Thursday, 16 March 2017

What's Brexit Got to Do With It?



I have to say I am finding it difficult to follow the various commentaries on the NICs U turn. On the one hand we are told that this is a humiliation for Philip Hammond. That's a given. On the other hand however it is the same for the PM. Well, maybe. But, if reports are true that she told him that they were reversing it and she didn't care how bad it was for him then that suggests a prime minister who is in full control and who is willing to be rather bold, albeit in reverse.

We are also told however that the fact that the Government reversed its decision so quickly is worrying. How so? Surely having the courage to admit one's mistakes is something admirable, especially if, as was suggested at the weekend and last week, the NICs equalisation was something that the Treasury tries to sneak through past every Chancellor and has been doing so since the 1980s. If so this was a measure very easy to reverse with the added benefit that the Treasury will never get away with trying to do it again.

And then there is the Brexit angle. Given the incompetence that this debacle demonstrated, how confident should we be in the Government's ability to handle the negotiations on Brexit we are told. Well, how are the two in any way analogous? One is an arcane measure introduced by a new Chancellor who is clearly not a great strategic or political thinker or yet in full control of his department. The other is a long drawn out process for which the Government has already been preparing for 8 months, will involve thousands of civil servants, dozens of ministers and a details obsessed prime minister known for her obstinacy and determination and unblinking attitude to negotiation.

And while we are on the subject of the intricacies of Brexit let us for a moment draw breath and stop running ourselves down. Why is it assumed that we will be bad at this, that the Eurocrats will run rings around us? The EU is famously incompetent. It is famously corrupt. It is famously simultaneously a vast monolithic Tower of Babel and a disparate group of competing and disputatious countries with different agendas and incompatible priorities. We are one country with an efficient civil service with all legal ducks in a row on our side and are net contributors to the EU budget. We don't have to pay them a damned thing after leaving and that gives us a massive advantage as does our willingness to simply walk away and go to WTO terms. This would not be the end of the world. It is why we will almost certainly get single market access on good terms. We will be showing Europe the way. Others will follow our lead.


The NICs issue was embarrassing for sure, but it was hardly terminally so. In government such mess-ups happen constantly and inevitably given the intricacies and complex nature of all policies. Intellectually there was a perfectly reasonable case to be made for what Hammond did last week and the Treasury, which always sees our money as its own, had clearly been itching to get this one through for years, saw him as their golden opportunity. Hammond, in truth, is nothing like as clever as he thinks he is and they saw him coming.

It will take the Chancellor a long time to live this down and indeed he may never do so. He gets the opportunity however to make amends later this year when he presents his second Budget. Here is a tip for him though: many of reacted to his NICs increase with a wince the moment we heard it. That is because we are Tories and Tories are instinctively opposed to tax rises. Remember that, Mr Hammond, and you won't go far wrong. Try being a reforming, simplifying, tax cutting, tax flattening, tax abolishing Chancellor, one determined to help Britain navigate its way through Brexit and into the sunny uplands of independent prosperity and you will indeed live it down.

One thing is for certain, what happened yesterday will not have the slightest bearing on Brexit negotiations. Anyway, maybe that is why the PM decided to delay invoking Article 50. Clear out the trash first.


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