Richard North, 02/07/2018  
 


It was one of our readers who spotted the incongruity. Last Saturday we had Charles Moore writing of Brexit that: "Of course the implementation of any decision that changes the life of a nation is fantastically complicated".

Yet, on 6 January 2017 – just short of two weeks before Mrs May's Lancaster House speech – this same Charles Moore was writing under the headline: "Only those who don't want to leave see Brexit as mind-blowingly complicated".

"Surely", he asked rhetorically, "Brexit is in that important category of things which are simple, but not easy?" And then came his punchline: "It is in the interests only of those who do not wish us to leave to insist that it is so mind-blowingly complicated that they must be put in charge of it".

Basically, Brexit is like that famous description of Irish politics: "if you think you understand it, you haven't been listening". Only somebody profoundly ignorant of the processes involved could begin to believe that it was "easy". And it has taken Charles Moore nearly eighteen months to graduate from the view that it was indeed easy, to becoming "fantastically complicated".

Even then, this fool of a man dismisses the prospect of UK aircraft being grounded as one of those "absurdities" which the EU is threatening. And, he says, if Mrs May understood what Brexit was about, her response would be to "outdo even M Barnier himself in her expression of disdain".

Clearly, Mr Moore has progressed a little way, but not very far. And he is unlikely to get much further. He is bedded down with the Tory "Ultra" group belief system. And together with his profoundly ignorant friends in the Telegraph, he is still convinced that there are no insurmountable problems that cannot easily be overcome to bring us to the sunlit uplands.

Theirs is a Brexit where, according to Rees Mogg (also writing in the Telegraph), our nation "will be free to make its own laws and conclude its own trade agreements, free to take back control of its immigration policy and no longer obliged to pay 'Eurogeld' in return for the dubious privilege of following EU laws".

Substance to the "free to make its own laws" meme is provided by the ever-willing Roger Bootle - another Telegraph contributor. He argues that, since exports to the EU account for approximately 12 percent of our GDP, approximately 88 percent of the UK's GDP is not exported to the EU. Thus, we are led to believe, only those firms exporting to the EU would need to encumber themselves with the costs of EU regulation.

In the post-Brexit paradise that the Bootle-Mogg nexus salivate after, freed from the cost of "EU intrusions", non-EU exporters will be able to depend upon a "new industrial revolution being allowed to sweep through the economy with the lightest regulatory restraint".

And now let's look at the real world. One of the cutting edge technologies in the UK is the development of advanced composites. They are used for Airbus wings, in vehicle manufacture, for panels in passenger trains and much, much else.

This characterises one of the leading Airbus suppliers in the UK – Icon Aerospace Technology - which even makes parts for wind turbines. And, while Airbus is only a small part of its business, one has to ask whether it is going to apply a different (lower) standard to the rest of its products just because they are not being exported to the EU?

Is it really the case, one wonders, that companies making goods to sell throughout the world are going to set up different production lines – one for EU exports and another for domestic sales and perhaps even another for US sales?

What actually happens, as we reported over three years ago, is that companies look throughout the world for the most rigorous standards they can find and produce to them. They anticipate that as long as the meet these standards, their product will be accepted everywhere else in the world.

Since the EU is considered a regulatory superpower, and its standards are often the most rigorous, more and more we are finding that companies throughout the world, even when not selling to the EU, are adopting EU standards, for this very reason. This is the so-called "Brussels effect".

Ironically, though, Icon Aerospace and its parent company are dual certified by both EASA and the US FAA. Far from being a burden, conformity with the regulation allows the group to do business worldwide.

You will get nothing of this from the likes of Bootle, Mogg or the rest of them, who remained determinedly locked into a "Little England" paradigm, where we can build global businesses on the back of UK-generated standards. In their world, globalisation never happened.

In yesterday's piece, I remarked that the impact of Brexit on aviation was something of a touchstone. And here again we find this to be true in terms of making our own laws in a post-Brexit environment.

Struggling to unpeel another layer of the regulatory system for UK airports, I've already remarked that EU law which applies to the likes of Heathrow is actually based on Annex 14 of the Chicago Convention, drawn up by the ICAO. Thus, if we break away from EU regulation, we experience the double coffin-lid effect of having to apply the same law, originating directly from a global body.

In exploring how this system works, I've come across the concept of the Regional Safety Oversight Organisation (RSOO), where one finds that, under the aegis of the ICAO, EASA has been recognised as a "level 3" RSOO, allowing it to take on the oversight powers normally exercised by the global body.

The interesting thing here is that, as long as the UK is part of the EU, it comes under the supervision of EASA but, when it leaves the EU it not relieved of supervision. It will have to revert to the ICAO, which will then exercise direct oversight. Ironically, EASA supplies the ICAO with technical experts, on secondment, so we could find ourselves inspected by EASA officials working for the global body.

Either way, Brexit affords the UK no relief at all from the "burden" of regulation. If there is to be a "new industrial revolution", it won't be in aviation. Nor, of course, will the pharmaceutical industry find things any different. Under current EU law, with a few exceptions a manufacturer can opt for an expedited test procedure, limiting sales of a medicine to the state in which it is tested. Only if the makers want to market the product throughout the whole of the EU do they need to undergo the full testing procedure.

Post-Brexit, nothing will change. If UK pharmaceutical companies want to market their products throughout Europe, they will have to get authorisation from the European Medicines Agency. And, given the wider market, companies will seek EMA approval for all significant medicines. They will not be adopting dual standards, one for the UK and the other for Europe.

And this is going to happen throughout industry. Cars, for instance, will be made to EU standards – which are, in any case, UNECE standards. It is inconceivable that manufacturers will have models built to an export standard, while they sell death sheds on the domestic market.

Even for enterprises such as slaughterhouses, although much of the industry strongly opposed introduction of EU standards, for those who survived the onslaught of the "completion" of the Single Market, the works they needed to do are sunk costs. Virtually every single slaughterhouse in the country now exports some of its production (either directly or in manufactured products). There is no interest in going back.

In sector after sector this applies. As far as industry in general is concerned, EU standards have been absorbed and there is little to gain from any change. The idea that business is yearning for a bonfire of regulation is a fantasy that exists only in the minds of Mogg and his supporters.

Going back to Charles Moore and his comments in January year last, the one simple thing about Brexit is that there is little enthusiasm for regulatory change. The only thing we need from Mogg is a bonfire of the vanities.






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