Archive for the ‘UK politics’ Category

The future of UK services trade is unlikely to be bright, whatever form Brexit takes

When it comes to trade in services, leaving the Single Market will result in increased regulatory costs and could have significant effects on the volume and composition of UK services exports, writes Olga Pindyuk.

In the Brexit debate, trade in services has been largely overlooked in favour of trade in goods. This is despite the UK being the second biggest exporter of services in the world and having one of the highest shares in total exports among leading economies (Figure 1). Moreover, the EU is a major market for UK services, having accounted for about 49% of the country’s total services exports in 2017.

When talking about sector specialisation of services exporters, London as the UK’s financial hub comes to mind. But the UK is competitive in a broad range of services, with ‘other business services’ – a combination of legal, accounting, management consulting, and public relations services – being most prominent in cross-border trade, having accounted for 33.5% of the sector’s total exports in 2016 according to WTO data. The second biggest subsector is architectural, engineering, scientific, and other technical services (14.6%), followed by advertising, market research, and public opinion polling services (10.1%). In the transport sector, air transport accounts for almost two-thirds of exports.

As a member of the Single Market, the UK has access to a market of over 500 million consumers, to the free flow of data between EU members, and to passporting rights, which allow financial companies to sell services in any EU country without having to set up a branch there. In other words, the Single Market allows the UK to supply more services through cross-border trade rather than through costly commercial presence. Passporting rights are also a very important reason why the UK has been used as an EU base by US and Japanese financial firms.

Important for the professional services sector is also the free movement of people. For example, UK companies can employ European staff in the UK or send their workers on trips to the EU to consult clients, provide technical support to users of their products, broker and draft contracts, and so on. As migration concerns were crucial for the Brexit vote, movement restrictions are probably the most binding constraint on the government, making free movement unlikely to be a part of any deal, which significantly limits the options available for the services trade.

If the UK opts for a divorce that precludes it from participation in the Single Market in services, it will inevitably face increased regulatory costs: relevant providers in the UK will face heterogenous regulations in each Member State, which implies an increase in trading costs. With a rise in cross-border trade barriers there would also be a relative increase in the proportion of services provided via a more costly commercial presence within the EU. The process has already started due to the political uncertainty that has surrounded Brexit since 2016, and has so far been most visible in the financial sector where more than 250 firms have moved or are moving business elsewhere.

The biggest losses would take place if the country crashed out of the EU without any agreement and had to trade with the bloc on WTO terms, which envisage a very limited scope of liberalisation under the General Agreement on Trade in Services. Even concluding a free trade agreement with the EU will result in a significant rise in the barriers to services trade – the EU’s recent agreement with South Korea and Japan, for example, does not address regulatory issues around authorisations and licensing, with processes varying between Member States.

It is nonetheless possible that Brexit could result in more advanced services liberalisation than previous EU agreements. But in order to achieve this, any preferential access to the EU market that the UK might seek will need to be part of a comprehensive agreement, otherwise the EU may be obliged to extend more favourable conditions to its other trading partners according to the most favoured nation principle. Politically feasible options of such an agreement are deals similar to the Comprehensive Economic and Trade Agreement or CETA+, which offer limited scope of liberalisation. The UK could possibly secure mutual recognition that would cover some professional qualifications and licensing for various sectors. Still, the scope of a deal will most likely be limited.

Comparison of the values of the OECD Services Trade Restriction Index for intra- and extra-EEA trade (Figure 2) shows that countries outside the Single Market face the highest barriers to trade with EEA members in air transport and a range of professional services: legal, accounting, architecture, and engineering. It is in these sectors that the UK is likely to experience the highest increase in trade costs.

The US is the most important market for UK services exporters outside the EU (20.5% of total services exports in 2017), but substantial reorientation of British services exports to this and other non-EU markets is unlikely as geography matters to services trade almost as much as to trade in goods. This is due to factors such as the need of face-to-face interactions, the inconvenience of operating in different time zones and so on, all of which tend to result in services exports being quite localised geographically.

Just how severely Brexit will affect the services trade will depend on the form it takes; however, it seems increasingly likely that under all feasible options the UK will face increased regulatory costs.

This post represents the views of the author and not those of the Brexit blog, nor the LSE. The full report on which the above draws can be read here. The post appeared first on LSE British Politics and Policy. Featured image credit: Pixabay (Public Domain).

Olga Pindyuk is an Economist at the Vienna Institute for International Economic Studies.

The risks of simple majority referendums: learning from Quebec

duncan bannermanBritain voted to leave the EU in a simple majority referendum. Gordon Bannerman (University of Guelph-Humber) argues that it would have done better to follow Canada’s example. After Quebec narrowly voted to avoid separation in 1995, the country revisited its approach to referendums. Indeed, not all UK referendums have involved a simple majority.

Canada has often featured on the LSE Brexit pages in terms of its past and prospective trading relationship with Britain. But surprisingly little comment has been made on the constitutional precedents Canada provided for pre-Brexit Britain, especially arising from the 1995 Quebec referendum, which resulted in a narrow 50.58 per cent to 49.42 per cent majority rejecting separation.

quebec flag

The Quebec flag. Photo: abdullahh via a CC BY SA 2.0 licence

Afterwards, alert to the potentially momentous implications of a simple majority popular vote, government set to work to provide a new legal framework for referendums. Mistakes had been made. The federal government had no input in drafting the question, with the impetus handed to pro-independence parties (Parti Québécois, Action démocratique du Québec, and Bloc Québécois) whose question asked if voters agreed Quebec “should become sovereign after having made a formal offer to Canada for a new economic and political partnership”.

The convoluted, hedged language, described by the British High Commissioner to Canada Sir Anthony Goodenough as “gobbledygook”, concerning the future of Quebec/Canadian relations was not new. Even greater obfuscation had characterised the referendum of 1980, with a question consisting of 106 words, to grant Quebec’s government a mandate to negotiate “sovereignty-association” with Canada. In both cases, the language conveyed the impression of a smooth transition to independence amidst the willing cooperation and assistance of the federal government. The reality was that such a scenario could not be guaranteed. The Quebec nationalist parties had also threatened to make a unilateral declaration of independence (UDI) should a vote for separation not be honoured within one year. The Canadian government of Jean Chrétien, acting largely on the ideas of Stéphane Dion, the Minister for Federal Provincial Relations, requested the country’s Supreme Court to rule on the legality of UDI, relative to international law and Canada’s constitution. Acting on the 1998 judgment Reference Re Secession of Quebec, Chrétien codified the Supreme Court’s recommendations in the Clarity Act (Bill C-20) in 2000. Any future referendum question had to be presented in the House of Commons and approved by both Houses. Section 1(4) stipulated that questions providing only a mandate for future negotiations with Canada would be considered unclear and invalid. The question had to be “clear”, and voted by an (unquantified) “clear majority” for the Federal Parliament, as arbiter, to recognise its validity. No longer would 50 per cent + 1 be deemed sufficient for far-reaching constitutional changes – in future, a stronger mandate would be required. There the question has rested, as no referendum has taken place since 1995.
As some Canadian commentators have argued, Britain should have learned from the Quebec experience.

Some diplomats and politicians, such as Sir Anthony Goodenough and Malcolm Rifkind (Foreign Secretary, 1995-1997), did see important lessons from the Canadian experience but these were more pointed towards drawing parallels between the nationalist movements in Quebec and Scotland. While lauding the Canadian government’s measures in undermining separatism, the example of the Clarity Act in strengthening central government did not seem to gain traction in Britain.

Yet examples existed closer at home. Since the 1970s, referendums – previously almost unknown in Britain – have been used in popular decision-making. There has been no fixed formula. In the 1975 EEC referendum a simple majority was required, but the 1979 devolution referendums in Scotland and Wales, preceded by legislative acts, were framed more cautiously. Parliament was firmly in control of the process, and an amendment (Section 58(2) of the 1978 Scotland Act) by the Labour MP George Cunningham, supported by Conservative and Labour anti-devolutionists, stipulated that for the Acts to become law, an affirmative vote of 40% of the total registered electorate would be required as well as a simple majority.

The amendment imposed a qualified majority, by making the vote of every registered voter count – meaning non-voters were counted as votes against. The electoral register used was based on a qualifying date of October 1978. There were over 500,000 “unavoidable non-voters” including prisoners, hospital patients, and those moving home. Most notoriously, the amendment meant those registered in October 1978 who had since died were counted as votes against. The grievances were not all on one side—some argued the 40% rule reduced the anti-devolution vote, since many voters, by equating abstention with casting a vote against, stayed at home. The 40 per cent threshold was not attained in either country but in Scotland a majority of votes cast (51.6 per cent) voted for devolution but on a 63.72 percent turnout, the total amounted to only 32.9 per cent of registered voters. While making no difference in Wales, the amendment negated the simple majority achieved in Scotland.

The historical and political context was crucial in establishing the framework for the respective referendums. The 1974 Labour government, lukewarm on devolution but needing SNP parliamentary votes, reluctantly acted on the 1973 Kilbrandon Report’s recommendations, but readily accepted the Cunningham amendment as a safeguard. By contrast, the 1997 referendums for a Scottish Parliament and Welsh Assembly promoted by the pro-devolution Blair Government imposed no qualified majority rule. Despite the establishment of the Electoral Commission (EC) with referendum management, via the Political Parties, Elections, and Referendums Act (PPERA) of 2000 being statutory acknowledgment of referendums as a fixture in the UK’s political landscape, little has changed. In 2014 and 2016 the EC played a key role in ensuring intelligible wording of questions but it neither drafts original questions nor decides what constitutes a majority vote – those decisions are made by Parliament, and subject to the vicissitudes of party politics.

The simple majority formula used in the 2011 AV vote, Scottish independence vote of 2014 and the EU referendum of 2016 followed the format of 1975 and 1997 rather than the more cautious provisions of 1979. The assumption that the policy preferences of the main Westminster parties were shared by a majority of the electorate was reckless and dangerous. While validated in 2011 and 2014 (though for Scotland, as with Quebec, the result was perhaps closer than it should have been) the gamble did not pay off in 2016.
The Cameron government was remarkably complacent not only in setting the referendum terms but in failing to make any contingency plans (unlike in 1975) in the event of an EU exit – an extraordinary dereliction of duty, which, as the 2017 House of Commons report ‘Lessons Learned from the EU Referendum’ stated, led to unnecessary political instability: “Such preparation would negate the need for the Prime Minister to resign … It should be reasonable to presume that the sitting Prime Minister and his/her administration will continue in office and take responsibility for the referendum result in either eventuality”.

How far David Cameron was genuinely committed to the referendum promised in 2013 remains unknown. If a “bluff-call”, it clearly failed but in having to deliver a referendum it would have been wise to have considered the format more carefully. Qualified majorities are often used in the public and private sectors (not least in the EU), and in an electoral system underpinned by majoritarian principles, it is questionable how difficult it would have been to impose. While the proposal would probably have met with opposition from Eurosceptics within the Conservative Party, that doesn’t seem like a good reason for adopting a hazardous simple majority formula, lending credence to the view that Cameron was guilty of putting party before country.

Leading political scientists, including Vernon Bogdanor and Peter Hennessy, have expressed grave misgivings over using referendums, and the lesson for post-Brexit British governments seems to be to tread carefully. Before the 2016 referendum, Lord Kerr of Kinlochard was one of the few who found the absence of a threshold “constitutionally quite surprising for a decision as big as this”. Afterwards, of course, many Remainers concurred.

Britain’s non-codified constitution ensures referendums are considered legally advisory rather than politically binding but in practice, no government has been prepared to ignore the outcome of a referendum. Given these customary pressures, it makes sense to ensure a proper balance between expressions of the popular will while minimising the chances of a fierce populist outburst.

How different things looked in 1817, when George Canning stated:

“When I am told that the House of Commons is not sufficiently identified with the people, to catch their every nascent wish and to act upon their every transient impression,—that it is not the immediate, passive, unreasoning organ of popular volition,—I answer, thank God that it is not! I answer, that according to no principle of our constitution, was it ever meant to be so;—and that it never pretended to be so, nor ever can pretend to be so, without bringing ruin and misery upon the kingdom.”

By using referendums, we have moved far from Canning’s deliberative assembly model, but the Canadian example indicates that referendums can be – and should be – more closely managed. Canada’s Clarity Act might have been a useful reference point for British policy-makers, for protecting territorial integrity and promoting political stability are fundamental elements of responsible government. Imposing more rigorous conditions may seem Machiavellian to some, but it is far from incompatible with maintaining democratic legitimacy – in many ways it may ensure more mature and measured decision-making in the contemplation of far-reaching constitutional issues. The alternative can be decisions made on a transitory and/or ill-informed basis.

This post represents the views of the author and not those of the Brexit blog, nor LSE.

Gordon Bannerman is a professor at the University of Guelph-Humber.

Despicable migrants? UK’s treatment of foreign criminals will only harden after Brexit

An increasing number of EU nationals who have committed crimes find themselves being deported. In the context of the UK’s tortured departure from the EU, the deportation of foreign criminals has become a touchstone of British notions of the public goodwrites Nevena Nancheva (Kingston University London). She argues that the UK has effectively curtailed the rights of what it sees as a particularly despicable group of migrants – foreign criminals. Rather than looking at its own inequalities, it has chosen to tighten its physical and invisible borders. 

Britain used to deport its criminals. In fact, it used to deport all ‘wicked and evil-disposed persons’ whom the judges were too merciful to execute instantaneously for a long list of crimes against property, or indeed, for being idle or seeking employment, as section V of the Transportation Act of 1717 mandates. Such offenders were transported originally to the West Indies (where they habitually neglected to stay), then to America (a secret often brushed under the carpet by American historians and politicians alike), then, amidst the turmoil of American revolution and to prevent the French from extending their empire, to Australia in 1787.

In those days, the dispossessed, the idle, the vagrant, the lewd fell into the category of criminals because they threatened the established social order. They were bound for expulsion to protect sovereign landowners, the common good, and the good society. The mobile, in particular, were frowned upon as ‘the chrysalis for every species of criminal’. From a longue durée historical perspective, Bridget Anderson spends a lot of time unpacking the link between vagrancy and criminality in Britain, positioning the migrant as essentially a ‘failed citizen’.

Today, we begrudgingly agree that our criminals, petty or not, are our own problem and should not be dumped on indigenous peoples around the world. (That is, unless we can strip them of their citizenship and invite Bangladesh to deal with them!) Foreign criminals, however, are a totally different matter: a cause célèbre for a host of Labour and Tory leaders, the deportation of foreign criminals has gradually become the norm, rather than the exception to the rule.

Changing the rule book

The notion of Britain’s ‘public good’ has remained intrinsically linked to this development: under the 1971 Immigration Act, non-citizens are liable to deportation if this is deemed to be ‘conducive to the public good’ (section 3(5)). There is no explicit mention of criminality in this law, but the 2007 UK Borders Act amends the omission by explaining that ‘the deportation of a foreign criminal is conducive to the public good’ for the purposes of the above (section 32).

The amendment came after a string of scandals and heated public debates over the fate of some 1,023 foreigners who had been released from British prisons into society since 1999, rather than considered for deportation, costing the office of the then Home Secretary Charles Clarke. It is perhaps not coincidental that these discussions arose in the process of EU enlargement to the 10 former communist states of Central and Eastern Europe. Even though regions in turmoil (such as Somalia) or human rights (e.g. international refugee protection) were cited at the time as constraints on deporting foreign criminals, Charles Clarke went on to write a book about the threat of migration within the EU, capturing a long-standing concern of the British public with the open borders and the freedom of movement which the EU seemed to be all about.

The invisible boundaries of Britain

In the context of Brexit and UK’s tortured extraction from the EU, the deportation of foreign criminals has become an interesting touchstone of British notions of the public good: that elusive abstraction which pits the lives and rights of concrete men, women and children against a fuzzy and imagined, but clearly incomparably more significant, entity: the nation. In 2018, I conducted a pilot study of the impact of deportation on the families of foreign criminals in the designated foreign nationals male prison HMP Maidstone. What I discovered in my conversations with matter-of-fact prison wives, is that the law is implemented with implicit disregard for the integrity of their families and the welfare of their children. That the much-lauded ‘public good’, upheld in the letters from the Home Office and the decisions by the judges, should trump the best interests of these families points to the boundaries of Britain’s community of value. As the Brexit dynamics narrows these boundaries, the distinctions between those who clearly do not belong (such as foreign criminals) and those who should belong but are not really welcome (such as EU nationals) become blurred.

Image: author’s, Walls of HMP Maidstone, The Visits Building (1819).

No Article 8 rights for foreign criminals

Even the immigration-control-obsessed 2007 UK Borders Act provides an exception (section 33(2)(a)) to the deportation of foreign criminals in cases where the removal of an individual would breach his or her rights under the European Convention on Human Rights, in particular the right to family and private life under Article 8. Before a decision for deportation was made, the individual’s rights would be weighed against the public interest on the basis of a five-stage test (the case of R (Razgar) v SSHD [2004] UKHL 27), normally by a panel of judges at a tribunal, covering a wide variety of factors (‘as varied as life itself’, lawyer Nick Nason sympathetically explains). These rules were swiftly changed, first by the executive in 2012 and then by the legislature in 2014, to limit the cases when individual rights would disable deportation, and to give decisively greater weight to the public interest.

Thus, a prison sentence of anything more than 12 months could justify interference with the rights of a foreign citizen to maintain his or her spousal or parental relationships in the UK, which would otherwise have been protected under human rights legislation. The Secretary of State’s practice to ‘certify’ these rights as ‘clearly unfounded’ (aka ‘deport now, appeal later’) aimed at ‘cracking down on the appeals conveyor belt used by criminals to delay their removal from the UK’, as then Immigration Minister James Brokenshire claimed after the practice was upheld at the court of appeal in 2015.

Disturbing stories began to emerge of petty criminals being ‘treated like animals’, apprehended when signing on with the Home Office and rushed on chartered flights to Jamaica at the break of dawn. Even as the Supreme Court ultimately ruled the system for deportation before appeal unlawful, the Windrush scandal followed in 2018, to illustrate the extreme extents to which Britain’s fascination with deportations had legitimised the practice.

What of EU criminals?

Interestingly, since 2014 an increasing number of EU nationals find themselves among the deported foreign criminals. This is somewhat surprising since EU law mandates a much higher level of protection against deportation for EU citizens than the domestic rules for other foreign criminals. This number is in addition to the homeless EU nationals deported from the UK on the basis of Home Office’s creative interpretation of EU Treaty rights as incompatible with homelessness. The removal of homeless EU nationals has fed into Britain’s own soul-searching over the enforcement of the 1824 Vagrancy Act continuing to criminalise homelessness and begging!

In favour of closure…

So Britain seems to have gone full circle from the days of the penal colonies and the deported mobile poor. It has effectively curtailed the rights of a particularly despicable group of migrants – foreign criminals – all the while making clear its displeasure with order-disturbing vagrants. Rather than looking at its own inequalities, it has chosen to tighten its physical and invisible borders. Brexit will inevitably bring further legal restrictions in the governance of migration. One can only surmise their impact on the public good of Britain after the EU.

This post represents the views of the author and not those of the Brexit blog, nor LSE. 

Dr Nevena Nancheva teaches Politics, International Relations and Human Rights at Kingston University London. She has studied EU migration to the UK since 2016, with a British Academy grant, building an academic network of scholars working on the topic. Her current research focuses on transnational identities and the marginalisation of migrants in the context of Brexit. This piece is based on a pilot study of EU nationals in detention with a view to family reunification and human rights protection.

Understanding Boris Johnson’s ‘retropian’ appeal to Conservatives

paul david beaumontThe election of Boris Johnson once again highlights the salience of nostalgia to the Brexit debate. This is more than a throwaway attack line, writes Paul David Beaumont (Norwegian University of Life Sciences). Drawing upon social psychology can provide the theoretical basis for why and how Johnson’s “retrotopian” rhetoric appeals to old, wealthy, and nationalist Brexiteers.

The election of Boris Johnson by the Conservative party membership should – but won’t – put to bed the popular hypothesis that Brexit was chiefly a rebellion by the ‘left-behind’ against the establishment. In this account, a combination of unchecked EU immigration and a decade of austerity had left great swathes of the working class, especially those in the North, in dire economic straits and angry at the establishment. The Brexit referendum was a welcome opportunity to take revenge. As a result, the last three years have seen  intrepid reporters voxpopping Wearsiders, with the subtext that these are the turkeys that voted for Christmas.

Yet the ‘left behinder’ thesis is at best partial. Indeed, one will not find many ‘left-behinders’ among the Tory party membership who selected Britain’s new Prime Minister. Johnson stood on the promise to Brexit, come what may. Indeed, the Tory membership offers a snapshot into the relatively wealthy, older, middle-England voter that seldom features on BBC news, yet also voted in high numbers to leave the EU.

The election of Boris Johnson also offers a timely excuse to revisit an article I wrote back in 2017: Brexit Retrotopia, and the Perils of Post-Colonial Delusions. As the title implies, it offers a plausible explanation for some of the reasons why this group voted Leave, and a why they are now doubling down on no-deal Brexit. The work sought to complement a number of quantitative studies that highlight how national identity and values are at least as important in driving Brexit as economic factors. However, I suggested that we needed to unpack the identity ‘variable’. After all, it is not a given that nationalists are Eurosceptic, and Britain has no monopoly on nationalism. Moreover, the EU is similarly bureaucratic, inefficient, and rule-imposing for other members, which begs the question of why Britain –  rather than say, Italy – chose to exit. (To be clear, I am not arguing that voting leave is irrational; there are plenty of good reasons to dislike the EU. Rather, it is an argument for why Euroscepticism has been especially strong in Britain.) Given this, a full explanation of how identity mattered to Brexit requires analysis of the quality of British nationalism: What is it about Britain’s identity narrative that made Brexit appeal to nationalists?

Drawing on social psychology, and a touch of Zygmunt Bauman, my article sought to add empirical and theoretic ballast to the now frequent refrain that nostalgia for Britain’s past informs Brexiteers’ plans for Britain’s future. Indeed, while Brexit baffles economists, social psychologists will not have been surprised to see Brexiteers risk diminished economic wellbeing for seemingly intangible identity reasons. Social identity theory (SIT) suggests that individuals are often willing to forgo economic gain in order to improve their social group’s status, enable positive comparisons with outgroups and thus generate pride and self-esteem. It should be immediately clear how provisionally SIT may relate to Brexit: voting Leave could be understood as a radical strategy for making their national social group more positively distinct from Europe. Yet as intuitively appealing as it appears, there is a snag with the standard SIT model’s applicability to Brexit. It is unclear why nationalists would consider Britain to compare poorly with other EU members in terms of what Brexiteers themselves considered important: ‘sovereignty‘. Britain enjoys bespoke treatment within the EU, unrivalled by other members: it has more opt-outs than any other member, and receives a rebate of approximately 66% of its annual net contribution. Britain, if anything, had privileged status in the EU.

While the standard SIT model founders, introducing a temporal dimension can help illuminate what underpins Brexiteers’ status concerns. An offshoot of the Social Comparison Theory that SIT is based upon, Temporal Comparison Theory (TCT), suggests that individuals do not just compare themselves to their peers but also to their former self’s status: people seek to maintain a coherent narrative of the self that shows self-improvement over time. When one struggles to make favourable comparisons with the past self, it can prompt low self-esteem in the same way that unfavourable comparisons to peers can. Scaling up this argument, Joshua Freedman has argued that China’s status dissatisfaction and subsequent status-seeking activities demands an understanding of how its identity narrative requires China to remedy its “century of humiliation”, and regain its former glory.

It should be clear by now that TCT is well placed to shed light on Brexit. If we assume that individuals often rest their self-esteem upon temporal comparisons with their social group’s former self, then what does this illuminate about Brexit? In short, my article suggested that two key features of Britain’s identity narrative make it particularly susceptible to Eurosceptic arguments. Because Britain’s mainstream national identity narrative relies upon glorifying its former empire (and lamenting its loss) together with fetishising the second world war, devolving power to the EU undermines nationalists’ sense of progression and self-esteem. To a country that once boasted (and still learns) how “the sun never set” on its empire, the EU’s practices of compromise compare poorly. Cooperation is easily presented as subordination.

Indeed, Britain’s present EU relationship – regardless of how much economically better off it may be than before, regardless of how much ‘more’ sovereignty it retains vis-à-vis its fellow members – seemingly turned Britain into a rule-taker rather than a rule-maker. Perhaps most ignominiously, from this perspective, Britain can be presented as having ceded power to the very countries it fought off in the second world war. All this enables Eurosceptic leaders to present a narrative of decline that calls for an urgent halt via Brexit. Indeed, Brexit embodies a vision that Zygmunt Bauman might have diagnosed as retrotopian: a nostalgic vision for the future based upon a lost but undead past. As such, the nature of the UK’s self-narrative – constantly reproduced via popular culture and the media — can thus help explain why arguments pertaining to “sovereignty” resonate so powerfully in the Brexit debate among older, wealthier, and more nationalistic Englishmen, who have certainly not been left behind.

While my article only provided provisional evidence supporting the plausibility of the thesis, two years on the argument appears to be holding up well. A growing body of research has fleshed out and nuanced the nostalgic underpinnings of Brexit and its post-colonial overtones. Meanwhile, second world war references continue to pepper Brexiteer discourse: scarcely a week goes by without a Brexiteer calling for Brits to reawaken the ‘spirit of Dunkirk’, rather than worry about the damage done by a no-deal Brexit. Perhaps most pertinently, Britain’s new PM Boris Johnson has risen to power on the back of almost cartoonish retrotopian appeal. Indeed, campaigning for Brexit, Johnson exhorted voters “to take the chains off the giant, unshackled Britannia and let the lion roar again!”, while his first speech as prime minister concluded with the call for Britain to “recover our natural and historic role”. As Edoardo Campanella put it in Foreign Policy, Johnson is “the ‘quintessentially nostalgic leader’.

It is certainly understandable that Johnson, and any state leader, wants their citizens to feel pride in their history. Indeed, glorifying the past can help solidify national cohesion; after all, if a nation is just a series of stories we tell about ourselves, why not make those stories good ones? The danger is when hubris based upon the past meets with the hard realities of the present. Little of what Johnson has said so far suggests he recognises the challenges that lie ahead either in renegotiating with the EU or in leaving without a deal. Indeed, Johnson’s claims that Brexit merely requires more ‘energy‘ and positive thinking resemble those of a self-help guru rather than a prime minister. It may well be exactly what Brexiteers would like to hear, but I doubt it will change either the EU’s calculus or soften the effects of a no-deal Brexit.

This post represents the views of the author and not those of the Brexit blog, nor LSE.

Paul David Beaumont is currently finalising his PhD dissertation, The Grammar of International Status Competition, at the Department of International Environmental and Development Studies at the Norwegian University of Life Sciences. He tweets @BeaumontPaul​.

Boris Johnson’s real agenda: The ‘Singapore scenario’

While immediate political attention has focussed on urgent questions of how, when or if Britain’s new Prime Minister, Boris Johnson, will succeed in taking the UK out of the EU, the longer-term agenda of a Johnson-led Conservative administration has been pushed into the background. This is unfortunate. Johnson’s dream, should his premiership survive, is of a post-Brexit Britain akin to a European ‘Singapore of the West’, writes Charles Woolfson (Linköping University). He cautions, however, that this ‘Singapore scenario’ leaves a lot to be desired.

In Johnson’s eyes and those of fellow ardent free-marketeers, a ‘Singapore scenario’ would be achieved by an ultra-business-friendly environment with low or zero corporation tax, low wages, weak trade unions, vestigial welfare provisions and a significant temporary migrant ‘non-citizen’ workforce (around 30 per cent of the total workforce), largely without the protection of national labour laws or access to welfare provisions.

Yet, as the Prime Minister of Singapore pointed out, the transposition of a Singaporean model to the UK is not so simple. Currently, the UK government spending on the public sector accounts for 40 to 45 per cent of the GDP, while for the Singaporean government it accounts for a mere 16 to 17 per cent of the GDP (Bloomberg News, 2018). Furthermore, the Singaporean economy, while ranking second in the World Bank index of 190 countries in terms of ‘ease of doing business’ (pro-business regulation), is also accompanied by powerful regulatory social controls and an extensive system of government patronage (Trading Economics, 2019). Social inequalities in Singapore are rising. A recent review of 157 countries in terms of commitment to reducing inequalities ranked Singapore overall at 149, among the 10 worst performers, and at 157 in terms of redistributive progressivity of tax policies (Development Finance International and Oxfam Report, 2018). Noting a decline in ranking since the previous year, the report concludes, ‘On labour, it (Singapore) has no equal pay or non-discrimination laws for women; its laws on both rape and sexual harassment are inadequate; and there is no minimum wage, except for cleaners and security guards’. As a prescription for a post-Brexit labour market, a ‘Singapore scenario’ leaves a lot to be desired.

None of this has dampened enthusiasm for turning Britain, free of European regulation, into some kind utopian free-market paradise. Johnson’s trademark rhetoric has consistently excoriated the EU for ‘trussing the nations together in a gigantic and ever-tightening cat’s cradle of red tape’. It was exemplified by Johnson’s theatrical appearance before the cheering Conservative Party faithful on the final leadership election hustings. Brandishing of all things, a kipper, Johnson claimed (incorrectly, as it happens) that ‘Brussels bureaucrats’ required that each kipper sent through the mail be accompanied by a coolant bag, an unnecessary and ludicrous burden on business.

There are echoes in Johnson’s buffoonery with the 1980s satirical BBC TV series, ‘Yes, Minister’. A 1984 Christmas special edition depicted an incompetent and opportunistic James Hacker as Minister heading the Department of Administrative Affairs, reluctant to sign a Xmas card to a Brussels Commissioner (one rather French-sounding ‘Maureece’ by name). In contention was a proposed Brussels directive to standardize the ‘EuroSausage’ and re-designate the ‘Great British Sausage’ as an unappetising ‘emulsified high-fat offal tube’. In the same election hustings speech, Johnson proclaimed, kipper to hand, ‘And when we come out, therefore, we will not only be able to take back control of our regulatory framework and end this damaging regulatory overkill but we will also be able to do things to boost Britain’s economy, which leads the world in so many sectors’ (New Statesman, 2019).

Hostility to EU regulation is merely a surrogate target for hostility to regulation in general, seen as holding back burgeoning British free enterprise. To realise full ‘regulatory divergence’ from EU controls (the glittering prize of a no-deal Brexit), Johnson has now proposed the creation of free economic zones or free ports, offering lower import taxes and customs tariffs, favourable manufacturing locations, and looser regulation to lure investment in up to 10 ports around the country. These free ports will be situated mainly in declining and ‘left-behind’ areas such as Teeside. Such zones are not specifically precluded by EU regulations, although it is true to say that they are regarded by the Commission as potential havens for counterfeiting goods and money laundering. In fact, over 80 exist within the EU, the majority in the newer member states of Eastern Europe. Besides providing free-enterprise zones where capitalism can be let loose to do what it does best, their attractiveness for employers is that they are typically insulated from employment protection and minimum wage legislation, while collective bargaining and trade union representation are generally non-existent. Free ports are ‘the Singapore scenario made real’ in the UK context. They will be the forward positions in a greater national project of wholesale deregulation accompanied by comprehensive labour subordination, UK-apore as one big free port.

The post-Brexit foreign trade and investment environment

Ironic, therefore, is the announcement by Brexit-supporting Sir James Dyson, one of Britain’s most celebrated entrepreneurs of the relocation of his corporate headquarters from England to Singapore. This comes only a few months after a previously announced ongoing UK investment programme, much welcomed by Theresa May, and portrayed as a sign of business confidence in Britain’s post-Brexit future. For Dyson, the business logic is presumably compelling. While preserving his UK sites, the company already has manufacturing and new R&D facilities in Singapore, in part following a previous relocation from the UK. The Singapore investment is proximate to profitable East Asian markets for his luxury products, not to mention providing a suitable base for Dyson’s new plan to develop electrical automotives. Not least, however, the move to Singapore potentially offers zero corporation tax. A further incentive is access to labour markets in the East Asia region providing both compliant and relatively cheap human resources when compared to the UK. Dyson Ltd presents a paradigmatic example of ‘foot-loose’ capital investment shopping for regulatory regime advantage in a globalised ‘race to the bottom’. As a pointer to the investment potential of a post-Brexit Britain, Dyson’s decision is ominous.

An additional dimension to the post-Brexit competitive challenges facing the UK economy is the fate of existing foreign direct investment. Japan, for example, is a significant investor in the UK. Nissan, Toyota, and Hitachi between them account for 40 billion pounds (nearly half of Japanese direct investment intended for the EU in 2015 and 144,000 UK manufacturing jobs. Japanese business has sought reassurances that the UK will remain in the European customs union and single market, a demand that is profound anathema to Johnson.

In or out of the single market and customs union, the fact is that the EU is itself remoulding the global trade and investment environment through an extensive series of Economic Partnership Agreements (EPAs), several of which it was hoped would be with potential trading partners for the new ‘Global Britain’. Recent among these is the EU-Japan Economic Partnership Agreement (EPA) of 2017. This will remove nearly all significant tariff barriers to trade. While the UK has already one of the least regulated labour markets in the EU, such agreements place further competitive pressure on a post-Brexit UK to show even greater ‘flexibility’ on labour and other standards. It is pressure to downgrade that will surely intensify as the UK government embarks on the mammoth task of ‘replicating’ forty years of existing European trade deals or tries its unskilled hand at forging new ones. If preliminary exchanges with the US regarding food safety standards in a future trade deal (specifically, the acceptability of chlorine-washed chicken) are anything to go by, the prospects are not enticing.

Labour migration: an unresolved contradiction

Theresa May’s successful wooing of Nissan investment in Sunderland may prove to have been only a temporary demonstration of foreign investor confidence in the future of the UK economy. As the Japan Ministry of Foreign Affairs warned, ‘Japanese businesses rely on inexpensive labour from Eastern Europe in the manufacturing and agricultural industries in the UK’.

Labour migration, the toxic driver of the Brexit debate, will present unique challenges to a free-market Johnson government, not least as its internal logic would suggest a more liberal and open regime. Migration, therefore, presents an unresolved contradiction at the heart of the ‘UK-apore’ project. To appease his core supporters it is more than likely that Johnson’s government will be forced, reluctantly or otherwise, to replicate much of the exclusionary path towards continued free movement of labour that informed the policies of his predecessor.

As Central-Eastern European migrants return home, (or refuse to come to the UK for the wages and conditions on offer) both of which increasingly they appear to be doing, UK nationals will need to be ‘persuaded’ to accept those low-paid ‘3D’ (dirty, dangerous, and demeaning) jobs that they had previously rejected. The ‘Singapore scenario’ applied to the UK would mandate a downgrading of current welfare and labour standards in a massive recalibration of labour expectations of the domestic labour force. Such a recalibration would be achieved by a radical shrinking of what remains of the welfare state, combined with a raft of ‘incentives’ to accept whatever jobs are on offer.

Questions of the downside of globalisation are not new but much accentuated by Britain’s current precarious political and economic conjuncture as it departs from the EU. In short, Boris Johnson’s ‘UK-apore’ can only be realised in a ‘race to the bottom’ to the significant detriment of existing standards. If the business model of labour and welfare devaluation in a ‘Singapore scenario’ is the pathway towards Britain’s economic salvation, then such standards now become integral to the democratic politics of post-Brexit Britain.

This post represents the views of the author and not those of the Brexit blog, nor the LSE. Image by David RussoSome rights reserved.

Charles Woolfson is Professor emeritus of Labour Studies at the Institute for Research on Migration, Ethnicity and Society (REMESO), Linköping University, Sweden. Since arriving in Sweden in 2009 after a decade of residency in the Baltic states, he has written on East-West migration from the newer EU member states, and on the impacts of radical austerity programmes in the Baltics following the crash of 2008. He co-edited with Jeffrey Sommers, The Contradictions of Austerity: The Socio-Economic Costs of the Neoliberal Baltic Model, Routledge, 2014.

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