip Hammond and Liam Fox, managed to co-author a newspaper article without resorting to their own version of ‘fire and fury’.

It is that both the Daily Mail and the Sun should so hastily have declared Brexit victory on the strength of the two ex-defence secretaries anodyne essay.

‘Operation Brexitise Hammond’ has been achieved, confirmed the more cerebral ConservativeHome website.

This triumphalist phase lasted barely 24 hours, until the media was briefed in slightly greater detail on what ministers are actually proposing in the first of this week’s Brexit position papers. But while the ‘triumph’ did last the cheerleaders also ramped up the shaky claim that most Remain voters are now keen on a Hard Brexit too.

That was the key finding of an LSE survey, the one that got a lot of attention after interviewing 3,293 people in a super-scientific way. At least, the Brexit SWAT Squad in Fleet St said it was, which is not necessarily the case – a point illustrated by the rapid collapse of Camp Brexit’s proclaimed triumph in the Hammond-Fox Non-Aggression Pact. We’ll come back to the LSE survey.

But the pact’s timing was pretty good for August. The ‘cabinet unity’ article appeared in the Sunday Telegraph (bottom of page four) on the very day that David Miliband – the nearest thing Labour Remainers have to a king over the water – wrote a snappier polemic for the Observer (most of page six). He used it to warn against enacting this ‘unparalleled act of economic self-harm’ without a second referendum on whatever deal with Brussels Theresa May’s government delivers – or doesn’t. Constitutional guru, Professor Vernon Bogdanor, threw his weight behind the campaign too: the only way to resolve the impending impasse in parliament, he said.

Miliband also grudgingly praised Hammond’s ‘valiant role’ in defending a soft Brexit against the barbarian hordes. That prompted a sharp reply. How out of touch with the new Brexit Phil can the man be? Miliband’s case for Britain staying inside a two-speed Europe was dismissed as the pompous witterings of a walking, £460,000 a year embodiment of ‘the entitled self-righteous elite’. This from the Daily Mail, whose permanently self-righteous editor-in-chief could stay in bed all day from Wednesday to Sunday for Miliband’s ‘chickenfeed’ (copyright B Johnson) level of salary. The cabinet is finally united behind its leader in rejecting ‘back door’ limbo half in, half out of the EU, the Mail proclaimed. This ‘seminal moment’ could presage a great Conservative revival as well as fatally divide Labour etc, etc. Well, yes, perhaps it could. There again …

I’ve known enough Mail leader writers down the years to know that some of them actually believe this bombastic guff, though former political editor, James Chapman, is more typical of escapees: after a brief stint in Whitehall he’s gone rogue against Brexit. So just to be on the safe side the paper also wheeled up one of its more reputable big bazookas. Columnist Dominic Lawson duly pronounced that Hammond, accused only weeks ago of being a ‘traitor’, is now safely on board HMS Brexit. The ‘Remoaners’ last best hope had abandoned them. In the Guardian the saintly Vince Cable helpfully agreed, so did the paper’s Brexit pundit.

But was it true? Plenty of my Remain friends promptly donned their black armbands and said it was. ‘Hammond’s getting No 10 in return for a Hard Brexit,’ was one improbable gloss. But the Times and FT (pause for Brexit hisses) wrote more circumspectly on Monday of a cabinet ‘show of unity’ as Mrs May returned from her walking holiday inside the Schengen area: emphasis on the word ‘show’. Having seen plenty of papering-over-EU-cracks stories cooked up in the No 10 press office for easy media consumption, I was unconvinced anything ‘seminal’ happened here at all.

Sure enough by Tuesday The Times was reporting that ‘Mr Hammond has the upper hand’ in seeking to secure current customs arrangements for up to three years – via a ‘temporary customs union’ that will ease business’ alarm about supply lines, for goods and services, parts and raw materials, even food. The FT reported a ‘victory for Hammond.’ That’s not surprising, is it? If you locked Fox and Hammond in a room which of the two would you expect to emerge as the other one’s pigskin bag?

Inasmuch as compromises were flagged up, were they significant and made by who? Or did we know most of it before? Do they matter anyway if Brussels says No? The Treasury, always the Whitehall party-pooper, favours a glide path transition from EU membership after March 29 2019, not a Road Runner exit straight over that economic cliff that Dominic’s ex-chancellor dad assures us isn’t there. After faffing about this summer we now know that international trade secretary Fox accepts there will be ‘a limited interim period’ when unspecified transitional arrangements will exist – if the EU27 agrees to all this, highly unlikely.

‘But it cannot be indefinite, it cannot be a back door to staying in the EU,’ wrote Hammond and Fox’s draftsman, let’s call him Foxmond. ‘And in must ensure a smooth and predictable pathway for businesses and citizens alike. We are both clear that during this period the UK will be outside the single market and outside the customs union – and will be a ‘third country’ and not party to the EU treaties.’

Well, that’s clear enough. Or is it? Hammond never said he wanted the UK to remain in transition ‘indefinitely’ or to stay in the EU by ‘the back door’ – though others may have done. So there’s no triumph there. The article makes no firm statement on how long the transition may last, though officials are apparently saying it will have ended by the time of the 2020 general election, which is to say a maximum of three years. On Tuesday’s tour of the studios David Davis said ‘most likely two years,’ but he also said the negotiations with Team Barnier are ‘going incredibly well,’ so we must offset his perma-optimism with a salt rinse.

Oh yes, we might also have to pay for temporary access, the DExEU secretary added. He’s offering two models for a temporary deal. Let’s skip the details until there are signs of interest. No wonder Tuesday’s Mail editorial sounded less certain. Even allowing for Davis’s ‘constructive ambiguity’ – a kind word for chaos – this is going to be messy. Best for the Mail to claim victory early and go home. Nigel Farage can always be relied on to cry ‘betrayal’ again. ‘90% of the UK economy is not involved in exporting goods to the EU,’ he assured Radio 4 listeners. Ignorant? Cynical? Both.

Transition talk sounds like a concession from Fox, though he can tell his pals that Britain – as a ‘third country’ outside the EU – will be free to negotiate (and even to sign?) all those free trade agreements with the economically dynamic Rest of the World during that period, though not to implement them. We’ll see how that works out. Friends who talk to officials in Brussels tell me it will be seen as more cake-and-eat-it fantasy. The 27 won’t have it.

It still suggests that ministers are edging painfully towards more realistic positions, albeit too slowly, and that their hopes remain wildly over-optimistic in terms of what the EU27 will concede. Will the election of Emmanuel Macron as French king and the upsurge in Eurozone economies permit greater generosity towards the departing Brits, as Davis seems to think?

There is certainly less talk of a Brexit domino effect, which was mostly fanciful anyway. It is the Brits who have created this problem, yet the May government expects its divorcing partners to inconvenience themselves at great expense – new customs measures, lorry ports next to the ‘Jungle’ at Calais, non-ECJ arbitration and much else. Why should they? As Bogdonor wrote this week when you leave the tennis club but still want to play tennis there, your ‘leverage is not strong’. Yes, they will suffer from a Hard Brexit, but we will suffer more. Even the Brexit camp now admits that, if only for the short term.

In a parallel skirmish this week, senior civil servants – cabinet secretary, Sir Jeremy Heywood (‘Sir Cover-Up’ in Mail speak) and DExEU’s Olly Robbins – were criticised in print for speeding up decisions on the new position papers during the summer weeks. Why? To avoid all but minimal ministerial scrutiny on work which should have been done last year, say anonymous sources. The Sun was briefed that ‘Treasury bean counters’ – Rupert Murdoch’s own ‘bean counters’ shop their reporters to the police – are running ‘Remain Central’. Much more likely an explanation is that civil servants can see the clock ticking and are filling the vacuum left by political indecision and infighting. The Sir Humphrys accept we are going to leave the EU, their job is to make the best of it, their unheroic post-imperial mission since 1945.

Meanwhile the City and big business are preparing for what is increasingly expected to be a ‘disorderly Brexit’. Unless things are clearer by the autumn more and more companies will have to take precautionary steps to allow them to continue trading across Europe – and to do so legally. When one acquaintance explained to a minister why his firm is opening new offices inside the EU27 he was told he was a ‘traitor’. No, said my pal, what we are doing is protecting our continuing ability to do business without breaking the law.

No wonder big firms keep their heads down and leave the mouthy stuff to the wide boys (Yes, I mean you Arron Banks). Faced with having to abandon cherished ideological preconceptions in the face of unavoidable facts of life too many ministers still stick their fingers in their ears. Newspaper pundits too – though much business and financial commentary in the Brexit press is only pro-Brexit in the headline and opening paragraph. These are the bits Rupert or the Telegraph’s Barclay Brothers, Dave and Fred, may bother to read.

But what about those polls? I feel about polls in general much as I do about the weather forecast. I listen with half an ear and then make up my own mind whereas my dear wife often says in bright sunshine: ‘But it’s meant to be raining now.’ I rarely get caught in the rain, but I was caught in the Corbyn heatwave on June 8, didn’t see his 40% vote share coming, my worst election prediction in decades. He still lost, of course. I did get that bit right.

Brexit polling isn’t like election polling and a glance at recent attempts to make sense of what voters want from the 2016 referendum show why: the options and trade-offs are too complex to provide coherent answers.

Thus in July Ipsos Mori found that 63% of voters regard control of immigration as important or essential to the eventual deal (cries of ‘what deal?’); whereas 45% regard access to the single market in the same light, as do 46% in regard to no further budget contributions. Almost as many (39%) see a transitional arrangement on the single market as pretty important too. Got that, have you? Strange to say, the pollster also found in July that the challenges facing the NHS (‘where’s that £350m a week, Boris?’) are 50% of voters first concern, Brexit only that of 41%. Both have slipped 10% in a matter of weeks.

Does YouGov offer a clearer picture? Of course not. In the wake of the June election it reported that 70% of voters believe the country should proceed with Brexit, including 26% who voted Remain but accept the referendum outcome. Some 21% voted Remain and want the government to drop Brexit (7%) or hold another referendum (17%). Most were gloomier than before about getting a bad deal. Add the pro-Remain voters (35%) to the soft Brexit camp (19%) and they outstrip the 45% who favour a limited deal or no deal at all.

So what about the London School of Economics (LSE) and Oxford survey? Its ambitious effort to tap into voter views on eight strands of the negotiation – from immigration controls to the Irish border – asked them to respond to bundles of ‘conjoined’ outcomes ranging from Hard Brexit to the Soft one which retained market/customs access. The results allowed Brexiteers like Dominic Lawson to claim that 51.3% of Remain voters favour an outcome that delivers ‘full control’ over immigration, even more (54.7%) that the UK should pay no divorce bill. Ditto (52.2%) leaving the jurisdiction of the ECJ.

Yet what the researchers themselves say – you can read it on the LSE website – is that Remain voters favour a softer approach on most issues and that on most issues most respondents on both sides of the Brexit Gulf do not regard them as so important as to be beyond compromise. ‘Both Leave and Remain voters are willing to make trade-offs. Indeed they appear to be almost completely indifferent to some aspects of the negotiation, such as the status of the (Irish) border and the timetable for agreeing any deal … Ultimately many citizens are indifferent about many aspects of Brexit.’

Is that surprising? No. Voters are busy, they do not understand the complexity. I am tempted to say some may be too busy picking drunken fights on Ryanair flights home from the Mediterranean or making false claims for food poisoning at hotels whose meals miraculously spare Dutch and Swedish guests. That is an unfair generalisation. Suffice to say that our EU partners have extra grievances against selfishly, over entitled British misbehaviour in the summer season.

But complexity is why a referendum on Brexit was such a shabby and dishonest option for David Cameron (and Harold Wilson in 1975) to deploy. The irresponsible dishonesty of the leadership class goes deeper. In Monday’s Times, Matt Ridley, polymath columnist and aristocratic landowner, wrote an upbeat Brexit column, selectively citing good economic news (there always is some). He also invoked YouGov’s recent finding that one in five Remain voters would regard ‘significant damage to the British economy’ after Brexit as a price worth paying to teach Leave voters a lesson.

Actually the figures are even more polarised. One in three (34%) would accept ‘significant damage’ as worth paying to stay inside the EU, 18% if it meant a family member losing their job. But the figures on the Leave side – unreported by Viscount Ridley in his attack on ‘spiteful’ Remainers – is far higher. In what YouGov calls ‘Brexit Extremism’ some 61% would accept ‘significant damage’ as a worthwhile price for Brexit, though the figures drops to 39% if a family member were to suffer. No, the Brexit tabloids did not report that cake-and-not-eat-it finding either. Nor the LSE’s ‘willingness to compromise’ finding. They prefer to pretend that minister Fox has triumphed over minister Hammond when both have trimmed previous positions.

This is all depressing stuff, shocking even, not unlike the polarisation that has divided America in the week of the race confrontation in Charlottesville, Virginia, where Thomas Jefferson once championed religious tolerance and (posthumously) freed his own slaves, events Donald Trump knows nothing of and cares less.

Accordingly to the impact assessment on Brexit’s effect on the UK economy, belated produced by Whitehall officials, the impact on most, if not all, sectors is negative. Poorer Brexit voters are in line to suffer first. Yet the assessment has not been published so that those who paid for it – you and me – can make up their own minds. Where is the Freedom of Information Squad when we need it?

Vernon Bogdanor argues that parliament and the major parties are split by Brexit and cannot achieve a parliamentary majority in either chamber for a weak May deal. Voters will have to be asked again to decide because parliament and government cannot do the job they are paid to do: govern. The InFacts campaign’s chairman, Hugo Dixon, argues that Remain voters must get real and stop trying to mitigate the coming disaster with a softer version of it. Daily Mail and DExEU renegade, James Chapman, is on the rampage, urging Remainers to back a new party, the Democrats, initially by turning out for a Trafalgar Square rally on September 9. He wants civil servants to resign rather than remain complicit in ministers ‘misconduct in public office’. Crowdfunding for a private prosecution on Boris Johnson is under way.

Do not imagine the ‘Crush the Saboteurs’ lobby on the other side is not engaged in equally lurid fantasies which are more likely to be inflamed by emerging economic difficulties (‘find the traitors’) than subdued. Just listen to Farage, a relatively harmless demagogue. To mitigate such dangerous and divisive anger is the task facing May, Davis, Michel Barnier and election-focussed Angela Merkel.

This is not like Pascal’s famous wager. When the French theologian said his belief in God’s was rational he explained that if he was wrong about the afterlife he’d never know. Even elderly Brexit voters will be around long enough to find out if their misplaced nostalgia for a better past is really worth YouGov’s ‘significant harm’.

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