Brexit: same old tunes

Yesterday I picked up on a tweet by Professor Brian Cox off the telly. He remarked that:

The only way Brexit could have worked economically speaking was to use it to deregulate, lower business taxes, shrink the state etc. It’s naive because the majority of U.K. voters - especially those who voted for Brexit - don’t want that. They actually want a European social model - high spending on health, education, defence, etc. And the only way you can have that in today’s difficult geopolitical world (given our geographical position on the European continent) is to be part of the vast, pan-continental single market and customs union that exists to deliver the European social model as far as is possible. This is why the Labour Party, in government, will eventually begin the process of joining the European single market and customs union. The only other option is to follow the Brexiteer vision of a much smaller state - and a large majority do not want that.

I’ve crossed swords with Cox before when he insisted that Switzerland was in the single market, so I thought I would drop him a line in the hope of an entertaining debate. As illustrated above, he declined the offer.

I pointed out that we have all the same regulations and high taxes as before. Very little has changed since Brexit - and the current model is not delivering decent health, education or defence. Dozens of councils are teetering on the brink of bankruptcy. We'd be in the exact same position had we remained in the EU, because the economy is strangled by red tape and taxes.

We very much do need deregulation. It's why nothing ever gets built in this country. Between Net Zero regulation and legacy EU planning and competition rules, there is no chance of rapid renewal of energy infrastructure. Consequently, energy costs will remain high, thus the economy will stay in the doldrums in perpetuity.

As such, without a functioning private sector there is no "European Social Model”, as Germany (still very much in the EU) is about to discover - as their heavy industry, auto industry and manufacturing sector collapse. This is as much to do with the EU's EV mandate (and its focus on useless renewables) as it is its former reliance on cheap Russian gas. Ease of export is something of a moot point if energy is too expensive to make anything.

Moreover, this is not 2016 anymore. Even before 2016 the mood across Europe and the West was turning more towards economic nationalism, rejecting the neoliberal principles the single market is founded on - even to the point of blockading Ukrainian grain. France has been quietly lobbying to dismantle the single market in haulage, and farmers are blockading European borders.

As to reopening trade discussions with the EU, the EU agri lobby would no doubt campaing against any easements on British imports. British consumers also want to do more to support British farmers. As such, we need to move away from the EU SPS regime in order to promote more localised meat production. Meanwhile, food prices in the EU are skyrocketing, not least because of wildly unpopular reforms to the CAP, effectively making it a Net Zero delivery mechanism - (all but eliminating profits for small and medium-sized farms). See also; the EU's war on fertiliser production.

In any case, the EU has already quelled any Labour hopes of renegotiating the TCA, and a veterinary agreement is unlikely (and actually not something we want), and if we joined the PEM convention, there is nothing much a customs union would solve. If Labour wants to rejoin the single market, they're going to have to make the case for restoring freedom of movement to European workers at a time when the vast majority wants a reduction in overall immigration.

Like all remainers, Cox talks about Brexit as though Britain is uniquely disadvantaged in Europe, oblivious to the continental economic turbulence, most of which is caused by EU Net Zero ambitions, at a time when European consumers can least afford it. It is precisely that kind of top-down, tone deaf political vanity that voters rejected in 2016, and it's the same reason populist parties will sweep the boards at the Euro elections. The "European Social Model" isn't working.

There is, however, a more serious debate to be had on deregulation. Cox says that the public doesn't want deregulation. Certainly the public wants decent standards of food safety, animal welfare, clean waterways, environmental protection, health and safety at work etc. Who doesn't? The question we have to ask is whether the regulation we have does what it's supposed to do.

I can certainly make the case that EU food regulation doesn't necessarily result in safer food in that the system is massively bureaucratic and expensive for producers and will cause them to cut every corner they can. The veterinary system is an appalling waste, and it means we end up with a vet shortage, and slaughterhouses end up recruiting vets from overseas with inferior qualifications and poor language skills. Also, using vets to inspect consignments of cheese is moronic.

Regulation has to be a balance of all the concerns. We want to respect natural habitats, and uphold certain environmental standards, but the bureaucracy is such that it adds years to the development of new infrastructure and massively adds to the cost. We've had critical infrastructure projects gummed up with red tape for years. Small Modular Reactors are an established technology that could solve our energy woes inside a decade, but who'll be remotely surprised if they're still held up by the regulator five years from now?

I've mentioned this before, but I remember working for a small nuclear consultancy firm a few years ago, and we had exactly the right people to bid for a contract on Hinkley Point, only we had to have some or other bullshit eco-credential, so we had to bring in a consultant to do an environmental audit of a small office unit near Gloucester, (costing £60,000) which resulted in us having to produce monthly office recycling reports and other such nonsense.

You have to put all this together before you can even bid for a contract, so it's a huge barrier for nimble start-ups. Contracts tend to get awarded to the big consultancies who can afford the compliance costs. The whole system is a "pay to play" rigged market, that chiefly benefits all the worst corporate parasites.

Then there's all the Net Zero and climate bullshit. Any contractor bidding for a major infrastructure project has to produce a Carbon and Energy Management Plan (CEMP) in order to get a development consent order (DCO) from the government. There are penalties that contractors must pay if they breach contract clauses. This is what has delayed the Thames Crossing. The planning application for the Lower Thames Crossing already adds up to 359,866 pages. It's now a protracted negotiation with National Highways. The organisation has spent tens of millions of pounds redrafting planning applications for its two flagship tunnel schemes. £297m spent on planning so far, for a tunnel that may never be built. All while China and India are ramping up their coal use.

Much the same problems can be found with the Thames Tideway "super sewer". The project was initially costed at £3.52bn in 2014, but the sum has gradually risen over the course of its construction. it requires a "Social Impact Analysis" as well as a CEMP and will end up costing north of £5bn.

This regulatory regime is a rent-seekers charter - where we pay billions to produce nothing, and nobody can sincerely say any of this pointless red tape protects the environment or makes the slightest impact on the climate.

People might say they don't want deregulation but they do want cost-effective, competent government and modern infrastructure. Unless we review our archaic and corrupt regulatory systems, we'll continue to limp along with antiquated infrastructure, having to spend billions more of "temporary" life extensions, as we're having to do with our gas-fired power stations.

Meanwhile, a third of the cost of the gas for them is carbon taxes. Not forgetting the millions we pay them to not produce energy when the wind is blowing. And that's before we get into the fraudulent world of carbon trading. The European Union has lost billions to VAT fraud related to carbon trading, according to Europol.

We have never been in greater need of deregulation, but that's made all the more difficult when you have the likes of Cox, Vorderman and O'Brien whipping up scares that we're lowering food and environmental standards. They cling on to the infantile notion that because something is regulated by the EU then it is properly regulated, when there are endless examples of EU regulations making problems worse - and being inferior to the rules they replaced.

There's also a lot we could say about "social protections" that have made businesses far more hesitant about employing people, and made it more expensive to hire and fire, resulting a whack-a-mole law making exercise to deal with the unintended consequences such as zero hours contracts. None of this actually helps workers in the end. A liberalised labour market would do more for wages than the national minimum wage ever did, and means workers don't have to stay in jobs they hate.

Basically Britain is locked into terminal decline, with decaying infrastructure, stressed far beyond its limits due to uncontrolled immigration, and now we're looking at energy rationing because we can't get our act together and build new nuclear power stations. Consequently, the economy gradually grinds to a halt and our living standards decline. Yet the midwit brigade (supposedly elite thinkers) think all this is magically resolved by rejoining the single market and customs union, and replacing power stations with windmills. These are the so-called "adults in the room". Aren’t we are blessed to have these towering intellects among us?

In any case, Cox has it wrong. The argument for Brexit was not deregulation as such. Even the most ardent Brexiteer (when challenged) recognises the need for regulation. The point is that regulation should be responsive and proportionate, which EU regulation very often wasn’t. Securing even marginal reforms could take more than a decade, resulting in years of horse trading between lobby groups, when in reality there is no particular need to have uniform regulations on absolutely everything. That the EU attempted uniformity on everything was to make it easier for European corporates to bid for infrastructure contracts - the very sort of “neoliberalism” the public mood is turning against. Why shouldn’t we prefer British companies to build British infrastructure?

When it comes to goods regulations, there is a an obvious case for harmonisation but rules regarding construction and national infrastructure should always have been an exclusive national competence. The infusion of climate and environmental regulatory mechanisms has become a white collar job creation scheme, but own that is holding back the renewal of our infrastructure. Even a small experimental power station requires a full environmental audit and inspection system and a carbon plan, adding months to the planning process.

The question remains, however, is why the Tories have not capitalised on the opportunity Brexit afforded them. Since we went to the trouble of leaving the single market in order to secure regulatory autonomy, their complete inaction is inexcusable. One of the many reasons they deserved to be kicked out.