George Smid

By George Smid georgesmid

This column has long argued that Brexit was the result of massive mismanagement by previous governments, Labour and Tories alike, and leaving the European Union offered a convenient scapegoat. But Brexit on its own will not solve our problems and might even make them worse.

Consider the following: you are sitting on the train, listening to excuses why the train is delayed: previous train blocking the station, ‘technical faults’, leaves on the tracks, … rain, sun … the best I have heard was ‘horses on the track’. What next? The attack by the Indians?

If the train has 500 people on board, a half an hour delay means that 250 man hours are lost in the UK economic performance. Repeat it every week and you have a problem with 18 thousand man hours lost, you need to employ 10 extra workers to cover that.

Look at the larger picture of how the rail network is managed: it is expensive, it is unreliable, it complains of underinvestment… and the solution? Cut costs. Cut the number of the guards, cut the maintenance costs, subcontract the work to the lowest bidder.

If the description in the last paragraph reminds you about the public hearing about Grenfell Tower you are right: Cutting the cost became obsession. For an extra £5,000 proper insulation could be used. And how much has the saving of £5,000 cost us? The final bill is reported to be one billion pounds.

Not to mention the unknown millions the councils and private owners now have to spend to replace existing claddings in the whole country.

The ‘added value’ of the millions spent as the result of Grenfell Tower is zero. Replacing faulty cladding will not build one extra flat. Likewise, the manpower loss due to train delays creates no additional value.

We are so obsessed with ‘cost’ that we have lost the sight of what the final bill is. Cheaper and cheaper operation leads to bigger and bigger payments for the services. In the final stage our taxes are used to pay the private companies to avoid bankruptcies such as with the Royal Bank of Scotland and Virgin Trains East Coast.

Bad management is why UK productivity is 15% below the rest of G7 advanced economies. Worse, our productivity is going down. In 2016 it was 16% lower than in 2008.

Averages can be misleading. If we extract Japan and Canada who have lower productivity than the UK and look at our comparative neighbours (Italy, France and Germany) we lose out: German and French productivity is around 30% higher!

Where the UK needs 10 workers, France and Germany need 7½. To keep up with them we need more workers. As long as our productivity is low and our drive for ‘cost’ overrides all other considerations, it will be always easier to import cheap labour than to invest.

Instead of automation we are relying on cheap labour. Witness the de-industrialisation of car washes. Replacing an automated car wash which damages your windscreen wipers and doesn’t clean side mirrors with a bespoke, hand cleaned, carwash.

Five immigrants polishing your car for half of the price.

The replacement of machines with cheap, imported, labour has changed the UK population. There are now over five million immigrants in the UK, fewer than half of them from the EU. Brexit will not help us to move away from our dependency on immigrant workers.

If we do want to solve the tension in society we need to address the fact that we need 10 workers where seven should be enough.

Otherwise as EU immigration comes down, it will be replaced by immigration coming from Africa, India, Caribbean and other regions.

Indeed, the NHS is already replacing our closer kinfolks from the EU with nurses from Philippines and India. Importing health workers from outside the EU has been a government sponsored policy since 2015 so Brexit only accelerated the non-EU immigration.

As long as the UK has significantly lower productivity immigration will be the solution to just keep us going.

Increasing productivity has nothing to do with Brexit. Germany is in the EU. If the Germans can have 35% higher productivity under the same EU rules, it is not the EU rules we can blame for our 35% productivity deficit.

Undeniably we can paraphrase James Callaghan’s famous phrase: Brexit? What Brexit? The crises leading to Brexit will not be solved by leaving the EU.

George Smid is chair of the European Movement East Midlands.

By George Smid georgesmid

2017 – the year of political U turns.

‘Remainer’ and ‘Remoaner’ were often used words in 2017.

Remoaners are not happy with the way the referendum went.

Remainers accept the referendum result but after analysing the options, can find nothing better yet than the current EU membership.

Brexiteers and Remainers share the same problem: not knowing what Brexit means.

The position of Brexiteers is indefensible though – it was up to them to define what Brexit means.

Instead of a definition, Brexiteers provided endless u-turns. Hardly a week went by in 2017 when there was not a political u-turn.

From massive ones, like Theresa May going for a snap general election despite earlier promising not to, via major ones like NI Contribution, to relatively unnoticed ones like abortion in Northern Ireland.

Most 2017 u-turns (not all) were about Brexit: what ministers said and what they did was the exact opposite.

And, just before Christmas came the internationally acclaimed, rally-car burning tyres u-turn in Brussels. Only to return back to Brussels a few days later.

And this is the problem with u-turns, performed one after another. While politically convenient, they cannot replace a policy. Are the Tories now a party of price caps or tax cuts? Are they borrow and spend Conservatives or ministers of judicious fiscal discipline? With all the u-turns we do not know.

Like a wind-up toy car which changes direction randomly when it hits a wall, Brexit keeps moving only by its own wind-up spring, rudderless and senseless like the toy car, changing the directions randomly when it hits the wall of hard reality.

It is the hard reality which forced 2017 u-turns on virtually every single issue: the role for European Court of Justice, the sequencing, the time of leaving the EU and the position of EU citizens.

We were going to keep European Agencies, only to lose them. We leave in March 2019, only to stay. We will, we will not, have the same regulations. We know, we know not, the Brexit impact. We will have frictionless trade with borders. Or no borders with diverging markets.

Like Schrödinger’s cat, Brexit is simultaneously dead and alive.

Only emotions now provide the wind-up spring to move Brexit along. When the emotions hit the hard wall of evidence the direction changes but the emotions refuse to change.

The emotions can stay intact because nobody knows what Brexit means. So, every new u-turn is a ‘new’ Brexit.

All we know is that the Brexit of December 2017 is different from the Brexit of June 2016.

By contrast, the position of Remainers is clear. Our base case against which we evaluate any Brexit proposal is the current membership of the EU.

We call for cost-benefit analysis, what we gain by Brexit and what we lose.

We know that the Article 50 can be revoked and we aim not for the ‘best deal for Brexit’ but for ‘the best deal for the UK’.

As more and more people are dissatisfied with Brexit we are offering an alternative. We strive for reconciliation.

New Year’s resolutions

In 2018 we must stop treating the EU as our worst adversary. We made it clear we were not happy and it is now time to forge a new partnership. Bombardier and the recent US attack on our PM prove that Europe is still our closest kin. (For a very good approximation Europe means EU.)

In 2018 I wish the EU will acknowledge why the UK voted to leave. Then parallel negotiations should start exploring the UK staying after March 2019. As Brexit of 2017 differs from Brexit of 2016, the EU of 2018 will differ from the EU of 2016 too. We must see that as a legitimate option to honour the vote to Leave.

For the UK I wish Remainers and Leavers talk to each other. Only then we can reach a Brexit solution acceptable to both. Otherwise, this country will stay dangerously divided.

In June 2016 we did not vote for being poorer, Derbyshire did not vote for less money for the Peak District National Park, Grimsby did not vote to lose their fishing industry, Lincolnshire farmers did not vote for losing farm subsidies.

In 2016 we did not vote for the Brexit of 2017.

Happy nEU Year!

George Smid is chair of the European Movement East Midlands.