Brexit Europe Government

Brexit, Divergence and Thatcherism

Chris Grey notes that the ‘sticking’ points about the neverending saga of the Brexit negotiations is around divergence:

It’s also worth noting something about these three sticking points. A key and utterly flawed claim of the Brexiters has been that a trade deal would be easy because the UK was starting from a point of total convergence with the EU, and it is agreeing convergence which makes making free trade deals so difficult and slow. This was the basis of, for example, Liam Fox’s now notorious claim that it should be “one of the easiest deals in history’. It was always nonsense (as pointed out in my post of July 2017) because the aim of this trade deal, uniquely, is divergence, and so it was the management of divergence which was bound to be problematic. And so it has proved – for all three of the potentially deal-breaking issues are about the terms of divergence

There’s a lot of discussion over why the UK thought it could both eat it’s cake and have it at the same time – have a trade deal giving access while retaining the unilateral ability to diverge on regulations. The real question is why is this so important? I think it goes to the heart of what appear to be contradictions within Brexit but actually aren’t – they are what Brexit is (at least to the core of the Conservative party that are essentially driving this process, but I think they also influence other reasons often given).

The point of it goes right back to Thatcher, her shift from pro-Europe to railing against the ‘Super State’. Thatcher had spent years rolling back regulations and introducing free market reforms, breaking the power of the unions and privatising state owned enterprises. Membership of the single market was a boon, as long as Europe stuck to maintaining a border-less zone that newly privatised British companies could sell into. When it suddenly became apparent that Europe was not content to be just a glorified bazaar, but had pretensions to social reform and regulatory standardisation for the improvement of it’s citizens’ lives. Not that Thatcher was necessarily against social improvement, she just saw it as coming largely from the individual’s own efforts rather than having the state step in as a collective. There was no such thing as society, as she famously said, and while true, in as much as society is a construct of humanity rather than something that exists in and of itself, I don’t think many people got the nuance of the point at the time or since, as a bit of googling reveals several in-depth explanations of what she meant.

“[A] mixture of free marketsfinancial discipline, firm control over public expendituretax cuts, nationalism, “Victorian values” (of the Samuel Smilesself-help variety), privatisation and a dash of populism.”— Nigel Lawson‘s definition of Thatcherism

So, to the famous Bruges speech of 1988, when Thatcher drew a line in the sand that the Conservative ‘Eurosceptics’ have been trying to pull the UK back across ever since:

Whereas the original Treaty of Rome was a “charter for economic liberty”, Europe’s new priorities — moving beyond the single market to develop a “social Europe” and a single currency — represented an attempt to “introduce collectivism and corporatism” and to “concentrate power at the centre of a European conglomerate”. Instead of distracting itself with “arcane institutional debates” or allowing itself to become “ossified by endless regulation”, Thatcher said, Europe should focus on competitiveness through enterprise and deregulation. As the most memorable sentence of the Bruges speech put it: “We have not successfully rolled back the frontiers of the state in Britain, only to see them reimposed at European level, with a European super-state exercising a new dominance from Brussels.”

And that is the key – Thatcher had created a liberal free market, where business could do it’s thing unencumbered by the state and the hell she was going to let Europe come in and roll any of that back. And that’s what the argument has been about ever since.