Politics: back to obscurity

04/08/2021  


The Financial Times is continuing on the trail of Ben Elliot and the "access capitalism" affair, having a former Conservative MP, Charlotte Leslie, accuse Elliot of mixing his business and political interests.

Despite this adorning the paper's front page, the accusation is nothing new. Delving further into the detail is getting a tad boring, without adding much to our understanding. If anything, more information is muddying the waters, taking us away from the central political issue of corruption in high places.

The situation is not improved by the belated intervention of the BBC which, five days after the story broke in the FT, has finally published a version of it on its website.

Predictably, the broadcaster avoids highlighting the central issue and instead goes for the cheap shot with the headline: "Top Tory marketed much-needed Covid tests to rich clients, says Labour". This is simply a repeat of the already published claim that Ben Elliot's firm arranged for its wealthy clients to buy PCR and antibody tests, at a time when the NHS and care homes "were crying out" for more tests.

Only at the very end of its report does it mention, almost in passing, that Elliot had developed "an exclusive club to connect Tory supporters with senior figures", citing the FT story in which Amersi claims that this was a "very elite" membership with people required to "cough up £250,000 per annum or be a friend of Ben".

There is no mention of the term "access capitalism" and no reference to the Advisory Board, or that fact that this "invite-only" club assured monthly meetings with prime minister Johnson and chancellor Rishi Sunak. In fact, there is no mention of either Johnson or Sunak. The BBC is offering a sanitised version of the story, devoid of political bite.

This reluctance to confront the dark shadow of corruption in high places rather confirms O'Neil's thesis in yesterday's Times about the tendency to avoid the C-word. Instead of saying in plain English that these are allegations of corruption, he writes, we resort to clever-clever phrases and knowing descriptions best uttered while nodding and winking.

O'Neil also notes that we're not quite so shy when talking about what goes on in other countries. Dominic Raab, he writes, recently imposed asset freezes and travel bans on public figures from Venezuela, Zimbabwe, Equatorial Guinea and Iraq and pledged to fight "the blight of corruption and hold those responsible for its corrosive effect to account".

There is certainly the sense that corruption is something that only occurs in foreign countries, as evidenced by Raab's press release from late July. And there was more of the same from Deirdre Brown, Deputy Head of the UK Delegation to the OSCE, who condemned corruption as "the scourge of all, and a serious inhibiter to economic growth". Never fear, though. according to Brown, it "impacts most heavily on the poorest nations".

But while the shrinking violets might steer clear of the domestic application of the C-word, not everyone does, and its use (and the circumstances of its use) does not escape attention, even on distant shores. Take for instance, the British Virgin Islands in the distant Caribbean, which has had a torrid time of late, edging up to a full-blown constitutional crisis exacerbated by the scourge of Covid-19, mired by allegations of corruption from the outgoing governor.

Enter Natalio D Wheatley, BVI minister for education, culture, youth affairs, fisheries and agriculture, speaking on 1 August. "Among some persons", he says, "disillusioned because of what they may perceive to be this society's weaknesses, an ill-advised sentiment has crept into conversations: 'Let Britain take over for a while'".

But he had already set the scene for the rejection of this idea by asserting that the UK is not immune to the alleged deficiencies being scrutinised in the BVI. He then refers to the Guardian, a "reputable publication" which had published an article entitled, "Under Boris Johnson, corruption is taking hold in Britain", with the subtitle: "Cronyism is rife, our system of checks and balances is being dismantled, and ordinary people will soon start to suffer". Johnson's fame has spread far and wide, and the erosion of standards under his administration has not escaped notice – except, it would seem, where it matters.

One reason why the use of the C-word in this article did not gain greater traction in the UK might very well be because it was in that "reputable publication", the Guardian, but an even more certain reason was undoubtedly the author of the piece, Gina Miller – she of Article 50 Supreme Court fame.

Whether it is she, Guardian doyen Jonathan Freedland, writing of the scandals "that should have felled Johnson years ago", or ex-Times foreign editor, Martin Fletcher, complaining in the New Statesman that "Corruption in Britain has reached new heights under Boris Johnson’s government", all these references have one thing in common – they are all from left-of-centre writers.

Thus, "corruption" has become a stick used by the partisan left with which to beat Johnson, triggering a defensive response from the tribal "right" that does not permit the charge to be examined. Party politics has poisoned the well of accountability.

Perversely, this puts in context my complaint yesterday that the legacy media was not joining the dots and was instead inviting us to see events as sporadic occurrences without picking out common themes or evidence of systemic failures.

No sooner had I published this then we had Yasmin Alibhai-Brown writing in iNews, under the headline: "From paying for peerages to the Queen's lobbying, these six scandals lay bare the corruption of our country". And, along the same lines as O'Neil, her sub-heading declares: "Around the world, the wretched protest tirelessly against corrupt governments. Here the corruption is cleverly alibied and now normalised".

The point is made, but to no avail. A left-wing writer in a left-leaning paper is going to make no more impact than any other commentary from the same political spectrum.

Alibhai-Brown states that old systems based on myths of British incorruptibility are ineffectual and argues that we should tighten the rules, create a robust body to regulate lobbyists and set up an independent committee to eject those who have bought peerages and to appoint people using fair methods.

"Let us clean up British politics – and make Britain truly great again", she concludes, while O'Neil declares that: "Reform of our opaque systems of honours, appointments and political donations is urgently needed before a worsening integrity problem becomes a full-blown corruption crisis".

Even The Times, though, will have little impact. Tribal politics are blocking the debate. There will have to be a full-blown crisis before this government even admits there is a problem. Meanwhile, "access capitalism" is likely to fade back into the obscurity from whence it came.

Also published on Turbulent Times.



Richard North 04/08/2021 link

Brexit: adults in the room

06/05/2021  


Virtually all the legacy newspapers have carried the publication of Michel Barnier's book on the Brexit negotiations, covering the period between the 2016 referendum and the end of January this year. It is out today in French and available in English in October.

Entitled La Grande Illusion (Journal secret du Brexit), it gets different treatment according to which paper is reviewing it. But, for those inclined, there is a 57-page extract on the publisher's website in the original French.

As to the papers, we start with The Times, which headlines, "Boris Johnson didn't know his own Brexit policy, claims Michel Barnier", adding the subtitle: "A new book by the EU negotiator reflects on the PM's 'baroque personality' and trouble with details".

The diaries, we are told, focus on how Conservative infighting shaped Brexit, especially with the emergence of Johnson as party leader and prime minister. As charmed as he is repulsed by Johnson's "baroque personality", Barnier does not hide his astonishment and, sometimes, anger at British negotiating tactics, particularly after Theresa May left No 10.

Thus, The Times's report leapfrogs almost to the end of the negotiations, focusing on the Brussels dinner on 9 December last year, as talks hung in the balance. Johnson is said to have stunned Barnier and Ursula von der Leyen, by appearing not to know his own negotiating position.

Amid deep disagreements on fishing and EU demands for a "level playing field" in regulation, the prime minister allegedly suggested a minimal deal on areas of existing agreement combined with a new pact on defence and security to take the sting out of a no-deal Brexit.

"We could even, in the event of disagreement, show a willingness to co-operate with a treaty on foreign policy and defence", he told the Brussels pair, to "general astonishment on our side", writes Barnier, because he had "brutally" rejected such a deal in the past.

Barnier said that he replied: "But Boris, it was you who refused to open a chapter on defence, co-operation and foreign policy in the negotiations". Johnson had replied: "What do you mean, me? Who gave this instruction?", while looking at his officials.

The Telegraph, predictably, takes a different slant, bringing in more players in its headline, which reads: "'Bulldozer' Boris and 'messianic' Raab: Michel Barnier's withering verdict on Britain’s Brexit team". The sub-head tells of Barnier hitting out at "childish" UK ploys.

That is expanded upon in the text, where Johnson's negotiators are "blasted" as "childish" and "not up to the task", with Barnier regarding his European team the only "adults in the room". He paints a picture of petulant British negotiators under Johnson, who he said had not fully grasped the implications of Brexit and was full of bluster and bluff.

At one point in the talks, when he says the British had wrongly claimed that the EU had ruled out a Canada-style trade relationship, Barnier writes: "We looked at each other with incredulity. It was almost childish".

This paper also has Barnier voicing disdain for his British opposite numbers, dismissing Dominic Raab as a man with a "Messianic light in his eye" who "lacks nuance". David Davis kept a low profile and "avoided blows".

Jacob Rees-Mogg is described as "one of the most ideological Eurosceptic Conservative MPs and decidedly the most opportunistic, who cultivates a style that is more 19th century than close to the people". Olly Robbins, on the other hand, wins plaudits as "taking the measure better than others of the consequences of Brexit and seeking to limit the damage".

Jeremy Corbyn gets short shrift as an "old school Leftist" who failed to grasp the technicalities of the negotiations and bore a "heavy responsibility" for sitting on fence. But Mr Corbyn's successor, Sir Keir Starmer, receives the Barnier stamp of approval "as I get the feeling I am dealing with a future prime minister of the UK".

As for Johnson, Mr Barnier lets rip as he writes about his resignation as Foreign Secretary. "In truth, Boris Johnson committed so many errors and verbal 'outbursts' that his nomination as head of the Foreign Office seemed incongruous in numerous capitals. And I can imagine that this was also the sentiment of many British diplomats".

The Independent, in one of the longer pieces, has as its headline, "Barnier hits back at ‘childish’ and ‘pathetic’ Brexit strategies of Boris Johnson", with the sub-head: "Memoirs of negotiation show how Brussels lost trust in Downing Street team".

Again we get the jibe of the EU negotiators having to act as the "adults in the room", the context being "repeated provocations" from Johnson which at times became "pathetic" and "almost childish". Barnier then accuses Johnson and his inner circle of "political piracy" and states baldly as negotiations reach their endgame: "I simply no longer trust them".

At one point, after Mr Johnson threatened to tear up the laboriously negotiated agreement on the Irish border, Mr Barnier wrote that it appeared the UK was pursuing the “madman strategy” of pretending to be ready for a no-deal Brexit in order to force Brussels into concessions. The Downing Street team were "not up to the challenge of Brexit", and Johnson himself appeared badly briefed in talks with European Commission presidents.

Right up to the last minute, a day before signing the TCA on Christmas Eve, the Johnson team were seeking advantage, presenting the EU with a legal text which was "peppered with traps, false compromises and backwards steps".

The Independent also picks up Barnier's reference to May's Lancaster House speech on 17 January 2017, from which Barnier expressed himself "stupefied" as she ruled out most forms of future cooperation with the remaining 27-nation bloc.

In the Guardian, this is given more thorough treatment, where Barnier "marvels at, "The number of doors she shut, one after the other", recording that he was "astonished at the way she has revealed her cards … before we have even started negotiating".

He pondered whether the consequences of the decisions had been "thought through, measured or discussed. "Does she realise this rules out almost all forms of cooperation we have with our partners?", he asked.

Furthermore, May's proposed timetable – undoing a 44-year partnership via article 50 and agreeing a future relationship, all within two years – also seemed "ambitious to say the least, when it took seven years of intense work to negotiate a simple FTA with Canada".

The Guardian headline tells us: "Tory quarrels determined UK’s post-Brexit future, says Barnier", with the text emphasising that Britain's post-Brexit future was determined by "the quarrels, low blows, multiple betrayals and thwarted ambitions of a certain number of Tory MPs".

The UK's early problem, Barnier is cited as writing, was that they began by "talking to themselves. And they underestimate the legal complexity of this divorce, and many of its consequences".

As to Johnson. Barnier writes that, "Although his posturing and banter leave him open to it", it would be dangerous to underestimate him. In the talks, he was "advancing like a bulldozer, manifestly trying to muscle his way forwards,, although seemingly hobbled by the same fundamental British Brexit problem.

When one of Barnier's 60-member team explained to Johnson the need for customs and quality checks on the Irish border, Barnier writes, it was "my impression that he became aware, in that discussion, of a series of technical and legal issues that had not been so clearly explained to him by his own team".

As late as May 2020, Barnier records his surprise at the UK's continued demands for "a simple Canada-type trade deal" while still retaining single market advantages "in innumerable sectors". There remains "real incomprehension, in Britain, of the objective, sometimes mechanical consequences of its choices", he writes.

The Financial Times then follows up with a headline declaring "Boris Johnson's 'madman' strategy dumbfounded Brussels' Brexit chief", as the sub-head has Barnier describing "how EU lost trust in UK's unpredictable and unprepared prime minister".

There is, of course, much more – even in these reviews – which I've read with some trepidation, with my own (very much shorter) rendition on the negotiations already type-set in the revised copy of The Great Deception.

To my relief, I don't seem to have left anything out of significance, but I will have to wait until October to be sure. But I am heartened by Barnier coming up with a similar view on May's Lancaster House speech and much more.

I'm also amused by Barnier's views of Brexiters in general and of Nigel Farage and his Ukip followers in particular. He writes that they had simply behaved "irresponsibly, with regard to the national interests of their own country". How else, Barnier asks, "could they call on people to make such a serious choice without explaining or detailing to them its consequences?"

Of the arch-Brexiters, Digby Jones, John Mills and John Longworth, he writes: "Their discourse is, quite simply, morally scandalous".

We are fortunate to get Barnier's views on these negotiations and, even if they don't add greatly to the sum of our knowledge, the at least confirm what we knew (or suspected) anyway. Even then, the shades of ignorance displayed by our politicians and our negotiators is an indictment of the way the Brexit process was handled.

When the final accounts are in, I would be fairly confident that history won't be kind to the British effort.

Also published on Turbulent Times.



Richard North 06/05/2021 link

Brexit: that petty and vindictive EU

01/03/2021  


I missed a couple of "Brexit" pieces in the legacy media yesterday, not least one in the Mail on Sunday. This was a classic Mail rant, with one of those long headlines which tell enough of the story without their readers having to dip into the main copy. It read:
How Brussels has launched a spiteful war on our glorious snowdrops and rhododendrons: Petty and vindictive even by EU standards, they're banning the import of plants that have touched British soil - putting jobs at risk and raising prices in garden centres.
When I first looked at this, I thought that this might be another instance where the UK was taking a "hit" from leaving the Single Market, in which case the paper would be partly author of our misfortunes.

After all, at a time when it really mattered, one of the key cheerleaders for the anti-EEA brigade has been the Mail, publishing in December 2018 an issue-illiterate diatribe from Dominic Lawson against the Norway option.

But, looking at the EU law, two things emerge. Firstly, the legislation is not part of the Single Market acquis. Two main laws apply: the 101-page Regulation (EU) 2016/2031 of 26 October 2016 on protective measures against pests of plants; and the very much longer Commission Implementing Regulation (EU) 2019/2072 of 28 November 2019, establishing uniform conditions for the implementation of Regulation (EU) 2016/2031, running to 279 pages. Neither are EEA relevant.

The second thing to emerge is how recent these laws are, both of them having taken effect on 14 December 2019 – only shortly before the UK left the EU. The timing is such that these laws, amounting to a major revision of the EU's plant health laws, would have had no formal input from the UK, which ceased to have any formal legislative role in the EU, the moment the Article 50 papers were lodged on 29 March 2017.

As to the Mail on Sunday's assertion that the EU is "banning" British soil, this is essentially true. The prohibition is set out in Annex VII of Regulation (EU) 2019/2072, which lists "plants, plant products and other objects whose introduction into the Union from certain third countries is prohibited".

Point 19 refers, where "soil as such consisting in part of solid organic substances" from "third countries other than Switzerland" is specifically prohibited. According to Point 20, the import of all organic growing media - apart from peat or coconut fibre, previously not used for growing of plants or for any agricultural purposes – is prohibited.

Nevertheless, we were warned about what would happen in the event of the transition period ending, without a covering agreement on phytosanitary issues, the latest advice published by the Commission in a revised Notice to Stakeholders on 13 March 2020 – the original having been published on 21 March 2018.

What could then have happened during the TCA negotiations was that Frost and his merry men could have sought an equivalence agreement. There is specific provision for that in of Regulation (EU) 2016/2031, Annex II, Section 2, which states:
Measures taken to manage the risk of a pest shall not be applied in such a way as to constitute either a means of arbitrary or unjustified discrimination or a disguised restriction, particularly on international trade. They shall be no more stringent for third countries than measures applied to that same pest if present within the Union territory, if third countries can demonstrate that they have the same phytosanitary status and apply identical or equivalent phytosanitary measures.
This is essentially a copy-out of the WTO SPS Agreement and could have provided the foundations on which border controls between the UK and the EU were relaxed, in respect of plant health provisions. However, when it came to the TCA text, there was no mention of equivalence, and the die was cast.

Thus is opened the way for the Mail on Sunday report, which starts off by telling us that this period should be peak season for Joe Sharman (pictured), a man known as "Mr Snowdrop" and one of the biggest growers in the country. Sharman, whose customers include the Queen, sells thousands of bulbs from his Cambridgeshire nursery to buyers in the EU and beyond. He also drives vanloads to sell at snowdrop festivals in Germany. But, says the MoS, not this year. "At a stroke, draconian EU regulations have wiped out half of his business".
The punitive new rules, which treat British growers as if they were located thousands of miles away in China or Brazil, have all but ended his export business. They have even prevented deliveries of snowdrops and other plants to homes and garden centres in Northern Ireland, which, following the Brexit agreement, remains under EU trade rules.

So extraordinary are the regulations that a plant that has so much as touched the soil of Great Britain can never be exported to the EU or any part of Ireland. No one has calculated the total cost of the regulatory assault, but what is certain is that British horticulture has seen millions of pounds wiped from its profits overnight.
Here, the paper is conflating separate issues, but the essence of what it conveys is correct. The tolerance for the presence of propagating material entrained with Snowdrop bulbs is set at zero. Joe Sharman is well and truly stymied.

But, says the MoS, to him it's an act of spite, particularly as British plants have been grown to exactly the same standards as those in the EU for many years. "I've had German customers in tears. These people have been buying from me since 1988 – they're my friends", Sharman says. "I've shed tears, too. I never thought I'd have to deal with this. I’m now hoping the EU leaders get off their high horse and let us trade".

On top of this, we are told that "the sheer weight of regulation and the stringent detail – some of it bizarre – make it all but impossible for British growers to turn a profit".

Under what the MoS insists are "new" post-Brexit rules, Britain is treated as a "third country" for horticulture, which means that for every consignment of plants – be it one bulb or one million – an expensive "phytosanitary" safety certificate is required, stating that the goods are soil- and pest-free.

These are issued by an inspector from the government's Animal and Plant Health Agency (APHA) at a cost of £127.60 per every half-hour spent on the consignment. The certificate itself then costs a further £25.52.

Species such as snowdrops are more tightly regulated. Controlled by CITES – the Convention on International Trade in Endangered Species of Wild Fauna and Flora – snowdrop bulbs require additional permits at a cost of £74 per order.

Then come the rules about soil, says the paper. Plants that have been grown in, or have ever touched, British earth can no longer be sent either to the 27 EU countries or to Northern Ireland because of the supposed potential risk of pests and disease. Even pots that have been placed on or touched the ground are deemed unsafe.

With words such as "infuriating", and references to "harsh rules" and their "sheer complexity", especially in relation to the rules applying to Northern Ireland, we are left in no doubt that this is the "spiteful" EU at its worst – although none of the growers cited actually make that charge.

However, the rules are regarded as "impossible to comply with", although it is also claimed that the UK is treating plant imports from the EU under the same rules as before. This seems to suggest that there are different rules in force, which is not the case. The EU regulations have been adopted by the UK and are part of the statute book. They are simply not being applied.

But, while one can sympathise with the growers who are caught up in this nightmare, it has to be said that these rules apply to all other third countries. If they were to be any different, Frost should have sought equivalence for the UK, and many of the problems could have been avoided.

Clearly, the rush to get a deal left little time for such considerations – another aspect of Boris's botched Brexit, that is so damaging British business. But such is that "take" from the MoS that "Boris" gets a free pass. This is a "spiteful" action by a "petty and vindictive" EU, the only Tory-approved way that Brexit can be reported.

Also published on Turbulent Times.



Richard North 01/03/2021 link

Brexit: crying sheep

02/02/2021  


"If the state can compensate businesses hurt by lockdown, it can rescue the industries struggling outside of the customs union", proclaims Simon Jenkins from the ivory tower of his Guardian column.

Although in his piece, there is a quote from Tory MP Neil Parish, who told the BBC that the public had "voted to come out of the single market and customs union", it is nevertheless clear that Jenkins is focused almost exclusively on the customs union.

As well as asserting that the public "voted to come out of the EU and was never asked if it wanted also to leave the customs union", he maintains that it was told a lie – that leaving the customs union would be "frictionless". Other countries such as Norway, says Jenkins, "are outside the EU but enjoy free trade within the customs union".

At this stage of the game, it would be hard to believe that there was any serious commentator who could actually assert that Norway is in the customs union, or that any major national newspaper could fail to spare the blushes of one of its own, by allowing such an egregious error to go unchecked.

But while we were quick to lament at the relative ignorance of the "brilliant" Financial Times", in real life it seems that we are still having to deal with the prominente who don't even understand the basics.

It was very early on in the post-Brexit debate that we realised that this was the case, although it comes as something of a shock that there are still people in elevated positions who haven't mastered the difference between the customs union and the Single Market. And I very much doubt that Jenkins is on his own.

But it is this basic error which lies at the heart of much if the grief currently being experienced by a wide range of businesses owners. If they had been on the ball after Mrs May's Jumbo-jet crash speech on 17 January 2017, they would have realised that the writing was on the wall and we were due for a torrid time, once we had fully dropped of the European Union.

That is not to say that anything fundamental would have changed. But a proper understanding of the effects of leaving the Single Market – and an awareness of the certainty that nothing could be negotiated which could take its place – would have helped.

At the least, it would have allowed businesses to prepare for the inevitable, taking mitigation measures, such as setting up EU-based subsidiaries or restricting their businesses to cope with the inevitable loss of trade. Departure would still have been a systemic shock, but some of the worst consequences could have been avoided.

After all, it is not as if, in the broader scheme of things that this could not have been predicted. I wrote in November 2016 of experiences recorded before the advent of the Single Market where, customs formalities at the internal borders of the Community were taking an average of 80 minutes per lorry – and this was before the introduction of the complex SPS controls that are currently in place.

It was then, in 1984, that each hour's delay was estimated to cost between £2.50 and £3.25. The overall cost of customs controls was therefore in the region of £1.7 billion (at 1980 prices) – between 5-10 percent of the value of the goods transported across frontiers.

If anyone needed an update, only a month after my piece on pre-Single Market delays, I wrote a post on border delays then experienced at the EU's external border. In this, I particularly emphasised the problems with Turkey, which has a customs union with the EU.

At the Kapikule Border Gate, marking the transition between Turkey and Bulgaria, more than 1,000 trucks had been reported, waiting for days to cross through to access European markets. This was by no means an uncommon event, and one which was experienced elsewhere.

But already, the intellectual rot was there, with Duncan Buchanan, deputy policy director for the Road Haulage Association, telling The Times that "imposition of customs procedures could have a particularly serious impact on Britain's food supply chain". Nearly 30 percent of food consumed in the country arrived from the EU via lorry, he said.

The use of the generic "customs procedures" failed to acknowledge the distinction between customs formalities (partly if not mainly attributable to the lack of a customs union) and the "official controls applicable to food and animal movements, relieved only by participation in the Single Market, and entirely separate from customs formalities.

Currently, Jenkins points to "enraged farmers and despairing fishers", fuming as their food rots in lorries and warehouses, unable to export to Europe or even Northern Ireland "because of Brexit". But Brexit, per se, is not the issue. This rests with Mrs May's determination to leave the Single Market, executed by Johnson when he took over as prime minister.

Of all the groups that might have most awareness of the impending problems, one would have thought that those representing farming and food interests might have been most on the ball. But it was not to be.

For instance, in a letter dated 30 November 2016 to Theresa May, fronted by the four UK farming unions, and joined by "71 leading food businesses with a collective turnover of over £92 billion", the signatories talked of "a bold and ambitious vision" for the industry.

But, when it came to specifics, their key demand was "maintaining tariff-free access to the EU single market". This, they wrote, was "a vital priority". The sector needed, they said, "access to EU and non-EU seasonal and permanent labour", alongside assurances that EU workers already working permanently in the UK would be allowed to remain.

This access to labour is essential as it underpins the UK food chain's timely delivery of high quality affordable food to consumers, they added, thus urging the government to seek "both these goals as the whole of society and the economy will benefit".

Nowhere in that letter, nor subsequently, did we see any reference to the impact of "official controls", the primary non-tariff barriers that would kick in once we left the Single Market. The thrust of the letter, when it reached the BBC was reflected in the headline: "Brexit: Food chiefs warn on EU tariffs".

Then, once Article 50 had been triggered, the NFU even went so far as to post on its website an analysis of what the 2016 referendum result meant "for the future of British agriculture", calling in aid the board chairmen to explain the position.

For the livestock sector, they had Charles Sercombe who stressed that the key issue for the UK sheep sector was "being able to maintain our ability to export to the European single market".

Without tariff free access for our lamb, he said, we would simply lose this market which would have a dramatic impact on farm gate prices. Then, for beef, again it was "the impact of a tariff barrier between the UK and EU" that could significant impact on trade flows.

Not for one second did Sercombe indicate that he had any understanding that the tariff barriers were entirely separate from the Single Market and that, even with tariffs removed, his sector faced a far greater threat from the non-tariff barriers.

Right up to 2019 and beyond, NFU leader Minette Batters was prattling about the effects of a no-deal outcome. UK farmers, she said at the 2019 Oxford Farming Conference, would have third-party (sic) status and would face high tariffs to sell their goods into Europe. "We'd be priced out of the market", she said, claiming that the result for UK farmers would be "catastrophic".

The very obvious point to make here is that, if industry "chiefs" never raised the alarm about non-tariff barriers, the ignorati in the media could hardly be expected to work it out for themselves. And, since the politicians seem to rely for most of their information on the legacy media, they would also remain blissfully unaware of the dangers.

Yet now, after the almost complete failure of industry to make any attempt to head off the inevitable effects of leaving the Single Market, we have the likes of Simon Jenkins – still unaware of what is going on – calling for government to compensate individuals and firms for their losses.

One can, of course, have sympathy for the individual businesses involved in this mess, but I cannot help but think that they should be looking to their own trade leaders for an explanation as to why they have been so badly let down.

In a perverse reversal of Aesop's fable, when the wolf was at the door, the trade representatives cried "sheep". And now their members are paying the price.

Also published on Turbulent Times.



Richard North 02/02/2021 link

Brexit: sovereignty abuse

12/12/2020  


There was speculation yesterday on whether Johnson really is utterly clueless or whether he has been negotiating in bad faith throughout, his aim always being a "no-deal" outcome. He simply strung 27 countries along, at the expense of a huge amount of work, effort and expense.

Supporting the first thesis is an anonymous account of the famous tête-à-tête between VDL and Johnson, which seems to have been something of a train crash.

However, nothing here has evidential value and, as to whether Johnson is either clueless or acting in bad faith, one need not rule out either. Both, in fact, is almost a racing certainty, given the fool's attempts to by-pass Barnier and appeal directly to Macron and Merkel.

Johnson scores on duplicity for seeking to subvert the accepted procedure, and for stupidity in believing that he could get away with it. But there can hardly be a higher level of stupidity in a man who then asserts that a no-deal is now "very, very likely" and then goes onto describe this as a potentially "wonderful" outcome.

There is a possibility, in this latter event, that the man is not lying, and actually believes the guff he is trotting out, although with Johnson, the normal process of giving someone the benefit of the doubt is reversed. Unless there is strong evidence to the contrary, one automatically assumes he is lying.

Marina Hyde puts it quite well. "For Boris Johnson", she writes, "lying is not second nature: it is nature. Even on the occasions he wants to tell the truth – a rarity, but imagine it momentarily aligning with his self-interest – he has to make a vast, almost physical effort to override his psychiatric biology. It's like watching a cat try to bring up a six-kilo hairball".

I'm sure I must have remarked on this before, but there cannot be a time in living memory when it has been possible to go into print and call a serving prime minister and out-and-out liar, without the slightest fear of a law suit.

And Hyde isn't on her own in today's press, being joined by Tom Peck in the Independent, who compares Trump and Johnson. Trump was a liar, Peck says, but he was also a fantasist, an unknowing liar, much of the time, who had long stopped being able to tell the difference between the truth and his own version of it. But Johnson is no such thing. "All his lies, and they are many, are full-throated and real".

Inevitably, it is the left-of-centre press which is making the running on this. You wouldn't expect the likes of the Telegraph at this juncture to point out that their golden boy has feet of clay. But it really is remarkable that there is so little confidence in a man in such a crucial position, at such an important time in our history.

Not least of his infelicities is the man's obsession with "sovereignty", and his insistence that the EU's "level playing field" provisions would breach this precious attribute, despite von der Leyen's assertion that the UK would remain "free sovereign" by retaining its ability to decide what to do in the event that the EU tweaked its standards.

So much rests on this concept of sovereignty, to the extent that the whole deal seems to depend on its preservation, that one might expect that Johnson had a clear grasp of what he is seeking.

However, as we have rehearsed on this blog, and in the comments section many times, there is no simple definition of the term, or universal acceptance of how it applies in practice or in various circumstances.

Referring to Philip Alston's book on "Treaty-Making and Australia", which I cited recently, illustrates the point, He writes of different contexts often being "unclear" and even contradictory in the use of a concept which is "conveniently open-ended and multipurpose".

Sovereignty, he says, has become a popular slogan in various settings. The term is often used in political discourse as a "surrogate for other unspecified concerns", so much so that the term is often invoked for very different purposes and with widely different connotations.

It is "not sufficiently precise", he adds, "as to contain ready answers to any of the key questions confronting modern democracy". With that, Alston cites other work to argue that "owing to its all-or-nothing character", a debate over sovereignty "is likely to be either distorting or uninformative".

In theory, of course, Brexit has restored to the United Kingdom – for as long as it remains intact – its long-lost sovereignty, most often exemplified in terms of the ability to control its own borders and to make its own laws.

Thus goes the rhetoric that the nation which gave to the world the idea that democracy relies on the right of the people to dismiss a government which has failed them, has shrugged off a form of government which was essentially a one-party state, in which the same unaccountable ruling elite would be permitted to remain in power for ever.

However, no sooner were the so-called "Brexiteers" revelling in their victory, insisting that their new-found sovereignty should not be compromised, then the very object of their desire was fading, rather like the rainbow which disappears as one approaches its end. The problem, in a practical sense, is the very ambiguity over the meaning of sovereignty, to which Alston alludes.

If we go right back to basics, traditionally, sovereignty has been assumed to be the right to govern, with a sovereign being a person on whom was conferred a divine, i.e., God-given, right to rule.

Thus, although sovereignty is often elided with power, the concept works better if it is treated as an absolute, distinct from power. Where sovereignty is held to stand alone as a unique property, its relationship with power is then simplified and clarified.

Basically, if the former is regarded as an inherent (or even inalienable) right, it requires power in order to exercise it. And the power is relative and variable – and can be delegated. A "sovereign" can have power in some areas but not in others.

A sovereign can even be devoid of power, such as when a minor or incapacitated and the power is exercised by a regent. The term 'regent' itself helps to illustrate the distinction between sovereignty and power. Derived from the Latin regens, meaning ruling or governing, it implies a separation between the person and the power, especially when a fully empowered sovereign might be termed the regnant monarch.

Within that framework, even as a member of the European Union, the UK had kept its sovereignty intact – evidenced by its right to withdraw, which had existed before Article 50. It had retained the right to govern in the manner of its choosing, but had delegated many of its powers.

Thus, when Edward Heath claimed that joining the EEC meant "no essential loss of sovereignty", he could be judged as being not entirely incorrect, although more than a little disingenuous. It would have been better – and more honest – had he stated that there was an essential loss of power, which would increase over time.

On this basis, when sovereign states conclude treaties, they usually do not cede their inherent rights to govern – the most obvious exception being the 1706 Treaty of Union between England and Scotland.

Where trade and like agreements give treaty organisations which they create – such as the EU - the power to frame regulations or standards, the nations are simply delegating their powers. Sovereignty is preserved as long as states reserves the right to end the agreements and to recover their powers.

Thus, despite Johnson's largely inchoate prattle, when it comes to the "deal" under negotiation, as long as the UK retains the right to decide how it will respond to moves by the EU in respect of level playing field and other provisions – even to the extent of terminating the treaty – sovereignty is preserved.

As yet, though, there is no indication whatsoever that Johnson has come to terms with the complexity of the issue with which he is dealing. We are in the hands of a shallow egoist to whom – it seems – sovereignty is no more than a vague "feel-good" factor that he can sell to his adoring fans.

And with that, he has no grounds whatsoever, to reject this deal (what we know of it) on the grounds of sovereignty. To do so would be an abuse of the term.

Also published on Turbulent Times.



Richard North 12/12/2020 link

Brexit: waiting time

24/11/2020  


It is seven years since I wrote in the first draft of Flexcit that leaving the EU was a process, not an event, a sentiment repeated in the current edition, where I also write of my draft that "it provides a template for the next twenty or so years of our national development".

Never, ever, was it the case that Brexit was going to be a short-term process and the estimate of twenty years was optimistic. One only has to look at Switzerland to see that third country relations with the EU are ongoing, spanning not years but decades.

One almost despairs, therefore, when one reads the likes of this in the Telegraph, where Brussels correspondent James Crisp writes that "Brexit will drag on for years", as Brussels is reportedly considering asking for a 10-15-year review clause in the trade deal and fishing agreement.

We can hardly disagree when he writes that "Brexit has never been a finite process", as he states that "future governments will circle endlessly, repeating the same never-ending 'brexistential' dramas over sovereignty, nationhood and trade".

When he thus concludes that "Brussels has an almost limitless capacity for boredom, repetition and detail but British officials will have learnt from their baptism of fire in the UK's first trade negotiation in 40 years", and that "it is not for nothing that Michel Barnier, the EU chief negotiator, calls Brexit a 'school of patience'".

The only remarkable thing is that it seems to have taken Crisp so long to come to this conclusion, and that he – or anyone else for that matter – ever thought any different, especially those who thought we could sign up for an instant deal and be done with it.

Logically, it makes total sense that, having spent more than 40 years reaching the current state of integration with our EU neighbours, we were not going to unravel the arrangements in a hurry. And this is why it always made sense to go for the Efta/EEA option as a halfway house, giving us (and businesses) a chance to adapt.

The trouble is that the moment there is the slightest concession to reality, the media starts squealing in a most disagreeable way, as with the Mirror which reports the same news under the headline: "EU accused of wanting to pick apart a Brexit trade deal within a decade".

The media, however, cannot be held entirely to blame as its headlines reflect the response from the Johnson administration, as it is said to be "set to resist the attempt". Thus, we get Johnson's spokesman saying: "We want a simple, separate fisheries framework which reflects our right under international law".

That sounds seductively simple, and therein lies the problem. There are no simple solutions to complex problems – except, perhaps in the mind of the current prime minister. Given all the ramifications of the fishing issue – and the emotional connotations – a resolution was never going to be easy.

In some senses, therefore, the EU proposal seems quite neat, kicking the can down the road a sufficient distance to take the issue off the table for the time being, allowing the other, less contentious issues to be resolved.

Another of the EU's strategies is to insist on a single, overarching structure for any deal, rather than the UK preference for a series of stand-alone deals. There are merits, of course, to either option, which probably explains why there has been such a battle over which path to take.

From the UK perspective, stand-alone deals mean that we escape the "tyranny" of nothing is agreed until everything is agreed. We could, for instance, sign a deal on aviation without it being dependent on us reaching an agreement on fishing quotas. We also escape the Swiss "guillotine" trap, where default on one deal automatically terminates the others.

The EU, on the other hand, reasons that once a framework deal is agreed, with common governance structures such as dispute procedures, it is easier to administer and it is much simpler to plug in new sectors over time, allowing the relationship to mature and expand, with the minimum of disruption.

In this, though, the EU is not only looking at Brexit. It is looking at the long-term and its need to simplify the myriad of agreements with neighbouring states. It is very conscious that concessions to the UK, which take it in the wrong direction, could set precedents which are exploited in a way which would set back Brussels' long-term aspirations.

Through following the ins and outs of the EU-UK negotiations over the years, it does not seem to me that the UK is always (or ever) aware of the constraints on the EU. The UK is looking at a deal from its own perspective, but Brussels must always be looking over its shoulder to see how any agreement inter-reacts with the other deals it has made – as well as its impact on existing members.

This is why May's original plan for a "deep and special partnership", which was to be of "greater scope and ambition than any such agreement before" – written into her Article 50 letter - was never going to fly.

Less than a month after that letter, Merkel was addressing the Bundestag, emphasising the UK, as a third country, "cannot and will not enjoy the same rights or possibly be better off than a member of the European Union". Unfortunately, she added, "I have a feeling that some in the UK are still delusional about this".

Equally delusional is Johnson, calling for "nothing more complicated than a Canada-style relationship", evidently without the first idea of what that agreement actually entails. Although ostensibly asking for less than May, he is offering far fewer concessions than Canada, while expecting more from the deal. This also isn't going to fly.

Given Johnson's declared stance, on fishing and other matters, it is hard to see how an agreement can actually be reached. Nonetheless, after his self-isolation, Barnier is rejoining the talks and remains optimistic that a deal can be reached. But how much of that is simply part of the blame-avoidance strategy, it is hard to tell.

However, Taoiseach Micheál Martin, is also optimistic, taking the view that an outline of a Brexit deal could be reached by the end of this week, despite both sides still complaining that "fundamental differences" remain.

One thing for sure, with the positive news about Covid-19 vaccines, there is hope of an end in sight for the UK epidemic, possibly as early as spring. This is good news and bad news for Johnson. The good news is that it gives the economy – which has proved remarkably resilient - a chance to recover.

The bad news is that Covid will not necessarily provide cover, to conceal the adverse economic effects of a no-deal Brexit. And, with the Bank of England governor warning that the cost of a no-deal scenario would be bigger in the long term than the damage caused by Covid-19.

Personally, I am always a little suspicious of long-term economic forecasts, which have a tendency to be wrong – and especially in this case as there are too many imponderables. But the potential political effect of this warning rather puts Johnson on the line. If the prime minister does opt for a no-deal, and the projections are even half-way correct, the damage to his diminishing credibility could be terminal.

Bearing in mind that the effects will not be evenly spread – as with rumours of a shut-down of the Nissan plant in Sunderland (since denied) – the electoral impact for the Tories might be disproportionate if it turns the newly-acquired "Red Wall" seats.

Nothing quite focuses Tory minds like the prospect of losing an election and while there are some years to run before we go to the polls, nervous MPs could still exert an influence on No 10.

Yet, for all that, we're still none the wiser as to what the immediate future might bring. Johnson is quite capable of blowing it at the last minute, but he is equally capable of conceding a disastrous agreement and going to the country telling everybody how "fantastic" it is. The man is truly that much of a moron.

So, as always, we wait and wait. They also serve who stand and wait, we used to be told. There may not be a lot of serving going on these days, but there is certainly a lot of waiting, especially when it comes to roadside toilets.

Also published on Turbulent Times.



Richard North 24/11/2020 link

Brexit: no point in more talks

19/10/2020  


There are times when the Financial Times is ahead of the Brexit field, with genuine insight on developments. This story isn't one of those occasions.

Headlined, "Time is running short to resolve the Brexit drama", this is one of those "statement of the bleedin' obvious" stories, with the paper telling us: "A path to a UK-EU trade deal exists, but theatrics risk a breakdown".

For sure, there is no need to dispute its general conclusions when it says that "theatrics and brinkmanship have become a wearyingly familiar part of Brexit". Indeed they have, and we're all bored witless with it.

But then, like most of us, the paper has seen through these particular "theatrics", sensing that Downing Street's declaration on Friday that talks on a future trade accord were "over" appears a reprise of Johnson's tactics in exit talks a year ago: threaten no-deal, use that as political cover to make concessions, then sell the final agreement as a triumph for toughness.

Thus, the paper says that Johnson's claim that the UK is ready to go it alone when the transition period ends in December "is surely a bluff". Brussels knows that, it says. The danger is that miscalculations blow up the talks despite both sides’ desire for a deal. That would be worse for the UK - but, on top of a resurgent pandemic, it would damage the EU too.

In the FT's view, both parties share blame for the current impasse. Johnson had raised the stakes by threatening to "move on" if there had been no agreement by last Thursday's European Council.

When a deal remained elusive, EU leaders called his bluff but the received wisdom is that the "colleagues" fumbled the diplomatic footwork. The Council conclusions "implied" all concessions must come from the UK.

What made the story was that the pledge to intensify talks, introduced in the first draft, was changed in the final version. The paper thinks this last-minute change was to avoid the EU and Barnier, appearing to be dancing too much to Johnson's tune.

It is there, however, that things are perhaps not so "bleedin' obvious". As always, the devil is in the detail. For instance, when we reported the change, we noted that the draft originally read as inviting Barnier "to intensify negotiations" – which is what the UK wanted, with the aim "of ensuring that an agreement can be applied from 1 January 2021".

But it the statement finally emerged as inviting Barnier to continue negotiations in the coming weeks, and calling on the UK "to make the necessary moves to make an agreement possible".

While the FT's "take" on this is compatible with the events, one must also recall that the European Council had pronounced on the talks, noting "with concern" that progress on the key issues of interest to the Union "is still not sufficient for an agreement to be reached".

In my view, this phrasing must not only be taken into account, it must also be put in context. If we go back to the third round of the Article 50 negotiations, and Barnier's comments on 31 August 2017, we find him observing that the UK wanted "to take back control", wanting "to adopt its own standards and regulations". That was fine but, he complained, "it also wants to have these standards recognised automatically in the EU".

That is what, he said UK position papers had asked for, to which he responded: "This is simply impossible. You cannot be outside the Single Market and shape its legal order". And this is actually a crucial point, a deal-breaker.

If the UK was allowed to dictate its own domestic standards and the EU was unconditionally to accept those standards as sufficient to allow products free circulation within the Single Market, then the UK would be effectively setting standards acceptable to the Single Market as well. To do so would, in Barnier's terms, breach the EU's autonomy of decision-making, something which could not possibly be allowed.

Now fast-forward to yesterday's piece where we see in the UK's proposal for aviation safety exactly the same dynamic of which Michel Barnier complained back in 2017.

Consistently, we see such expectations expressed by government figures or figures "close to government". And when we look to the CAA Website on Brexit, we see references to the absence of UK-EU aviation safety agreements and "no continued mutual recognition".

The CAA thus tells us that its "contingency planning is based on a scenario in which the UK Government and CAA take all reasonable steps within their control to reduce disruption to the aviation industry if a mutual recognition arrangement is not agreed".

Here, one would have thought that a government agency would know what it was talking about, but apparently not. There is no "mutual recognition" agreement with the EU – we have harmonised our standards, which is an altogether different thing. And not under any circumstances will the EU permit mutual recognition arrangements. They are simply not on offer.

And this somewhat illustrates the EU's problem. If British negotiators and officialdom continue, after all this time, to seek "mutual recognition" solutions to access the Single Market, then the EU's only response must be to refuse. To allow them would breach the EU's autonomy of decision-making.

But if this is the only solution that the UK is offering, then the negotiations have nowhere to go. Unless and until the UK is prepared "to make the necessary moves to make an agreement possible" – as specified by the European Council – there is little chance of negotiations succeeding.

It is perhaps because of the futility of carrying on the negotiations on the current basis that the European Council firmed up its message and demanded that the UK made the "necessary moves".

Perhaps also, it is no coincidence that Manfred Weber, leader of the European People's Party (EPP) in the European Parliament, is recorded by Zeit online as accusing Johnson of irresponsibility. He calls for him to start "negotiating seriously", noting that the European Union will never give up the integrity of its internal market.

This latter phrasing is more or less the same as the sentiment expressed by Barnier, which really does suggest that the negotiations have a long way to go. If the UK does not take note of this, the talks truly are at an end.

Thus, it is pointless Michael Gove saying that the door is "still ajar" for more talks, while expecting the EU to "change their position". If things haven't advanced since 2017, then more talks are not going to make a lot of difference.

Also published on Turbulent Times.



Richard North 19/10/2020 link

Brexit: the price we pay

14/10/2020  


Yesterday was a crucial day in the ongoing saga of the EU-UK talks, with the meeting of the General Affairs Council in preparation for Thursday's European Council.

As expected, Michel Barnier, informed ministers of the state of play of the negotiations, the implementation of the Withdrawal Agreement and the EU's readiness efforts. In turn, the Ministers went through the ritual of reaffirming their support for Barnier and his mandate, and expressing "their trust that further progress can be achieved".

The official communiqué also stresses that the EU "remains committed" to concluding an ambitious agreement for the future relations. Nevertheless, the Ministers underlined the need for businesses and countries to prepare for all scenarios.

Statements and private briefings then make up the bulk of agency copy, which has the EU demanding "substantive" movement from Britain on "fisheries, dispute settlement and guarantees of fair competition".

In other words, we're looking at the same old, same old, with no discernible movement, spiced up by Germany saying the talks are at a "critical stage", while France is calling for the EU to hold fast on fishing rights. Ireland, meanwhile, comes up with a statement of the bleedin' obvious, saying that Britain is "running out of time" to seal the terms of a deal.

The European affairs minister of Germany - current holder of the EU's rotating presidency – says the EU is ready if necessary to trade from 2021 without an agreement, confirming our general understanding of the state of play, that, "In terms of substance we have not really made progress".

The corollary of that, of course, is that for a deal to be concluded, "substantial progress" must be made in the key areas. But Johnson's spokesman is offering nothing of that substance, simply reiterating Britain's stance that it wants a deal "on the right terms", with the usual issue-illiterate mouthing that, "... if we can't get there we are ready and willing to move forward with an Australian-style outcome which holds no fear".

Several EU ministers stated their governments had stepped up planning for the possibility a deal may not be found, the Irish Times reports, having France's European affairs minister, Clément Beaune, saying the cabinet had met to discuss the matter. "As things currently stand, the hypothesis of a 'no deal' is a very real one, and also one that is unfortunately very likely today", he says. "We know the British skill in tactics . . . but today is not the time for tactics. We have finished playing, we are coming to the end of the game", adding: "We are prepared for all eventualities".

Barnier, it appears, was also forthright, mocking the fatuous Johnson for issuing a "third unilateral deadline". He noted that Johnson had twice previously suggested that the UK needed the certainty of a deal by a specific date, only to later backtrack. "It is the third unilateral deadline that Johnson has imposed without agreement", Barnier was said to have remarked. "We still have time".

With 48 hours remaining before the European Council, for which Johnson has demanded a "breakthrough moment", a laid-back Barnier observes that a deal is “very difficult but still possible". Putting a damper on UK expectations, he says that there is "little prospect" of the two sides entering a decisive "tunnel" negotiation.

Responding specifically to Barnier, a UK government source complains that, "The EU have been using the old playbook in which they thought running down the clock would work against the UK". They have assumed, the source adds, "that the UK would be more willing to compromise the longer the process ran, but in fact all these tactics have achieved is to get us to the middle of October with lots of work that could have been done left undone".

He concludes: "This is all the more frustrating because it is clear that we have come a long way since the beginning of the year. We have approached the negotiations constructively and reasonably but time is now extraordinarily short. We need the EU to urgently up the pace and inject some creativity".

That the UK is expecting the EU to make the moves has been the story of these negotiations, right from the point when Mrs May sent the Article 50 letter in March 2017, triggering the withdrawal negotiations. And another feature of the talks has been the constant attempts by the EU to by-pass Barnier.

Another of those attempts seems to be in hand, with Johnson planning to meet Ursula von der Leyen today, in what is described as a "crunch meeting". However, von der Leyen is unlikely to allow Johnson to undermine Barnier, or step outside his mandate, so there is little that can come of this meeting.

Meanwhile, back in the UK, there has been an ungainly little spat, with Treasury and Cabinet Office Minister Lord Agnew accusing businesses of taking a "head in the sand approach" when preparing for trade once the transition period has ended. He says that traders "really must engage in a more energetic way" to be ready for 31 December.

"Ultimately, the government can only do so much", he said. "If businesses haven’t engaged in the process and understood the processes from 1 January, that has to be their responsibility".

This provoked angry reactions from business associations, which said that they have been seeking clarity on border process and IT systems for months, many of which are still not in place.

"A 'head in the sand approach by traders'? That'll go down well", said Tim Rycroft, chief operating officer of the Food and Drink Federation, in a sarcastic response posted on Twitter.

Labour peer Stewart Wood, a member of the Lords' EU committee, said Agnew had provided a "spectacularly unfair characterisation" of business preparations, noting that many had been "pleading for guidance, clarity and timelines for months".

However, the criticism is not entirely without merit. Alex Chisholm, permanent secretary of the Cabinet Office, told MPs last week that about one-third of businesses still believed there would be an extension to the transition period, and were thus holding off making any preparations.

Nevertheless, that does not gainsay the point that, for many issues, there are many areas where there are no preparations that UK businesses can make, until more is known about the nature of any trade deal.

The UK's departure from the Single Market, for instance, will mean that the EU will no longer take UK conformity with EU standards for granted. Yet, a mutual agreement on conformity assessment with the EU will determine whether exporters will be able to rely on existing testing arrangements, or whether they will have to arrange for extra testing via test houses established in EU Member States.

There are many such examples, where business can only prepare once the full terms of any deal are known, which is all the more reason why the current talks should be concluded as swiftly as possible.

But at least one preparation that the government can make has been made. Yesterday, it signed a £77.6 million contract with ferry operators to ensure crucial goods, including medical supplies, would reach the UK even in a no-deal scenario. And, contrary to previous government practice, these contracts are being made with DFDS, P&O and Stena, firms which actually operate ships. For all that, though, we still wait for the European Council on Thursday, for the next marker. This has President Charles Michel saying that it is in the interests of both sides to have an agreement in place before the end of the transition period. But, he says, this cannot happen at any price.

Sadly, that price is not for Michel – or anyone else – to determine. Whatever it is, will be far larger than it should have been, and will have to be paid in full before this is over. And the payment will not only be in money.

Also published on Turbulent Times.



Richard North 14/10/2020 link

Brexit: the COAG speaks

27/06/2020  


Having written yesterday that everything that possibly could be said has already been said about TransEnd, it's a little bit difficult to turn round the next day and write something brand new about … TransEnd.

But, I suppose, Angela Merkel's direct intervention in the game does have a certain novelty value, even if her comment does reside deeply in the "No shit Sherlock!" range.

I mean to say, as the vernacular goes, do you really need to be Chancellor of All Germany to work out that the "UK must live with the consequences" of weaker ties with the EU? Or is it that you have to be Chancellor of All Germany to make a statement of the bleedin' obvious like that, and still get it turned into a Guardian headline?

Perhaps I need to modify yesterday's statement a little bit. How about: "everything that is worth saying has already been said about TransEnd"? You would have serious difficulty in arguing that it's worth saying that the UK will have to live with the consequences of its (or Johnson's) actions. I think we could have guessed that without any assistance from the Chancellor of All Germany.

One has to admit, though, that Frau Doktor Merkel has a tiny point when she says that: "We need to let go of the idea that it is for us to define what Britain should want". It is, she says, "for Britain to define – and we, the EU27, will respond appropriately".

There has been an element in the talks, ever since Mrs May lodged the Article 50 notification, of the tale wagging the dog (yes, I do mean tale), and it's about time that the egregious Johnson did the decent thing and spelt out exactly what it is that he wants. That, of course, means that it's never going to happen. "Johnson" and "decent" are not words that can co-exist in the same universe.

Mind you, if the COAG (Chancellor of All Germany) wants the British government "to define for itself what relationship it will have with us [the EU-27] after the country leaves", then she could be waiting for a very long time. To get the right answer, three hurdles must be surmounted, and it is by no means clear that Johnson could straddle any of them.

The first thing he has to do is work out for himself what he actually wants from the EU. And if that isn't insurmountable, he must define it in terms that the EU would be prepared (or likely) to accept. He must then buy into the sorts of conditions that the EU will demand.

Not just one, but all three numbers must click, before the lock opens, and we haven't even got past key stage one. That means, the COAG says, that we must live "with a less closely interconnected economy" – less closely interconnected with the EU-27, that is.

"If Britain does not want to have rules on the environment and the labour market or social standards that compare with those of the EU, our relations will be less close", she says. "That will mean it does not want standards to go on developing along parallel lines".

Yesterday, it was evident that the Financial Times had spun the wheel and it stopped on "optimism", which had the paper telling us that "hopes are rising that EU and UK could find compromise". So, today, the wheel stops on "pessimism" for the Guardian.

That paper has thus rearranged the paragraphs to come up with the narrative that "Negotiations between the UK and EU are in deadlock over whether Britain needs to tie itself to the EU’s developing state aid rules and common environmental, social and labour standards in return for a zero-tariff trade deal".

Woe is us … we are well and truly domed. And it gets worse.

Merkel’s ambassador in Brussels, Michael Clauss, recently said he expected Brexit to command most of the political attention in the autumn, fanning British hopes that Germany's six-month EU council presidency could push the negotiations back to the top of the political agenda before the transition period ends on 31 December.

But Frau COAG now, apparently, thinks differently. Ignoring the attention-seeking Johnson, she has vowed to devote most of her political energy during the presidency on rallying EU member states around a joint economic response to "a challenge of unprecedented dimensions" posed by the Covid-19 pandemic.

One can never be sure how a sociopath such as Johnson will take to having his tantrums ignored. It is said, though – of ordinary mortals – that you're nobody until you've been ignored by a cat. By the same token, no British prime minister is up to much until he (in this case) has been ignored by a Chancellor of All Germany.

However, if the experience elevates his status, it doesn't do much for the prospects of UK PLC, which will find itself out in the post-Covid wilderness, battling to get its goods accepted on the other side of the Channel, having to beat off rampant French customs officials, veterinarians and plant technicians, before it can sell inside the Single Market from which it has so recently departed.

Then, according to Politico (there's always one), Germany is going to take control of Europe and run it as its own private fiefdom. For the average Breitbart reader, that doubtless means jackboots down the Champs-Élysées again.

However, unless we're thinking of delivering our exports in Lancaster bombers again, no amount of anti-German rhetoric is going to improve the situation. But, when push comes to shove, that's probably all Johnson has – rhetoric, which will so very easily take on a negative or nationalistic tinge as he gets stuck in the mire.

Interestingly, after the whole world has been talking about it for months, the Telegraph has just worked out that combining the worst elements of Covid-19 with "Brexit" (it actually means TransEnd) isn't a terribly good idea.

Quick off the mark as always, their resident genius thinks they might be "about to collide", sending another "conflagration" steaming down the tracks. It must be something in the water that is somehow delivering us into the hands of the bleedin' obvious. The worst of it is that you have to read a lot of drivel to get there.

Since almost everybody now expects a no-deal TransEnd, talking about the possibility of a collision is somewhat moot. The discussion might be better focused on the consequences of the perfect storm – except that there is only so much speculation one can indulge in before one begins to bore oneself.

The one novelty about the situation though, is the RTE observation that: "Those parts of the economy that have suffered least from the Covid-19 Crisis will likely be most affected by Brexit in the new year". They mean TransEnd, of course.

Where the crisis is really going to strike though, is after 31 December, when the media will be at a total loss. They will no longer know how to label their stories. By then, even the meanest of intellects (and there are a lot of they) will have realised that we have left the EU, so they should no longer be using the Brexit moniker. Perhaps "post-Brexit" might be in order.

Anyway, with post-Brexit blues, COAG throwing a wobbly and ignoring us, and then Covid (or is it post-Covid) on top, we could be in for a pretty miserable time. Maybe someone could have a word with BMW for us. They'll tell COAG what to do, and then all our problems will be solved.



Richard North 27/06/2020 link

Brexit: the effects of withdrawal

21/06/2020  


It is now part of urban history that David Cameron, when he set up the 2016 referendum refused to allow the civil service to carry out any formal contingency planning in the event of a Brexit vote, on the basis that the government's official position had been to remain in the EU.

However, what the civil service may or may not have realised is that the government had been there before, in the previous referendum. On the 14 March 1975, just short of three months before the June referendum, then Foreign Secretary, Jim Callaghan, submitted a confidential document to the Cabinet, detailing the results of a lengthy "stocktaking" his department had carried out on the EEC renegotiations that Wilson's government had just concluded.

But attached to the appraisal was a densely-typed Annex which set out the "Consequences and Implications of Withdrawal from the Community" which has just come to light, written in the name of the Foreign Secretary, presumably by one or more anonymous civil servants.

Written in the first person, Callaghan (or his civil servants) sketches out a case which is remarkably prescient and could just as easily, 40 years later, have served as a template for a report on leaving the EU after the 2016 Referendum. Cameron's civil servants could have dusted it off, and with only a few changes, resubmitted it as a fresh evaluation of the consequences of leaving.

The author (let's go with the fiction that it was Callaghan) starts off by saying that, "I cannot disguise my view that the impact of withdrawal would be much greater than if we had originally taken a decision not to enter and the consequences to the political morale of Western Europe would be extremely grave". He then goes on to sketch out the immediate effects.

Bearing in mind that this was before the Lisbon Treaty and Article 50, the stages he sets out are remarkably similar to what we have been going through and have still to come.

Following a referendum decision against membership, he writes, we should be faced with the need to: negotiate our withdrawal from the Community and the terms of our future relationship with the Community; frame new policies over a wide range of international and domestic matters; and thereafter enact legislation, both to repeal the European Communities Act and to substitute domestic legislation to give effect to the new policies, especially on such matters as agricultural support arrangements.

He then goes on to say: "All this would take time. However much contingency planning was done, there would be a protracted period of uncertainty about our future course at home and in the world". How true that has turned out to be.

As to the withdrawal negotiations (yes, there would be some), Callaghan writes that "a considerable number of complex issues would have to be settled". He adds: "The scale and difficulty of the operation could not be assessed until we could discuss the problems with the Community", noting that, "Some time would elapse before the withdrawal was completed, but we could hardly take a full part in normal Community business during that period".

With almost uncanny foresight, he then suggests that: " The Community might be reluctant to negotiate before our formal withdrawal, about permanent post-withdrawal arrangements, for example on tariffs".

"The Community's main concern", he says, would be with its own continued cohesion. There would be bound to be bitterness about our withdrawal. The withdrawal negotiation could not avoid taking on the character of a confrontation between the Community and ourselves, on different sides of the table".

One must also recall that this was written before the "completion" of the Single Market, but Callaghan notes that, "The crucial subject for the withdrawal negotiations would be the future trading relationship with the Community".

"We would badly want a free trade area", he avers, "but the necessary unanimity for this in the Community may not be forthcoming; as an industrial competitor we are in a different class from such countries as Norway".

"If the Community were to contemplate a free trade arrangement", he says. "they would probably insist on major transitional exceptions and on rules enforceable by the Community to ensure proper competition". The prudent working assumption, he suggests, "should be that agreement will not be reached on a free trade arrangement. The pre-1973 tariffs on both sides would then be restored".

"The decision to withdraw and the uncertain prospects for the future", he warns, "would give a major shock to the system". He adds:
It is a matter of judgement as to how long these effects would continue, but there is little doubt that because the business community believes that membership is greatly to our economic advantage, and because of the poor prospects for a free trade arrangement, the referendum decision would itself lead to a sharp fall in business and financial confidence. This effect would continue during the period of confusion and uncertainty about our future relationships and policies.
There could, he then suggests, "be serious short term effects on investment, depending on how long it took us to renegotiate new arrangements". Confidence effects "would also tend to depress the sterling exchange rate and make it harder to finance the UK deficit by attracting funds from abroad".

Again with some prescience, Callaghan reviews the "general consequences" of leaving, noting:
We should cease to be bound by the Treaties and by Community Secondary Legislation. Directly applicable community law would cease to have effect in this country and with the repeal of Section 2 of the European Communities Act 1972 the "Sovereignty" problem of Parliamentary control of community decisions would disappear. We should be free of the special Community arrangements, involving the Commission and the Court, for supervising and enforcing Treaty obligations.
But he says, "Our practical freedom of action would still be limited by political, military and economic realities as well as by numerous international obligations under GATT, etc affecting many areas of domestic, trade and foreign policy". And that was written more than 40 years ago. What applied then applies now in spades.

Our absence from the EEC discussions (read EU), Callaghan suggests, "could lead to a hardening of EEC positions". We should clearly not take part in political consultation among the Nine (read 27).

Our withdrawal would be regretted by the USA and by the Commonwealth, and there is no means of knowing whether we could develop our economic and political relations with either in a way which would compensate for the consequences of withdrawal. The Community (with the Germans and French in the lead) would increasingly be treated by the US and others as the spokesman for Western Europe.

Pointing directly at the pretension of the Johnson administration, he acknowledges that, "We should be free to offer preferential trade and aid, links to the Commonwealth and could seek to revitalise the political link".

But, he adds, "there is no prospect of returning to our earlier trading arrangements with the Commonwealth. Commonwealth countries, including those of the Indian sub-continent, would regret the loss of their indirect influence over Community policy which would result and the benefits to them which we have been securing. They would continue to attach major importance to the Community as a source of aid and trade benefits.

With a list of specific consequences, dealing with the Community Budget and similar matters, which could also apply today, he deals with the effects on different sectors. His take on agriculture is interesting as he observes that the consequences of withdrawal would be "particularly difficult to assess". A return to cheap world food is unlikely, he says, and if we withdrew, we should introduce our own support and import regimes.

Ironically, about the only unequivocal benefit he isolates is fishing. "It is uncertain whether we shall secure modifications of the common fisheries policy", he says, "which would compare satisfactorily with the exclusive control over home waters which we could exercise outside the Community". Plus ça change.

Overall, this remarkably prescient document should have been aired earlier. It could at least formed the basis of discussion and introduced some reality into the current debate. But, as we are finding, if we ignore our history, we are doomed to relive it.



Richard North 21/06/2020 link

Brexit: waiting for the real thing

31/01/2020  


With the focus on Wednesday's proceedings in the European Parliament, little attention has been paid to the vital and final stage of the Article 50 process. This requires a vote from the Council of the European Union, on the basis of qualified majority voting, to conclude the Withdrawal Agreement.

Anyhow, that happened yesterday with the adoption of a decision by the Council, thus allowing the Agreement to enter into force at midnight CET on 31 January 2020.

By the time I publish my next blogpost, therefore, we will have left the European Union and will be considered (by the EU) to be "a third country", a new status which the Irish Times (and doubtless many more) considers "a senseless act of self-harm".

The naysayers are, of course, entitled to their views, but I think that the "self-harm" was in joining the EEC in the first place. And, as I wrote on the eve of the 2016 referendum, leaving is a matter of correcting that historical mistake. It has to be done and it would be better if it had never had to be done.

There is, of course, a possibility that, had we never joined and remained as a member of Efta – an organisation that we founded – we would have been party to the talks on the creation of the EEA.

There is even the further possibility that we could have brokered a better deal, we might currently be an Efta/EEA member – the status that we would have preferred to take us through the Brexit process – only perhaps improved by us becoming equal partners in a European Economic Space.

Even without that, there were other opportunities for economic cooperation at a European level, not least the European Council. But had history been even slightly different, and the United Nations Economic Commission for Europe (UNECE) had been awarded the management of the Marshall Plan, it could have emerged as the dominant force for economic cooperation in Europe.

This would have been the closest approximation to Winston Churchill's vision, set out in his Hague Speech of 1948 (the year I was born).

Then he argued for the United Nations to be the "paramount authority" in world affairs, but with regional bodies as part of the structure. They would be "august but subordinate", becoming "the massive pillars upon which the world organisation would be founded in majesty and calm".

Effectively, a New World Order would comprise a hierarchy of three tiers – national, regional and global. In the European context, this would have included all the nations in continental Europe, organised around the central body of UNECE, based not in Brussels but in neutral Geneva.

In the nature of things, however, the victors get to write the history and while the fascinating history of UNECE (linked above) has been effectively airbrushed from the popular record, acres of print has been devoted to the hagiography of the European Union.

As a corrective, Christopher Booker and I wrote an alternative history of the European Union, in The Great Deception. And, whatever its merits, there are two important omissions to the earlier chapters: one is the development of UNECE and the other is the story of the founding of the EEA.

These issues, seemingly less important when we published in 2003, in the throes of the European Convention and its Constitution for Europe, before it was transformed into the Lisbon Treaty. But they have taken on vastly more significance with Brexit, and may point our way to the future, after the current generation of politicians have finished botching the exit process.

Given the approval of my publisher, after the launch of Booker's Groupthink (now complete and due in March), I will get the go ahead to revise The Great Deception and bring it up to date, covering the period up to the end of this year when it is expected that the transition period will end.

It was something Booker and I had discussed many times but sadly, he can no longer be a partner to the endeavour, and nor will he be able to see the fruits of our joint work which has been instrumental in taking us out of the EU.

Interestingly, this was noted recently by Owen Paterson, with whom I worked for more than a decade. Although I disagree profoundly with his current stance on Brexit, he has always been a good friend.

He tells of our "fruitful collaboration", along with Booker, "whose co-authored books The Castle of Lies and The Great Deception, he writes, "did much to influence Eurosceptic opinion".

Although I have effectively been "no platformed", as was Booker in the later stages of his life, that is indeed true and it is a reflection of the state of the former Eurosceptic "movement" that, during the celebrations of today's exit, I will be sitting at home, consuming a wee dram as the clock chimes eleven, and then getting down to writing my blog – as I have been doing for the past 16 years.

I often claim that the only breaks I took during that whole period were when I was sent to prison for refusing to pay the Police precept of my Council Tax (in protest at the uselessness of West Yorkshire's finest – who then sent 12 police officers to arrest me), and for a couple of days when I lay idle in hospital having open heart surgery.

Before even the sadly late Helen Szamuely and I had started the blog, Booker and I had been working with Paterson, when – as he writes – "we shared frustrations that increasingly damaging European regulations were being compounded by crass implementation due to the ignorance of an urban Labour government doing great harm to the countryside and a variety of businesses across the UK".

In fact, the great rush of regulation came with the run-up to the "completion" of the Single Market in 1992, coinciding with Maastricht, under the aegis of Margaret Thatcher and John Major, and in the years after, up to 1997, which took in the great BSE crisis, and the ground-breaking Factortame decision on the ownership of the British fishing quota.

Our best work, I think, included that period, but Paterson nonetheless concedes that Booker's Sunday Telegraph column was "a fantastic platform" from which to highlight the depredations of the EU. "Combined with meticulous research from Richard North", he writes, "we made an effective triumvirate and won some important victories".

It saddens me, in this context, that Paterson has done a Peter Lilley who, back in August 2016, complimented me on my "original research" which, he wrote, was "thorough and well documented".

But, as with Paterson, that only applied as long as I was supporting their prejudices. Because I have called for a reasoned and measured Brexit process, we have parted ways. Both Lilley and Paterson now occupy the extreme fringe, pushing for an ultra-hard Brexit with no concessions to reality – and my research is no longer of value to them.

Tellingly, it was Lilley himself who wrote that "when politicians debate issues of which they have no experience they seize on any plausible argument which supports their case". Nothing changes.

The real battles, however, were elsewhere, with the struggle to get what we originally called the "exit and survival plan" onto the agenda. That endeavour has, so far, failed – largely due to the shortsightedness and lack of vision of the Eurosceptic Movement, and the hijack of the agenda by darker forces.

Directly and indirectly that has led to what Booker himself called " a catastrophic act of national self-harm" – not the fact of Brexit but the way the process has been botched. Pete writes of this yesterday, in somewhat pessimistic terms, then adding another piece warning that the real Brexit day is "a long way off".

Sadly, he's right, which is why I will only be having a small dram tonight. While the Grand Place in Brussels glows with Union Flag colours, we wait in hope for the real thing.



Richard North 31/01/2020 link

Brexit: the deed is [almost] done

30/01/2020  


I would have preferred our exit from the European Parliament yesterday to have been done with dignity. But Farage and his ghastly crew don't do dignity, preferring instead to break the EP rules by waving national flags in the chamber to accompany the Great Leader's final speech.

Farage had previously been warned (in an earlier session) against such demonstrations and the repeat, in this case, predictably drew a response from Mairead McGuinness, the vice-president in the chair. She switched off Farage's microphone, leaving him to mouth soundlessly to the chamber.

Rebuking Farage, she told him to "Sit down, put your flags away", adding: "you're leaving - and take them with you". This did not stop his MEPs raising a cheer for their leader – another tasteless, if somewhat raucous display.

When it came to the vote, 621 MEPs approved the motion to consent to the Withdrawal Agreement, 49 opposed and a mere 13 abstained. With 751 MEPs elected for this round, that means that 68 did not vote, either because of absence or for some other reason.

That provoked an outbreak of singing from the chamber, with a rather fractured rendition of Auld Lang Syne, some MPs waving EU-UK "half-and-half football scarves", with prominent union flags, the like of which had recently invoked McGuinness's ire. All that was left was a few public displays of emotional gushing by reluctant departees and it was done.

The General Affairs Council is now scheduled to declare that the Article 50 proceedings are concluded, as required by the Treaty. This will be conducted in writing today, presumably by the permanent representatives acting as plenipotentiaries.

Then, and only then, will all the formalities be complete, clearing the way for the UK to leave the Union at midnight, Central European Time, on Friday, ending our membership of 47 years and one month, respectively of the European Communities (which included the EEC and Euratom), the European Community and the European Union.

Should there ever be a United States of Europe, we are unlikely to be part of it. Even though some MEPs have pledged to "leave a light on" for our return, Guy Verhofstadt has made it clear his preference for a UK shorn of "opt-ins, opt-outs and [budget] rebates. These are conditions which, if applied, would present an insuperable barrier to a UK determined to rejoin.

For the moment, however, it is clear that any thought of returning to Brussels with our tails between our legs (or otherwise), is firmly off the UK political agenda, with the Labour leadership campaigners all refusing to include that commitment in their personal manifestos. It may be that a new Lib-Dem leader is prepared to burn a candle in the window, although who cares? It will do nothing more than attract moths for the foreseeable future.

Meanwhile, Johnson has signalled to the fanboy gazette that he will be telling the EU that he is prepared to accept post-Brexit border checks rather than allowing Britain to be a rule-taker.

Johnson, of course, is not the one who personally will have to bear the delays, disruption, costs and loss of business concomitant with accepting border checks with the EU, but he is nevertheless preparing to concede this in what is being slated as a "major speech", setting out his aims for a trade deal next week.

The man, we are told, will say that sovereignty is more important than frictionless trade. Whitehall sources have told the Telegraph that, while Johnson wants to avoid tariffs and quotas on cross-Channel trade (to say nothing of trade across the Irish Sea), he will never "cave in" to demands for alignment on regulations, despite knowing "the consequences that flow from that".

Bolstering this "hard line" stance is Sir Robbie Gibb, described as Theresa May's Downing Street chief of staff, but actually her press spokesman/comms chief. He asserts that the EU has failed to grasp that the UK's political landscape has "utterly changed" as a result of Johnson's majority at the general election.

The new year, he says, is producing the same old briefings from Brussels: that the EU will set the sequence for the coming talks; that we will have to make concessions over our fishing rights for access to EU financial markets; and that EU judges should have the final say over any trade disputes with Britain.

That this man ever had anything to do with advising Mrs May, however, illustrates the lack of knowledge and understanding that pervades even the highest level of the state.

Gibb asserts that the current Irish protocol – as a "stand-alone provision" - has the effect of keeping Northern Ireland in both the EU and UK customs areas and, he says, with these arrangements, Britain is free to diverge from EU rules when it wants. This is the biggest change that the EU does not seem to grasp.

This government, he goes on to say, wants a good trading agreement with the EU but not at the expense of UK sovereignty. With that, he avers, the EU can also choose to keep friction to a minimum for the benefit of its business as well as ours.

And then, in what amounts to the "money quote", he actually suggests that the EU "can stop playing hardball and accept mutual recognition of our standards as they do for many other countries in certain sectors, such as Canada, Japan and the US".

Even after all this time, we have people such as this who fail to understand the difference between "equivalence" and "mutual recognition of standards", the latter applying exclusively to members of the Single Market – a concession given to no third countries, including Canada, Japan and the US.

The trouble with such people is that they never step outside their own little bubbles. Had Gibb done so, he might have recorded the complaints of Canadian meat producers, which I reported in March 2017.

Here we got an understanding of how "equivalence" actually works in practice. Despite implementation of CETA, we had Ron Davidson, head of international trade for the Canadian Meat Council, saying, "We do not have what we would call commercially viable access to the European market".

More than two years later, we have an article in CBC News reporting (predictably) that the Canada-EU beef trade deal was "not working as well as hoped".

European health standards, it said, were "too costly and complicated for Albertan beef exporters", stating that: "a difference in food health standards between the European Union and Canada is being blamed for beef exports falling short of expectations, despite a promising modification to a trade agreement between Canada and Europe".

Remarkably, in 2018, Canada sent just 3.1 percent of the 50,000 tonnes of meat authorised for export each year, and in 2017 the total was only 2.3 percent. That means CETA earned only $12.7 million for Canadian producers in 2018, against a theoretical potential of $600 million in any one year.

This is by no means an isolated report, with the Financial Post later publishing a headline that complained: "Beef and pork for cheese deal sours as strict EU health rules hinder Canadian exports under CETA".

Here, we see that, despite the new opportunities afforded by the deal, pork and beef exports to Europe have hardly budged, despite being "one of the most important elements for Canada in this negotiation".

Canadian exporters filled none of their frozen beef quota in 2018, and just 1.5 percent of their pork allowance. By contrast, European cheese exporters have taken almost full advantage of CETA, filling 99.2 percent of Canada's quota for fine quality cheese in 2018 and 71.1 percent of the quota for industrial cheese.

Then, in the last few days, we had France 24 asking: "Is Canada on losing end of CETA free trade agreement with EU?"

The answer, as one might expect, is yes. But that is the reality Johnson must be prepared to accept when he sets the pace for the coming negotiations. And when his stance is endorsed by the ignorance of such people as Gibb, with Farage apparently telling us that everything will come right as German car manufacturers will insist on a good deal, we haven't much to look forward to.

They can all wave their little flags, and I suppose we'll be seeing a lot of that over the next few days. But then the reckoning will start.



Richard North 30/01/2020 link

Brexit: reality on hold

21/11/2019  


In the beginning, long before Article 50 had been invoked, many of us thought that the future relationship between the UK and the EU would also be settled in the two-year negotiation period foreseen by the Article. Thus, it was anticipated that, at the end of the negotiations, we would drop out of the EU and move seamlessly into a new relationship.

That this was not to be the case only really emerged after Mrs May had invoked the Article, the consequences of which would mean that there would have to be a gap between us leaving the EU and finalising a new agreement, during which period there would be no formal trading arrangements.

Pretty obviously, this was not a happy situation (except for those who thought that the WTO scenario was desirable), opening up a requirement for a transitional period – which Mrs May insisted on calling an "implementation" period.

Had Article 50 been thought through, perhaps the arrangements for transition might have been specifically laid out in the Treaty. But, as it wasn't, the agreement to allow a period was treated by the EU as a concession to the UK, included in the draft agreement of 14 November and endorsed by the European Council on 25 November 2018.

At a time when we were supposed to leave on 29 March, the period was set to end on 31 December 2020, with a one-off provision to extend by either one or two years. This had to be agreed by the end of June 2020, with no allowance for any further extensions. At the very latest, an agreement would have to be concluded by the end of 2022.

Why such a short period was agreed is something of a mystery. EU officials have been very explicit in their warnings that a comprehensive trade deal, along the lines of the EU-Canada trade agreement (CETA), would take "many years". Even the maximum period allowable seemed hardly long enough.

Despite extensions to the Article 50 negotiating period, with us not due to leave the EU until 31 January 2020, the transition period has not been changed, which means that the first period has been whittled down to a mere eleven months and the maximum period foreseen is now less than three years.

This, though, seems to be of no concern to prime minister in office Johnson. He has repeatedly stated that he has no intention of seeking an extension of the transition period past December 2020. In the event that he forms a new government after the general election, that means he is committing the UK to concluding negotiations on a trade agreement, from a standing start, in eleven months.

Justifying his stance, Johnson argues that our current membership of the EU means that we are already in "perfect" regulatory alignment with the EU, so that any negotiations would be quick and simple, allowing a speedy conclusion within the eleven month period.

But, while we are offered this bland assurance, Johnson has not specified the type of agreement he has in mind, nor the degree of regulatory alignment that he is aiming for at the conclusion of the deal. Furthermore, he has given no indication of what flanking policies he might be prepared to accept, such as alignment on employment law, competition policies, environment, data protection and, of course, freedom of movement.

On the other hand, Johnson remains publicly committed to the doctrine established during the referendum, pledging to "take back control of our borders, our money and our laws".

On the face of it, this creates a conflict between objectives. If the UK wants a comprehensive trade deal inside eleven months, it needs to "copy out" CETA, making only those changes necessary to accommodate specific national characteristics. But if it is content with a "best in class" free trade agreement, whereby the UK would be free to set its own regulatory standards, this will entail significant renegotiation.

According to the EU's Director General for Trade, Sabine Weyand, eleven months is not long enough for that. That leaves two likely options, a thin "bare bones" deal or a hard exit from the transition period without any deal.

Given Johnson's pre-election rhetoric, we can probably rule out a no-deal resolution, but a "bare bones" agreement might amount to little more than a tariff and quota-free agreement, plus a "rules of origin" pact and perhaps limited administrative arrangements on VAT, customs cooperation and data sharing. Even a mutual recognition agreement on conformity assessment for a limited number of sectors might be attainable in the time.

Even with these add-ons, the substance of the agreement would be thin, falling far short of a comprehensive free trade agreement, which in itself would represent a significant loss of market access to the EU. Nevertheless, for Johnson, it could still qualify as a "deal" – to be paraded in front of a gullible media, its acceptance guaranteed by compliant MPs who would constitute his working majority in the Commons.

That is possibly the greatest danger that we confront. Johnson could end up believing his own propaganda and take a "bare bones" agreement as sufficient to fulfil his obligation to settle a long-term relationship with the EU.

Obsessed with the idea of forging a trade deal with Trump's United States, he could – and most likely would – argue that any downside to the EU agreement would be more than compensated for by the riches awaiting the UK on the other side of the Atlantic.

By contrast, seeking an extension to the transition period could present Johnson with major political risks. With his campaign slogan, "Get Brexit Done", he has openly committed to avoiding any further delay in the Brexit process, stating that there is "absolutely no reason" for not concluding an agreement by the end of 2020.

In respect of the withdrawal agreement and his failure to honour his "do or die" promise to leave by 31 October, he has been able to blame an intransigent parliament for the delays. But, if he returns after the election with a working majority, he only has himself to blame if he then seeks to extend the transition period – unless, of course, he aims to put the EU in the frame.

Getting the EU to take the fall, however, seems unlikely. Both Juncker and Barnier have warned that a comprehensive trade deal would take "years" and, with Weyand joining the fray, Johnson cannot say that he was unaware of what was involved. Having already decided to finish talking by the end of next December, he must be ready to accept that the only option available to him is a "bare bones" deal.

With his withdrawal agreement, though, he agreed something which many believe is far worse than Mrs May's deal. Yet he is still quite capable of talking it up, describing it as "fantastic" and arguing that there is "no better outcome". With his slender grasp of the truth, talking up a "bare bones" deal would present him with few problems. If needs must, he would describe a train wreck as "fantastic".

And such a scenario is not at all far-fetched. Through the years, Johnson has shown that he has only a very limited understanding of the technicalities of EU membership – to say nothing of international trade. He could, therefore, easily convince himself that he had negotiated the best possible deal.

Where there would be a difference is that, rarely in his career has Johnson hung around long enough to take responsibility for his actions. Usually, he leaves others to clear up his messes. But in this instance, the effects of a "bare bones" deal would swiftly become apparent.

Should these be pointed out with sufficient force in time for Johnson to apply for an extension, he could simply tough it out and stretch out talks to the end of 2022, relying on his majority to see him through.

Articles such as this from Jeremy Warner certainly help, and even Rafael Behr is pitching in via the Guardian, asserting that Johnson's "snappy, inane slogan is the prelude to inevitable lies, betrayal and duplicity".

But if anyone thinks that mere criticism is going to deflect Johnson from his path or that he will spend next year "climbing the steep learning curve towards realisation that Britain thrives on frictionless access to the single market" – as Behr suggests – is probably in for a disappointment.

There is nothing quite so impervious to reason as a man who thinks he already knows the answers, and we now stand at risk of having such a man at the head of our government for the next five years. In the eleven months that follow the election, my guess is that we will see reality put on hold and he will go for a deal by the end of next December.



Richard North 21/11/2019 link

Brexit: not in the real world

08/11/2019  


Reading the minutes of the Monetary Policy Committee (MPC) and the associated policy summary isn't everybody's cup of tea. But the document issued yesterday is only 12 pages long and written in plain English with relatively little jargon. And, with its references to Brexit, it is well worth reading.

Somewhat less user-friendly is the Bank of England's monthly Monetary Policy Report for November. At 49 pages, it presents more of a challenge, although it still manages to be remarkably free of the dense jargon that might be expected in such documents.

Taken together, though, the documents have important things to say about Brexit, giving an insight into the state of play and the thinking of the Bank of England (BoE) on the issue.

Starting with a statement of the obvious, we are told that, in October, the UK and EU agreed a Withdrawal Agreement and Political Declaration, the UK House of Commons approved the second reading of the Bill that translates the agreement into law, and the UK and EU agreed a flexible extension of Article 50.

Thus, sterling has appreciated markedly as the perceived probability of a no-deal Brexit has reduced and, says the MPC, "These developments are also likely to remove some of the uncertainty that has been facing businesses and households".

Moving on, we are then told that the MPC's projections are now conditioned on the assumption that the UK moves to a deep free trade agreement with the EU, although it is admitted that "some uncertainty is likely to persist". This is because the details of the UK and EU's eventual relationship "are assumed to emerge only gradually over time and the smoothness of the transition to it remains to be determined".

As for the current situation, the MPC now anticipates that GDP will emerge one percent lower by the end of 2022 than was projected in August. Three quarters of the difference is accounted for by moves in asset prices and the "weaker global environment", but the remaining quarter is partly due to changes in Brexit assumptions, brought about by Johnson's deal.

Nevertheless, UK GDP is expected to pick up during 2020 "as the dampening effects from Brexit-related uncertainties begin to dissipate", boosting business investment growth. From one percent annual growth by the fourth quarter (Q4) of 2019, the MCP expects to see 1.6 percent by 2020 Q4, 1.8 percent by 2021 Q4 and 2.1 percent by 2022 Q4.

This, however, assumes an improvement in global growth and progress on Brexit - and in particular the future trading arrangements with the EU. But, as Mark Carney, BoE governor, acknowledged yesterday, "both are assumed in the MPC's latest projections; neither is assured".

In fact, says the BoE in a separate report, "some uncertainty is likely to persist". Brexit, it observes "is a process rather than a single event" and, while the agreement sets out the broad parameters of the UK and EU's future trading relationship, "the range of potential outcomes is still relatively wide".

If there were prizes for understatement, this report would surely be on the short-list, as the chances of securing a stable, long-term trading relationship with the EU in the near future seem slight. And as long as Johnson insists on concluding a deal by next year, without extending the transition period, the chances are next to nil.

On the other hand, if Corbyn takes the prize of No 10 residency, there is absolutely no knowing what will happen. On the face of it, he will try to renegotiate the withdrawal agreement, and claims he will be able to wrap up Brexit within six months. Very few people, though, would have confidence in that estimate.

Either way, therefore, with nothing really resolved, one might expect little in the way of a reduction in uncertainty. And - in the event of Johnson renewing his lease on No 10 – if by the end of June he has not extended the transition period, adding the full two years allowable, we cannot rule out a collapse in business confidence.

Then, come the end of 2020, as we are precipitated into what will amount to a no-deal scenario, the most likely outcome is a deep and prolonged recession, with predictable effects on the private sector and public finances.

With that hanging over us, therefore, it does seem rather unwise for both main parties to commit to ambitious public spending promises, fuelled by massive increases in borrowing – in what seems to be an unrestrained bidding war.

Those of us schooled in traditional economics are more used to the idea of governments building up reserves in the good times, to help cope with the demands on public finances that recessions bring, at times when tax revenues fall.

For sure, under Keynesian economics, governments are encouraged to spend during recessions, and Sajid Javid's promise of a £300 billion investment spree could be just what is needed to keep economic activity buoyant when exports collapse as a result of our failure to agree a trade deal with the EU.

However, when shadow chancellor John McDonnell promises an even larger £150 billion "social transformation fund" over the next five years, on top of £250 billion for investment in green infrastructure over 10 years, and renationalisations which are expected to cost nearly £200 billion, one begins to wonder if we are inhabiting the same planet as the politicians.

Javid, for instance, is assuming that he can keep borrowing at today's low interest rates, ignoring any future inflationary effects from a botched Brexit – such as the plummeting value of the pound and the soaring costs of imports. And that is without taking account of the fragile global economy which could slip into recession at any time.

Despite that risk, Chancellor Javid assumes that the UK GDP will continue to grow, thus allowing debt to fall as a proportion of GDP. However, he promises to cap borrowing if debt interest payments rise beyond their historic share of GDP. But, on that basis, where the economy is in recession, his spending promises would never be realised.

Since much of this new investment would be directed at infrastructure projects, there are also serious questions about the ability to deliver at short notice. For instance, with construction projects the shortage of skilled labour – made up in the recent past by immigration from EU Member States – would be a major constraint.

The worst of it all, though, is that the politicians seem to be either ignoring Brexit or assuming that it will have no harmful effects on the economy that they need to take into account. They really do seem to be occupying their own fantasy worlds, which bear very little relation to possible post-Brexit scenarios.

In fact, once again – with day two of the election campaign over – Brexit seems to have disappeared from the front pages of the print media. Personality politics have even displaced news of the spending war, with several papers featuring as their lead items, the decision by "Labour veterans" to support the Tories.

A more sanguine media would, of course, be homing in on the soft optimism of the MPC report, warning that the uncertainty incumbent in the unrealistic Brexit policies of both main parties has not improved our overall position.

Together with a deteriorating global economy – and some very worrying economic news coming out of the eurozone - there is a far stronger risk of recession than is being allowed for. The BoE's growth projections could be completely off-beam, with the real-world situation rendering ambitious spending promises so much hot air.



Richard North 08/11/2019 link

Brexit: into the darkness

28/10/2019  


The Guardian is getting terribly excited about its "exclusive", revealing the content of a draft decision on the UK's Article 50 extension, which has been "leaked" to the paper. You can't keep a good story down, though. It is now shared with the BBC, the Financial Times and even Reuters, with ample coverage on Twitter.

But, for all the excitement, we're looking at exactly the extension scenario that Johnson asked for in his original (enforced) extension request, complete with a break clause that allows the extension to be terminated early if the Withdrawal Agreement is ratified before the end of the three-month period, still scheduled to end on 31 January 2020.

Of the French objections, and the prospect of a short extension, there is no sign. It seems that Tusk – who has been talking to the parties over the weekend – has been successful in convincing Macron that a three-month extension avoids the EU being dragged into the domestic row in the UK. This is the way EU demonstrates its neutrality.

Nevertheless, the cut-off has been tweaked. It is now proposed that we can leave at the end of the month during which the agreement is ratified. Thus, we could potentially be on our way out on either 30 November, 31 December or, if we go full term, on 31 January.

As to the status of this inspired "leak", it rests for the moment with the EU ambassadors (COREPER II) who are scheduled to meet this morning, ready to pass on their recommendations to the European Council. When the EU-27 leaders will formalise the decision is not known, but it is assumed they will keep to Tuesday before their "written procedure" takes effect – as long as there is progress on the election front.

That keeps open the possibility of the EU leaders changing the text, although this does seem unlikely at this stage, unless we see some dramatic developments through the day.

As with the previous extension decision, there is a clause stating that the extension "cannot be used to reopen the withdrawal agreement nor to start negotiations on the future relationship".

This is being taken as signifying the end of the line as far as further negotiations go, even though the similar provision in the last decision made no difference when it came to negotiating the deal with Johnson. But then, the Humpty Dumpty way with words seems to define the EU's way of working.

Where there is no ambiguity, though, is a demand that the UK nominates a Commissioner to serve after 31 October. For the period up until (potentially) 31 January, the UK will remain a full member of the European Union, with all the rights and obligations that that entails. Up to press, Johnson has refused to send anyone for the new Commission, which is still in the process of being formed.

It now remains to be seen whether this leak will be sufficient to stiffen the resolve of Jeremy Corbyn and his fractured Labour Party, when it comes to today's vote on whether to give the go-ahead for a general election.

Here, the crucial issue might be whether Johnson will continue to demand that MPs pass his WAB before 6 November, something the opposition parties are reluctant to accept. Today, therefore, might be a day of fast-moving horse-trading as all sides seek to find a formula which will allow an election to proceed.

On the cards is the so-called "plan B", devised by the Lib-Dems, which involves an amendment to the FTPA, allowing an election to proceed with only a simply majority in the Commons. Although it breaks the link between voting for the election and passing the WAB, Johnson apparently now accepts that this is his only realistic chance of side-lining Labour and holding a pre-Christmas election.

For all that, the issues have been rehearsed with such frequency that even the media seems to be struggling to maintain an interest, while real people are switching off in their droves. Sometime today, something may happen, or it may not. As to the party games in parliament, the mood amongst ordinary people seems to be "wake me up when they're over".

With the clocks going back on Sunday, though, we got the first taste of the dark evenings to come, which will make for a difficult election campaign. In a way, that symbolises where we're at. We are entering a period of darkness and it will be a long time before we see the light.



Richard North 28/10/2019 link

Brexit: it's a deal, Jim…

18/10/2019  


… but not as we know it. In fact, there is no deal. There are two draft documents, one a revised text on the political declaration and the other, the all-important revised text "agreed at negotiators' level" on the "Protocol on Ireland/Northern Ireland included in the Withdrawal Agreement".

It is the latter that constitutes the supposed "deal" but it has only been "agreed at negotiators' level" and – as the frontispiece states – is "subject to legal revision". This can't even be taken as the definitive document.

For this revised text to take on the formal status of a binding treaty, and thus constitute a "deal", several things must happen. Firstly, it must be ratified by the Westminster parliament, which we assume will be attempted on Saturday. It must then be formally "concluded on behalf of the Union", by the Council, acting by a qualified majority, but only "after obtaining the consent of the European Parliament" (my italics).

This is what Article 50 says. I have to admit that I had to remind myself of the text – specifically Art 50(2) – but there is no equivocation or ambiguity there. The deal has to be concluded by the Council, after the European Parliament has given its consent.

On that basis, the European Council could not "conclude" the agreement yesterday, and nor can it do so today. All it can do is what it actually has done, according to the meeting conclusions. It has "endorsed" the Agreement and invited the European Parliament and the Council "to take the necessary steps to ensure that the agreement can enter into force on 1st November 2019".

The earliest the European Parliament can meet to give its consent is some time next week and, given its own procedural requirements, that may be towards the end of the week, possibly on 24 October at the last plenary session of the month. Presumably, the Council can arrange a special meeting then formally to conclude the agreement.

It would not be wise, though, to take the European Parliament for granted. Verhofstadt has said it will "take its full time to carefully examine and approve" the deal – which is more than either the Commission or the Council has done so far. And that process, he warns, could spill past 31 October.

Verhofstadt also says that MEPs will only start work once the Westminster parliament has ratified the deal. If that slips past the plenary session next week, it could well have to be picked up in the session that begins on 13 November.

When it comes to the Council's concluding the agreement, I'd always assumed that it was the European Council that did this. But Article 50 specifically refers to the "Council", which actually means the Council of the European Union (formerly Council of Ministers). One presumes that it will be the General Affairs Committee which does the honours.

The crucial point here is that, until the Council has voted, technically there is no deal. It could be pulled at any time, and we could be back where we started. However, there is another rather important issue – the European Union (Withdrawal) (No. 2) Act 2019, better known as the Benn Act. On this, there has been much talk of it kicking in if the swamp-dwellers fail to approve the Agreement on Saturday, but there is an aspect of this Act which most people seem to be neglecting.

The particular issue is that – as expressed in popular terms - should Johnson fail to bring home a deal by 19 October, the Act imposes a duty on him to seek a three-month Art 50 extension, lasting until 31 January 2020.

Yet, while this approximation might suit the legacy media, the actual terms of the Act are subtly different, in a very important respect. The requirement is for the United Kingdom to have "concluded an agreement with the European Union under Article 50(2) of the Treaty on European Union", which is far more than has been currently achieved.

As we have seen, to conclude the Agreement requires the input of the European Parliament and the Council and, since neither have fulfilled their roles, it cannot yet be said that that the UK has concluded an agreement with the EU. Neither can that happen before Saturday.

Strictly speaking, therefore, when Johnson goes before parliament on the 19th, he will not have complied with this condition of the Benn Act. Thus, he will be legally required to make a formal application to the European Council for that three-month extension – whether parliament ratifies the deal or not.

The big question, of course, is whether any of the swamp-dwellers have read or understood the finer details of the Benn Act. On current form, that seems unlikely, in which case those who so desperately want to slow down or stop Brexit will have missed an opportunity.

Oddly enough, the SNP has already decided it will not back Johnson's deal on Saturday and has tabled an amendment to the motion approving it, calling for an immediate extension to the 31 October deadline in order to give time for a general election. Would that they knew it, they already have the means to force that extension.

Presumably, the most likely outcome of an extension would be a vote of no confidence and, given the inability of the opposition parties to front a candidate for leader of a temporary government, this would lead to a general election. Johnson would still hold the office of prime minister and be able to decide on the date of the contest.

Should that be the case, the prime minister might have very little time to play with. Sir Mark Sedwill, head of the Civil Service, is reported to have warned No 10 that going to the polls after 12 December could lead to logistical difficulties.

Predictably, when you think about it, many village halls and other locations used for polling stations will already be booked for festive events like pantomimes and parties in the weeks leading up to Christmas. To avoid clashes - with a minimum of five weeks required for an election campaign - that means an election would need to be called within the next three weeks.

Add two weeks to that, if the vote of no confidence option is triggered – the period allowed for the second vote - and that would give Johnson the very narrow window of a week. If missed, it could be February before an election could be held, with all the complications that that might entail.

In terms of the potential for electoral success, there might be significant variations in the outcome for Johnson in the different campaigning scenarios. Generally, the polls seem to suggest he might do better if he went to the country after the UK has left the EU, as against a situation where he had failed to achieve a deal and was forced to fight against a background of continued EU membership.

What hasn't been tested, though – as far as I am aware - is the scenario where he has successfully negotiated a deal, but where the three-month extension is implemented anyway, again forcing him to go to the country while we are still in the EU.

There again, one might expect a difference in public sentiment where he was forced into this position by the opposition parties and where it was brought about because the agreement had not been formally concluded – arising essentially because the negotiations had been left so late.

Either way, some might anticipate that any campaign would be fought on the content of the deal. But that would be expecting too much of the legacy media – it could not cope with anything beyond the superficial and would quickly revert to personality politics, basically on a platform of "trust". It would boil down to whether the voters trusted Johnson and his "deal", or Corbyn and his commitment to renegotiation and a referendum – in which he would oppose his own deal.

My sense is that there is a growing impatience with the continued delays, so much so that even some remainers want to see the thing finished. In this context, the deal is seen as the best and fastest way of achieving that end. And such a seductive refrain could well play into Johnson's hands, as long as the focus stays on personalities and "trust". It is a contest he could well win.

If the campaign ever got down to detail, though – however unlikely that might be - a rampant Farage might score some points, with his campaigning company seriously eroding Tory votes. The net effect of the Lib-Dems could also be to damage the Tories more than Labour, possibly leaving us with a hung parliament and no further forward.

On the other hand, a clear Johnson victory would have him ratifying his deal in an instant, taking us out of the EU as fast as is humanly possible. Then the fun would start. The one thing this deal buys is a standstill transitional period (one of Mrs May's legacies from the original Withdrawal Agreement), during which we negotiate the future relationship.

But, if the view coming through is correct – and study of the Irish Protocol over the next few days will give us a better insight – Johnson has only got so far by caving in to the EU on every substantive point. To have this man, with a five-year mandate, in charge of the next round of negotiations, almost beggars belief.

Sadly, as long as Corbyn is the leader of the opposition, the alternative is no better, which perhaps gives a serious impetus to the idea of a referendum on what will set out to be a permanent treaty. On this, the peoples' decision can hardly be worse than anything our full-time politicians would come up with.



Richard North 18/10/2019 link

Brexit: still anybody's guess

15/10/2019  


If you keep them in their comfort zones and let them focus on issues they understand – like court politics – the occasional hack can sometimes make a bit of sense. Thus we have Robert Peston delivering his opinion of the Queen's Speech debate, saying it was the maddest, most pointless event anyone alive has watched.

In his view, it was all "displacement activity" with the speakers taking refuge from the only two questions that matter, namely whether the UK is leaving the EU on 31 October (and if so how) and whether there will be a general election before Christmas. As a result, wrote Peston, the debate "has all the significance and weight of an undergraduate debate on a wet autumn afternoon".

It would be comforting to think that this put yesterday's proceedings in a class of their own but Peston's assessment could apply to the majority of debates conducted in the House of Commons. It comes as no surprise, therefore, that the level of public trust in the institution has plummeted, with 77 percent of a recent opinion poll unwilling to trust it to make the right decisions on Brexit.

That figure, incidentally, compares with 76 percent for Corbyn, and 60 percent for Johnson, indicating that we are undergoing an almost complete breakdown in trust in the ability of our politics to fix Brexit. Johnson may be the least worst, but even that means that twice as many people don't trust him as believe he is capable of doing the right thing.

And when it comes to guessing whether we will be leaving the EU on 31 October, at least we seem to be getting closer to an answer. Finland's Prime Minister, Antti Rinne – holder of the EU's rotating Council presidency – took time out yesterday to warn that things were not going well in Brexit land.

Speaking in Helsinki alongside Belgian prime minister Charles Michel, who is the next European Council president, he told reporters that there was no "practical or legal way" to find an agreement on Johnson's latest proposal, in time for the European Council on Thursday.

This, of course, is not in the least surprising. The parties are trying to combine thrashing out an agreement on an incomplete and poorly-thought-out UK proposal while, at the same time, attempting to carve out a detailed legal text covering the areas where there is some degree of accord.

Inevitably, this is slow, painstaking work – and that is without taking into account the need to have versions in all 24 of the Union's working languages. And, understandably, the EU is insisting that any draft which goes up to the European Council for approval must be "legally operable", requiring the production of a complete, watertight legal text.

Nor is Rinne on his own. Simon Coveney, the Irish deputy prime minister and self-confessed optimist, also suggested that talks might have to "move into next week". And although he did qualify his own pessimism (or realism) by venturing that it was "too early to say", the very fact that he was making such a downbeat appraisal tells us an awful lot about the status of the talks.

Barring a miracle, therefore, there is next to no chance of Johnson putting a new deal to MPs on Saturday, assuming he still goes ahead with the weekend sitting. Apparently, a motion approving the session must be tabled at the very latest by Wednesday for debate the following day – and even then the swamp-dwellers could reject the opportunity to spend extra time in Westminster, in favour of prolonged lie-ins in their constituency homes.

Assuming, as I think we must, that there will be no deal settled on Thursday, on the face of it thus requiring Johnson formally to apply for an Article 50 extension, it would seem that there will be nothing much to talk about on the Saturday. The one exception might be to reassure the House that talks will continue (which is by no means a given), with a view to crafting a deal later in the month.

By tomorrow, of course, Barnier may well have put the coffin into the ground when it comes to a Thursday finale. It would be entirely in order for him to declare to the General Affairs Council that there had been insufficient progress in the talks for him to commend a deal to the European Council, even with an additional day that Wednesday might bring.

However, if Barnier is prepared to take an optimistic view and suggest that there is a chance that a special Council, convened in the following week, could bring about a resolution, Johnson could still hold out hope of closing a deal in time for the UK's departure on 31 October.

The "colleagues" may or may not play ball on this, but I would be inclined to suggest the caution will prevail and they will go for the extension option, planning to use the special Council to agree an extension to the end of January 2020. On the other hand, they could string Johnson along with the promise of an early deal, only to bounce him into an extension when it becomes apparent that the talks have not delivered.

Even over the space of a week, though, the variables have multiplied to such an extent that predictions have become perilous. Nevertheless, there are definitely signs of movement, with the Telegraph in a buoyant mood, reporting that there is "cautious optimism" in Brussels. With talks on a knife-edge, we are told that Johnson has cancelled today's planned Cabinet meeting, to avoid leaks that could derail delicate talks.

All the same, I'm still reluctant to accept that the "colleagues" will go for the quick fix. Recent polling – of which they must be aware – suggests that delaying Brexit could cost Johnson a majority in the coming general election, as Farage's party siphons off Tory votes. But whether a hung parliament – with the remote possibility of Farage holding the balance of power – is something they want to risk, only they can tell.

But the main constraint, as I see it, is the prohibition in their own Decision on conducting negotiations on the Withdrawal Agreement during this extension period. Holding off until after the end of the month gets them off that hook, while a general election, which would cause talks to be suspended, might buy time and fresh opportunities – and the chance of a Labour government that could deliver a referendum.

It is at this point that the perils of speculation become all too evident. The Irish Times has it – along with the rest of the media – that Johnson is still adamant that Brexit will occur on 31 October and, even if he does seem boxed in, no one is prepared to bet that he doesn't have a trick or two up his sleeve. Thus, while we can assess the odds of certain plays coming to fruition, firm predictions are for the birds.

Not least, for all the media chatter, no one has actually seen a hard copy of the UK proposal – if one actually exists. And this could mean that all the earnest speculation over what the parties are discussing could be empty hype. Furthermore, with these complex issues, there can be absolutely no dispute that the devil is in the detail and the talks could so easily founder on a technical issue that no one can find a way of circumventing.

Then, of course, even if the parties manage to agree something, there is no guarantee that the swamp-dwellers will ratify. Opposition from the DUP seems to be firming up, and behind them are Unionist-supporting Conservative MPs who will vote alongside them.

It is enough, therefore, to posit that, by the end of today, we will be slightly more certain that we are not going to be seeing a deal this week. Beyond that the outcome is, as always, still anybody's guess.



Richard North 15/10/2019 link

Brexit: a dose of reality?

14/10/2019  


Following the completely predictable (and predicted) news yesterday evening, that a Brexit deal had not materialised, the legacy media is having to scale back its euphoria and admit to the difficulties which have long been apparent to more sanguine observers.

Readers here, for instance, might recall our piece conveying the comments of Bruno Bonnell, a French MP for Emmanuel Macron's En Marche! party. Of Johnson's proposal, he complained that, "It's not a final version", describing it as "almost like a joke", saying that, "We don't even understand it".

In the wake of the weekend's "intensive technical discussions", therefore, it should hardly come as a surprise to the Financial Times that it was dealing with a dog's dinner. Nevertheless, with its most recent headline declaring: "Brussels baffled by UK’s 'complex' proposals to fix Brexit deadlock", it seems to be trying to tell us something of which we were already well aware.

Nevertheless, I suppose it is vaguely helpful to have a more detailed account of Michel Barnier's brief to EU "diplomats", other than a terse press release which is so lacking in detail as almost to amount to mockery.

The only things of substance it tells us are that, "A lot of work remains to be done" and "Discussions at technical level will continue tomorrow" (Monday). Barnier is also to brief EU-27 Ministers at the General Affairs Council (Article 50) on Tuesday.

Via the FT and the other news gatherers that were present in Brussels, we are told that British plans to keep Northern Ireland in the UK's customs territory while avoiding a hard border on the island of Ireland are "fiendishly complex and not yet properly worked out", which entirely accords with Bonnell's earlier observation, but demonstrates that there has been precious little progress since last Tuesday.

It hardly comes as a shock, therefore, to have one EU diplomat making a statement of the bleedin' obvious, that there was "no breakthrough yet". He adds: "If the British government wants a solution, it must move quickly now. The clock is ticking", again a statement so obvious that it scarce merits repeating.

What is less clear is why another "European official" is saying that talks on Monday would be "one last chance". That is the last chance for the two sides to bridge their differences, or they risk failing to agree a deal in time for the European Council on Thursday.

By any account, it is already too late to meet that deadline. Normally, without the GAC giving its go-ahead, the European Council could not entertain a deal. However, the BBC has suggested that the EU team seems to have "softened" its position, indicating it is prepared to keep talking until Wednesday, the eve of the European Council.

Then we see The Times elaborate on this, reporting that the EU might back Johnson's plan in principle, even if a legal text cannot be finalised in time for the European Council, provided the UK made some concessions.

This narrative has the prime minister in office returning from Brussels with a political deal that could be put to a vote in the Commons on Saturday, with a legal agreement to be finalised afterwards. That does not make sense. The Commons is not going to vote for a "deal", sight unseen. MPs will want to see the small print.

When one sees the FT talking of "an extra summit", however, this does make sense. This paper suggests 29-30 October, but there is the matter of the European Parliament ratification. The last plenary of the month is on 23 October, which sets its own limit.

But, while Downing Street apparently had hoped the negotiators would be on a "glide path to an agreement", the Guardian is scaling back on the optimism having Barnier warning that the latest talks have been "difficult".

With a dose of realism that has been distinctly lacking of late, it goes slightly against the grain of some of the other reports, observing that it is appearing "increasingly unlikely that agreement can be found" in time for the Council later this week. However, this is not inconsistent with what other media sources are saying.

Ironically, the paper speaks of Barnier holding "a restricted session due to recent leaks", but somehow the leaks continue as we learn of the chief negotiator's disappointment at the lack of progress. This leads "EU sources" to suggest that an extension is "all but certain" given the amount of ground that needs to be covered.

Not least of that is the minor problem that the UK proposal would lead to the "dismantling of the EU's customs code", leaving the Union open to widespread fraud in the absence of hard data about whether goods end up in the Single Market or not. "We've told the UK our concerns about the Single Market and they don't have any answers to it yet", says a diplomat.

According to RTE, some of the ideas advanced by the UK - specifically a proposal to have Northern Ireland be part of the UK's customs territory, but continuing to apply the EU's rules and procedures on customs and tariffs - remain "conceptually difficult".

It is felt that the British plan would create more problems than solutions, in terms of the potential for fraud, the difficulty of tracing goods and the prospect that things would not be ready in time for the end of the transition period. Some EU officials believe that the arrangements are so complex that up to three months may be needed to thrash out all the details.

Interestingly, another leaking EU diplomat effectively confirms this, saying that: "The Northern Ireland-only backstop proposed in February 2018" (by Mrs May, as rejected by Arlene Foster) "could be landed by Thursday, but not a bespoke plan". On that basis, "a technical extension looks probable".

Such a move is also mentioned in The Times piece. It would definitely have the support of Jean-Claude Juncker, who says he would back a prolongation of UK membership. "It's up to the Brits to decide if they will ask for an extension", he told the Austrian newspaper Kurier on Sunday (paywall), "but if Boris Johnson were to ask for extra time – which probably he won't – I would consider it unhistoric to refuse such a request".

The Independent, though, reports that Johnson is "desperate for an agreement" which can be signed off before Saturday, to avoid him having to ask for a further extension. Yet the EU has told him that he must move "further and faster", even though other papers are saying that the gap is unbridgeable in the time, with the likelihood that there will be a later, special European Council.

Needless to say, the EU stance has been seen in negative terms by the Telegraph, the paper headlining its report: "Fury as EU demands more Brexit concessions". The text has a Cabinet minister "hitting out" at Brussels for ignoring the need to get parliamentary backing for any deal reached. This minister says: "What the EU needs to understand is all their very clever negotiating tactics don't mean anything if you can't get it through the House of Commons".

From this, it would appear that there is an expectation that the EU should abandon its own requirements – a process called "flexibility" - simply to assist the passage of any deal through the Westminster parliament, notwithstanding that the MPs could still reject the deal presented to them, regardless of what is agreed.

Like as not, MPs are not going to get an early chance to vote on a new deal, even if Johnson had set aside the Saturday session in the House of Commons on 19 October for precisely that reason. But if there is to be a special European Council later in the month, the timing would be ideal for framing an Article 50 extension, an application for which could then be heard in time for it to take effect before the end of the month.

That, of course, could be the ultimate in anti-climaxes. With all the hype about a deal, if all Johnson is able to do is walk away with another extension, his credibility is going to take an even bigger hit.

For the moment, though, as long as there is perceived to be the slightest chance of a deal being agreed, the hype will continue. By the end of today, we should have some better idea of where we stand which, on reflection, could be a little unfortunate for Johnson.

Wrapped up in his Queen's Speech agenda, and hoping for positive coverage in Tuesday's media, the very last thing he wants is for the EU to rain on his parade by announcing that talks have been abandoned and there is no hope of a deal being agreed at the coming session of the European Council - assuming that the talks don't continue until Wednesday.

On the other hand, one wonders what Johnson (and his advisers) really expected. Can they have imagined that throwing a complex, apparently incomplete and controversial proposal at the EU, waiting for the very last minute to do so – was going to yield dividends?

Perhaps this isn't the real play. Maybe, after the show of offering a new proposal, the game is to convince the likes of Merkel and Macron that there is no prospect of a deal, and they are better off refusing an extension, allowing the UK to cut loose.

But, if Johnson wants the cooperation of EU leaders in this ploy, then he will need to get his people to tone down the rhetoric about demanding more "concessions" and thus sabotaging the talks. The balance of advantage on blame avoidance will probably be a key factor in determining the timing of Brexit, and at the moment there is no particular incentive for the "colleagues" to allow the UK to quit by the 31 October.

So far, this just seems to be another game that Johnson is losing. The smart money looks to us still being in the EU after the end of the month.



Richard North 14/10/2019 link

Brexit: a future so opaque

13/10/2019  


In the absence of firm information or official statements, it is extremely difficult to be certain of where we stand with the Brexit talks which are said to have continued through yesterday and are set for another long session today.

If there were first prizes for media hubris, though, the winner would undoubtedly be The Sunday Telegraph which talks of "Great Britain" being able "to exit the single market and the customs union, and to be able to diverge from all EU rules and regulations: a full, clean Brexit".

As far as Northern Ireland goes, there would be "a compromise solution" which would allow the province to take part in UK trade deals and be legally out of the customs union. Miraculously, it would maintain an open border with the Republic, alongside some form of ongoing democratic consent mechanism.

This, in the view of the ST, "would be far better practically, legally and philosophically for unionists and Brexiteers than a Northern Ireland-only backstop".

The result would not be "perfect" and, surprisingly enough, "the devil will be in the detail", where the onus is "on Mr Johnson not to stray from the principles of self-government and democratic control he so brilliantly expounded during the referendum".

The paper is in no doubt that, if the talks are evolving as we believe, the result looks to be "a real Brexit for Great Britain, with a settlement for Northern Ireland that genuinely hopes to satisfy all sides".

Needless to say, the devil always lies in the detail and while No 10 officials point out that none of the pundits know the full details of the proposed deal, the speculation of what it might contain is enough to have DUP deputy leader, Nigel Dodds fulminating that the proposed deal "cannot work".

The cause of his grief, apparently, is that Johnson is said to be ready to "shaft" the North (as in Northern Ireland), by reverting to the idea of a "wet" border in the Irish Sea. This means that there will be customs controls imposed on goods from Great Britain entering the province, in order to avoid checks on the Irish land border.

Dodds is insisting that the North should be fully within the UK's customs union, with his party refusing to accept any changes in the status of relations between Northern Ireland and the rest of the UK.

Despite recent comments from Arlene Foster (pictured with Dodds), which appeared to support Johnson's deal, the party is consistent, it says, in demanding that the UK leaves the EU as one nation and "in so doing that no barriers to trade are erected within the UK".

Assuming that the DUP's "take" on Johnson's deal is correct – and we have no means of knowing – it is relevant to ask whether the party still has sufficient political leverage to block any deal it doesn't like.

Certainly, the party itself is in a difficult position if it endorses a deal that other Unionists can cast as a "betrayal", using this to damage their electoral standing.

But, it seems, the UK government has more to worry about than the finer sensibilities of the DUP. Johnson, we are told, is "desperate" for a deal because security chiefs have convinced him that no-deal Brexit would lead to an upsurge in terrorism by dissident republican groups.

This comes from The Sunday Times, which employs another of those wondrous anonymous sources – one "familiar with the warnings" – to tell us that there was a danger of terrorist attacks in Northern Ireland and on the mainland, as well as sectarian violence in cities such as Glasgow.

We are informed of a "recent conversation" with a senior Conservative, which covered the implications of no-deal on Northern Ireland and disruption in England, when it is claimed that Johnson said: "Any one of these risks we could cope with, but taken collectively they would be a massive challenge to the UK state and no one would choose to go down that route".

Some might argue that there is a certain shallowness in that assessment, in that a solution which angers the Unionists could, of itself, trigger sectarian violence, pulling in the Republicans and triggering a full-blown replica of the Troubles. With Northern Ireland, it is never wise to take sentiment for granted.

Nevertheless, as has been pointed out, with the devil lying in the detail and no detail available, there is only so far speculation can take us. And even this may be moot as a "senior EU source" is said to be describing the chances of a deal at the European Council as "50-50", while a British government official is said to be claiming that they were "on a knife edge".

As long as the talks in Brussels go on, however, they are buying Johnson respite from the worst his critics have to offer. But all good things must come to an end and, by 5pm this evening, Barnier is due to give "EU Ambassadors" a briefing on progress so far. Saturday saw an almost unique level of security, with not a single leak escaping the talks, but Barnier will be talking to a leaky ship, and we are bound to get some intimation of where the talks stand within a matter of hours of the briefing.

The following day (Monday) Johnson will have domestic matters to attend to, as he will be attending the Queen's Speech, but he then plans to speak to Angela Merkel, Emmanuel Macron and Jean-Claude Juncker. These contacts will take place in the next two days, when we are told that Johnson's message will be: "Let's finish this off".

He is, it is said, ready to offer EU leaders "a historic grand bargain on Brexit" - help deliver "his new deal" this week or agree a no-deal Brexit for 31 October, presumably by refusing his forced application for an Article 50 extension.

It remains to be seen whether any of these players will intervene, but the likelihood is that they will take their lead from Barnier on whether to accept the deal – assuming the European Council is disposed to accept any deal at this coming meeting. It still seems far more likely that, if they feel a deal might be in the offing, the Council will offer an extension that will take us past 31 October, so that formal negotiations can take place.

However, if the "colleagues" collectively are coming to the view that Johnson's last hurrah is going nowhere, they may be disposed to consider whether to reject an extension application.

To that extent, Johnson may have queered his own pitch, in being so strident about blaming the EU for any failure to do a deal. The Council will be conscious of the potential for bad publicity in the event that they are seen to be pulling the plug. If the UK wants the Council to cast it adrift, therefore, it will need to find a formula which allows for what is, effectively seen as a "no-fault Brexit".

Yet, for Johnson, that has its own drawbacks. Given the expected adverse consequences of a no-deal, being able to blame the EU for our troubles becomes an important part of the narrative. If we part on an ostensibly amicable "no-fault" basis – with Johnson winning a subsequent general election (which looks possible), his administration will be open to taking the full blame for the trauma that follows.

This could present the prime minister in office with an unfortunate paradox. In order to exit on the 31 October with a no-deal, he is going to have to make nice with the "colleagues", yet to escape blame for the effects he needs to be at odds with the EU, conveying the impression that his "reasonable and constructive" offer has been refused.

In any event though, Johnson is hardly in control. Although he will be attempting to focus on domestic issues after the Queen's Speech on Monday, if his "new deal" is known to be dead in the water by then, he will find it hard to keep the opposition benches focused on his agenda.

Bearing in mind that, traditionally, votes against the Queen's Speech are taken as votes of confidence, the prime minister in office could find himself facing a vote that could trigger a general election on his hands, even as he wings his way to Brussels for the European Council.

It would then remain for the "colleagues" to agree to any formal application for an extension, thereby presenting Johnson with the worst of all possible scenarios when he goes to the country without having taken us out of the EU. And even if such an election is winnable, the outcome would still be uncertain.

One way or another, there is a lot riding on this week, and rarely has our immediate political future been so opaque.



Richard North 13/10/2019 link

Brexit: Russian Roulette

12/10/2019  


When there's nothing to report, it's better to say nothing rather than indulge in excitable speculation that has been our fare from the legacy media for the last day or two.

We could somehow be close to a deal, although I very much doubt it. But it could be that Johnson is being played – led up a garden pathway that ends abruptly in a cul de sac from which there is no escape without humiliation.

On the other hand, this could be a giant hoax against the British public or even parliament. It will turn out that Barnier and the rest of our ruling elite really are shape-shifting lizards and they've had a deal stitched up for ages, ready to unroll at the last minute, just for the sheer hell of it.

What we do know of yesterday, though, is Alexander Boris de Pfeffel Johnson insisted there was a "way forward", claiming that his new blueprint - which has yet to be disclosed - would mean the "whole of the UK takes full advantage of Brexit".

On the other side of the fence, both Michel Barnier and Donald Tusk have had tweets issued in their names. The former refers to "intensifying technical discussions with UK over the coming days". These are in a "constructive spirit" (and I don't think they're talking Airfix), with the inevitable claim that the EU "will do everything it can for an agreement, fully in line with our principles".

Earlier, after a two-hour breakfast meeting with Barclay, he had described Brexit "like climbing a big mountain". For that, he said, "we need vigilance, determination and patience".

Meanwhile, a less emollient Tusk had set Johnson an ultimatum of presenting new Brexit proposals for that day or "no more chances". Later, he was talking of "promising signals" from Leo Varadkar that a deal was possible, but noted that the UK had "still not come forward with a workable, realistic proposal".

This was confirmed by two journalistic sources later in the day, one saying that the UK proposals to date had "not been the basis for a negotiation", with the other offering much the same news, that "no new UK legal text" had been submitted by the end of play.

Earlier in the day, the Commission had issued a short press release stating that "the EU's position remains the same". There must, it said, "be a legally operative solution in the Withdrawal Agreement that avoids a hard border on the island of Ireland, protects the all-island economy and the Good Friday (Belfast) Agreement in all its dimensions, and safeguards the integrity of the Single Market".

There is nothing new there but it does tell us that, despite the heady optimism in some quarters following the Varadkar-Johnson meeting, there have been no fundamental changes. In formal terms, we are no further forward.

Nevertheless, what the Commission describes as "discussions" (not negotiations) will continue over the weekend (a stark contrast to last week). Initially, the Commission said it would take stock with the European Parliament and Member States again on Monday, with a view to preparing the General Affairs Council (Article 50) on Tuesday morning. For "logistical reasons" the Member State briefing has been brought forward to 5pm tomorrow (Sunday).

Coincidentally, Angela Merkel is due to hold talks with Emmanuel Macron that evening and, while they have no locus in the negotiations, this will be an opportunity for them to exchange views on Brexit, face-to-face – if they haven't more important things to talk about.

Whatever else happens, the General Affairs Council is very much set to go for Tuesday and, under normal circumstances, if a deal was to be presented to the European Council for approval, the finished draft would have to be ready for the GAC.

For that, of course, the document would have to be translated into the EU's 24 working languages (something I've mentioned before) and circulated to the Council Members before the meeting. Yesterday, therefore, was effectively the deadline for the production of a legal text and, as we now know, this hasn't happened.

I suppose, at a stretch, something could be arranged if the UK came up with a very modest draft today – something in the nature of a supplement to the Political Declaration - but in purely practical terms, it no longer looks as if a finished draft can be got to the European Council in time.

What might be an option for the European Council, though, is for it to agree to set the date for a special Council in about ten days' time, with the declared intention of approving a legal text, on the assumption that a draft will be ready by then. Somehow, the European Parliament would have to be roped into the act, but there is a plenary on 23 October, which could be fixed to take an emergency resolution and ratify an agreement.

That still leaves legal issues to be resolved, but it is possible to say that, while a "deal" is unlikely on 17-18 October, it is theoretically possible, given that the European Council is prepared to meet later in the month.

One might expect that, if the legal text of the deal does not then materialise, the Council could instead address a request for an extension. There might then be some confusion if the Benn Act requires Johnson to apply if there is no deal by 19 October. What happens if a deal is ready on 23 October? Would Johnson still have to apply for an extension?

What, incidentally, would be Westminster's position if the Council granted the UK an extension to the end of January 2020, but with a break provision which allowed it to be terminated if a deal was agreed? If that was to transpire – and everything came together – we could still be out by 31 October.

That said, there is enormous scepticism that a deal could be forced through in so short a time. If one is on the cards, it might be better to have an extension anyway, to give time for the proper procedures to be adopted.

As long as formal negotiations (as opposed to discussions) can be held after 31 October, the Council gets over its legal prohibition of conducting negotiations on the Withdrawal Agreement before that date. For that reason alone, one might expect there to be a delay.  

The trouble is, though, that all of this is entirely theoretical unless Johnson delivers a scheme which is acceptable to the EU. And so far, with even what they've got, the EU is complaining that the UK has not delivered anything which is either "workable" or "realistic".

Despite that, both sides are sticking to the mantra that "a deal is possible", with neither wanting to be seen to pull the plug. Yet, without firm, bankable progress, there must eventually come a point when the parties have to concede that the talks have failed – or will fail to deliver at the forthcoming European Council.

So far, it seems that Brussels and London are playing a bizarre variation of Russian Roulette, where only Johnson has his head in the line of fire and Barnier pulls the trigger once for every day he fails to produce a "legally operative solution".



Richard North 12/10/2019 link
20














Log in


Sign THA





The Many, Not the Few