Selections for comment from recent Brexit-related media articles. (£) denotes article behind paywall
LONDON should not be a European financial hub after Brexit, says Michel Barnier – Telegraph (£)
This smacks more of either petulant obstructionism or even desperation from the EU’s chief negotiator, rather than a credible threat. However, it’s rather disturbing to see some UK commentators appearing to fall for it by suggesting we should sacrifice both what’s left of our EU-decimated fishing industry and autonomy over our sovereign territorial waters in return for financial services.
I believe that this is both a false dichotomy, and an empty threat. Compare the amount of EU-related financial business going through London with that going through, say, Frankfurt, which is the only possible alternative. There’s no comparison. In any event, the EU’s intention to introduce a disastrous pan-EU Financial Transactions Tax would act as a massive disincentive for business to move from London to Frankfurt.
On this, Bottler Boris needs to hold his nerve and hold the line. Any more Brexit delays would be an affront to democracy – Express
In focusing on the nuts and bolts details of the negotiation process, it’s easy to overlook the underlying electoral politics. Arguably, they mattered less while the Tories were continuing to post poll leads in double digits, despite misgivings about their mishandling of the Covid-19 crisis.
Now, however, with Keir Starmer providing more effective opposition to a visibly struggling Johnson, and with widespread reservations over the Tories’ timidity over exiting from lockdown, they start to matter more.
Against this background, the Centre for Brexit Policy has released its new paper entitled Do Not Delay Brexit – the View from the Red Wall https://centreforbrexitpolicy.org.uk/wp-content/uploads/2020/06/CBP-Do_Not_Delay.pdf, which backs up its chairman Owen Paterson’s Express article by showing the extent to which the Tories’ December 2019 election landslide was largely due to ex-Labour voters in the Midlands and the North trusting the Conservatives to deliver a genuine Brexit.
The significance of this, of course, is that with the opinion polls now tighter, and the proponents of an extension to the Brexit transition period trying to leverage the coronavirus outbreak as justification for it, a failure to complete the implementation of Brexit on time will rebound adversely on the Tories electorally. They would do well not to rely on the next election being four and a half years away and think they can take their recently-acquired electorate for granted.
The Economic Case Against Extending the Brexit Transition – Briefings for Britain
The case against extending the Brexit transition period isn’t only political. As economist Julian Jessop points out, any theoretical adverse impact from the completion of Brexit on time, even based on exiting on World Trade Organisation terms if a free trade agreement cannot be reached, is dwarfed by the economic impact of Covid-19 and the tremendous costs Johnson’s government has incurred in trying to mitigate it.
As Jessop also points out, the global economic downturn from the pandemic has also slashed borrowing costs still further, to the point where some gilts yields are negative.
This means that any additional government borrowing as a result of completing Brexit on time may actually have been made cheaper by the coronavirus crisis, apart from becoming relatively less significant when set against the extent of Covid-19 borrowing as a whole. There is simply no convincing case for deferring completion of Brexit on economic grounds.
The fact that this article is far more about farming than it is about fishing – which gets a mention only in regard to a possible trade-off against financial services – made me wonder if the Times’s sub-editors took a small liberty with the headline to garner more clicks, fishing being such a touchstone issue.
Whether the case or not, the premise for that trade-off is questionable; firstly because the EU’s ability to hold the UK and City of London to ransom over financial services is limited – as I explain in the first link commented on in this article – and secondly because Brussels is now reported to be backing down on access rights to British waters anyway.
The validity of an argument linking farming with fishing, as though they were but two sides of the same coin, looks suspect in any event. Even taking into account the self-sufficiency case for, and the anti-protectionism case against, giving farming and agriculture special treatment, the two aren’t the same.
Fishing isn’t just a trade issue. Given that it involves the ‘ownership’ of national territorial waters, it’s far more a sovereignty issue than it is merely one of trade and commerce, and if Johnson has succeeded in forcing Brussels to accept that it is off the table, that can only be a good thing.