Thursday, July 14, 2016

REACTION TO NEW UK GOVERNMENT. BREXIT STARTS TO UNRAVEL. LIGHT AT THE END OF THE TUNNEL?

The new UK Cabinet is interesting in several respects.

It places responsibility for a satisfactory Brexit fairly and squarely on the shoulders of those who argued for it most powerfully, notably Boris Johnson. His reputation as a buffoon, and the fact that he has managed to insult many of the most important people with whom he has to deal may make his task harder, but that is his problem first and foremost. "You broke it, you own it."

Fox and Davis will not find life any easier on the trade front. Several factors are becoming apparent.

 - There is no automatic reversion to WTO status. That is a Brexiteer illusion.
 - Many or most of our potential "new" trading partners will want to see an end to agricultural subsidies. This  may be a good idea in principle (though I'm less sure) but it will be a hard sell for the Tory faithful in Middle England.
 - Other trading partners, notably India, may value freedom of movement as part of the deal. This is ironic. We should be welcoming talented Indians to the UK but that is not what most of the Brexiteer followers voted to achieve. 
 - The appalling complexity of unpicking just about anything - and we potentially have to unpick everything - is becoming daily more apparent.

The leading Brexiters will have the unenviable task of explaining:

- why the concerns expressed by every shade of expert during the campaign have by and large been realised.
- why they are unable to deliver both free trade and control over the level of immigration.
- why the explicit "promises" made in the campaign are undeliverable.
- why the campaign was based on a number of deliberate falsehoods.

And the likely endgame? This is much harder to predict. I suspect May will refuse to trigger Article 50 until a very clear route forward is established. If there is any kind of agreement, with the EU and/or other others, I anticipate it will be put to the electorate either in a referendum or a general election. We may well end up with the default option, which currently looks like the best on the table, that of continued EU membership. But it all depends on how many bitter pills some of our political leaders are prepared to swallow.

An interesting feature is the obliteration of the neo-liberal or neocon influences in the new government. Austerity is abandoned for the time being, and we have promises of a more interventionist government, more emphasis on infrastructure, attacks on the "undeserving" rich and moves to greater equality and support for those regions that have been "left behind".

In these conditions some of the main threats to a positive and constructive UK climate policy look as if they have subsided, at least for the time being. Loss of a separate department for energy and climate change should be a concern but we shall have to wait and see. Retention of our connections with Europe should be an energy priority for the new government, not least because of our physical dependence on interconnection. With luck some of the damage caused by this ill-considered referendum can be repaired.

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