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MICHAEL WHITE: Shooting the UK’s Fox

International Trade Secretary Liam Fox leaves the cabinet meeting in 10 Downing Street, London. Photo: Isabel Infantes/PA Wire - Credit: PA

MICHAEL WHITE discusses how Brexit attitudes can be challenged but conclusions cannot be escaped.

The big Brexit surprise for me this week wasn’t that talks between Labour and the Conservatives broke down. Or that Theresa May again sidestepped Meaningful Ultimatum Four from the Keystone Coppers of the 1922 committee’s executive. She opted instead to come up with another of her doomed “new, bold offers” – this one with added Corbynism and a glimpse of the People’s Vote.

Nor was my surprise that Britain’s entry to the Eurovision Song Contest got slaughtered again. Why don’t these Europeans like us, eh? Or even that Jacob Rees-Mogg’s autobiography – ostensibly about 12 “Victorian titans who forged Britain” – was panned by Tory critics (“terrible, bad, boring and mind-bogglingly banal”) as well as by historians. Perhaps he thinks a dud book may boost his prestige with core Moggsters, but it reassures the rest of us that sounding like Lord Snooty is no guarantee of brains. Would Jake even have got into Oxford under the university’s new fairness rules?

No, my big Brexit surprise was that I listened to a half-decent speech from a leading advocate of Brexit. Don’t get alarmed. I haven’t lost my marbles and am voting Liberal Democrat on Thursday like many other Labour Remain voters and not a few Conservative ones either, Lord Heseltine. What a joy to hear rent-a-quote “sack Hezza” demands from pipsqueak MPs who are shamelessly playing footsie with the Faragistas. The Brexit Party poses a far greater threat to Tory survival than Vince Cable’s crew has done since David Lloyd George last outwitted them. But the zealots don’t care.

I’ll come back to that half-decent speech in a moment. But, rather than leave you in suspense, let me add that the event was at the high-end Institute for Government (IfG) think tank. When it finished a heartless young person, better informed on trade procedures than I am, dismissed the speaker’s vision as a “Potemkin” one. Grigory Potemkin was the dodgy Russian toff who built fake villages to impress Catherine the Great, with whom he’d enjoyed a knee-trembler. Don’t tell Nigel Farage, it will only give him more disreputable ideas.

Later that day I attended another seminar, this time on the other side of St James’s Park, at the rather swank HQ of the cross-party Resolution Foundation, which once housed the European Commission. Here the discussion about ‘Britain Beyond Brexit’ (the title of a new collection of essays, Wiley £12.99) was so far superior that not even the rogue Potemkin would have tried a scam. Farage’s chutzpah might have risked a quick rant against the assembled “experts” before he escaped across the road to the Two Chairmen. An alleged Corbyn activist throwing milkshakes at the Brexit leader in Newcastle was a very bad idea. It may only be milk, but milk can provide a slippery slope towards more serious assault and worse. Historically, the right tends to be better at violence. So when ChutzpahFarage dares complain about “radicalised Remainers” we can best reply that he has set the pace in radicalising the terms of a desirable Brexit far beyond the focus of 2016. Having stirred up votes over immigration, he has since moved on: “It’s now about democracy.” No, it isn’t Nigel, it’s still about YOU.

But the awkward fact is that Farage has taken millions of decent, frustrated people with him and looked set to win Britain’s strange European non-election almost from the off. Britain’s equivalent of Macron’s insurgent En Marche isn’t Change UK after all, it’s Farage (again) and his pantaloons jaunes, though he didn’t seem to wear them on his courtship tours of Labour’s northern weakholds.

“We should stick together,” counters Emily Thornberry, perched on the leadership’s wobbly fence. But her vote is splitting three ways. Polls report that only 13% of voters claim to understand Labour’s policy, about the same proportion (says YouGov) which thinks it is pro-Brexit. Twice as many Labour voters think it is neutral. Well done, Seumas and Len.

Not that the split Tories are doing better. The emergence on Tuesday of post-cabinet details from May’s latest wheeze – added protection for workers and the environment in the Withdrawal Agreement bill – never looked likely to change the political weather before the European elections, but the 10-point offer, its second referendum clause mutilated by a cabinet revolt, came in below expectation and was almost immediately rejected by almost everyone in sight.

With more than 20 Tory MPs who reluctantly backed Meaningful Vote Three – including Mogg and Johnson – rejecting it with fake theatrical horror, No.10 was not even back to square one, her 344-286 defeat on March 29. It’s worse. No “temporary customs union” to tide the economy over, no magic Irish backstop, Jeremy Corbyn was basically right to call it “a repackaged version of the old deal”. The end of May cannot long be delayed now, though she will be a caretaker while her party tries to find a different approach.

None of which will resolve two urgent and closely related questions which cannot be ducked after May finally departs the scene, her overriding sense of Brexit duty unfulfilled. One is the Tory leadership, a field so crowded with mediocrity at the starting line that it looks like a disastrous Grand National in the making. But party rules require one horse to limp home. Let’s paddock that problem for now, other than to note that the party activists and their media/online echo chamber seem determined to have Boris Johnson over the wishes of most Tory MPs (they know him) and those One Nation grandees, for whom Nick Soames is this week’s spokesman. Boris is reportedly courting the moderate centre. Don’t do it, Amber, he’s not safe in political taxis.

Will MPs do their duty and keep the shifty rascal off the shortlist? When I listened to a Tory panel talking Brexit in a West London pub this week, the mostly-Tory audience was cynically wary (“he’s unusually selfish”) of their former mayor. The panel was 2-1 in favour of Michael Gove, a serious policy wonk despite his reputation for treachery (“unfair”) and odd appearance. Was I encouraged? Not much.

I don’t see MPs having the courage to deny Johnson a finalist’s ticket (cries of “Betrayal!”), not least because they think he will see off both Farage and Jeremy Corbyn. That calculation is open to challenge in austerity Britain, where desperate voters grasp at the flimsiest straws. But English nationalists care as little about harsh choices as they seem to about Northern Ireland or the union with Scotland, where naked Johnsonism would be a provocation.

Perhaps Boris-the-closet-liberal’s historic mission in No.10 would be to betray his Brexit supporters, as he has betrayed everyone else, family, friends, colleagues, employers. He would do so after first persuading himself that the facts of Brexit options are, upon closer inspection, not quite what he previously persuaded himself and the 52% that they were: easy. Here is a vulnerable man who needs to be liked, a loner whose bluff is easily called, grown fat on a diet of soft options and unbuilt bridges.

Whoever succeeds May, Liam Fox inadvertently illustrated the scale of the next leader’s challenge in his session at the IfG. Yes, it was the international trade secretary’s speech which unexpectedly impressed me. I have followed him for years, notably as shadow health spokesman, where he betrayed the same naïve weakness for grass-is-greener free market policies that was on display here.

To my surprise he is the sole survivor of May’s three 2016 Brexit Musketeers in cabinet, still loyal to her deal, though clearly keen to opt for the no-deal pick if it fails. He’s still voting Tory. At the IfG Fox sensibly dodged headline-making questions about predatory Trumpism (whose side would he be on?) and possible resignations. The ex-GP sounded personally in better shape too, like a fiftysomething who has given up drink or taken up jogging.

But what pleased me was his positive emphasis on how he has built up a department from scratch – three staff to 4,000 – and created a global network of staff rapidly acquiring trade skills which Britain surrendered to the EU 45 years ago. Policy is regionally devolved but everyone kept in touch. Job applications to the DIT are so numerous that the Treasury says there is no need for its officials to get pay rises. A real joker, that Phil Hammond!

Given that he can’t actually negotiate his beloved free trade agreements (FTAs) yet, only prepare for them, Fox makes a virtue out of the fact that only 20% of his department’s work is on trade. The bulk concerns investment promotion (the UK is Europe’s number one destination of foreign direct investment, and global number three, he told us) and export promotion. Too many British firms – 400,000 of them – that could export just don’t bother. The government’s export credit machinery is there to help. It’s building a modern database and much else. Good.

Three things struck me out of that. One, that most of this work could have been done from inside the EU. One FoxFact is that the UK exports 31% of GDP, but Germany manages to export 47%, or did before China retrenched. And foreign investment is sometimes a euphemism for exploitative takeover at bargain prices – think Cadburys. Secondly, the terms of trade between the big blocs are changing.

A passionate Atlanticist, Fox is careful not to take sides in the US trade battle with China and cautiously endorses a rules-based WTO system, while sympathising with Donald Trump’s complaints about Chinese dumping, intellectual theft and other cheating. Good luck with that one, Liam. Let’s hope the UK’s excellent supply chain products don’t get squeezed too hard between Asia Factory, Europe Factory and North America Factory in the coming decades. The expert contributors to Britain Beyond Brexit at the Resolution Foundation session fear they will.

Last but not least, the minister’s remarks sounded quite state-ist for a free market enthusiast. He seemed to recognise the constraints that bind all trading nation’s sovereignty to the need for high standards – animal welfare and (“case by case”) human rights too – as well as close, frictionless alignment on technical regulations with Europe. Nor was Fox persuasive that lost markets among the next-door neighbours can easily be replaced. He said little about the City’s export industry, financial services, except to point out that at £18.8 billion it is worth less to the economy than education (£19 billion) – with whisky and defence each below £6 billion. They all rely on sensible government support and tax regimes.

As we left, my bright young companion dismissed Fox as out of his depth, his team of officials a mere “Potemkin department”. It knows its biggest declared prize – a US/UK trade deal – is impossible because Washington wants market access to health and agriculture, which incompatible standards render impossible to concede. Of course, Brexit Britain could adjust its version of democratic capitalism away from 45 years of semi-integration with the EU’s Rhineland model, towards the harsher world of low regulation, minimal welfare America or (laughably) Singapore. In theory.

It’s what some of the Britain Beyond Brexit crowd fear. Most people agree that 40 years after the Thatcher revolution, the British economic and social model is too skewed towards big capitalism and the rich – even some of the Tories I listened to in that prosperous West London pub. They have kids too and are all too aware that Corbynomics have some appeal to young voters when Conservative policies and people are such an incompetent mess.

Will Brexit generate a radical, transformation to a fairer society? Or will it stagger on towards what Vince Cable once called “More of the same, but worse” – a country economically and regionally divided, a consumption-driven economy with over-priced housing, low productivity and squeezed public services? Loss of jobs, output and tax revenues would certainly be a drag on reform.

FT pundit Martin Sandbu, one of the Resolution speakers, cites the threatened car industry as a force for economic inclusion and good manufacturing jobs far from London. But they are “not so much good British jobs as good European jobs located in Britain”, which exports almost as many cars as it imports, mostly to you-know-where. They are obviously at risk.

Even more alarming was Cambridge professor Diane Coyle, who specialises in the economics of digital technologies. Along with genomics – the branch of molecular biology concerned with the mapping of genomes – it is at the forefront of the biggest and fastest ever transformation of life as we know it, she explained. Technical standards, competition policy (the EU Commission has done well), access to large capitals sums, the advantages of scale arising from the networking effect, all reinforce the growing dominance of China and the US, the underlying cause of Huawei’s exclusion from key US markets.

It does not bode well for Britain’s techies, as some of my friends in the hitherto dynamic industry keep telling me. The current uproar over Huawei, which has political and cultural overtones – rival censorships too – symbolises the wider risks of what Coyle called “digital Balkanisation”, after 25 years of digital globalisation. But in Britain’s case “we are doing it to ourselves”.

That’s the recurring paradox of Brexit. In the name of Global Britain the country is poised to cut itself off from markets, standards and capital except on terms dictated by others who do no more than sentimentally wish us well – and drive hard bargains in increasingly nationalistic times. Fox’s vision acknowledges only uneasy glimpses of the big picture out there, Boris Johnson’s thoughtless chauvinism even less.

Co-funded by some dark money which the Electoral Commission is finally examining far too late, the hard Brexit lobby knows what it wants: deregulation, more competition and a smaller state. As Boris-backer, David Campbell-Bannerman, the Tory-to-UKIP-to-Tory-again MEP, put it in that West London pub, Brexit Britain could abolish VAT and landfill taxes. “I’m not saying we will get rid of them, but we will have the right to get rid of them.”

But as a sceptic countered from the floor: “Sunderland didn’t vote Leave for that.” Three years on, what exactly does Sunderland think it is voting for this week?

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