The Tories Want Divergence: Be Careful What You Wish For

More than 600 days after the people voted to leave the EU, the government’s painful efforts to draw up a coherent strategy stumble on. Prime Minister Theresa May, now habitually drawn by cartoonists as a ghost after her achievement in giving away her parliamentary majority, convened her senior Cabinet at her Chequers country retreat to hammer out a coherent government policy on Brexit.

After two days the war Cabinet — a phrase that must raise eyebrows in Berlin as well as Brussels — came with up three old English words put together like never before: ambitious managed divergence.

Divergence means that British rules and regulations can move away EU rules which shows we are a sovereign state. This keeps the warlike Johnson, Gove, and Williamson happy.

Managed means that it will be done very slowly and gradually, perhaps in the hope that the EU27 won’t notice. Ambitious? That’s just the sort of guff one gets at corporate strategy meetings. It doesn’t mean anything but sounds good and, well, who can really argue with it.

Unfortunately, the war cabinet’s efforts in Chequers, May’s rural idyll bunker, is a fragile mess that will collapse at its first engagement with Brussels. The EU’s chief negotiator Michel Barnier has made clear that Europe will not let the UK pick and choose when it sticks to EU rules for cross border trading. If it wants to flog financial services and medicines into Europe it’s going to have to accept the same rules for food, toys, and toilet paper. The best thing the Europeans could say was that the UK had given the world a new school of thought – cake philosophy (having and eating it)

none of this will happen because it sounds very much like a “Mad Max-style world borrowed from dystopian fiction”

But let’s assume that divergence takes off and becomes as British as moaning about Europe. There are many sectors and professions that would like their own divergent rules and regulations.

Let’s start with autonomous vehicles, that impossible pipe dream beloved of techies and car companies and Uber. If Britain is to rule the ways as well as the waves, then clearly prototypes need their own “regulatory sandbox” rather than the restrictive Highway Code.

Farmers should be allowed to offset the loss of Common Agricultural Policy payments by making all roads across their land into toll roads with fees payable to them. To fall in line with the Trump Administration’s sympathetic stance Wall Street, bankers only obsessed with making a fast buck without any mind to proper investment in the real economy will find more room for manoeuvre.

Perhaps children can cut a deal with each of their teachers on a case-by-case basis, abandoning school rules and the dead hand of Ofsted and the Department for Education.

Of course, none of this will happen because it sounds very much like a “Mad Max-style world borrowed from dystopian fiction”. And Brexit Secretary David Davis has ruled that out.



More about the author

About the author

Phil has run Clarity Economics, a London-based consultancy, since 2007 and, before that, was Economics Correspondent at The Independent.

Phil won feature writer of the year Work Foundation Work World media awards in 2009, and was commended by the Royal Statistical Society in 2007.

He is the author of Brilliant Economics and The Great Economists.

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