MICHAEL WHITE: What has Liam Fox got to show for his 290,000 Air Miles?
PUBLISHED: 00:01 02 March 2018
The Trade Secretary who travelled all that way for a packet of crisps.
Even if you were one of the unlucky ones caught in a British blizzard, the real “beast from the east” this week was President Xi Jinping’s manoeuvre to secure himself as President-for-Life over the mighty market-Stalinist economy of China.
That puts our post-Brexit quadrille with the EU’s customs union in perspective, doesn’t it? It overshadows Game of Thrones intrigue to succeed Iain McNichol or install the communist, Andrew Murray, in Jeremy Corbyn’s filing cabinet.
Even Martin “Juncker’s Brain” Selmayr’s Momentum-style coup to succeed the European Commission’s departing secretary general (the vacancy lasted several minutes) pales into relative insignificance, at least for now.
More than all that, Xi’s bold imperial restoration serves as a timely reminder that blithe predictions by Ronald Reagan and Margaret Thatcher, often echoed by their successors around the West, that capitalism, free trade and democracy march effortlessly in lock-step were just that. Even at the time that sounded as optimistic as a Reagan budget.
Xi’s tightening grip on political power – economic centralisation in the name of “anti-corruption” too – decisively halts a trend launched by Chairman Deng’s post-Mao reforms in the 1980s. Rare for China, usually so much more sophisticated than Russia, it apes the authoritarian model of nationalism pioneered by Vladimir Putin. It would be a boost to battered US global leadership if the White House pointed this out. For obvious reasons that’s unlikely.
Yet this ominous development in world affairs came as Liam Fox – who himself advocated a customs union in 2012 – attacked British business (again) for endorsing a Labour “sell-out of Britain’s national interest” by supporting some as yet vague form of customs union with the EU market across the Channel, thereby preventing him from seizing the greater trading opportunities he swears exist across the booming Pacific. Not that EU rules currently hold us back.
Despite the extension of last Friday’s cabinet’s Chequers Truce and the economic trouncing which Greg Clark unexpectedly inflicted on him there, Boris Johnson burbles along similar lines about Labour’s shamelessly political U-turn as if he was not himself the master of that dance step. The foreign secretary manages to sound as irrelevant on Brexit as he does on Myanmar or the Assad regime’s bloody siege of eastern Ghouta.
In real life, counters Fox’s former senior official at the department of international trade, mild-but-mischievous Martin Donnelly, the boss’s “fairy story” formula amounts to “giving up a three-course dinner for the promise of a packet of crisps.” Talk about a crisply-shot fox. Thank goodness Sir Martin already has his retirement K.
Not content with casually spraying around charges of “betrayal” Air Miles Liam – he has clocked up 290,000 with little to show for them so far – repeatedly argues that damage to the UK’s £553 billion trading relationship with the EU27, more than three times US/UK trade, can easily be replaced in fast expanding parts of an Asia-centric world. Sluggish British businessmen will just have to play less golf, as our Maoist trade secretary once tactfully told them.
But earnest letters to weightier newspapers constantly show that he is not alone in the “no deal better than a bad deal” free trade/WTO lobby. In his Times science column this week Viscount “Matt” Ridley cheerfully argues that it was free trade that made Victorian Britain the global economic giant it briefly became after the traumatic repeal of the protectionist corn laws (the Tories split for 20 years) in 1846. It also gave the poor cheaper food.
Up to a point, Lord Ridley. From the mid-17th Century Britain had built its global commercial dominance by a mixture of economic protectionism and imperialism, sustained by naval power, as Germany and the US would later do in turn. But in 1846 Britain was the world’s greatest manufacturer and could afford the purity of John Bright’s free trade doctrines. Poor consumers had jobs with which to buy cheaper imported food. UK agriculture and its ill-paid worker/producers languished.
In any case, by the 1870s newer industries – steel, chemicals, oil – were being dominated by Britain’s emerging rivals behind their tariff walls. Within 50 years protectionism was again splitting Westminster parties. Does Jeremy Corbyn know or care about any of this? Almost certainly not. His mind functions on simple templates, capitalism, imperialism (bad), socialism, liberation, (good), hard choices (to be avoided), opposing opinions (ditto).
Some of those listening to his Coventry “customs union” speech – he posed next to a driverless car – sensed the Labour leader was reading it for the first time, and not very well either. That is a little unfair. Corbyn had clearly been coaxed in this direction by a combination of factors: by Keir Starmer, his patient Brexit spokesman, and by John McDonnell, who gets the economics better than Jeremy; by the majority of Labour MPs who believe in as close an economic alignment with the EU27 as is politically possible; even by big business which is still on tenterhooks over the eventual Brexit deal.
What a malfunctioning world we live in when the CBI feels happier with a quasi-Marxoid Labour leader, one who threatens them with higher taxes to fund batty renationalisations and much else, than with a supposedly pro-market Tory government which is trying to cap fuel bills and flaying hopelessly in most directions. Michael Gove’s farm subsidy plans may be the exception to prove the rule. It does not stop Lloyds Bank boss, the £6.4m-a-year Antonio Horta Osorio, making flattering noises about Corbyn’s commitment to “the real economy”.
Bankers, the CBI and hyper-ventilating media were right on this occasion to welcome the Labour leader’s speech - as cliché ridden and escapist as most “major” political speeches nowadays - as a significant development after 20 months of opportunist dither since the referendum. The Mail certainly thought it worthy of page one “betrayal” treatment for the second successive week, undeterred by polling evidence that its bogus, OTT campaign against Agent COB, the former Czech tea-drinker, has done Jez no harm among the ignorant young.
Will his customs union “betrayal” do him harm among Labour’s sizeable minority of Labour voters, especially in struggling constituencies which voted Brexit in Wales, the North and Midlands for sovereignty, border control and no Brussels laws? Brexit’s Frank Field MP and his allies eagerly predict it.
To judge from his own emphasis on protecting jobs, standards and regulation, Corbyn fears they might be right. He also plans to “insist” on EU rules not getting in the way of his vision for socialism in one country and the NHS. Yet on the most toxic of all Brexit passions – immigration – he stuck to the Diane Abbott and metro-liberal line that migrants should always be seen as positive except when wicked bosses underpay them. It works in Islington, but will it work in Immingham?
So Labour’s immigration policy sensibly remains fuzzy. But the core message brings two challenges into sharp focus. A version of the customs union would solve the acute problem of the Irish border which London and Belfast have promised not to restore, but the EU must do if it is to retain the integrity of its single market and tariff regime.
To pretend this is not a problem of Britain’s own making, or to suggest, as former Ulster secretary, Owen Paterson, did that the 1998 Good Friday Agreement (GFA) may have outlived its usefulness, is both dishonest and irresponsible. As a self-styled peacemaker, Corbyn is politically sensitive to Irish questions, though neither he nor – in her speech this Friday – Theresa May can yet explain why there need be no border down the Irish Sea either. Hell-bent on flippancy, her foreign secretary likens the Irish border to congestion charge transactions between the London boroughs of Westminster and Camden.
Brussels’ own draft of the legal treaty which will “operationalise” Brexit in EU law has no such inhibition. Its three border models – Options A, B and C – apparently omit May’s December phrase about “no new regulatory barriers” between mainland Britain and the six counties. If they are to square the circle, the high tech remedy promoted by Whitehall (Option B) had better be as good as the Sweden/Norway AI expert boasted it could be to the Sunday Telegraph.
Michael Barnier’s clock is ticking away and the Irish have a veto on the outcome. So do the Spanish, who have been flagging up renewed interest in establishing joint authority over Gibraltar airport as part of the final settlement: tobacco smuggling is an irritant for Madrid. If that wasn’t enough to further ruffle British feathers the Irish Taoiseach, Leo Varadkar, cheekily urged Sinn Fein’s seven Westminster MPs to end their historic boycott of the UK parliament (though not its hard cash expenses) by taking their seats to vote for the customs union.
Don’t hold your breath, the Shinners are as introverted as the rest of us. But it takes us to the more important consequence arising from Corbyn’s speech: the much-debated prospect that a combination of Labour, Lib Dem, assorted nationalist (including SNP) MPs and pro-EU Tories can defeat May on the customs union issue, either in the trade bill or the final stages of the EU (Withdrawal) Bill, now in the truculent House of Lords.
It’s tricky, after all there are pro-Brexit Labour MPs in the calculation too and lots of arm-twisting taking place both ways. But the threat is more real than most speculation about parliamentary defeats and opens the possibility that May will lose and with it the authority to govern. That opens the road to a general election and the prospect that exasperated or disaffected voters will “give Jeremy a chance” to do better. He now seems persuaded he has a real chance – and is rash enough to want one.
Will that happen? Nothing is certain in these strange times: President Trump boasted this week that he would have tackled the Florida school gunman unarmed, despite the heel bone spur that prevented him fighting in Vietnam. Personally, I stick to my guns, as metaphorical as Trump’s. Pace Tony Blair’s appeal for a second referendum on the outcome, I don’t think there will be one. Nor an early election. May will survive as PM. She may be the hologram butt of Matthew Parris’ cruel joke, but she is a hologram who survives. Corbyn is her unconcealed weapon.
So some colleagues are urging her to make the customs union issue a de facto vote of confidence in her government, much as John Major did when cornered by his “bastards” over his excellent Maastricht Treaty compromise in 1993. Ignore expert waffle about the Fixed Term Parliaments Act. The move would be justified by the 2017 Tory manifesto pledge to take Britain out of both the EU’s external customs regime – rightly called protectionist by naïve critics – and its internal regulatory regime known as the single market.
Of course, May lost her hard Brexit mandate the 2017 election, but let’s not quibble. Faced with the prospect of a Corbyn government, even more ideologically hidebound and incompetent than her own, May may be able to bully enough Tory rebels back into line, though her inexperienced whips office have annoyed some who should be stroked: it comes from watching too much House of Cards in their teens.
Ken Clarke and Anna Soubry won’t be bullied. Others will. Twelve Tories defied the whip over last year’s “meaningful say” vote. With Sinn Fein out of the equation, that sort of number (14?) would be needed again. May could offer her own resignation – not her government’s – as a variant of the threat. Tempting, but both Tory camps fear something worse.
More subtle surely will be for her to delay the votes in the hope that something will turn up. She has already shown flexibility on the divorce bill, the EU court and – most recently – the residency rights of EU migrants during the transition. The Moggsters have acquiesced and repainted their red lines elsewhere. Might some form of resolution emerge that No 10 can sell to MPs, to ageing party activists with painful knees and to Brexit-weary voters on both sides who just want it over?
After all Soubry’s crucial amendment – Tory rebels aren’t rash enough to vote for a Labour version – talks vaguely of “a” customs union, as does Corbyn. What else did May’s lost election mean but a mandate for a softer Brexit than she proclaimed in her Lancaster House speech? She could justify that too, if she had to. It would mean a showdown with the hard Brexiteers, but that is years overdue. Johnson says he won’t have it, but Gove might and Boris needs to feel loved. They can say they have listened to parliament.
But all this is for the months ahead. We already know the EU’s reaction to the spectacle of Britain’s two main parties negotiating with themselves to strike a compromise their own party can live with, apparently oblivious to the certain knowledge that Berlin, Paris and Brussels will reject both cake-eating versions. May’s “three baskets” approach – an echo of John Major’s “three bastards”? – envisages some key industries like car making remaining fully compliant, albeit voluntarily, with the EU regime; others, notably financial services, gently diverging but not slashing standards; a third, frontier technologies like robotics or biotech, pioneering new rules.
Though more emollient than May’s “managed divergence” fig-leaf Corbyn’s version also envisages a bespoke deal with elements of Turkey’s “rule-taker” customs deal but also of the arms-length Canadian and cosier Norwegian alternatives. It is just more pick-and-mix wishful thinking, say EU ministers and officials. Mark Rutte of the Netherlands told May as much before her Chequers cabinet endorsed. He might have saved his breath.
But if politics got us into this mess politics may yet get us out of it. Yes, Brussels holds most of the negotiating cards and the Eurozone economy is enjoying better growth. But the UK’s position is much better than feared and even productivity shows signs of picking up at last. We have structural problems, but so do they.
Romanian corruption rarely gets an airing, but elsewhere in eastern Europe President Xi’s authoritarian nationalism is catching on. Dublin angles for London-based TV companies as well as our banks. Amsterdam hopes finally to land Unilever’s HQ. But Italy faces an alarming election, Germany has no government. Even nice Netherland is contemplating banning referendums to keep it at bay.
We’re all bluffing a bit and in the hard-nosed world of Xi, Putin and Trump, we need each other too.