Why the UK has lost its mind

Britain is hamstrung by Brexit because of a fundamental misunderstanding of the UK constitutional settlement.

We all know that as a representative democracy, Parliament is sovereign, and accountable to the people, who elect them. Referendums, as an exercise in direct democracy, do not sit well with this system. They potentially set-up an opposing pole that, if claiming sovereignty for itself, foments internal conflict.

There are two requirements needed to avoid these tensions. The first is that each options must be sufficiently well-defined to give people a clear picture of what to expect. The second is that the government must want it and be responsible for it's implementation. In short, a referendum is a mandate for a government proposal. It is the consent of the governed, not an instruction from a sovereign.

Referendums as consent are a viable check on the powers of a legislature of a constitutional democracy, where they are so used routinely. As the UK has no constitutional checks on the powers of parliament, referendums are an optional, political act that have come to be misused for things the government does not want to do; the Alternative Vote, Scottish Independence and of course Brexit.

A victory for the Alternative Vote would probably have been tranquil, as it was a really well defined and instant change. Scottish Independence would have degenerated in to "alimony" arguments about oil rights etc which had not been well defined beforehand. As the unwilling UK parliament would have been in charge you can bet the eventual settlement would have favoured the English mightily.

Then, Brexit. 

As the gulf between the peoples' expectations and reality has widened, the shrillness and confusion over "The Will of The People" and "Betrayal of Democracy" has grown. Much has been written about how Brexit represents a populist coup d'etat of the people over parliament. Parliamentarians are cajoled into ignoring their own judgement. As the available options diverge ever further from the peoples' plurality of expectations, the political class is paralyzed and the government hunkered down in denial. The people grow increasingly dismayed at the politicians' duplicity and spinelessness.

The tension set-up by the referendum's opposing pole to parliament can only be released by following one of two paths: forward to direct democracy, or back to representative democracy. The former is being called for, unconsciously, by the campaigners for a people's vote. This has all the problems inherent in direct democracy as I have written about before.

The other is taboo.

Mending our representative democracy requires the assertion that the referendum was an act of political consent to a proposal, albeit one the proposer's wished to disown. We must not let them disown it. Hold the government to account for their decision to hold a referendum. It is their responsibility to deliver on the expectations. To be clear, theirs is a political responsibility, not a legal one. The fallout for failing to deliver comes at the ballot box, not in a courtroom.

The Tories need to put country before party, to take responsibility, and to face the fact that they cannot deliver the product as described. They need to admit their failure. This is a failure of such magnitude that they must resign from power in shame. Their punishment will be at the ballot box. Brexit will die with the Tory Party. If parliament to live, that is the only way it can die.

The Irish Border is not just an EU problem

There have been repeated claims in the UK media recently that in the event of a no-deal brexit, the UK would not insist on a hard border or impose tariffs. The view is that any tariffs imposed would be entirely the EUs fault. This pervesely suggests that it is the EU that wishes to install an unnecessary border, and that the UK is blameless in this. It seems all the "take back control of our borders" rhetorc is being selectively airbrushed out of the picure whenever Ireland is mentioned.

Lets take a deep breath and moment to examine this.

A customs border will come into effect automatically in the absence of an agreement otherwise. Enforcement is another issue. Most businesses will trade lawfully rather than resorting to smuggling so 90% of the economic impact will happen even without enforcement. If it continues for a protracted period the EU will need to implement stop and search of vehicles somehow but it will not be a disaster if it takes a while to figure out how to do this on a softly softly basis. It will probably be a mixture of pre-registration of goods vehicles, cameras on the border and random searches of vehicles on roads near border crossings, but largely avoiding fixed checkpoints.

The EU need not be concerned with the movement of people as Ireland is in the CTA not Schenegen. The Schenegen zone will be protected as it is now by passport checks to/from Ireland. On the other hand, it is not clear how the UK can implement the much-vaunted migration controls without passport checks on Irish border.

The idea that that the UK would not impose any tariffs at all comes from Rees-Mogg’s ERG and goes hand-in-hand with the notion of trading on WTO rules alone. Let’s be clear what this entails. The WTO rules say that without a trade deal, MFM (most favoured nation) applies. This means if you set zero tariffs for anyone (eg Ireland), you must do the same for everyone (eg China).

The first thing to note is that if you already have zero import tariffs for everyone, why would any other country bother entering into a trade deal with you? They all already have a great one-way situation in their favour. Maybe some other benefits can be found, but the inescapable fact is that it is a very weak negotiating position indeed.

The second and most important thing to note is that with zero tariffs for everyone, you have a model called “unilateral free trade”. This is exactly the model proposed by the ERG’s favoured economist, Professor Patrick Minford. The idea is that one’s own businesses will be forced to become the most competitive in the world in order to survive, and that they are helped in this by being able to purchase supplies worldwide at free market prices without tariff barriers. Countries keeping trade barriers will only be hurting themselves by keeping the protected sectors inefficient. Poorer countries will gain the most by this (due to cheaper labour, land etc) so it is “progressive” in the sense of redistributing labour opportunities from richer nations to poorer ones.

It is an attractive model, but one I fear is flawed in it's analysis by reliance on static equilibra, not taking full account of the strategic dynamics of other nation's trade policies. Mainstream economists regard Minford as more or less a lunatic fringe, so his model should be considered a radical experiment. The risk involved is not negligible as mainstream models of unilateral free trade predict industrial collapse. To adopt it would be an ideologically driven leap of faith that advances neoliberalism in a way that I doubt the public expected at the time of the referendum nor would approve of now.

Refreshing was the candour Rees-Mogg showed by stating it could take 50 years for the benefits of this model to appear. The picture he did not paint so candidly was of the 50 years privation required to reach this promised land. No matter; what I predict will actually happen is that a public backlash at their dismal fate will bring Corbyn to power without restraint or caveat. This will expose the UK to the full horrors of socialism, especially harshly if the UK has also left the ECHR and become estranged from it's closest democratic friends due to the anti-EU rhetoric used by the Brexiteers to shift the blame for Britain's home-made problems.

A People's Vote on Brexit is not as simple as it sounds

I have been thinking a great deal recently of exactly how the mechanics of a Peoples’ Vote on Brexit could work.

It has been said that Westminister is unable to find a way forward, that brexit is a shambles, as if this alone justifies a people’s vote. This is a dangerous misreading of the situation. It risks repeating the mistake of the first referendum. Parliament must never again say “we cannot decide, let’s abdicate our responsibility and instead make the public take a punt - the gamble will then be their responsibility”.

Parliament remains responsible for putting forward legal, practical and well-defined choices, and only such choices. It must be absolutely clear beforehand how any outcome will be implemented, otherwise the arguments will just resume again. The inclusion of any ill-defined options in the people’s vote would enable charlatans promising everything for nothing to hijack the debate once again.

There are three well-defined options are on the table already. The EU has indicated it would accept a Canada (Third Country with NI in the CU), Norway (EFTA) or Remain. These are all practical and well-defined outcomes. The latter two are also clearly legal.

The first, Canada option is more problematic as it requires a customs border between NI and GB. This would not be right without the consent of NI. So the ballots in NI should include a question for consent to such arrangements. Without a majority of NI consenting, the Canada option should be taken off the table and the vote becomes a run-off between the other options.

The Chequers plan appears to be dead, and hence does not qualify as a ballot option for the time being. It is clearly not practical if it assumes the EU will agree to arrangements it has already rejected.

In order for a “no deal” scenario to qualify for inclusion on the ballot, the plan would need to be far better documented. It seems the Minford Model is behind much brexiteer thinking. Minfords’ model could be the basis for a “no deal manifesto” but needs to include peer-reviewed projections, not just one man’s opinion. Overall, I think it would take a lot of work for such an option to get to “practical and well-defined” status in the eyes of an impartial judge. I am sure Mr Rees-Mogg would disagree and he is welcome to prove me wrong. Also it is clear no-deal would lead to a hard border in Ireland. This means the NI vote should provide for a veto on this option in the same way as the Canada option would.