Whitehall and Westminster will not, do not want, and cannot deliver the result of the June 23, 2016 referendum.

The Brexit talks have been lumbering on, as the Prime Minister makes her oral commitments to the British public and then  proceeds to rescind them. The UK, she has reiterated, will be leaving the Single Market and the Customs Union, and will no longer be under ECJ jurisdiction. But Brussels is not negotiating. The UK has to be either out or in, and if it is in, it will not be able to revert to the status quo ante June 23 2016: it will have to pay the full 20 billion sterling contribution, sign up to joining the Euro, and forgo all other exemptions that have been conceded over the last 25 years.

There are a number of reasons for this hard line.

The first is that M. Barnier is not negotiating first and foremost with the UK. As a servant of the French state, he is negotiating first and foremost with Germany. If the UK is to be granted any privilege, it will set a precedent for Germany, where public opinion is not less sceptical about the EU than was UK opinion prior to the referendum of June 2016. The EU, and its predecessors, was conceived by France to contain Germany, and to ensure that Germany never becomes more than a semi-sovereign state. The problem of course for France has always been that Germany insists on equality with France, in other words that France, too, is semi-sovereign, a condition which , as President Macron intimated on UK television, if put to the vote in France, would not pass.

The second is  legal theology, developed also as part of the post-1945 policy of France to deal with its German Question. The concept of the acquis communautairehas obvious Marxist connotations, that can readily be put to good purpose in the cause of “the construction of Europe”. Marx borrowed from Hegel in postulating progress over time as undergoing a dialectical process of thesis, antithesis and synthesis in an upward spiral of improvement.  Applied to EU law, as interpreted by the European Court of Justice, all directives, regulations, standards, laws represent an accretive volume of irreversible law, whose destination is not “ever closer union”, but simply a USE. Seen in this light, Brexit is the mother of all regressions, and therefore cannot be tolerated, and has to be reversed.

The third is inter-state rivalry. Over the past 25 years, the UK negotiated a number of exemptions-non-membership in the Euro, non-membership in Schengen, partial participation  in the European Arrest Warrant, but complete and enthusiastic participation in the Single Market, the Customs Union and a strong supporter of the ECJ. Under this dispensation, certain sectors of the UK economy flourished: finance, law, pharmaceuticals, cars. I remember in INSEAD in the early 1990s that we invited the President of Saint-Gobain, an arch product of the Napoleonic state, who explained his corporate strategy as stretching from the banks of the Tagus to the banks of the Vistula. At dinner afterwards, I suggested that the introduction of the single currency would greatly further the City of London’s ambition to steal Europe’s financial crown. He almost swallowed his vol-au-vent whole. That was then. Now that Prime Minister May has stated that “Leave means Leave”, Paris and Berlin are lining up to denude the UK: kick it out of Galileo, onshore wholesale markets for the Euro, keep the UK in the Single Market as a law-taker, and generally  have the UK as a vassal state in purgatory, until its does penance and returns, as a full contributor, to the bosom of the EU.

Fourth, Brussels knows that May was a Remainer, that she cannot bring herself to state that she is enthusiastic for Leave; that 90% of MPs are not Leavers; that Whitehall is for Remain, not least because since 1972, Whitehall has enjoyed being co-legislator in the Council of Ministers, thereby further reducing the influence of Westminster as the formal seat of law-making; the BBC, The FT, The Economist, The Guardian, the Daily Mirror are gung ho for membership in the EU, as are 90% of University lecturers, nearly all of whom are some form of social democrats. Then there is business, primarily interested in easy access to European markets and to non-European markets with which the EU has negotiated trade agreements. As if that were not enough allies in the UK for Brussels, the SNP in Scotland and Sinn Fein in Ireland are allies for the Commission in seeking to break up the Union, whether the Brexit path is taken or not. There can be little better illustration that the EU has little to do with overcoming nationalism, and everything to do with power politics, than Brussels de facto alliance with the Celtic nationalists in the UK.

There is a fifth factor which is making it so much easier for Brussels to manipulate the UK. Forty-three years in the EU fostered  a constitutional crisis. Over time, as the scope of EU law widened, Prime Minister Heath’s definition of the UK’s relationship to the EU distorted the operation of the British constitution, as rooted in the Glorious Revolution of 1689, which laid the foundation for constitutional government, habeas corpus, freedom of the press, trial by jury, and regular elections. The right of the electorate to sanction their lawmakers became the law of the land. Until 1972, when 1972 ECA Section 2.1. stipulated that EU law overrides UK law, no if, no buts. Whitehall mandarins in the Council of Ministers became co-legislators in the EU, and un-sanctionable by the electorate. Thanks to reforms of the House of Lords under the Blair/Brown governments, the UK has now gone a whole step further. The Upper House, the House of Lords, now over 1000 strong unelected officials, have used the Brexit saga as a means of borrowing from Brussels, and legislating for the UK on Brussels behalf. The House of Lords is a bastion of Remain. Because super-annuated MPs look to the Lords as a pleasant watering-hole for retirement, the Commons is complicit in its own abeyance.

The result is that an undeniable pattern has emerged over the period of these Brexit negotiations. Prime Minister May lays down her red lines in public; and then erases them, while continuing to assert that she remains strong and stable, as she did during her ill-begotten 2017 general election campaign. Her apparent hope is that nobody notices that she is making concessions, while saying the contrary.

The hope is becoming ever more tattered. This last week, two blasts from the past prior to June 23 2016, have both rubbished the May Premiership. They come from opposing camps: Dominic Cummings, a chief organiser of the Leave campaign, has written to MPs to defenestrate May as soon as they can: Whitehall, Cummings, writes, knows that the May/Hammond policy is surrender, so they are not preparing at all for a “no deal” solution. Although he does not write as such, his implicit conclusion is that their deal will be an EU diktat, or as Lord Kerr, an  (uncited) mandarin has been quoted as saying, the EU will bring the UK to heal.

https://dominiccummings.com/2018/05/23/on-the-referendum-25-a-letter-to-tory-mps-donors-on-the-brexit-shambles/

Sir Ivan Rogers, the mandarin who played a key role in  the ill-fated Cameron negotiations to carve out a permanent arrangement for the UK on the inside periphery of the EU, has pointed out that the May premiership needs to get real, by which he means sticking as close as possible to the Single Market, the Customs Union, and under the ECJ. The unspoken corollary is that parliament will likely reject this proposal  to have the UK as a vassal state, and  seek to rejoin. He is under no delusion that this too is problematical. https://policyscotland.gla.ac.uk/blog-sir-ivan-rogers-speech-text-in-full/

The Rogers text is here to be read. But I would like to highlight a couple of his points as an illustration of Whitehall thinking. The first deals with the EU as a supranational union; the second deals with Rogers definitions of UK options.

In his talk, Rogers repeatedly comes back to the theme of the EU as a regulatory union, promoted most effectively by UK diplomacy. The Single Market was set up to break down the non-tariff barriers that were such a hindrance to trade, and the one person who did most to create it was Lord Cockfield, Prime Minister Thatcher’s man in Brussels, who has turned out to be, in Rogers words, “the biggest producer of supranational legislation in history”. Cockfield radically deepened the Customs Union through the Single Market project to establish a common area for the circulation of goods, backed by a Common External Tariff, the Single Customs Code, common IT systems and common judicial oversight. The internal barriers are only removed by participation in the Single Market. Outside the EU as a “third party”, it will be the EU which judges unilaterally whether or not the UK’s rules are “equivalent”. In short, the EU is a supranational entity, and taking back control is an illusion.

As I have argued elsewhere on this blog, this is not true. Germany has taken back control through the mechanism of the Constitutional Court, which does not define the EU as “supranational”(as Rogers does, and the Heath Section 2.1. does), but as an alliance of sovereign states. And unlike in the UK, the German Constitutional Court re-iterates that the rights of German citizens to sanction their lawmakers is inalienable. In other words, Germany is a sovereign state in an alliance; for Rogers, as for Heath and Whitehall, the UK is a province in a supranational legal order.

Rogers then points out that this is what Cameron put to the test in June 23, 2016, and the public was not persuaded. The result, says Rogers honestly, would be the same now. There is of course, he points out, a huge difference between May’s proposal to have the UK “just outside the EU fence” to Cameron’s radically different proposal to be “just inside”.

He identifies three schools of Brexit(I paraphrase):

  1. Remainers who are Reversers. They want to return to the status quo ante prior to the Cameron package. He does not go into this option. Presumably, he thinks the public won’t wear it. More to the point,Whitehall thinks supranational, as does Rogers. He therefore has no means of answering to the vital question of how the UK official position on the EU is compatible with the inherited constitution of the UK that lives on in the hearts of millions of British people. Rogers does not know what to do about the lack of consent: his talk leaves a gaping hole at the heart of the matter.My proposal prior to June 23 was to follow the German Constitutional Court’s position, and redefine the UK’s position by altering the wording of Section 2.1. This is my position as of April 2016: https://knowledge.insead.edu/blog/insead-blog/the-best-case-scenario-for-avoiding-brexit-4639
  2. The Clean Leavers. Rogers makes a very good point here that if you were going for a clean break, or even doing so for the purpose of negotiations, you would be building the regulatory infrastructure “at full speed”. He also makes the point that a Clean Break takes UK companies out of the standard-setting organisations, as they would be neither in the EU nor in EEA. Here is a choice which the May government has opted out of: EEA membership. The UK would be in the Single Market, subject to the ECJ in that sphere; but outside agriculture, fisheries and free to make trade deals. In short, the EEA or EFTA position is not a Clean Break, but it goes a long way to meeting the requirements of a half-way house, as reflected in the 52/48 referendum result. The objection that EEA membership requires complete acceptance of free movement is not credible, in my view. Much tighter immigration restrictions within the UK are possible, but contrary to the UK’s own globalist agenda. I have also argued elsewhere that the UK became the importer of mass unemployment from southern Europe, occasioned by EU policy that contradicts the EU’s own commitment to high levels of employment. This option has never been contemplated, to my knowledge, by Whitehall. Why? Because Whitehall believes collectively in international law as a Mosaic imperative.
  3. Cake and Eat it. This, he says, is government strategy. Read his talk and you can see that he thinks, to mix metaphors, that this is pie in the sky. Rees Mogg, of course, takes a tougher stance. The UK, says Rees Moog does not want a hard border, nor does Dublin. Brussels does. Article 24 of GATT, Rees Mogg points out, does not require hard borders of any kind between countries with contiguous frontiers that are in a free trade area and a customs union. Furthermore, Rees Mogg says no money for the EU if no free trade. He is quite prepared to have a no deal on WTO terms.

Rogers does not elaborate on any of these alternatives, within his categories.I consider that this is very typical of UK mandarins: superficially very clever, but blind to asking fundamental questions. Rogers’s is an indication of the confusion in the minds of Whitehall civil servants, who, as Cummings points out, have taken over the negotiations.Whitehall is making preparations, he writes, for the continuation of EU law and the jurisdiction of the ECJ. Their expectation is that MPs will vote down May’s terrible agreement, so they are making no plans for leaving. “The government has no credible policy and the whole world knows it”. The policy is surrender.

Both Cummings and Rogers are saying that Whitehall and Westminster will not, do not want, and cannot deliver the result of the referendum. The Brexit vote is accelerating the UK’s constitutional crisis.

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About Jonathan Story, Professor Emeritus, INSEAD

Jonathan Story is Emeritus Professor of International Political Economy at INSEAD. Prior to joining INSEAD in 1974, he worked in Brussels and Washington, where he obtained his PhD from Johns Hopkins School of Advanced International Studies. He has held the Marusi Chair of Global Business at Rensselaer Polytechnic Institute, and is currently Distinguished Visiting Professor at the Graduate Schoold of Business, Fordham University, New York. He is preparing a monograph on China’s impact on the world political economy, and another on a proposal for a contextual approach to business studies. He has a chapter forthcoming on the Euro crisis. His latest book is China UnCovered: What you need to know to do business in China, (FT/ Pearson’s, 2010) (www.chinauncovered.net) His previous books include “China: The Race to Market” (FT/Pearsons, 2003), The Frontiers of Fortune, (Pitman’s, 1999); and The Political Economy of Financial Integration in Europe : The Battle of the Systems,(MIT Press, 1998) on monetary union and financial markets in the EU, and co-authored with Ingo Walter of NYU. His books have been translated into French, Italian, German, Spanish, Chinese, Korean and Arabic. He is also a co-author in the Oxford Handbook on Business and Government(2010), and has contributed numerous chapters in books and articles in professional journals. He is a regular contributor to newspapers, and has been four times winner of the European Case Clearing House “Best Case of the Year” award. His latest cases detail hotel investments in Egypt and Argentina, as well as a women’s garment manufacturer in Sri Lanka and a Chinese auto parts producer. He teaches courses on international business and the global political economy. At the INSEAD campus, in Fontainebleau and Singapore, he has taught European and world politics, markets, and business in the MBA, and PhD programs. He has taught on INSEAD’s flagship Advanced Management Programme for the last three decades, as well as on other Executive Development and Company Specific courses. Jonathan Story works with governments, international organisations and multinational corporations. He is married with four children, and, now, thirteen grandchildren. Besides English, he is fluent in French, German, Spanish, Italian, reads Portuguese and is learning Russian. He has a bass voice, and gives concerts, including Afro-American spirituals, Russian folk, classical opera and oratorio.
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8 Responses to Whitehall and Westminster will not, do not want, and cannot deliver the result of the June 23, 2016 referendum.

  1. Henry Story says:

    You mention the German Limitations to European Integration. But it seems there are French ones too. The French Constitutional Scholar Jean-Philippe Derosier, who holds a blog in LeMonde on constitutional matters, wrote a book “Les Limites Constitutionnelles à l’Intégration Européenne” [The constitutional limits to European Integration] [1]. He cites this book in an article on Digital Sovereignty, a theme that was taken up in France at least 8 years ago, by Pierre Belanger the founder of SkyRock, which lead to in 2016 an amendment to look into creating such a position to report to the French prime minister. All the details of that are in my very recent blog post “The Digital Sovereignty Dilemma” , where I quote some of your positions above.
    http://bblfish.net/blog/2018/05/16/digitalSovereigntyDilemma.html

    It is interesting to see for example how nice Nigel Farage was to Mark Zuckerberg in his questions in the European Parliament where he claimed that his voice has since the beginning of the year fallen by 20%. Would you not be nice if you were dealing with the owner of a platform who was unelected, beholden to powers that are beyond you, and that can change policies at any moment to make you visible or invisible to just the right amount of people to make you lose or win an election? https://twitter.com/Nigel_Farage/status/998990964671893506
    Passing laws against these US Corporations seems quaint. A bit like tilting at windmills. They can change your election before you ever get to implement an action against them, and remove all political will to fight them. It would be a bit like legislating against war, but not have an army to back it up.
    Now, what would an army be in the digital space? We are dealing with ideas here not bullets, and so everything is upside down.

    [1] https://www.lgdj.fr/les-limites-constitutionnelles-a-l-integration-europeenne-9782275040059.html

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  2. PHILIP LINGARD says:

    May’s first three months of Premiership was catastrophic.

    Faced with a 51/49 divided nation she should have reached out to the Remainers to bring them on board. Instead we got the Citizens of Nowhere speech and secured at least 40% of the population and probably 70% of the most influential determination to undermine her at every turn. Her doing as the Prime Minister of Nobody.

    What is painfully obvious is a yes vote to Brexit was never a definition of what sort of Brexit we were to have, not a mandate to leave either the Customs Union nor the Single Market nor a free hand to wreck the UK economy. Brexit needed defining and frankly the best definition was that of the Official Leave Campaign which was pro Single Market, pro Customs Union, pro soft border in Ireland. Before the economy tanked, giving the NHS all that money was feasible and May should have committed to do so immediately thus fulfilling the most visible commitment of the leave campaign.

    With that settled in summer 2016, the massive complexities of Brexit could have been tackled and A50 triggered as a technical and not a political pissing contest decision.

    Remember Y2K? that took £2bn of public awareness campaign and four years of preparation.
    Remember the SAD (Single Administrative Document)? That was a SIMPLIFICATION and took a billion pounds in a public awareness campaign and over two years to bring in.

    Brexit has somewhere between 200 and 750 SAD equivalents and they are going to make life more COMPLICATED for Joe Citizen.

    Brexit will not happen- I say this with 100% certainty. The British Government has not decided the definition of what Brexit is let alone begun to do anything about the detailed negotiations which would follow. Starting the preparation of the Great British public for the implementation is at least two years away…. and Article 50 happens on 29 March 2019? Or let’s put this another way, are there more than 60 votes in the Commons and Lords combined for a no deal crash out?

    Just a little technical point- Russia and America are now in a very heated but little publicised fight about over flying rights. And the UK thinks it is going to waltz into the American-European Open Skies Agreement (Europe for these purposes includes every inch of Russia including the bit Sarah Palin could see from her back yard) sometime in the back end of this year when it has somehow cobbled together an idea of what it wants by way of trans-Atlantic and trans-Russia flying rights and Trump and Putin will sign obediently? And there are four European Common Flying Area agreements which take an average of over two years to get signed (that’s after getting agreement which we haven’t got yet because we don’t know what type of Brexit… gets circular) because these changes don’t come into effect until all countries individually and unanimously have signed. Charmers like Erdogan and Netanyahu are members of the Common Flying Area by the way while Tunisia and a few other countries are in the queue ahead of the UK. And do you think Gibraltar Airport doesn’t close permanently on 30 April 2019?

    The moment I hear a British politician say “it is in the interest of the EU 27 to reach agreement” I know they are totally floundering. Yes it is in the interests of CDG, AMS and FRA not to take LHR’s trans-continental traffic. LHR incidentally is already talking to secondary European airports, British domestic airports and EasyJet about taking the slots which might be released by Brexit.

    Every single industry and aspect of commerce has a similar “this isn’t possible” list. And now we have increasing evidence that the Leave result was all a Putin plot anyway.

    Theresa May could have achieved Brexit but her abject failure in late summer 2016 sealed Brexit (and her) fate as a total dead duck.

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  3. May will definitely go down as the worst PM ever. Dead duck is questionable, because it assumes there was life in the bird prior to her Anywhere/Nowhere speech. An idea-free zone is one I have used, to which someone added, and a leadership free zone, too. She has been compared to a cocker spaniel, that can be trained to pick up birds, but otherwise too stupid. The author added that he didn’t’ want to be unkind to spaniels. Actually, I think she is also duplicitous, and vicious.

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    • And I thought Gordon Brown was the worst PM ever. I’ve no idea why she ever chose to become PM; she doesn’t have the right personality at all, stifles all ideas and enthusiasms (e.g. small modular reactors), and delivering Brexit while being a Remainer was never going to make her happy. My son met her recently: he thought she looked depressed (and that was before the Windrush disaster). I’m starting to get uncomfortable dreams about Brexit.

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  4. PHILIP LINGARD says:

    Didn’t expect my description of May to be “trumped”.

    FT article this morning pretty well sums up the fact that a no deal result is now impossible if the UK is to continue as a functioning state in any recognisable sense- https://www.ft.com/content/23663bc4-619e-11e8-90c2-9563a0613e56?segmentId=a7371401-027d-d8bf-8a7f-2a746e767d56

    Remain is the only practical option by default. This is no longer a political or philosophical matter but simple national survival.

    Yes Whitehall and Westminster deserve mention is despatches but the Donkeys in the Alan Clark sense are Johnson, Davis, Fox and above all May.

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  5. philipparees says:

    Thank you for the benefit of your knowledge and insight. Depressing but un-arguable!

    Like

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