Swinson: Sectoral analysis shows that Brexit is a far-reaching, ridiculous folly

So MPs and peers had some time alone with the Brexit “sectoral analysis” papers. And those of ours who expressed an opinion were far from impressed. You can make your own mind up as the papers have been partially published here.

Vince Cable had been particularly scathing about them in an article for the Independent on Sunday:

Those who have seen them – under a procedure rivalling access to the Crown Jewels – say they are descriptions of the sectors, not assessments of impact, and contain nothing unavailable on Wikipedia.

The second, more serious, point was that the decision to leave the customs union was taken by the Cabinet without any quantitative assessment of impact.

This doesn’t surprise me. Whenever I try to engage Brexiteers with technical issues which face supply chain industries, whose components cross borders, along with practical problems surrounding border certification and rules of origin, eyes glaze over.

Then Jo Swinson had some time alone in a darkened room with them and she was underwhelmed to say the least. She set out her thoughts in a series of tweets.

Tom Brake said that the papers were the “biggest case of the dog ate my homework” we’d ever seen.

This is the biggest case of the dog ate my homework the world has ever seen.

We’ve been given binders of old information, extracts from Wikipedia, and a few choice quotes, and yet nothing at all on how Brexit will hit each sector.

Now the government’s woeful failure to prepare for Brexit has been laid bare in front of the whole country. The mess this government are making of negotiations shows why the people must be given the opportunity to exit from Brexit.

It is unbelievable that we are being dragged out of the EU, one of the most huge events of my lifetime, and the Government hasn’t properly worked out properly what it will mean for our key industries.

* Caron Lindsay is Editor of Liberal Democrat Voice and blogs at Caron's Musings

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24 Comments

  • Perhaps the best solution would be to rename the European Union the Confederate States of Europe. That way the brave Brexiteers could celebrate the demise of the EU and the rest of us could get on with life as it is now (all be it under a different badge); finally getting too sort out the many domestic issues that are continuing to build up.

    As a further sop to the brave Brexiteers we could make the new CSE passports blue.

  • As a further sop to the brave Brexiteers we could make the new CSE passports blue.
    My understanding is that they could have blue passports today, it’s a UK government decision…

  • Of these 24 sectors, the papers show that in 21 of them, industry has concerns about skills gaps, attracting talent and labour mobility post-Brexit.

    I’m a little surprised the brave Brexiteers haven’t been more vocal about this, unless they mistakenly believe that they will be able to readily replace EU workers with workers from the rest of the world (at lower rates of pay).

    Personally, I would have thought that here is one of the opportunities provided by Brexit; UK businesses are going to face up to having to invest in UK nationals. Given the timetable for Brexit, it would seem that actions taken now have a good change of delivering an improved supply of locally developed talent by 31-December-2020…

    So as part of “BRITAIN must get behind Theresa May to make a success of Brexit”, we need to be reminding the government and business of their obligations to UK nationals resident in the UK and asking them what are they going to do to wean themselves off the drug of cheap labour imports.

    The only area I can see a real problem is that without free movement of labour and the status membership of the Single Market gives us, namely making the EU market an extension to the home market, is with UK contractors working in the EU and thus contributing to our exports.

  • Katharine Pindar 22nd Dec '17 - 4:03pm

    I see already that Do It Yourself will have a whole new meaning, a rather important one, if we do indeed leave the EU.

  • I find this whole thing bizarre. How can you enter into trade negotiations without understanding the benefits of aspects of that agreement on the economy. The only explanation I can think is that either the government is withholding that analysis or they have concluded that there is never going to be a trade deal in which case any analysis is pointless.
    Anyway
    Merry Christmas everyone.

  • Roland,

    I expect the top Brexiteers will indeed think it’s a brilliant idea too being in cheap labour rather than train our own. As to business investing in labour some may but must I fear will up sticks and move to cheaper climes. As to what most brave Brexiteers think too either of these possibilities I fear they will be saying “I’m shocked I never thought that would happen, that isn’t my sort of Brexit”. But as I’ve often said “You don’t get the Brexit you want, you get the Brexit you are given”.

  • Tony Greaves 22nd Dec '17 - 8:37pm

    It seems that Hilary Ben has now put them all on the internet with just a small amount of redaction (as they say nowadays). What a farce it all is. Anyway I am glad I did not waste my time going to read them in camera.

  • Tony Greaves 22nd Dec '17 - 8:37pm

    Or indeed Hilary Benn…

  • Little Jackie Paper 22nd Dec '17 - 11:27pm

    ‘Then Jo Swinson had some time alone in a darkened room with them and she was underwhelmed to say the least.’

    Before anyone gets too far up their high horse on this I suggest going to YouTube and looking up ‘TTIP Reading Room, Luke Flanagan.’

  • Little Jackie Paper 22nd Dec '17 - 11:37pm

    Roland – ‘So as part of “BRITAIN must get behind Theresa May to make a success of Brexit”, we need to be reminding the government and business of their obligations to UK nationals resident in the UK and asking them what are they going to do to wean themselves off the drug of cheap labour imports.’

    I’m not totally sure who you mean by, ‘we,’ here. But leaving that aside, isn’t the real problem here why, ‘we’ couldn’t ask this WITHIN the EU and, more importantly, ask what to do about it? In terms of the EU having a negative effect on wages the evidence is there – see p27 here for example:

    http://www.europarl.europa.eu/RegData/etudes/STUD/2016/579001/IPOL_STU%282016%29579001_EN.pdf

    p28-41 is also quite the eye-opener if you have a bit of reading time.

    It’s not about getting behind Theresa May or anyone else – it’s about getting behind people on the rough end of the economic dislocations here and the fact that the EU is not a reciprocal deal in a way that is meaningful to a lot of people. It’s not just the UK – we now have 90% of Bulgarian doctors immediately leaving on qualification. That is not a good thing. Putting the boot into the idea of LEAVE is one thing, but I don’t think it follows that there is no problem in need of resolution in the EU picture. The question REMAIN signally failed to tackle in 2016 is what to do about it.

  • Little Jackie Paper 22nd Dec '17 - 11:46pm

    Frankie – ‘I expect the top Brexiteers will indeed think it’s a brilliant idea too being in cheap labour rather than train our own.’

    I’m sure that’s true, no doubt. Indeed I was once told that Boris was more liberal than Nick Clegg on immigration – https://www.libdemvoice.org/boris-shows-himself-to-be-more-liberal-than-nick-on-immigration-35160.html. To quote, ‘But when it comes to immigration, I’m afraid the reality is you’ll more often find Boris showing liberal leadership than Nick.’ How times change!

    But unlike the EU I can tell Boris Johnson and Nick Clegg what I think about them at a ballot box.

  • Jackie,
    What do we do about it, bit late to be asking that question now. You voted out but don’t seem to know what to do. Unfortunately that seems to be the reason d’etra of most Brexiteers, you disliked the EU but don’t know what to replace it with. Each of you has your own personal Brexit and the most realistic seems to be Tinkerbell will wave her magic wand and everything will be OK; sadly that is more realistic than some of the other private Brexit dreams.

  • Little Jackie Paper 23rd Dec '17 - 12:11am

    Frankie – ‘What do we do about it, bit late to be asking that question now.’

    Yes. It is, isn’t it.

  • It is often said we cannot remove the people who make decisions on behalf of the EU, including us. Which people are being referred to?

    The council of ministers are all elected by their home countries.

    The European parliament is elected.

    The commissioners are nominated for fixed terms by their home countries. I guess we could elect them.

    I am not sure how the judges of the ECJ are appointed.

    The problem seems to be that the UK does not elect everyone, even though the UK has contributers at every level that are under its control.

    The same could be said of the inside of the UK: I only elect one MP, not all the others. It could probably be argued that this is at the heart of our current political difficulties, but that is a different discussion.

  • I had heard that HMG’s studies were on the flaky side but even so I am astonished. These ‘sectoral analysis’ papers are a joke, a national embarrassment.

    I’m pressed for time (turkey to collect) so I urge everyone to read Richard North’s excellent take-down (link below) and also to follow the contained link to his blog post of last January on mutual recognition of drivers’ licences and certificates of professional competence. That’s just one of the minefields the government is pretending doesn’t exist.

    http://eureferendum.com/blogview.aspx?blogno=86712

  • Peter Martin 23rd Dec '17 - 3:40pm

    Folly? Or maybe not? It depends on whether Emmanuel Macron is right and also is capable of getting his way against German opposition. If he’s right and the euro does crumble we’ll be pleased to be well out of it.

    https://www.theguardian.com/world/2017/jan/11/euro-will-fail-in-10-years-without-reform-emmanuel-macron

  • Little Jackie Paper 23rd Dec '17 - 4:13pm

    Gordon – If you ever get the chance, North’s ‘Flexcit’ ideas really are excellent. I’m not sure I agree 100% but real food for thought there.

    Although it is worth noting that the EU did make a bit of a pig’s ear on qualification certificates a few years ago and should have got picked up on for it rather more than it did.

  • Little Jackie Paper 23rd Dec '17 - 4:17pm

    Peter Martin – The real question will be what happens at the next EZ crisis. If we end up with another EFSF/ESM then that would suggest that the EZ has learnt nothing and the best the currency can hope for is muddling along. If we do end up with Macron’s ideas then that would be real reform. I would argue however that Macron’s thinking would need referendums in many countries and would need to survive a brush with the German Constitutional Court.

    If the next EZ crisis is in France then we are less than four years away from President Le Pen.

  • Katerina Porter 23rd Dec '17 - 10:26pm

    With mostly hostile newspapers people know hardly anything about what the EU does. Graham Watson formerly MEP gave a very interesting talk before the referendum and Denis Macshane wrote several books. I had a recent experience of this lack of information when talking casually about films. Someone mentioned The King’s Speech (?) and she was surprised and almost shocked to hear that the EU backs films and this one had depended on EU finance.
    Perhaps part of the campaign about Brexit should be to spread information about the wide scope of what EU does.

  • @ Andrew – Surely the problem is not that “the UK doesn’t elect everyone” but that ALL political parties have failed to exercise political control – haven’t even attempted to. Thus, the Lib Dems ALWAYS acted as cheerleaders for EU plans, even clearly illiberal ones or daft ones like the euro, with MEPs avoiding discussing EU matters. Plan beats no plan so that was always going to end badly.

    @ Peter Martin – That Guardian headline, if it accurately reflects Macron’s views, makes me wonder what he defines as ‘failure’. The appalling youth unemployment figures across southern Europe are a pretty comprehensive failure in my view.

    I assume he really means that the euro won’t continue. If so, 10 years is a generous estimate of its life-expectancy. Trade imbalances between EZ countries create net amounts owing by the central banks of deficit countries (Spain & Italy are the big ones) to those of surplus ones (mainly Germany). These accumulate as ‘TARGET 2’ balances between the respective central banks. Deficit countries now owe Germany around 1 trillion euros that can’t be paid. The only way round that is if Germany ‘gives’ that to the deficit countries just as HMG does to Northern Ireland (a deficit region of the UK) – a so-called “transfer union”. That’s simply not going to happen; the politics doesn’t allow it.

    Incidentally, I don’t think the euro will ‘crumble’. AFAIK the former EZ currencies no longer exist in cyberspace. Credible estimates from the Greek crisis were that it would take at least three years (in just one country!) to reinstate them in the core financial systems of banks credit card companies, etc. meaning no ‘money national grid’ for 3 years or more. That would be an epic disaster.

    @ LJP – I had a look at North’s Flexit. He was, of course, at one time a prominent UKIP member and it reflects his idea that Brexit should be a process, not an event which it would indeed have to be if it is to having any chance of succeeding. However, that’s not even remotely close to where the government is headed perfectly reflecting frankie’s point above that you don’t get the Brexit you want, only the one you’re given.

    Davis & Co clearly haven’t got to grips with the issues at all and that is very, very dangerous.

  • Peter Martin 24th Dec '17 - 9:11am

    @ Gordon,

    I agree with most of what you’ve written – except on the question of whether the euro using countries have burned their boats on their old currencies. I don’t believe they have.

    For example, if the UK had decided to join the eurozone, we’d all have the numbers in our bank accounts multiplied by 1.13, or whatever the exchange rate was at the time. Then, hey presto, we’d have euros instead of pounds. But the euro we’d have would still be an IOU of the Bank of England. The banking system would carry on pretty much as it was except that a programmer would have inserted a factor of 1.13 into the old code. The euro we’d end up with wouldn’t be a direct IOU of the ECB. The Bank notes and coins printed by the BoE would be identifiable. So switching back could be messy and inconvenient but the process can be undone – probably within a matter of days.

    http://bilbo.economicoutlook.net/blog/?p=31313

  • Sorry Peter Martin, I usually have a lot of respect for your views ‘economic’, but on the euro you are wrong. If the UK had adopted the euro currency, the Bank of England could NOT just print away more euros as it saw fit, without getting the ECB approval first, and the blog post you pointed to shows this very point clearly.

    “Thirteen EU Member States have their own banknote printing works, with eight countries including Greece, locating this facility within the central bank.”

    And the reason?
    “To print the Euro banknotes after ECB’s approval.”

    And the why? The euro printing facility is located inside the ECB, so they can keep an eye on their more ‘prodigal’ neighbour countries craving to print themselves out of financial trouble.

    We can’t thank Gordon Brown for a lot, but keeping us out of the euro, on his watch, was one of his better judgements, because ‘reversing-out’ of the euro currency is I suspect, a whole lot more complicated than you have imagined.

  • Peter Martin 24th Dec '17 - 10:59am

    @ Sheila G,

    Perhaps I should have explained myself more clearly. You are quite right that if the UK had joined the euro, it couldn’t just do as it liked. The recent QE program would not have been allowed, for example. You’re quite right too that Gordon Brown called it right in keeping the UK out of the euro zone. Except, he possibly did the right thing for the wrong reasons – but that’s another story.

    I’m not trying to make light of any country wanting to exit the euro. If one does then more will probably follow and the whole system will disentangle. That will be messy to say the least.

    But Gordon said ” meaning no ‘money national grid’ for 3 years or more. That would be an epic disaster.” The point of my comments was to suggest that while a de-euroication process will inevitably be disruptive it won’t be quite as bad as Gordon suggests. The euro isn’t quite the common currency it first might appear and has been constructed as a bolt-on to what existed previously.

  • @ Peter Martin – You misunderstood my previous comment. Translating pounds into euros or back again isn’t conceptually a particular problem and doesn’t change the relationship of debits and credits except for the fairly straightforward interposition of the ECB into some of them.

    The difficulty lies with the software that carries out financial transactions be they ordinary domestic credit transfers or international payments or credit card transactions and no doubt many other financial systems.

    At the height of the Greek crisis there was much talk of reverting to Drachmas which would indeed have been a good plan if only that were doable. But financial software specialists pointed out it wasn’t doable in anything much under three years because it would require rewriting great swathes of banking (and credit card etc.) software.

    It may well be that pre-euro banking software still has database fields for Drachmas etc. preserved in it’s deeper recesses but any new software added since the euro started won’t have have. So, to reintroduce older currencies will require, among other things, creating new database fields for them and linking all the various financial systems together. Also, everything will require testing exhaustively – individually and in every possible one of their multiple collective interactions.

    That is a HUGE task made all the harder because banking software specialists don’t grow on trees and already command astronomical salaries. Even worse, I gather that many banking software systems aren’t well documented and – the cherry on the cake – many programmers have been ‘let go’ in cost-saving drives. Also the ‘three year’ guesstimate’ for reintroducing the Drachma was for just one currency. Goodness only knows how long it would take for every EZ country – or what stratospheric levels banking software would reach.

    All in all it’s a desperate situation with no good alternatives. As Sheila Gee says, we have much to thank Gordon Brown for.

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