Brexit: not an easy option

25/07/2018

You really do wonder about the legacy media sometimes. Give them a front-page story and they don't even realise what they have. Such is the Financial Times which headlines a report: "Heathrow raises £1bn debt as it prepares for Brexit", having chief executive John Holland-Kaye say this was equivalent to two full years' funding.

"That", he says, "gives us a level of financial resilience that means we're well protected in case of whatever worst-case scenario we can envisage". He then went on to say that he expected "something close to continuity" through a Brexit agreement, but added, "our funding levels mean we are protected. Even if we have no income for two months, we would be financially safe".

And therein lies the front page story: "Even if we have no income for two months, we would be financially safe". The boss of Heathrow is making financial provisions for a two-month shut-down after Brexit. And the FT didn't understand what it was told.

This, though, is no surprise. Derivative to the last, the legacy media only knows what it's told, and unless you spell it out in foot-high capitals, attached to a person of prestige, they have no idea what's going on. The idea that Heathrow might have to shut down its international operations after Brexit simply has not occurred to them.

This distance from reality certainly affects wunderkind Tim Stanley in the Telegraph. He has at last come out in favour of the blindingly obvious, writing under the headline: "Why it's time my fellow Brexiteers took a second look at the Norway option".

Never mind how long us "invisible" have been looking at it. "Dim" Tim has discovered it, so it now becomes an item. He must give us the benefit of his wisdom, telling us that "the major political headache would be immigration", because the EEA offers "just an emergency brake".

Stanley thus demonstrates that he has only the slightest idea of what the Efta/EEA option entails. The debate of the past four years, with its increments of knowledge that have come with it, having completely passed him by. Yet such ignoramuses still manage to rate themselves as leaders of opinion, their burblings treated with far more respect than they deserve.

Nevertheless, this wunderkind is one of several commentators who have recently woken up to the potential of the Efta/EEA option – although most of them, locked in a knowledge bubble which was frozen in time some years ago, still refer to it as the Norway Option.

Latest of the converts is David Smith, Economics Editor of The Sunday Times, writing in The Times to instruct us lowly plebs that: "The Norway option offers a Brexit plan that could placate both sides". Well, you don't say David.

At least he has the decency to acknowledge that the "more thoughtful Brexiteers have always favoured it, as the smoothest way of exiting the EU with the minimum of economic damage, and a reflection of the fact that the vote in June 2016, of 51.9 percent to 48.1 percent, was not conclusive enough to make the case for a hard break".

Like Stanley, though, Smith's knowledge of the option is wafer thin, referring to it as "one of the off-the-shelf plans" proposed by Michel Barnier. Here, I have to admit that, in the early days, I thought the EEA Agreement was an off-the-shelf option. But then, actually reading the damn thing and learning something of the way it operates has convinced me otherwise.

And this is why these people aren't actually very helpful. For instance, with his brain preserved in aspic – that part which holds the details of the EEA – Smith writes about "the strings attached to EEA membership".

Out come all the old tropes: free movement, being a rule-taker and paying into the EU budget. But there is a tiny bit of movement as he notes that "many have pointed out", there are "plenty of things that Britain can do within the rules to restrict free movement, as some EU countries already do. But then he spoils it by instructing us that: "This is without resorting to the emergency brake allowed under EEA rules".

I recall writing here of a high level meeting I went to in London, where the "leaders of men" types gathered around a table in a high powered venue in the City, to talk of free trade agreements and other things. Yet, when I asked the assembly whether any of them had ever read a free trade agreement – or even skimmed through on – not a single one had.

So it is with these born-again converts to the so-called "Norway Option". The only way you could blather about "the emergency brake" is if you hadn't read the EEA Agreement. And of course, none of them have. They don't acquire their knowledge by reading primary sources. They are intellectual leaches, feeding off each other, walled in by prestige and slaves to poncey academics who often know far less than they think they do.

Despite that, some of the wider debate does seem to have broken through the bubble, with Smith admitting that "the experience of Norway is that it does have influence over EU rules affecting it, even if it does not have a formal vote". He also says that Britain could expect to have even greater influence.

For all that, I suppose we should welcome the renewed interest, especially as Smith concludes his piece by saying that "the best Brexit outcome, EEA membership, is staring us in the face". Given time, he might even learn something about it.

Nevertheless, in this new-found enthusiasm for an old solution, there is great danger, especially with those buffoons who believe we can park ourselves temporarily in the EEA, buying time to sort out the mess we have got ourselves into before moving onto greater things. If ever there was a way of ensuring that Efta states rejected our membership, that is the way to go about it.

The problem is that there is little understanding that Efta/EEA membership is not an easy option, not least because the first hurdle that has to be surmounted is Efta membership. Coming at that, reluctantly, as a last resort, is not going to get us welcomed with open arms.

Should we surmount that obstacle, the fact that the EEA Agreement is not an off-the-shelf option but a complex series of country-specific adaptations which make the deal for each of the three Efta states unique.

Here, we have the pundits – almost to a man – burbling about the CAP and the CFP being excluded from the EEA Agreement, as if that was necessarily an advantage. But the fact is that, while the exclusion of agriculture suits the Efta states (as does the exclusion of fishing suit Norway and Iceland), this will not be the case for the UK.

Like it or not, decades of policy integration have enmeshed us in the European systems. Making the break – if we are to avoid unnecessary damage – needs to be slow and very carefully managed. In the meantime, parallel farming and fishing policies specific to the UK, embedded in protocols to the EEA Agreement, would be an admirable way of managing our affairs.

Similarly, although financial services are not a core part of the EEA Agreement, the structure of the agreement, with its three tiers of the core, the protocols and the annexes, lends it to building an agreement within an agreement, using the established institutions to manage its implementation.

Another thing which comes across, with increasing force, is that in respect of the Efta states, the EEA agreement does not define the totality of their relationships with the EU. Norway, for instance, has no fewer than 49 bilateral agreements with the EU and is a co-signatory to over 130 multilateral agreements.

Many of these are not relevant to the UK but many are. And in many important areas, the EEA Agreement provides either the platform on which other agreements are based, or the means by which they are implemented – or both.

That brings us back to where we started, with the problem that Heathrow faces in that it stands to lose the mutual recognition of airport safety certification, leading to a possible shutdown after Brexit (other than domestic flights).

With this even being acknowledged by the CAA, we are desperately in need of a solution which will keep our airports open and our aircraft flying. And while the Efta/EEA option does not provide a solution, it paves the way for one, as it allows EASA to treat Efta states as if they were fully integrated into the EU system.

The interesting thing is that, without the Efta/EEA option, I don't see an easy or quick solution to the aviation issue. It may be a long time after Brexit before we see pictures of Heathrow like the one above. And returning to the status quo applies equally to the food sector, to vehicle manufacturing, pharmaceuticals and many other sectors. The Efta/EEA option does not directly provide the solutions but it paves the way to them.

That said, there is no way that we can use Efta/EEA membership as a get out of jail free card. At this late hour, it cannot be treated as an alternative to the Chequers/White Paper plan. Having wasted so much time, the only way sensibly we can progress is to go with what we've got and then pursue Efta/EEA membership in the transitional period.

That would mean reorienting the nature of our future trading arrangements and committing to a declaration which identified Efta/EEA as our preferred option. And that is very far away from what the pundits are suggesting. That makes Pete perhaps a little more optimistic than I am, but then, neither of us are giving up until the fat lady has had her coronary.