Sunday, January 15, 2017

Philip Hammond spells out British government's Brexit thinking - to the German press

Brexit, we Britons have been told, means Brexit and it will be red, white and blue.

Beyond that, we know very little about our government's plans. Theresa May's speech on Tuesday may change that. Then again, it may not.

So if you want to know what the future may have in store, try the German press.

Philip Hammond has given an interview to Welt am Sonntag in which he is far more forthcoming than any minister has been to a British newspaper:
Hammond: We are now objectively a European-style economy. We are on the U.S. end of the European spectrum, but we do have an open-market economy with a social model that is recognizably the European social model that is recognizably in the mainstream of European norms, not U.S. norms. 
And most of us who had voted Remain would like the U.K. to remain a recognizably European-style economy with European-style taxation systems, European-style regulation systems etcetera. 
I personally hope we will be able to remain in the mainstream of European economic and social thinking. But if we are forced to be something different, then we will have to become something different. 
Welt am Sonntag: We don’t understand: Who or what would force you? 
Hammond: Economic circumstances. If we have no access to the European market, if we are closed off, if Britain were to leave the European Union without an agreement on market access, then we could suffer from economic damage at least in the short-term. 
In this case, we could be forced to change our economic model and we will have to change our model to regain competitiveness. And you can be sure we will do whatever we have to do.
Reading between the lines, Hammond is telling other European governments that Britain, if it is not favourable trade terms with the EU, will set itself up as an offshore tax haven with low standards of regulation and welfare.

How convincing a threat that will sound to those governments, I do not know.

But you can see how convenient it might be to right-wing British Conservatives. The line will be: of course, we would love to keep the NHS, but  because of those wicked Europeans we cannot afford it.

This vision of Britain as the Singapore of Europe, incidentally, was set out in the 2012 collection Britain Unchained.

Elsewhere, Hammond makes it clear that controlling immigration is the government's chief concern in Brexit negotiations.

He also offers this interesting observation:
In my judgement it would be a mistake to read the Brexit vote as being part of the same strand of thinking that has formed in the US. If you look at the media and the reporting during the Brexit referendum campaign, there was no anti-trade rhetoric. It was the exact opposite.

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