Politics: traced out

Wednesday 12 August 2020  

If only I hadn't already written multiple pieces about contract tracing, it might just be worth commenting on this. But, having written so many times about it, there is little more that I can add. If the government had listened to me from the start, it would have saved millions.

But there is one observation worth making: apparently, the man at the top running everything is Dominic Cummings, supposedly a genius in his own lunchtime. But if he really is so clever, how come he didn't pick up the inadequacies in the current system, and push for something more effective?

However, that begs a more fundamental question: when government systems go off the rails, how do we overcome the deficiencies and get it running effectively, so that it can deliver the necessary functions?

Sadly, though, we already have an answer to that question: we don't. There are very little in the way of corrective mechanisms which can use to turn round the great juggernaut of state when it goes wrong. Largely, it is impervious to correction and it will most often carry on regardless, irrespective of what people think or say.

The contract tracing debacle is an excellent example of this, where the level of inefficiency is indistinguishable from corruption. There have been endless articles on the failure of the system – and not just in The Guardian. Any number of experts have spoken out, and some have even run their own systems to illustrate the deficiencies of the state system, and the government has been entirely unresponsive.

Since nothing has had any effect – until now, and then only marginally so – it is appropriate to ask how we deal with a government which seems to prize inefficiency and expense (and even corruption) to quiet competence and economy.

And where we have a situation where the answer is genuinely not known should not preclude the question from being asked. It is certainly more productive than fantasising about hiding out on a roof overlooking a government building with a sniper's rifle, and picking off the offenders as the emerge from a day's sloth.

In fact, the fantasy approach rarely works, otherwise more people might try it, but since nothing at all seems to work, the most productive option might seem to be nothing. Doing nothing at least has the merit of conserving energy – a mechanism for getting no result for the least effort.

On the other hand, only a few days after the Beirut explosion, determined street protests have forced the government to resign. The odd thing here in the UK is that we have had a government which has killed through neglect far more people than the government of Lebanon, yet there hasn't been a murmur of protest.

One might think, on the other hand, when we scan the front pages of the national print media, and the obsession with the royal soap opera, that we get what we deserve. Except, of course, that reading newspapers is a minority sport and what we see in the headlines does not reflect popular opinion – if indeed there is such a thing.

Speaking personally, I have to believe that writing books is a way of influencing people and making things happen. I am sure that those that Booker and I wrote – and especially The Great Deception had some effect on the referendum. I am hopeful that the revision will have some long-term effect on the way people look at Brexit, enough to shape events.

Similarly, that has to be rationale for writing this blog, and investing in Turbulent Times. That's certainly more productive than poncing about in fancy dress for photo-opportunities, which seems to be the main preoccupation of the idiot prime minister. One might almost think that he had a hard hat and hi-viz jacket fetish. It really is bizarre how many times we see him in that garb.

When we then see that there have been a million jobs lost through the course of this pandemic, in the UK alone – with many more to come, there is a possibility that we are, unwittingly, building an army of discontent, which may then end up being the catalyst for change.

While the pessimist might suggest nothing might happen, it is at times of great uncertainty and personal hardship that political change is most likely to occur. Many of the demagogues of the past might have had little impact if they had been born in different times.

I've always felt that we're too comfortable and have been too secure to want political revolution – but that may change as our governments increasingly lose touch with reality. The difficulty, compared with days of old is that we have too many things to entertain us.

The urge to stand on a cold, windy hillside in the company of thousands more, listening to political speeches, isn't as powerful as it once was, not when we can stay in a warm home and watch any number of screen entertainments.

Perhaps we'll never see change until we succumb to a series of major and prolonged power cuts, which deprive people of home entertainment and drive them out onto the streets. And even then, if we take Hong Kong as a model for well-motivated and continued street activism, the book is still open as to whether it will be effective.

But as long as we're doing we're doing – and are content with more of the same – not a lot is going to change. We will continue to get bad government as long as we are prepared to tolerate bad government. And that, currently, seems to be the status quo ante. We may not get what we deserve, but we deserve what we get.

Also published on Turbulent Times.

Richard North 12/08/2020 link

Migration: not in control

Tuesday 11 August 2020  

Faced with the embarrassing situation where our own version of the "boat people" are daily demonstrating that the UK does not have control of its borders, as promised by Brexit, prime minister Johnson has entered the fray to do what he does best: burble incoherently and confuse the situation.

Thus we have the idiot chuntering about wanting to look at the UK's "legal framework" on the removal of what he calls "illegal migrants" amid a row with France over an increase in boats crossing the English Channel.

Johnson, we are told, says the current rules mean it is "very difficult" to remove failed asylum seekers once they arrive on British shores, encouraging "cruel and criminal gangs" to profit from the crossings.

We then get Number 10 supposedly clarifying the prime minister's burbling, explaining that he was specifically referring to the European Union's Dublin regulations, which are said to be "designed to identify which member states are responsible for considering a person's request for asylum".

The rules, we are thus informed, are often used to argue that asylum seekers who have passed through another member state on their way to the UK should be returned to that country. But Downing Street believes that the "inflexible and rigid" regulations are being "abused".

What is extremely puzzling about this intervention is that it does not seem to recognise the very fact of that thing apparently so close to the prime minister's heart – Brexit. We left the EU on 31 January last and, while common asylum rules continue to apply until the end of the year, we are working our way out of the system.

On that basis, if we are to be looking at the UK's "legal framework" pertaining to migrants travelling from the EU, then we should no longer be concerning ourselves with EU law – the writ of which has only months to run. We are back dealing directly with international law.

Specifically, we will be bound directly by the United Nations Convention relating to the Status of Refugees, adopted in 1951, the 1967 Protocol, plus other measures such as the Protocol against the Smuggling of Migrants by Land, Sea and Air, the Safety of Life at Sea (SOLAS) and Search and Rescue (SAR) Conventions, which have relevance to seaborne migrants.

However, we are also bound by the European Convention on Human Rights, which have specific and general application to migrants, as well as case law from our own courts.

In this context, Johnson may be whistling in the wind if he wants to return the "boat people" to France. As a result of a case determined in 2000 by the UK Court of Appeal, France (and Germany) are not "safe places" to send refugees, as these face persecution "from forces other than the state".

The then Home Secretary was found to have acted unlawfully in ordering three asylum seekers to be returned to France and Germany, the effect of which was to prevent Britain deporting thousands of failed asylum seekers.

For the UK, therefore, the very limited provisions of the "Dublin system" are of little assistance, especially as Austria and Greece have been added to the UK list of "no return" countries.

This, effectively, puts us in a position of having to rely on the UN Convention, which defines the term "refugee", making it applicable to someone who is unable or unwilling to return to their country of origin owing to a well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group, or political opinion.

This must be applied without regard to race, religion or country of origin and, subject to specific exceptions, refugees must not be penalised for their illegal entry or stay.

This latter provision recognises that seeking asylum can require refugees to breach immigration rules. Prohibited penalties include being charged with immigration or criminal offences relating to the seeking of asylum, or being arbitrarily detained purely on the basis of seeking asylum.

Importantly, the Convention also contains various safeguards against expulsion, known as the principle of non refoulement (non-return). This is so fundamental that no reservations or derogations may be made. Those accepted as refugees cannot be expelled or returned against their will, in any manner whatsoever, to a territory where they fear threats to life or freedom.

In the longer term, the best option for any European state – including the UK – is the return of migrants to their countries of origin, where they can no longer validly claim refugee status.

This has been the policy of the EU, through its Return Directive, which has also negotiated readmission agreements with a number of countries. Migrants from these countries can then be returned without falling foul of international law.

Currently though, EU asylum rules are under revision, based on COM(2016) 197 final, published on 6 April 2016. However, the regulatory programme seems to have run into the sand in 2018, with very little development since then, that I can discern.

Earlier this year, the EU was supposed to be bringing forward a "New Pact on Migration", which is currently in the Commission's work programme. Mainly because of Covid-19, though, this programme has stalled. Other than a promise that the Pact will be adopted as swiftly as possible, there has been no further news.

Therefore, even if we were still in the EU, there would not be much prospect of relief. But since the acquis will shortly cease to apply, any developments are largely of academic interest. We will soon be a third country, outside the loop. To enable us to return migrants to their countries of origin (where it is safe for them to be returned), we will have to negotiate our own readmission agreements.

Pending these, about the only current option is to prevent migrants from entering UK territory. And since our Border Control vessels, and any Royal Navy assets that we might use, cannot carry out enforcement roles in French waters without their permission, we are largely in the hands of the French.

Here, as we have seen, a price tag of £30 million has been suggested, without any guarantee of satisfaction. And we're not likely to get much sympathy from the French. While in 2019, they processed 151,070 asylum applications. We had to deal with around 36,000.

Given that there is very little we can do under international law to prevent the flow across the Channel, we thus have another example of the "double coffin lid". As we shed EU law (for what good it would have done us), we get caught by international law. In this case, we not only fall back on the UN Convention but also the European Convention on Human Rights.

While we might at some point consider withdrawing from the European convention, that option is not available with UN law which has acquired the status of customary law, applicable regardless of whether we have signed up to it.

That leaves, possibly, one final option – the application of the safe country of asylum concept, via international law. This can be applied when "asylum-seekers/refugees may be returned to countries where they have, or could have, sought asylum and where their safety would not be jeopardised".

However, the caveat on not being subject to persecution or threats to safety and liberty still apply, which may rule out returning people to France. But, in any event, nothing can be achieved without international cooperation, which puts us right back where we started. Johnson can chunter all he likes. He's not in control.

Also published on Turbulent Times.

Richard North 11/08/2020 link

Brexit: partial truths

Monday 10 August 2020  

In revising The Great Deception, the relentless work has got me to the point that I am tired to the core, the sort of tiredness where, after you get up after a good night's sleep, you are still tired.

But it isn't the writing, per se, that's doing the damage. It's the toil of dredging through the sludge of ill-informed reporting, trying to distil some sense of what is happening from the froth of ignorance and prejudice.

On reflection, it's not surprising that the politicians so often don't know what they are talking about. Most of them get much of their information from the media, which means that what they are mostly doing is choosing their sources of misinformation.

With that in mind, I was somewhat entertained by a report from Deutsche Welle in 2011, which, rather imperfectly, looks at the reference to the German Constitutional Court of German plans to participate in the European Stability Mechanism (ESM) – which it misnames the "European Stability Fund".

For the moment, the details are not important, other than to observe that, in approving German participation, the Court required greater participation of the parliament, obliged the government to get the approval of the parliamentary budgetary committee before funds were disbursed.

But what is of particular interest here is the comment of Piotr Kaczynski of the Centre for European Policy Studies. He agreed that the ruling would make the overall approval process "more cumbersome", but conceded that there could be an upside.

"The cost for making things harder", he said, "is that it's more legitimate. If you include the national parliament in these decisions then it should be more legitimate". He thus confirms what we all know to be true, that democracy is a messy process.

There's also a cynical side to it. "Involvement of the parliament is a cushion vis-a-vis complaints about the process", Kaczynski says. In other words, if you go through the "democratic" motions, it's harder for people to complain about the outcomes.

The "money quotes", though, are where Kaczynski warns that this added layer of decision-making doesn't automatically mean that the risk factors will be reduced. "The knowledge is scattered, so the parliamentarians' knowledge is scattered", he says.

"Of course you do not have access to all the information that is available in other states", he adds. "It applies equally to the national government and to the national parliament. Whatever decisions are to be taken by the government are only based on partial truths. As such, this is the limitation".

And there's the rub. Any decision-making, by and large, is going to be a function of the information available. Where access is limited – for whatever reason – the quality of decision-making may well be reduced.

I think, though, that much of the problem rests not only with the fact that "knowledge is scattered", thus reducing the ability to evaluate matters and reach reasoned conclusions, but with self-imposed filters which screen out much of the available information, creating those "partial truths" which distort perceptions.

For today, we could not have a better example of this phenomenon than in two contrasting pieces – both Brexit-related – one an editorial in The Guardian, the other a supposedly factual report in The Daily Telegraph.

As to the Guardian, it is taking a view on "Brexit bureaucracy", lamenting that it is "tied up in red tape". In a highly pessimistic view, it suggests that businesses already struggling with the fallout from Covid-19 "will be forced to deal with a mountain of new bureaucracy in the middle of a deep recession".

I wish I could dispute what the paper says, but find myself reluctantly agreeing with much of it – reluctant because I wish that it wasn't true. The one point I would argue with is the assertion that "the theological demands of Brexit continue to trump all practical considerations".

The problem here is the generic use of the term "Brexit". It is not Brexit which is that cause of the problems. It is this government's crass and wholly inadequate version of it. With that proviso, one could not deny that, "It is an irresponsible and reckless way to govern a country", as the Guardian avers.

When we turn to the Telegraph, there we see the headline: "Knives are out for a Withdrawal Agreement MPs fear is not worth the paper it's written on". The sub-heading repeats the sentiment with the legend: "Mounting disquiet among Leave-supporting Members that the agreement still isn’t worth the paper it is written on".

As one might expect of the Telegraph, the distortions are full-frontal, right from the very start, with prime minister Johnson credited with "succeeded in ditching the Irish backstop and getting his Withdrawal Agreement through Parliament against all the odds".

This, one might recall, was originally the precursor to May's agreement – which she rejected as "a deal that no British prime minister could accept". Yet Johnson bought into a version of it which turned the backstop into a permanent "frontstop", effectively locking the UK into a "wet" border in the Irish Sea in perpetuity.

Now, as the Guardian rightly points out, as we get closer to the end of the transition period, the full implications of Johnson's catastrophic intervention are becoming increasingly clear. And this has "senior Brexiteers" whingeing about the inevitable "creation of a border in the Irish Sea with customs and regulatory checks on goods crossing from Britain to Northern Ireland".

Prominent amongst the naysayers is Iain Duncan Smith who, when discussing the many downsides of Johnson's "fantastic" deal, admits: "Everyone knew this stuff before". He asserts that the "reason we voted for it is because we needed to be out of the EU in order to negotiate successfully as a sovereign nation after 31 January".

But, despite the UK being locked into what is an international treaty – which Duncan Smith and his fellow-travellers in the ERG voted for – the man wants the British negotiators "to block parts of it off".

When it comes to the prospects of seeing change, though, we see the self-imposed filters drop in. Quoting an anonymous "Tory", writer Camilla Tominey – who styles herself "associate editor" - tells us "Germany needs a trade deal with Britain for its manufacturing and France needs it for its argi-produce (sic), so the UK is in a very strong position to renegotiate the Withdrawal Agreement".

This, of course, is in the land of the fayries, bringing us right back to the archetypal Tory myth that "they need us more than we need them", tempered by the fiction that Germany (and now France) are going to intervene at the last minute to deliver a settlement which meets with the expectations of the Brexiteers.

Actually, to dismiss this as utter tosh would be a kindness, but here we have what was once a serious national newspaper giving houseroom to this sort of drivel. The chances of the EU reopening the Withdrawal Agreement are precisely nil, and it is only in the fantasies of the Brexiteers that they could be any different.

Yet, when you get this sort of report cluttering the media, added to hundreds more over the years, sorting through the "first version of history" becomes more than a little tiresome. Add the technical errors, and all the many misunderstandings and distortions, and it is a wonder that any reliable history gets written at all.

Certainly, when I add my own errors, the inevitable selection bias and succumb to the pressure to precis the accounts of events, the attempt seems more than a little precarious. My one consolation is that, even in the latest official history of Britain and the European Community (volume II) – which has the luxury of covering a mere 13 years in 668 pages – there are errors.

In that respect, there probably isn't such a thing as the absolute truth. There are only partial truths. Some, though, are more partial than others.

Also published on Turbulent Times.

Richard North 10/08/2020 link

Brexit: an interesting year

Sunday 9 August 2020  

About the only interesting Brexit-related detail this weekend is the claim that the sugar firm, Tate & Lyle, stands to gain around £73 million from being allocated a tariff-free quota when it buys its raw material from overseas suppliers.

However, this is not as straightforward as it appears. The EU will doubtless react by setting tariffs on products made with UK-produced cane sugar, using "rules of origin" requirements to make it very difficult to sell processed products into the EEA. Tate & Lyle might find itself in a swings and roundabout situation, cutting costs but losing domestic sales.

Meanwhile, back on the treadmill, I've now – after a week of solid work – just got The Great Deception revision to the end of 2010, barring a few weeks which I'll complete today.

The year, however, presents me with some problems as I was intending to cover the whole period of 2010-2015 (inclusive) in one chapter of about 14,000 words. As it stands, I've already written 6,000 words and I haven't quite finished the first year in the period.

My problem stems from the fact that 2010 was an extremely busy year. This is the time when the euro-crisis really got going, after Greece started to get into serious trouble after the Socialists had been elected in October the previous year and spilled the beans about how bad the financial situation really was.

This made 2010 - in which was engineered the first Greek bailout, and which finished with the Irish bailout – the year of the beneficial crisis. I use an analogy here, in describing the euro as akin to an aircraft without wings and engines.

It was built that way because the makers had rightly judged that the shareholders would not fund a complete aeroplane. So they built what they could. They filled it with passengers, gave it a piggy-back ride to the upper atmosphere and cast it loose.

The hope was that, as it hurtled to the ground, the shareholders would see disaster looming and shell out for the missing wings and engines – so making the aircraft whole, and flyable, whence it would calmly resume its journey, untroubled by gravity.

To my delight, I then stumbled on a quote from Kalin Anev Janse, Secretary General of the European Stability Mechanism – the body charged with safeguarding the euro. He described his early work as "like we were flying a plane while we were still building the engine", which is uncannily close to what I've been writing.

I did a treatise on the beneficial crisis some time back, and have used a version in the book. It is an interesting concept. As applied to the Community and then the Union, former Telegraph Brussels correspondent, Ambrose Evans Pritchard, thought it was a Monnet term that lots of people in Brussels used - mostly behind closed doors.

But the term pre-dated Monnet: Una Crisi Benefica is found in Papal doctrine. Interestingly, though, neither this nor the French term, crise bénéfique are particularly well used. But that is not to say that the concept is not known.

It is recognised by the Vatican, even finding its way into an encyclical letter from Pope Benedict XVI, where a crisis becomes "an opportunity for discernment, in which to shape a new vision for the future".

This English translation may reflect the Latin, the form expediunt discrimine coming out as one of the options. In modern Italian, though, it seems to have morphed into crisi salutare – translated literally as "healthy crisis". And here, not only is there a wealth of usage, it goes back well over a century.

We can, for instance, see it in the work of Giulio Pullé, published in 1858 (La nostalgia; dramma in tre atti, di Riccardo Castelvecchio). It is used by Francesco de Sanctis, who lived from 1817-1883, a volume of whose political writings were published in 1900.

We also find it used in the writings of Giustina Michiel, published in 1829 (Origine delle feste veneziane). In contemporary works, we have evidence of Romano Prodi in 2007 using the term when he was Italian prime minister.

Then we have Delors using the term in 2004, where he is cited in an Italian language report, claiming that a 'No' in the constitution referendum would not be una crisi salutare. We find it in Il Fatto in March 1999, describing the affairs of the French socialists. And, in the same year, we see Corriere Della Sera talk of una crisi salutare in relation to the collapse of the Santer Commission.

Thus, it would seem that the concept of a beneficial crisis is long-established in Italian politics, the term openly used. The same could be said of France, where the term crise salutaire is no stranger to the print media. There are multiple references to Delors in this context. But, while the concept clearly goes way back, it is a very continental phenomenon, only recently finding a home in the UK.

Ambrose seems to have first used it in print in May 2005, when he wrote that, "EMU's architects always expected trouble, but counted on a 'beneficial crisis' that would help push Europe further towards full economic federalism". He was to return to the theme on 27 November 2007, writing that:
The politicians were told that the euro would ultimately lead to a crisis. They did not care. Indeed, they saw the uses of pushing events to a head as Romano Prodi candidly admitted as Commission president hoping for a 'beneficial crisis' that would then enable Brussels to push its agenda, taking over parts of fiscal policy and establishing the beginnings of a debt union.
"The euro", wrote Ambrose, "was to be the midwife of the federal state". Since then, only a few other British journalists have used the term. One of those, of course, was Booker, who occasionally used it in his Sunday Telegraph column.

But in the early decades of the Century it became the driving force behind the development of the euro – the most important issue of the time, dominating the European stage and threatening the entire global economy. And all because the "colleagues" thought they could build a currency without "wings" and glue them on later.

With that, I've been faced with the task of describing the progress of the Greek financial crisis, on which whole books have been written. It was easily the eurozone's first big test, in which prime minister George Papandreou likened his country to "a laboratory animal in the battle between Europe and the markets".

Greece was certainly the test bed for devising support systems for the euro, spawning in the first instance the Greek Loan Facility (GLF), a cumbersome €80 billion facility comprising 15 separate bilateral loans from the Eurogroup pooled by the European Commission.

But this was not a Greek rescue package. If Greece defaulted, Portugal or even Spain could follow. Thus, the terms were deliberately harsh. Faced with hostile press in her own country, Merkel admitted that it was the only way to save the single currency: 'These countries can see that the path taken by Greece with the IMF is not an easy one. As a result, they will do all they can to avoid this themselves', she said.

Finance minister Papaconstantinou said Greece had been called on to make a "basic choice between collapse or salvation". This was by no means to be the only time. As a European Commissioner was later ruefully to observe: "Marathon is a Greek word".

From this first attempt at a bailout stemmed the second attempt, the European Financial Stabilisation Mechanism (EFSM), worth €60 billion, linked in with the European Financial Stability Facility (EFSF), a Special Purpose Vehicle to raise funds guaranteed on a pro rata basis by participating Member States. That could borrow up to €440 billion, but the mandate would expire after three years.

Collectively, the EU had by early May created a loan facility worth €500 billion, which could be used to rescue eurozone countries, with the possibility of an even 'bigger bazooka', in the form of an additional €250 billion from the IMF.

It was just in time. In Aachen on 13 May 2010, to be awarded the prestigious Charlemagne Prize, Merkel warned: "If the euro collapses, then Europe and the idea of European union will fail". There could be no clearer indication as to the nature of the single currency project.

Back in the UK, of course, there was another event going on – a general election in which David Cameron failed to secure an outright majority for the Conservatives, ending up in coalition with Nick Clegg's Liberal Democrats. And we're not even halfway through the year.

I dread to think what the rest of the years will be like.

Also published on Turbulent Times.

Richard North 09/08/2020 link

Scared to Death

Saturday 8 August 2020  

For me, this has been the year of the book. I started with Booker's unfinished work, Groupthink and then, when that was finished, I moved on to work on the second edition of Scared to Death, updated to include a chapter on Covid-19. No sooner was that done then I started work on the revision of The Great Deception, on which I'm currently engaged.

Such is the span of human attention – or mine, at least – that I can't remember when life was any different from an endless cycle of book, blog, bed – with the occasional meal in between. If the lockdown hadn't been invented, I doubt I would have noticed.

Occasionally though, it is good to see that the work occasionally comes to fruition with an actual material product. I have my treasured copy of Groupthink to remind me that it was a real project and now, as of 6 August when it was published, I have the second edition of Scared to Death.

Between actually finishing it, months ago, and now, I hadn't looked at it but now, with publication, I've cast my eye over the new work – the chapter on Covid-19 and a revised conclusion, and I'm quite pleased with what I read. That isn't always the case. Sometimes, I can't bear to read stuff that I've written.

With such a fast moving issue as Covid-19, though, material even written a few months ago can look dated, but the text so far seems to be standing the test of time.

It is ironic, or perhaps prescient, that in 2007, when the book was first published, Booker and I highlighted in the prologue to Part One an example of a contemporary scare that had two years earlier been dominating the headlines. This was what was then the mysterious new disease: "Asian bird flu".

It was a long-familiar fact, we noted, that certain strains of influenza could be deadly to humans. The "Spanish flu" epidemic of 1918–19, for instance, had killed between 20 and 40 million people (and possibly as many as 100 million); more than the death toll of the First World War.

And, by 2005, in Asia, people had been dying from what the media had come to call the "deadly H5N1 strain" of the bird flu virus. In Asian domestic poultry flocks, it had been estimated that more than a billion birds could have been infected with the disease that was seemingly fanning out across the globe.

As we remarked in our opening, the emergence, or re-emergence, of H5N1 – which had been first isolated in 1996 – was hailed by the World Health Organization (WHO) as "the greatest single health challenge" to mankind, greater than HIV/AIDS or malaria.

A severe pandemic, it estimated, could wipe out 2 percent of the global economy. In Britain, the government's chief medical officer, Sir Liam Donaldson, claimed that such a pandemic was now "a biological inevitability" – "no longer a matter of 'if' but 'when'".

To cut a long story short, however, by 2007 only 385 people around the world had been infected, with 243 deaths. Most of the cases had been in Asia, where people had been in close contact with infected poultry. Despite the fears, the virus had not been able to cross the species barrier and pass easily between humans. It was to remain a zoonosis – a disease transmitted from animals to humans – with no evidence of human-to-human transmission.

That year, a House of Lords Select Committee had been looking at the handling of the disease and of the risks in general from pandemics. Its report recalled "sobering" advice from government ministers that: "While there has not been a pandemic since 1968, another one is inevitable".

It had been estimated that the next one could kill between 2 and 50 million people worldwide, and between 50,000 and 750,000 in the UK. Socio-economic disruption, it said, would be "massive".

From the evidence given to the Lords, it was clear that the government was very well aware of the scale of the potential threat. So was the global community and, in particular, the WHO. In fact, the WHO had been ahead of the curve. In 2005, even as the H5N1 virus was threatening to burst into the human race, this venerable organization – established on 7 April 1948 – was making plans to deal with another pandemic.

Specifically, it had taken the step of publishing a new set of International Health Regulations, replacing the 1969 set, which in turn had been preceded by the International Sanitary Regulations adopted in 1951. The 1969 Regulations had covered six "quarantinable" diseases, which over the years had been reduced to three: yellow fever, plague and cholera. The last amendment in 1981 had marked the global eradication of smallpox.

Then – in recognition of the growing threat in this "interconnected" world, where air travel had grown exponentially – the WHO created a list of diseases, the emergence of which "may constitute a public health emergency of international concern". Only four were listed: smallpox; poliomyelitis due to wild-type poliovirus; human influenza caused by a new subtype; and – with some considerable foresight as it turned out – an entirely new illness known as severe acute respiratory syndrome, or SARS.

SARS, as a pandemic disease, emerged in 2002, only a few years before the most recent bird flu epidemic had gripped the attention of the global health community. The causal agent was a virus from a group known as the coronavirus, codenamed SARS-Cov.

The original outbreak is believed to have started in Guangdong Province, China, in November 2002. Over the following months, the illness spread rapidly to more than two dozen countries across Asia, North America, South America and Europe.

By the time it was contained in July 2003, over 8,000 people had been affected, of whom over 750 had died. The majority of cases occurred among close family members associated with an initial case, and hospital workers who had cared for infected patients.

In the UK at the time, the front-line body responsible for managing a pandemic was the Health Protection Agency (HPA). Set up in 2003 as a non-departmental body, in 2007 it acknowledged the WHO's changes to its regulations, noting that they had been made "in the light of the global SARS experience".

And there was no equivocation in the WHO's demands. In respect of SARS and the other listed diseases, including pandemic influenza, each member state was required to "develop, strengthen and maintain … the capacity to respond promptly and effectively" to the newly defined public health emergencies of international concern to public health.

To the UK's credit, it had not been slow in responding to one of the WHO's requirements. In October 2005, the Blair administration had delivered a 177-page Influenza Pandemic Contingency Plan. Confusingly, in the March, it had already published a supplement for planners in England – this one a more modest 24 pages.

The publications spanned the tenures of two Secretaries of State for Health, initially John Reid, who was in office until 6 May 2005, and then his successor Patricia Hewitt, during whose tenure the ban on smoking in public places became legally enforceable.

Here, it would appear, was the start of a fatal confusion that would end up hampering the government's response to the Covid-19 epidemic when the disease emerged in the UK in late January of this year. The UK plan – the introduction stated – built on "previous experience of managing events such as SARS in 2003", also taking into account the WHO guidance that had also been published in 2005.

With multiple references to SARS throughout the body of the work, the authors were unwittingly conflating two very separate diseases. While they had been advised to plan for SARS as well as for a pandemic influenza, the government was planning for influenza only.

And that is the story behind the lamentably inadequate response to Covid-19, one that has crippled the nation and caused unnecessary deaths, disruption and economic strife. And still, before this day, it hasn't been properly told in print. But now it has.

Interestingly, at the very time that Blair's administration was getting it so wrong, the man himself was bogged down in a time-consuming and expensive spat over Britain's contributions rebate, ending in him "surrendering" £1 billion of our rebate and agreeing to a massive hike in the EU budget.

One likes to think that, had he not been so all consumed with this issue, he might have spent a little more time on his home turf, looking at what his people were doing to protect us from pandemic disease.

Oddly enough, in his biography, Blair does talk about the run-up to the 2005 election when, he writes, "we nearly had a vast panic over the approaching flu pandemic". As to his response, he adds: "I'm afraid I tried to do the minimum we could with the minimum expenditure. I understood the risk, but it just didn't seem to me that the 'panpanic' was quite justified".

In his second entry, it gets seven lines, with him observing that, "As with the flu pandemic, you have to steer an ever-so-careful line between overreacting and underreacting". There is, he added, "always a torrid deluge of bureaucracy for those caught up in an overreaction".

Sadly for us all, when it came to SARS, he didn't react at all. And that's one of the reasons why we are paying the price we are.

Also published on Turbulent Times.

Richard North 08/08/2020 link

Coronavirus: about time

Friday 7 August 2020  

It is about bloody time that someone "in authority" said this and, at long last, it is being said.

"The NHS will be inflicting pain, misery and risk of death on tens of thousands of patients if it again shuts down normal care when a second wave of Covid-19 hits". So say doctors' and surgeons' leaders. They add: Hospitals should not leave patients "stranded" by again suspending a wide range of diagnostic and treatment services.

"We cannot have a situation in which patients are unable to access diagnostic tests, clinic appointments and treatment which they urgently need and are simply left stranded", says Dr Chaand Nagpaul, chair of council at the British Medical Association (BMA).

He adds: "If someone needs care – for example for cancer, heart trouble, a breathing condition or a neurological problem – they must get it when they need it".

At last, then, serious people are urging "NHS bosses" not to use the same sweeping closures of services that were introduced in March to help hospitals cope with the huge influx of patients seriously ill with Covid.

"The NHS must never again be a Covid-only service. There is a duty to the thousands of patients waiting in need and in pain to make sure they can be treated", says Prof Neil Mortensen, president of the Royal College of Surgeons of England.

Given the scale of the problem, it is too late to say that this should never have happened first time round, but better late than never. As it stands, one million fewer patients underwent planned surgery in England in April, May and June.

Some 30,000 to 40,000 could not start cancer treatment as hospitals discharged thousands of patients and suspended many of their usual services to concentrate on treating those with Covid-19.

Unavailability of care, in tandem with patients’ reluctance to go into hospital, have been linked to the fact that in England 12,000 more people than usual have died of illness not linked to Covid in recent months, such as heart attacks.

One cancer expert, the Guardian says, has estimated that anywhere between 7,000 and 35,000 patients could die over the next year as a direct result of missing out on NHS care in recent months.

"The NHS had to stop almost all planned surgery at the beginning of the Covid crisis, and we just cannot let that happen again. Things will need to be done differently in the face of any further spike", Mortensen thus tells the newspaper.

Nagpaul adds: "While not publicised in the daily briefings, these [12,000] excess deaths are just as much a tragedy and loss to loved ones as those occurring from the virus".

If we dwell on that figure, and reflect on the recent events in Beirut, where the dead are numbered in their hundreds, there is real anger in the streets and those suspected of being responsible have been locked up.

And here we have twelve thousand dead – twelve thousand unnecessary deaths because bloated, over-paid and basically incompetent NHS planners and civil servants did not do their jobs properly, while the politicians in charge did not have the wits to intervene.

Only now are a few beginning to talk sense, calling for the sort of plans that should have been in place right at the beginning. Mortensen suggests that hospitals, should set up more "Covid-lite" sites to enable surgeons to resume common operations such as hip and knee replacements and cataract removals.

Nagpaul says more use should be made of the NHS's £400 million-a-month deal with private hospitals. The NHS should also look at using the seven Nightingale hospitals it created early in the pandemic as extra capacity for non-Covid care.

The NHS, we are told, is trying to arrange care for the large number of patients who missed out on care in recent months, many of whom are facing a long delay before they can get seen.

But, says the Guardian it could see its treatment waiting list soar if there is a repeat of the shutdown that NHS England chief executive Sir Simon Stevens (pictured) ordered in March.

But there is no could about it. Patients, already stuck on over-long waiting lists, have had their treatment peremptorily delayed, with no new dates and not the slightest indication when they might expect treatment. There is a total communications vacuum to the extent that the NHS might as well not exist. In functional terms, for many patients, it already has ceased to exist.

You don't have to be a rocket scientist to know this. All you have to be is a patient who has been well and truly abandoned by the system, while shitface ponces about on TV pumping iron and telling us to lose weight, giving £355 million to companies in Northern Ireland to help them complete their Brexit paperwork that he said would never have to be done.

Thus we have Nagpaul saying: "Aside from the individual distress, pain and potentially life-threatening impact that delaying care would have on individuals, there's a risk that increasing the backlog further would have a grave consequence for the NHS in the future".

"The knock-on of not addressing this now and delaying further care during a potential second wave could mean that we are constantly trying to catch up with the missed care", he says.

No shit, Sherlock! No f**king shit!

Needless to say, we have the apologists and the bureaucrats sticking their oars in. The NHS Confederation, which represents hospitals, has graciously acknowledged what it calls the service's "unprecedented pausing of normal care" involved "a terrible cost" for patients needing non-Covid care.

What a great pity they didn't think about that when they were setting up their contingency plans, when they allowed their obsession with flu to distort planning priorities.

Niall Dickson, the NHS Confederation chief executive, gobbles away in newspeak, saying: "The NHS can flex and will be there for patients again if there is a second wave. The challenge this time will be to run both Covid and non-Covid services in parallel as far as is possible".

The "challenge", he calls it. What does he call dying because the NHS has totally failed to perform?

We are told that hospitals "are working hard to clear the backlog that built up", but we also hear that there are wards empty and specialists unable to do their work because operating theatres and other facilities have been turned over to Covid.

And all Stevens can do is tell hospitals to get back to providing 80 percent of planned operations by September and 90 percent by October, in order – he says - to reduce the backlog as far as possible before a second wave hits.

Apart from the fact that this is easier said than done, does this facile little man not even realise that, pre-Covid, the NHS was not meeting its targets? Working at 80 percent, or even 90, isn't going to see the backlog reduce. It is going to increase – the numbers tempered only by those additional patients who die for want of treatment.

But then, we're only plebs, and what do plebs matter? As long as Sir Simon Bloody Stevens can keep trotting out his tractor production statistics, he will stay in post long enough to get a peerage from a grateful prime minister. He can then retire with a generous pension, and a few directorships in big pharma on the side.

Ours is not to question why. Ours is but to do and die, as quickly and silently as possible, doffing our caps politely as we expire.

Also published on Turbulent Times.

Richard North 07/08/2020 link

Politics: the essence of government

Thursday 6 August 2020  

It is interesting to see the numbers of articles in diverse newspapers attesting to the uselessness of the government's Covid-19 test and trace system, matched by those recounting how local authorities are taking up their own schemes to make up for the shortfalls.

But equally interesting is the government response, fronting Dido Harding to quote tractor production figures, asserting that the scheme is working well. Criticism is water off a duck's back. It has no impact whatsoever. This government does exactly what it pleases.

However, the refusal to countenance greater local authority responsibility in a systematic way seems to be more profound than just a wish to bolster private sector contractors and the next generation of quango queens. It suggests a wholesale antipathy towards local government, as a core value of the Johnson administration.

That much also is evident in the government's latest plan to butcher the local authority planning system, mistakenly paraded by The Times as a Johnsonian effort to "slash red tape".

The idea of deregulation is one that this administration seems to favour, although to treat it as an unalloyed good is a mistake. Most regulations were originally created for a purpose and to remove them without care can give rise to the very problems the regulations were intended to address.

I am absolutely sure that the very last thing on the minds of the tragic city of Beirut at the moment is the relaxation of health and safety law, especially that relating to the storage of explosive material. One might even suppose that there could be a general enthusiasm for more such law, more tightly enforced.

If this is something of an extreme example, it has to be said that, while such a major "accident" as has afflicted Beirut is rare, they do happen from time to time in poorly-regulated communities.

Yet the last time this country suffered a major industrial explosion which caused fatalities in the adjoining community was in 1974 at Flixborough in North Lincolnshire. That we have a raft of legislation specifically aimed at preventing such disasters, has doubtless contributed to our relative safety, one of which is based on EU Directive 96/82/EC of 4 July 2012, the so-called Seveso III Directive, taking its name from the Seveso disaster, which occurred in 1976 in Italy.

This has been transposed into the Control Of Major Accident Hazards Regulations 2015 (COMAH), currently enforced by the HSE, except – it has to be said - for the land-use planning requirements, which are implemented by local authorities.

These planning laws keep hazardous processes well-separated from residential and other vulnerable areas and, one presumes, would have prevented the storage of large quantities of explosive material in a situation similar to that which caused such terrible carnage in Beirut.

To that extent, we as a society can consider ourselves fortunate that we are protected by "red tape", even if it is of EU origin. Doubtless, if the Seveso suite of directives had not been promulgated, the UK government would have produced its own legislation.

By the same token, the obsession with the removal of "red tape" for the sake of it really isn't a good thing. For sure, you can expect a newspaper such as The Guardian to rail against the reduction in controls, which it does in this case, headlining its report: "England's planning reforms will create 'generation of slums'".

In its view, the "biggest shake-up of planning for decades" will dilute democratic oversight, choke off affordable housing and lead to the creation of slum dwellings. The move has already prompted "stinging criticism" from housing charities, planning officers and architects who have warned of a new generation of fast and substandard housing.

The Town and Country Planning Association (TCPA) has condemned the proposals as disruptive and rushed, saying that 90 percent of planning applications are currently approved. And, as there are already up to one million unbuilt permissions, more relaxed law isn't suddenly going to trigger a massive upsurge in housebuilding.

Bizarrely, for a government which is so keen on reducing red tape, this doesn't apply to the current obsession of Johnson's paramour – climate change. All houses built will have to be "carbon-neutral" by 2050, which means massively increasing building costs and rendering most of them uninhabitable as fresh air ventilation is banished.

For the moment, the proposals are at White Paper stage, which theoretically means that they are open to consultation. But given this government – and British governments generally – "consultation" tends to mean announcing what you are going to do, and then doing it regardless.

Given also the weakness of our current parliament and the inadequacies of most MPs – to say nothing of Johnson's inbuilt majority – we can expect no more than token discussion before the scheme is railroaded through to become the law of the land.

If ever there was a role for the Harrogate Agenda, this is it. Such profound changes should not be the plaything of a narrow group of ideologues but should have the direct approval of the majority of people affected by them, by way of a referendum. There should always be the option of calling a referendum for contentious laws, breaking the grip of the elective dictatorship that this country has become.

However, to have an effective planning system does require an effective (and democratic) local government, and even without these proposals, there are signs that this government is working towards the almost total abolition of local democracy.

This, in an almost Orwellian fashion, is being perpetrated under the guise of "devolution", where two-tier local authorities such as those in North Yorkshire are being amalgamated into the County Council to form one mega-authority of over 600,000 people.

There are in this world over sixty sovereign states with populations of less than 600,000, including Luxembourg, one of the founding members of the EEC, and a full member of the EU in its own right. Anybody who wants to assert that an authority with 600,000 residents is a local authority isn't right in the head.

We saw this with the recent partial Covid-19 "lockdown" in Bradford where, with no notice at all, we were instructed by the incumbent in Downing Street that we could no longer have visitors. By "Bradford", of course, he meant the Metropolitan District of Bradford – an abortion of an administrative area which encompasses a population of near half a million.

The thing is that, although I am forced to pay my council tax to this council, I don't live in Bradford, any more than do the people of Queensbury, Keighley, Bingley and Shipley. I live in an urban village called Wibsey to the south of the city, which actually predates Bradford as an independent settlement. The instruction was ignored.

To that extent, the foundation of democratic consent, and the respect for the law, rests with strong, healthy local government. Authority should not be seen as a remote, detached entity which hands down instructions and periodically demands large chunks of money. Destroy local government and you set down the path of destroying the very essence of government.

As with so many things, this government doesn't seem to have the first idea of what it is doing. In its own way, though, it could prove to be more destructive than the 2,700 tons of Ammonium Nitrate in Beirut Port. With its incompetence on Covid-19, it's already killed far more people.

Also published on Turbulent Times.

Richard North 06/08/2020 link

Brexit: keep trucking on

Wednesday 5 August 2020  

Nothing is final until it's final – especially with this government. But it does look as if the government is at last recognising what is about to happen to us once the transition period ends on 31 December, and is dealing with it in detail.

What this amounts to, in the first instance, is a reactivation of Operation Brock, which requires legislative amendments for enforcing traffic management plans "for outbound heavy commercial vehicles in Kent after the EU transition period". To that effect, the government has issued an open consultation.

The premise on which the consultation is based is fairly blunt. "After the EU transition period ends", the introduction tells us, "the EU will impose new controls on goods arriving from Great Britain potentially causing disruption to heavy commercial vehicles (HCV) traffic moving through the Port of Dover, Eurotunnel and the Short Straits Channel crossing".

Strictly speaking, of course, the EU will not impose "new" controls. Rather, as I pointed out, some time ago, the UK moves out of the regulatory framework (what Barnier calls the "ecosystem"), whence the controls which apply to all third countries.

One would not expect this government to understand the nuances of this position, and especially that it is largely self-imposed. But the die is cast. Operation Brock will live again.

Predictably, this has been picked up by segments of the media, although not so many. Up front is the Financial Times, which talks of trucks being stacked on the motorway in Kent if new checks cause tailbacks from 1 January.

Here, the paper rather seems to be reflecting the government's own words. It says that disruption at the cross-Channel ports at the end of the transition period "is not inevitable". Instead, it merely regards this as "a possibility for which a responsible government needs to prepare".

The Independent, however, takes a more creative view, with the headline, "Fears of dead chicks in lorries and 10 months of ports chaos detailed in new government document".

This picks up a "warning" in the consultation document that the emergency traffic measures are to last until the "end of October 2021" and then fantasises about day-old chicks dying by their thousands as "they cannot be fed in their vehicle, and delays risk dehydration and mortality".

In this, I rather feel the article authors have not read the consultation document. The whole purpose of the procedures set out in the document is to prevent vehicles even setting off for journeys to the ports unless the correct paperwork is in place, thus ensuring speedy clearance.

Specifically, in respect of the Port of Dover and Eurotunnel, the government is introducing the legislation to support the "Kent access permit" (KAP) system. This is tied into a Smart Freight (SF) Service, where HGV drivers will have to self-declare, via a web portal, if they have all the documentation they need to take goods across the "Short Straits".

Only if they are given a "green" or "amber" is a permit issued and, only with a "green" clearance can the goods be taken directly to the port without first going to an HMRC Office of Departure or a Third Party Authorised Consignor to complete customs processes.

All hauliers intending to use the ports have to use designated roads, and drivers who travel without permits, who fail to follow instructions or use non-designated roads, can be fined £300 for each offence.

For all that, we get the Independent's spectre of cute, fluffy chicks exported to the EU being left to die "unless they can be rushed through the chaos expected at UK ports next year", a prospect described as "horrifying” by Layla Moran, "a Liberal Democrat leadership candidate".

Why she should be given a cameo part in this drama isn't really (or at all) explained, but the most likely outcome is that shippers will not be allowed to move live animals or birds unless the documentation and necessary certification is already in place. These are the vehicles which will be given the "green" clearances and be able to make uninterrupted journeys to the ports.

If there are delays for these goods, it will be at the French end, where the Border Control Posts have insufficient capacity to handle the throughput. However, I suspect shippers will be testing out the system with a few trial loads before they commit themselves to a normal service.

Thus, it is the "amber" traffic which will have the delays on this side of the Channel, and there is no means of knowing the volume which may be caught. And that is the reason for Operation Brock, plus the add-ons.

Nevertheless, there also seem to be some reservations about traffic coming the other way. Operators delivering medicines after the end of the transition period are being advised by government to avoid the Channel ports "as a matter of priority", while medicine suppliers are being instructed to begin stockpiling again, by building up six weeks' worth of drugs.

These precautions are unrelated to Operation Brock as that affects outgoing traffic, and this is related to incoming goods. There is not expected to be any blockage of roads heading out of the ports, so we can only be dealing with customs clearances by the UK authorities or marketing authorisation issues.

The latter is an area of uncertainty and a number of drugs manufactured in EU Member States have as their market authorisation holders UK-registered firms. These authorisations will lapse on 31 December and, unless they have been transferred to EU domiciled entities, they can no longer be manufactured.

If this leads to a shortage of drugs in the UK (as well as elsewhere in Europe), it would not seem to be primarily be a distribution issue, so one wonders what the government isn't telling us.

It could be that the overall productivity of the transport fleet drops, that UK drivers may no longer be licensed to operate in EU Member States territories, and there may also be a shortage of ECMT (international road haulage) permits. But none of these problems, or even authorisation issues, relate specifically to the Channel ports.

Perhaps the oddest thing about all this, though, is the reaction of Chris Yarsley, policy manager at Logistics UK, formerly the Freight Transport Association. He expressed "disappointment" to see that the government "is expecting significant friction at the border with the EU", saying that the logistics industry had been given previous reassurances that friction would be minimised.

Apart from the fact that "minimised" is a rather ambiguous term that does not mean "removed" or "eliminated", there is something rather naïve about this response. I recall speaking to the FTA in the early days, and even then, they didn't seem to be of this world. Things don't seem to have improved.

Yarsley wants government's assistance "to ensure logistics vehicles can continue to move smoothly into and out of the EU". He says that "the current proposals leave too many questions unanswered and very little time available in which to identify and implement solutions to keep the country trading".

As regards logistics vehicles continuing to move "smoothly into and out of the EU", that ship has already sailed, so to speak. We kissed goodbye to that as soon as Mrs May decided we weren't going to follow down the Efta/EEA route. Border friction is going to be a fact of life, for the foreseeable future.

That said, the government is quite evidently going out of its way to ensure that congestion on the roads leading to Dover Port and Eurotunnel is managed, which is only what one would expect of it. But what happens when goods get to the other side of the Channel is, at the moment, unknown in detail. We are very soon going to find out.

Also published on Turbulent Times.

Richard North 05/08/2020 link

Brexit: chemical uncertainties

Tuesday 4 August 2020  

It was in her Mansion House speech on 2 March 2018 that Mrs May spoke on our future economic partnership with the European Union.

In that speech she told us that we will want to explore with the EU, the terms on which the UK could remain part of EU agencies, one of which was the European Chemicals Agency (ECHA), the body which implements REACH and other EU chemicals legislation.

For a prime minister to be that ill-informed was more than a little concerning, but ill-informed she was. As with most of the EU agencies (but not all), there is no provision for third countries to be part of ECHA.

As made absolutely clear in Regulation (EC) No 1907/2006, establishing the agency, the agency's mission was to service Member States, and only they can be full members. Once the UK left the EU, our membership lapsed.

There is a provision for Efta/EEA members to participate in the work of ECHA and, by virtue of EEA Joint Committee Decision No 25/2008, they can also participate in the Management Board, but they have no right to vote.

To achieve that status, the Efta/EEA states are required to adopt all the REACH legislation into their domestic law and thereby, when the Commission took authorisation decisions, the Efta States would "simultaneously and within 30 days of the Community Decision, take corresponding decisions", thus allowing the marketing of the chemicals authorised.

The only way a third country could get any kind of special treatment would be to implement REACH legislation into its own domestic law and then to build-in a recognition system into a free trade agreement. This is the path adopted by South Korea with its Korean REACH.

Even though the chemical industry seems to have deluded itself that there was an opportunity for continued collaboration, it should have known that the possibilities were extremely limited, and that Mrs May was talking nonsense.

Furthermore, whatever chances there might have been under the May administration to make provisions for the UK chemical industry within the EU, these evaporated once Johnson became prime minister.

Even now, though, the government is very vague on the post-transition and, so far, there does not seem to have been any formal notification of a new system.

Although existing REACH authorisations will continue to be recognised, UK companies will no longer be able to apply for authorisations, and existing authorisations will have to be transferred.

The complexities and uncertainties, however, have not stopped the Financial Times running a piece headed: "UK chemical industry warns of £1bn cost to duplicate EU regime".

This tells us that the safety registrations of the chemicals currently used in the UK - currently held in the REACH registration database run by the European Chemicals Agency in Helsinki - will need to be re-registered with a new UK equivalent.

There is a possibility though that the FT is jumping the gun. Defra, the responsible Ministry, has certainly admitted that it plans to have a replacement system ready, although it has produced no detailed (or any) information, other than to say that this will be ready by the end of the year.

Nevertheless, the FT is speculating that registering a single chemical in the new UK Reach database could cost up to £300,000 if companies are required to buy "letters of access" to use the vast banks of test data held by ECHA - information that is expensive to produce and often owned by third parties. Even then, additional testing may be required.

Steve Elliott, chief executive of the Chemical Industries Association, asserts that unless a data-sharing deal is done with Brussels the new system would add more than £1bn in costs to companies, just to duplicate existing registrations.

To make matters more complex, chemical business owners have still not seen the computer software that the Health and Safety Executive will use to collect the new UK registrations. There is concern that there could be considerable problems in getting hold of the registration data, which is held in commercial agreements.

This, of course, will not be a problem if the UK continues with its current position of recognising EU authorisations after the end of the transition period. Thus, the real problem at the moment, as one of the FT sources concedes is that the situation is unclear "and we're getting closer and closer to the time when Brexit is going to happen".

At the moment, I can't see how the UK government could even set up a scheme in the time available. And, from the moment a new scheme does start, it would take time for new registrations to be made, and authorisations to be processed. Thus, there must surely be a UK transition period, when the EU system continues to be recognised.

Presumably, it is possible that some provision might be made for the chemical industry in any "future relationship" agreement, which may explain why the government has been reticent to supply any details as to its intentions after the end of transition.

All we have to go on, for the moment, is a letter to MPs in May, from Rebecca Pow, the minister at the Department for Environment, Food and Rural Affairs overseeing the policy. She admits there will be "significant cost and burden to industry" in complying with UK Reach, but argues that the "benefits of having control of our own laws outweigh the costs".

That, says the FT, is not a view shared by Dani Loughran, managing director of Aston Chemicals in Aylesbury, a medium-sized business that imports and distributes chemicals used by some of the world's leading cosmetics brands.

Aston sells about a thousand different products, many of which the FT says will require a new UK registration. Thus, it asserts, the company and its suppliers may have to commission fresh testing to duplicate the Echa data.

Even without new testing, the company says, the basic cost of registering each chemical will be about £5,000, with the additional cost of "letters of access" varying from £33,000 for an emollient used in a face cream, for example, to £150,000 for a shea butter used as a base for sunscreen. In one case a letter of access cost nearly £300,000.

"Our EU competitors are licking their lips, and that is deeply frustrating", Ms Loughran says of the mounting costs. "We've spent 30 years growing from nothing, now all these barriers are being forced upon us". She adds: "It is enormously wasteful and uncompetitive for UK companies like us to have to spend time, money and resources to repeat all of these registrations for no additional benefit to anyone".

However, there are doubts that "UK Reach" would have the bureaucratic bandwidth to manage the new processes. ECHA employs 600 people with an annual budget of €110 million, compared with the £13 million a year budgeted for the UK version, including up to 50 staff.

Crucial to shrinking the new registration costs for UK companies — by up to 80 per cent according to Chemical Business Association chief Peter Newport — will be whether British negotiators can broker a data-sharing agreement between ECHA and the UK authorities to remove the need for the letters of access.

"Basically the EU has a pantry in Helsinki stuffed full of goodies, and we now want to populate the UK's new pantry with that data", Newport said, although he fears that the cost of UK registration risked making some chemicals commercially non-viable in the UK market, with knock-on effects for supply chains and UK jobs.

All this, though, does seem to be speculation. The point, therefore, is that an industry of this importance should not be in this position. Far from taking back control, the UK government seem to be losing control, and it is about time it got a grip.

Also published on Turbulent Times.

Richard North 04/08/2020 link

Brexit: freeports revisited

Monday 3 August 2020  

In a ministerial foreword to the recently completed consultation on freeports, the authors – led by Rishi Sunak - waxed almost lyrical.

In the Ancient World, they wrote, Greek and Roman ships – piled high with traders' wines and olive oils – found safe harbour in the Free Port of Delos, a small Greek island in the waters of the Aegean. Offering respite from import taxes in the hope of attracting the patronage of merchants, the Delosian model of a "Free Port" has rarely been out of use since.

They then go on to assert that this is because freeports still offer that same story of trade and prosperity across the modern world. From the UAE to the USA, China to California, global freeports support jobs, trade and investment. They serve, we are told, as humming hubs of high-quality manufacturing, titans of trans-shipment and warehouses for wealth-creating goods and services.

And, for that reason the government wants to recreate the best aspects of international freeports in a "brand-new, best-in-class, bespoke model", which they have out in their 48-page consultation document.

Interestingly, they set out four main benefits from using the freeport system. The first is "duty suspension", where no tariffs, import VAT or excise are to be paid on goods brought into a freeport from overseas until they leave the freeport and enter the UK's domestic market.

The next is what is called "duty inversion". If the duty on a finished product is lower than that on the component parts, a company could benefit by importing components duty free, manufacturing the final product in the freeport, and then paying the duty at the rate of the finished product when it enters the UK's domestic market.

The third possible advantage is duty exemption for re-exports. A company could import components duty-free, manufacture the final product in the freeport, and then pay no tariffs on the components when the final product is re-exported.

Finally, there are simplified customs procedures. In this context, we are told that the government intends to introduce streamlined procedures to enable businesses to access freeports.

However, by various mechanisms, some of which I discuss in this post, most of these advantages can be gained through administrative means, without taking on the disadvantages of the freeport system, arising from having to isolate the facilities and introduce enhanced perimeter security.

Specifically, a system of duty suspension already exists outside the framework of freeports, known as the Excise Movement and Control System (ECMS). Although applied to alcohol, tobacco and energy products, the monitoring and administration system could easily be applied to other sectors. Without having to go to the trouble of creating freeports.

Similarly, if the goods are brought into the country, but are to be re-exported, there is a temporary admission procedure which could be adopted, again without having to set up a freeport.

As for the simplification of customs procedures, this needs to be applied to all ports and, as this example shows, could yield considerable dividends. To focus solely on freeports would disadvantage the rest of the industry.

That then leaves the so-called "duty inversion", which is the subject of a front-page report in the Financial Times today, under the headline: "Freeport advantages for business are 'almost non-existent'". The sub-heading tells us: "Study suggests only 1% of UK imports by value could benefit from arbitrage opportunity".

Getting into the text, which adds meat to the headlines, we see the claim that government plans to build a network of ten freeports after the end of the Brexit transition period "are unlikely to have any material impact on the UK economy".

This relies on detailed data analysis by Sussex university's UK Trade Policy Observatory, which shows that duty savings are so small as to be "almost non-existent", thus providing "minimal" opportunity for businesses to take advantage of fundamental aspects of freeports.

The point raised by the analysis is that, in the United States, there are several hundred freeports, where they are known as foreign trade zones. However, they are so popular there because opportunities for tariff inversion, particularly in the automotive and petrochemicals sector, make them attractive. But, says UKTPO, that opportunity will not exist in the UK. Only around one percent of UK imports by value could benefit from the arbitrage opportunity.

"The fundamental thing is that the trade benefits of a freeport are almost non-existent", says Peter Holmes, a UKTPO fellow who co-authored the analysis. "The only benefit might be in some sort of enterprise or urban regeneration zone — but that has nothing to do with the 'port' aspect".

Delving deeper, UKTPO found that out of the 20 most imported inputs in the UK by value, accounting for around 40 percent of the UK's imports of intermediate goods, 12 were duty-free and none had a tariff of more than 4 percent.

They found that a tiny handful of sectors, including dog and cat food inputs, could offer a significant "wedge" between input and finished products, but in total these accounted for only 0.6 percent of UK imports of intermediates.

Looking at the potential tariff gap between inputs and finished products within the same sectors, the group found dairy products, starches and starch products, and animal feeds provided the greatest potential for duty savings in these sectors, but even these accounted for only 1.1 percent of total UK imports.

It would appear that the sectoral analyses to identify potential duty savings "all tell the same story", which means that introducing freeports into the UK is "unlikely to generate any significant benefits to businesses in terms of duty savings".

The FT report goes on to tell us that the lack of obvious trade benefits from freeports has led to recent warnings from industry and anti-fraud campaigners. They are concerned that the zones will encourage fraud or, if they just offered laxer regulation or planning laws, will simply displace business.

On this, the paper cites Adam Marshall, head of the British Chambers of Commerce. He sits on the government's freeport advisory panel, and has said that business was nervous that freeports would displace jobs, not create them.

Robert Palmer, the director of campaign group Tax Justice UK, has been more scathing, predicting the chancellor's freeport plans would amount to "a few glorified industrial parks on the edge of Tory target seats in the North and midlands".

Looking at the proposal in the round, that would be exacerbated by the displacement of resource, which could be better spent on upgrading the ports network as a whole – introducing systems such as the "single window" – and improving infrastructure, the limitations of which are often the cause of restricted growth.

It really is quite remarkable, therefore, that so much energy is going into a proposal which has so little merit and which is likely to yield such little benefit. But then, this does rather typify this government which, as Pete points out, is drifting us into failed state territory.

I suppose we can expect very little else from this government.

Also published on Turbulent Times.

Richard North 03/08/2020 link

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