Monday, 31 October 2016

Government’s ‘No Running Commentary’ on Brexit is Coming Apart at the Seams

When the Prime Minister, Theresa May, finally decided that the ‘Brexit Means Brexit’ line had passed its sell by date as an indication of the government’s strategy for Brexit negotiations, it was replaced by the ‘No Running Commentary' line. The original line was meaningless anyway, you might have well as said ‘breakfast is breakfast,’ when the real question was croissant or a full English?

So, the next cunning plan was to say there will be no running commentary on the negotiations, and justify it as not giving away the government’s negotiation stance in advance of talks with the European Union (EU). The problem with this is, that it is completely unsustainable in the real world.

I certainly expected leaks from the EU on the matter once talks began, but it is actually falling apart before negotiations have even begun. Greg Clark, the Business Secretary, was forced to reveal what looks to be a central plank of the government’s approach over the weekend, by releasing details of the assurances given to the Japanese Car Maker, Nissan, which has a plant in Sunderland, and were worried about having to pay tariffs on cars sold in the EU, post Brexit.

So we have a situation where Nissan knows more about the British government’s negotiating position than the British people and their representatives in Parliament. Or at least we didn’t know, but it has got out anyway. The running commentary has begun, in the media, and will no doubt continue. The line can’t hold and the government is beginning to realise this, so Clarke was wheeled out to give more details.

Clark revealed, that the government will seek a no tariff agreement for the car industry, on the basis that we buy a lot of German and French cars, so the arrangement will be beneficial all round. But companies like Nissan will not decide to invest in production in this country, on the basis of what the British government thinks will be the arrangement that we will end up with. There must have been more to the assurance than that, like the government agreeing to cover any tariffs, in the worst case scenario, with tax-payers money.

Clark denied this, pointing to World Trade Organisation (WTO) rules, that disallow such state subsidies to businesses, which is the worst case scenario should we not be able to agree anything better with EU. This is quite true, but there may be a way around this, if the EU is agreeable.

What could be done, is that Britain pays the EU direct, not the particular businesses themselves, as this would get around the WTO rules, as we do now, by being a member of the EU. Of course in order to make this attractive to the EU, we would no doubt have to stump up a great deal of money, but it appears that the British government is prepared to do this.

It may well not end there either. Other businesses will want the same treatment, and particularly the financial services industry which Britain’s economy is heavily reliant upon.

The government’s strategy on Brexit is becoming clearer, which is to do anything big businesses want, and it is affecting wider policy, like the deal with the Chinese to build the huge white elephant that is the Hinkley Point nuclear reactor, and we see it also in the decision to build a third runway at Heathrow airport.

What is also clear is that the no running commentary line can’t last, and nor should it do, the government should make public what deal it has offered Nissan in its entirety, so we all know how much all of this going to cost tax-payers. We could well end up paying more to the EU, post Brexit, than we are as members of the club. All to stop a few Romanian migrants entering the UK. What a complete shambles this Brexit thing is going to be.   

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