Brexit: a tree in the storm

14/10/2018  


As we creep up to the European Council later this week, the Brexit narrative in the legacy media has almost completely internalised, with multiple reports of plots, rebellions and calls to reject Mrs May's "flawed" plan.

The more febrile elements of the media are speculating about an impending government collapse and possible coups against the prime minister, an increasing number of ministers are said to be close to resignation. Then, as the noise level rises, Arlene Foster is reported as believing that crashing out of the EU without a deal is "the most likely outcome".

Whatever the reality, therefore, there is no sense to be had of measured negotiations moving towards a known outcome, where parties are preparing to agree terms. At this stage, though, one might expect some theatricals, but these are usually staged between the negotiating parties. In this instance, the actual negotiations have assumed the character of "noises off" in some distant land, while the main plays are being rehearsed in front of a domestic audience.

In trying to judge how much is genuine, the "outrage" being recorded does not seem contrived and it would be unwise to assert that we're being treated to a vast, orchestrated theatre, designed to show that Mrs May has prevailed against all the odds.

If anything, we might be looking at a situation where Mrs May has lost control of the agenda, with her team in Brussels looking at terms which she will know do not have the slightest chance of being accepted by the dissenters in her own party, precluding any possibility of a deal being accepted by parliament.

This leaves us to conclude the third part of our analysis of the speech given by Sir Ivan Rogers in Cambridge last week, this taking on the mantle of a tree holding out against the raging storm of speculation which is currently driving Brexit.

However, the speech remains just as relevant as ever it was for, whatever the outcome of the current perturbations, there will come a point when the government – with the entire nation – will have to return to the issues raised by Sir Ivan.

As we left his speech yesterday, he was warning that the EU will treat us with the sheer lack of sentimentality in trade negotiations that the US and China, the other trade superpowers, deploy against everyone - and will also deploy against the UK in the next few years.

Trade negotiations with any regional power bloc or major country, he says, are hardball, brutal negotiations. Thus, when one reads recent tracts, like the IEA's recent one covering Britain's trading future and marvels at the sheer naïveté on every page, both about the EU and the US.

As for other world players, we read on China that "the UK should initiate discussions with China but be clear that its requirements for a UK-China deal are likely to be difficult for China to meet in the short term". It goes on that the UK would need "progress in many areas of China's approach to trade". Says Sir Ivan, "Good luck with that. I am sure Beijing is awaiting Dr Fox's Department's advice on how to conclude a path-breaking deal with the British".

On India, we read that among the main obstacles EU-India deal has been the EU's aversion to allowing India Mode 4 services access. We are told that this, "ironically, is due to the UK". But it’s not ironic at all. Because it's of a piece with the views on cross border movement of people espoused by the advocates of Brexit, and delivered into the negotiation by the former Home Secretary, now Prime Minister.

But never mind. We are assured that, when we are sovereign, we shall decide that the numbers of highly skilled workers arriving from India will be “very small indeed”. Sir Ivan (with the rest of us) looks forward to the celebrations when Delhi hears.

As we can see only too well from this weekend's press, nearly 30 months on from the referendum, we are still lost in campaign mode on fantasy island, even though the time for these fantasies is long past. Yet, it gets worse by the day. As tends to happen in revolutions, the core players have become radicalised. They have abandoned ideas of participating in the Single Market, or solutions based on the relationships that Norway and Switzerland have with the EU.

The "radicals" – those whom we define as the "ultras" - increasingly loudly declared these versions of Brexit a betrayal of the manifest “will of the people” – of which, of course, only they are the true interpreters. There is only one pure form of Brexit, and any compromises represented a treasonous betrayal and/ or a humiliation.

It was this "purity" that, via Lancaster House, duly set us on the path we have meandered slowly down over the last two years. And, predictably, the EU has reacted by averring that Mrs May's red lines, if immutable, pointed ineluctably to an economic relationship no deeper than a bog standard free trade area.

At the time, Sir Ivan had to deal first-hand with the extent of the surprise in the European elites that the PM should have taken such a hard line and unequivocal view on the UK's post Brexit destination.

That in itself tells us that those elites thought that Brexit was a long process not a single event, and that a number of end states for the relationship were in play after the referendum.

In other words, that the "hardness" of the Brexit destination and the extent of the unravelling of existing relationships and structures we wanted, depended on post referendum choices and had not been fully determined by the referendum itself.

We then had the remarkable situation where Mrs May herself started to discover what her speech's content actually meant to the other side of the Channel. It seems staggering that, before she delivered it, that she has not gauged precisely what the reaction in Brussels might be but, on this as in many other occasions, she seems to have been talking only to domestic audiences.

This means, of course, that her dream of frictionless trade with our partners, despite having left both Single Market and Customs Union, was just that – a dream, and an impossible one at that.

That perhaps is even more remarkable, where Sir Ivan is revealing that the prime minister of this nation embarked on the most important negotiations this country has conducted since the war on the basis of an "impossible dream" – with no concessions to reality. And she's still dreaming, with key components of her Chequers plan hankering after the "frictionless trade" that she was never going to get.

Therein lies an elephant trap lined with sharpened stakes. The "revolutionaries" were always going to denounce Mrs May for betrayal of the true path Brexit if she committed the UK to staying permanently in a Customs Union, and thus limiting the UK's post Brexit trade policy sovereignty.

And because she had no option but to agree to a legally secure, permanent backstop giving Dublin the guarantee that the UK's departure would not automatically lead to the re-erection of a hard border across the island of Ireland, she had only one place to go politically, if the Brexit revolution was not to eat her as its first victim.

And that was to say that she could agree a legal backstop to solve the Irish border question. But only because no such backstop would ever enter into force. Because there would be an all UK trade deal which would obviate the need for it.

And that, supposedly, would simultaneously guarantee the Brexiteers their goal of a sovereign, autonomous trade policy post exit, by leaving the Customs Union, and being free to depart from the Common External Tariff, but also guarantee manufacturing Britain the friction free trade that comes only when inside a Customs Union, by replicating all its features in the new dual tariff regime.

This is the world of revolutionary politics, in which this kind of total fantasy proposition starts to make sense. You persuade yourselves that, as there is no other way of your squaring impossible circles, it must fly. The slight problem, though, is that it makes no sense at all to Brussels, with whom we have to negotiate.

And that's where we are this weekend. We have the Brexit "revolutionaries" storming the citadels of Westminster, while the denizens of Brussels must be reading today's papers with a growing sense of bemusement, especially when the Sunday Mirror confidently announces that: "Theresa May could clinch Brexit deal by Wednesday".

The rider, though, is what will make sure it will not happen – the price is keeping us in the Customs Union until the end of 2021. In proper revolutionary fashion, says Sir Ivan, this betrayal will be laid at the door of the shadowy conspiratorial counter-revolutionary establishment elite determined to thwart the Revolution’s purpose.

And now, even the advocates of “Norway then Canada” are starting to receive the same “enemies of the people” treatment. The revolution starts to eat its own.

Whether we have reached the point where Mr Gove and acolytes get condemned by the pinstriped Robespierres of the Committee of Public Safety – or is it the European Research Group? – for insufficient revolutionary fervour, and being, like some latter day Danton, in the pay of foreign powers, Sir Ivan does not know.

Danton, of course, famously supposedly said, as he passed Robespierre’s house on the way to his execution: "you will follow us shortly. Your house will be beaten down and sowed with salt". Yet none of us can vouch for what now passes between Brexit supporting leadership candidates.

But, if Mrs May gets past this weekend intact, with a potential deal standing on the table for the European Council to discuss, she will have survived an attempted coup and perhaps the most serious challenge to her leadership to date.

Perhaps it's only fluff, but if it isn't and the "revolutionaries" get their way, then all bets are off – whatever they were. We will see which way the land lies, from how the European Council reacts, and what agenda – if any – it defines for any November meeting. If we see it looking to working on "no deal" contingency measures, then we are in serious trouble.

Bringing us back to earth with a bump, the "revolutionaries" must know that this will have a high probability of bringing down the May government and precipitating a general election with a new leader – with completely unpredictable results.

It could even be that the "Ultras" want a Labour government in place to take blame for the pain of a "no deal" Brexit – then taking the reins of power back at the next election. Who knows what passes through the minds of these people, or what will happen next.

In finishing his speech, Sir Ivan made three brief confident predictions about where we shall be in two years. First, he said, we shall be having precisely the same debate over sovereignty/control versus market access and as frictionless trade as is possible from without as we are now.

The trade negotiations, properly starting quite late in 2019 – a year of transition in Brussels and Strasbourg, and with the need for the 27 to agree amongst themselves a complex, detailed negotiating mandate for a new negotiator – will be getting to multiple real crunch issues. The private sector will still be yearning for clarity on where we are going, and not getting much.

The UK political class will, finally, be starting to understand what trade deals are, how mind-numbingly legally complex and turgid their provisions are, and how negotiations work. And that what they view as the essential pluses to make a Canada style FTA tolerable are precisely the big sticking points. And that all manner of strings, as alluded to by Claus Grube, will come into the deal.

Second, it will be obvious by early autumn 2020 – long before, in reality – that the deal will not be ready by the year end, and that an extension is needed to crack the really tough issues.

The EU, in no particular rush to get this done, as it sits rather comfortably with the UK in its status quo transition, with all the obligations of membership and none of the rights, will use the prospective cliff edge to force concessions, or to offer a thinner deal, more skewed to its interests, in the hope that the UK is desperate enough, pre-election, to get it done.

Third, the Irish backstop, enshrined in the Withdrawal Treaty will still be in place, and no other prospective Agreement being yet in sight which obviates the need for it. And, with that, he closes by venturing an even more cynical fourth.

The Brexit revolutionaries, Sir Ivan predicts, will be saying Brexit has really not turned out as badly as the Project Fear Mongers told you it would. It's fine. And the counter-revolutionaries will be saying it’s only not turned out that badly because nothing at all has actually changed yet, because we are in a long term purgatory transition with the Europeans having taken back control, and what was the point of that?

Whether, in the febrile atmosphere of this weekend, those predictions will even survive this coming week remains to be seen. Anything can happen in the next few days. The only certain thing is that I haven't done justice to Sir Ivan's speech – but then it is available on-line to read in full.

Tragically, we have enough from it on this blog to know that the Brexit negotiations are not in safe hands. This does not look as if it is going to end well.



Richard North 14/10/2018 link

Brexit: grilled pain

11/10/2018  


A couple of days ago, I was remarking that the media coverage of the latest instalment of the Brexit soap opera didn't make sense.

It doesn't make much more sense now, but at least we have another speech from Michel Barnier to work on. By rights, we should have been able to put this alongside Tuesday's statement by Dominic Raab in the House of Commons. But that was such a vacuous word salad that it wasn't even worth reporting. I regret the time wasted reading it.

As for Barnier, much of what he said at the closing session of Eurochambre's European Parliament of Enterprises was familiar ground. But the fact that much of what he had to offer was unchanged told us something. The Commission in large areas of its work has reached the end of the road. There have been some concessions but there are to be no more.

The crunch is what it has always been. The UK wants to leave the Single Market and the Customs Union and that means that there must be checks of goods between the EU and the UK. That is unarguable and is not up for discussion.

Interestingly, Barnier lists customs and VAT checks. I may be wrong but I cannot recall him ever having specifically referred to VAT checks. I wonder if its dawning on the Commission that cross-border VAT issues could end up being as big a problem as the rest combined.

Anyhow, Barnier then addresses the crucial question. Both the EU and the UK are agreed that checks will not take place at the border between Northern Ireland and Ireland, so the matter to be resolved is where those checks will take place.

On offer are some administrative devices to make the checks in the least intrusive way possible, but there is no compromise on the fundamental point that checks must take place. And the sticking point is going to be what Barnier calls "health and phytosanitary checks" for animals and products of animal origin.

EU rules, he says. are clear. These checks must happen at the border because of food safety and animal health reasons. And obviously, in the future, the island of Ireland will remain a single epidemiological area.

Barnier, however. notes that checks already exist in the ports of Larne and Belfast. Post-Brexit, though, they would have to be 100 percent of live animals – a tenfold increase on the ten percent currently checked. And animal-derived products would have to be included for the first time.

To be fair, the EU's chief negotiator understands why such procedures are politically sensitive. But he makes three remarks. Firstly, he says, Brexit was not our choice. It is the choice of the UK. Secondly, the EU's proposal limits itself to what is absolutely necessary to avoid a hard border, but it gives Northern Ireland benefits that no part of a third country enjoys.

I think this is the point where he is saying thus far and no further, but he also makes reference to meeting the leaders of all Northern Ireland – Arlene Foster, DUP leader, among them. And, to judge from the press conference held afterwards, there was no meeting of minds.

As to Barnier's third point, his language is a little confusing. He talks of a "backstop" which will be needed "because it will be negotiated after the UK's withdrawal". But that brings him to the outline of the future relationship, whence he notes that "certain British positions expressed in the White Paper do not correspond to the guidelines of the European Council and to my mandate".

That's obviously the code for saying that Chequers is toast, or pain grillé. Anglicised, that could mean grilled pain, which is probably what Mrs May is experiencing.

We agree to base our future relationship on a free trade area without a tariff or quota, says Barnier. "But", he says, "we have two points of divergence with the British proposals because these two points are clearly contradictory to the foundations of our, your single market".

Firstly, in customs matters, he avers that the UK would like to maintain the autonomy of its trade policy, to be able to negotiate its own agreements, while remaining in our customs area. It also wants to apply its own external tariffs while collecting European customs duties.

These are problematical enough but what really screws the pooch is the divergence on the regulatory framework for goods. The United Kingdom has asked to align with a substantial part of our standards for goods, but only part of them, in order to maintain the same participation as today in our internal market, for these goods only. At the same time, it wishes to remain free to diverge on all the regulations that apply to the factors of production of these goods, whether we think of services, labour, capital or social standards and environmental.

Here, it is worth referring directly to the speech as M. Barnier gives some worked examples of how this "single market à la carte" would be "tantamount to offering the UK and its companies a major competitive advantage over companies working in the single market".

For instance, in the regulatory cost of chemicals, only 31 percent of the regulatory price is related to the REACH regulation. The rest is induced by compliance with other Union regulations, for example environmental standards. And it is on this part that the British would like to remain able to diverge.

This is our pain grillé on toast, so to speak. But negotiations with the UK continue this week intensively, day and night, in an attempt to meet the goal set by the leaders of the 27 that the agreement should be "at hand" for the European Council of 17 October - Wednesday next!

This has been taken by some in the media to suggest that a deal could be finalised by next week, but the main UK news is more focused on the DUP plans to topple Mrs May's government if too much is conceded to Brussels - grilled pain indeed.

Some commentators, though, think Foster is bluffing. The DUP has a lot to lose by bringing down the May government, which means that there is a deal there to be found.

In his speech, Barnier is clearly aware of what is at stake. In case of "no deal", costs would be very high, he says, first for the United Kingdom but also for certain sectors of our economy. But, he adds, there will have to be adaptations. "It cannot be business as usual", he warns.

Here, Spiegel Online picks up the threads. Diplomats, it says, continue to believe that the Brexit negotiations could fail, largely because of the unpredictable situation in British domestic politics.

Thus, when the European Council meets next week, unless there is "decisive progress" in the negotiations, the EU-27 will be "prepared for failure". At that point, the special European Council pencilled in for November could be rededicated to prepare for a "no-deal" Brexit.

Furthermore, the Commission has already ruled out cooperating with the UK on planning for a no-deal scenario and is not anticipating any special measures for transport, customs or financial services. Thus, should it indeed come to no-deal-Brexit, says Spiegel Online, "in all likelihood, the consequences would be dramatic".

For all that, there are doubts in Member States as to whether the Commission's minimalist contingency plan is sufficient. Many EU countries, including Germany, would like to move faster. Legislative proposals must be drafted by mid-November at the latest, so the November venue is ideal. The next scheduled meeting is not until December. By then, Spiegel Online observes, "it might already be too late".

By that measure, if there is a November Council and the UK is still in the game, we can judge that progress has been made – whatever the noisemakers might say. With no meeting to settle contingency measures, the EU will be committed to a deal. For once, we will all be sailing in the same boat, sharing the same pain.



Richard North 11/10/2018 link

Brexit: mending Humpty Dumpty

09/10/2018  


It's getting to the point where the reporting on Brexit isn't making any sense. For sure, journalists are trying to second-guess what may or may not be agreed as part of the withdrawal settlement, but we seem to be dealing with people who don't understand how the current system works.

For instance, the ever diligent Guardian is writing about a "new concept" of a veterinary deal between the EU and the UK to cover essential health checks on food produce between the UK mainland and Northern Ireland.

Under present EU law, the Guardian writers say, all products of animal origin ranging from cheese to frozen chicken coming from non-EU countries are required to undergo health and safety checks. Sometimes these involve laboratory tests and often require containers to be fully unloaded at special border inspection posts, they say.

Referring to "health and safety checks" is such amateur stuff, but we can let that pass. But what really jars is their claim that "one of the new suggestions" on the table in Brussels is that the scale of checks could be reduced from 100 percent to 30 percent trade talks go well up to 2020.

The thing is here that the normal rate of inspection is 20 percent. Concessionary rates, as with New Zealand, can drop to as low one percent. A 30 percent inspection rate is no concession at all. 

Making more sense is the assertion that "market surveillance" procedures will continue for goods destined for Ireland. Making no sense at all though, is the next apparent concession. Up until now, we are told, it has been reported that these checks would take place in British ports such as Holyhead and Liverpool. Now, it is understood that under the EU proposals, the checks would be done on premises, distribution centres and ports across the UK.

The point here, though, is that "market surveillance" means what it says – monitoring the performance of a product or system in its marketing environment. Largely, this involves the collection of information from a wide range of sources – from consumer complaints to the results of routine testing by official bodies. Not in any normal context can "surveillance" be interpreted as spot checks at any particular location.

The interpretation of what might be, therefore, is so wide of the mark that there is nothing we can learn from it. It looks as if we'll have to wait until we get some official documentation, where we can see what is really intended (if anything).

The same goes for what might or might not transpire at the October European Council - what people insist on calling the "summit". So far, the consensus from diverse media reports is that nothing formal is going to be submitted, while the Dominic Raab is not even going to Brussels this week.

Mrs May, on the other hand, is insisting that the apparent optimism coming out of Brussels is over-egged, a way of heaping pressure on the UK. She is warning that there are still "big issues" to settle and is demanding concessions on the Irish border issue.

Meanwhile, back in the real world, the truth has a habit of leaking out from the most unexpected of quarters. Via an independent Cornish councillor, we learn that Brittany Ferries are concerned about the impact of Brexit could have on the ferry service between Plymouth and Roscoff.

Brittany Ferries have been warned that every vessel carrying refrigerated goods, food and other natural products may face inspections upon arrival in France after Brexit, with around a third of the 210,000 freight units carried by Brittany Ferries every year affected.

The firm said this would need infrastructure such as huge warehouses to carry out the task and those do not exist in Roscoff and other French ports and it is unlikely to be in place by March next year.

According to this report, Brittany Ferries also said there was a risk that some ports could be excluded from post-Brexit preparations entirely, which would mean there would be fewer entry points into France for hauliers.

The company’s CEO Christophe Mathieu said: "The British may take a pragmatic approach and wave lorries through upon arrival into the UK, but cross-Channel trade works both ways".

"In a worst case scenario", he said, " British hauliers carrying refrigerated goods could face the prospect of far longer journeys – perhaps hundreds of additional miles – to find a French port equipped to process their consignment. When they finally get there they could encounter further delays waiting for checks to take place".

How interesting it is that we haven't had such clarity from other ferry operators, but all Mr Mathieu is doing is stating the obvious, facts already known to readers of this blog for a considerable time. And nothing so far has happened to prevent this becoming the inevitable outcome.

In some respects, though, the situation is worse than is painted. Once we leave the EU, we cannot simply revert to pre-EEC days and pick up where we left off. Some of the systems and procedures which sustained us before we joined no longer exist and cannot easily be restored – if at all.

Before the "completion" of the Single Market, for instance, this country operated a system of meat inspection based on local authority environmental health officers (EHOs), working within a traditional framework of a public health system dominated by medical professionals.

For reasons lost in the sands of time, meat inspections on the continent have developed as centralised services under veterinary control, the basis of which has been used as a model for the EU, leading to the dismantling of the established UK system.

With little in the way of a veterinary public health resource in the UK, however, to run the service in a way alien to the UK has required the import of cheap vets from EU Member States, contracted out by entrepreneurs to the state inspection service to act as "official veterinary surgeons" (OVSs) in UK slaughterhouses. But now that we are leaving the EU, many of those vets are going home and replacements are not forthcoming.

One of those entrepreneurs has become exceedingly rich by exploiting foreign vets, (very often young, recently qualified and inexperienced) and selling their services at top dollar rates, with UK abattoirs forced under EU law to pay for their presence. And now he is whingeing that Brexit "has the potential to decimate the United Kingdom's veterinary, food and agricultural sectors".

This is Dr Jason Aldiss, managing director of the well-named Eville & Jones, who claims that the UK will be "in deep peril" if a post-Brexit deal with Brussels does not include "guaranteed access to properly-qualified vets from other EU states and mutual recognition of professional veterinary qualifications".

There is, he says, already a veterinary recruitment and retention crisis in the UK, and that problem is getting worse. Currently, 45 percent of UK government vet posts are filled by vets from other EU member states and 95 percent of OVSs are non-UK EU vets. With less than six months to go until Brexit, there is still no guarantee than these individuals will be allowed to remain in post.

In the absence of these cheap vets, there are not enough UK vets to do the work. And not only don't they want to do it, they are too expensive. The additional costs would bankrupt the meat industry. However, the EHOs who once did the work are no longer trained for it, and also don't want to do the work.

What we should have done, of course, is sought recognition of our EHOs under EU law, which would have enabled us to maintain traditional (and more cost-effective) services. But now the system is broken, like Humpty Dumpty, it's not going to be possible to put all the pieces back together again.

That will leave the UK struggling to maintain EU export standards, which we've allowed to become based on veterinary inspection, which means that the meat industry will find it increasingly difficult to keep up current export volumes – with operating margins also under pressure.

Nothing of this, though, is understood by the media pundits, and our own government negotiators seem to be unaware of the implications of breaking with the EU. Short of staying in the EEA, nothing is going to fix this in a hurry. Certainly, a free trade agreement is not going to afford any relief.

And this brings us back to where we started with this piece. So few people understand in detail how systems work that they are unaware of what happens when you break them. And then they don't have the first idea of how to fix them.

We thus have negotiators circling round the margins of complex agreements, trying to find political fixes which simply will not deliver the goods. Small wonder the over-riding impression is one of confusion, as the Mrs May's men confront the impossible task of putting Humpty together again.



Richard North 09/10/2018 link

Brexit: the dancing of May

04/10/2018  


Of all the many things I could be doing, one of the ones I least want to do is review dancing May's conference speech. Watching the woman humiliate herself makes me feel ill. Dissecting yet more of her turgid prose is more than should be expected of any mere mortal.

Perhaps this is only temporary, brought upon by a surfeit of Tory conference, having been overly sensitised by the oaf's performance yesterday. Or perhaps it is the sheer tedium of revisiting the limited set of ideas on offer, having once again to trawl them for the ever-elusive signs of sentience.

There is one good thing about the speech, though – the relative brevity of the section on Brexit, running to about 1,300 words. The rest is of no interest, and no relevance. For sure, Mrs May attempted to widen out the framework and bring in other issues but, until Brexit is resolved, there is nothing else worth talking about in the political domain.

That said, under her section which labelled "Honouring the referendum", we were treated first to a brief dissertation on "leadership". In Mrs May's book, this is "doing what you believe to be right and having the courage and determination to see it through".

It helps of course, if you go beyond belief and seek to ascertain that your course of action is actually correct. Many a military blunder has been perpetrated by generals who, convinced of their own rectitude, have led their men to disaster. Such actions may be "leadership" in the textbook sense, but they are rarely cited as good examples of the art.

Leading us "with courage and determination", however, is the approach Mrs May has taken on Brexit – or so she says. And the terrifying thing is that she probably does believe she is right.

Stating the obvious, Mrs May then acknowledged that "we have had disagreements in this Party about Britain's membership of the EU for a long time". And, in a side-swipe at the oaf, she conceded: "it is no surprise that we have had a range of different views expressed this week".

But her job as prime minister, she instructed us – pulling rank over the pretender – "is to do what I believe to be in the national interest". Here we have that "belief" thing again, which she then coupled with her own definition of the national interest. That meant "two things". The first was "honouring the result of the referendum". The second was to seek a good trading and security relationship with our neighbours after we have left.

And that was the basis of her deal. "No-one wants a good deal more than me", she said. "But that has never meant getting a deal at any cost". Britain, she added, "isn't afraid to leave with no deal if we have to".

It is interesting how – and especially as Northern Ireland features so strongly in this affair – so many politicians speak glibly of "Britain", when the context is so obviously the United Kingdom. It is no wonder the Northern Irish tend to feel neglected.

That aside, Mrs May speaks for herself when she talks of not being afraid to leave without a deal. The rest of the nation is scarcely in a position to judge, with the consequences having been so deliberately played-down. If there is such a thing as informed consent in politics, Mrs May doesn't have it.

And she continues the trend. "But we need to be honest about it", a studied precursor to more dishonesty. "Leaving without a deal - introducing tariffs and costly checks at the border - would be a bad outcome for the UK and the EU". She adds: "It would be tough at first, but the resilience and ingenuity of the British people would see us through".

A "bad outcome" is something of an understatement – as indeed the assertion that "no deal" would (merely) involve tariffs and costly border checks. If the woman was speaking the truth, she should have pointed to the near (if not actual) collapse of our exports to the EU, and the catastrophic consequences to our economy, to say nothing of our international standing.

Such is the nature of contemporary political discourse, though, that our prime minister can perpetrate lie after lie and no-one even notices. We would need far more than " resilience and ingenuity" to recover from a "no deal" scenario. There is an argument that this is a situation from which there is no recovery.

Clearly, though, some disquiet must have reached the prime minister. "Some people", she says, "ask me to rule out no deal". She should do so – it would be the sensible thing to do. But Mrs May is locked into the "souk paradigm" of negotiations. If I did that, she says, "I would weaken our negotiating position and have to agree to whatever the EU offers".

Now she creates another false paradigm. That would mean "accepting one of two things", she asserts. "Either a deal that keeps us in the EU in all but name, keeps free movement, keeps vast annual payments and stops us signing trade deals with other countries. Or a deal that carves off Northern Ireland, a part of this country, effectively leaving it in the EU's Custom's Union".

The first – although not explicitly stated, is Efta/EEA plus customs union. The second is the "backstop" component of the withdrawal agreement. With paintbrush in hand as she backed into her familiar corner, Mrs May roundly declared:
So, let us send a clear message from this hall today: we will never accept either of those choices. We will not betray the result of the referendum. And we will never break up our country.
In what is now becoming a mantra, we then hear from the lady that she has "treated the EU with nothing but respect", and "the UK expects the same". This is followed by a tiresome little homily: "In a negotiation, if you can't accept what the other side proposes, you present an alternative".

That, says Mrs May, "is what we have done. Our proposal is for a free trade deal that provides for frictionless trade in goods". This is now the unnamed "Chequers deal". It's a free trade deal of sorts, but very far from delivering frictionless trade in goods.

Mrs May is only working on regulatory alignment in limited areas, stepping outside the regulatory "ecosystem". This is simply not acceptable to the EU. They have said so many times.

Thus, when Mrs Mays says, "it would protect hundreds of thousands of jobs in the just-in-time supply chains our manufacturing firms rely on" – it wouldn't. When she says, "businesses wouldn't face costly checks when they export to the EU" – they would.

She also says "it would protect our precious Union the seamless border in Northern Ireland, a bedrock of peace and stability, would see no change whatsoever". But that rather depends on what you mean by "no change". A "hard" border is considered to be a pretty major change by some.

By now, we're about halfway into her dissertation on Brexit, but it's obvious where we're going. Apart from the disappearance of the Chequers "brand" – which may or may not be significant – there are no surprises at all.

Digging in deeper, she goes for the dog-whistles on immigration, telling us she will restore full and complete control of who comes into this country to the democratically elected representatives of the British people.

Free movement of people will end, once and for all. In its place we will introduce a new system. It will be based on what skills you have to offer, not which country you come from. Those with the skills we need, who want to come here and work hard, will find a welcome. But we will be able to reduce the numbers, as we promised.

Then, at last, we get to the core – the real message of the speech. "Even if we do not all agree on every part of this proposal", says Mrs May, "we need to come together". And that's what it's all about – party unity. "Because it's time we faced up to what is at risk", the party leader says, "We have a Labour Party that, if they were in Government, would accept any deal the EU chose to offer, regardless of how bad it is for the UK".

"And there's another reason why we need to come together", she say. " We are entering the toughest phase of the negotiations. You saw in Salzburg that I am standing up for Britain. What we are proposing is very challenging for the EU. But if we stick together and hold our nerve I know we can get a deal that delivers for Britain".

It really would be so nice if it was that easy. We stick together, present a common front to Johnny foreigner and keep a stiff upper lip – and everything will come out alright. It's a pity that it takes more than such a simplistic strategy, because – quite obviously – Mrs May isn't up to much more.

But, in Birmingham, she got what she came for – the approval of her party and the semblance of unity. That was sufficient unto the day. The warm afterglow might last a few days more, and then it's back to bickering.

However, there is now just a chance that the prime minister may feel sufficiently emboldened to offer a few tentative concessions to Brussels, in the hope that we can edge closer to a deal. For, in walking away intact from Birmingham, Mrs May has done something else.

She's seen off the oaf. We had "peak Boris" and he's now on the wane, taking the "ultras" with him. They've proved to be empty noise. All that leaves is for her to prove to Brussels that she has the measure of the beast and can come up with something more than the noise she doled out to the faithful in yesterday's speech.

Yet, no one here is holding their breath.



Richard North 04/10/2018 link

Brexit: a free pass for Mr Johnson

03/10/2018  


It surely cannot be the case that none of the thousand-plus people who listened to the oaf yesterday were thinking. But surely none of those who so readily applauded can possibly have understood the implications of what they were being told.

The crucial paragraph came towards the end, when he told the throng that now was "the time truly to take back control and make the elegant dignified and grateful exit the country voted for". That got him a round of applause, but nothing to compare with what came next.

"This is the moment", Johnson said, "to chuck Chequers…". That got him prolonged applause, as one might expect. But then he continued with: wanting "to scrap the Commission's constitutionally abominable Northern Ireland backstop". That got him more applause.

He would then, he told his admirers, "use the otherwise redundant and miserable 'implementation period' to the end of 2020 to negotiate the Supercanada FTA". That got him still more applause, whence he added that we would also "invest in all the customs procedures that may be needed to ensure continued frictionless trade, and to prepare much more vigorously for coming out on WTO terms".

Yet, anyone schooled in the terms insisted upon by the EU would have known instantly that without a "backstop", there would be no withdrawal agreement and no "implementation period" – otherwise known as the transitional period – ending in December 2020.

On that basis, there would be no continued negotiations – no "Supercanada". We would drop out of the EU on 29 March 2019 without a deal, working solely within the framework of WTO rules.

And there Johnson was not only misleading his audience but also confusing himself. If we were supposed to be negotiating with the EU on this free trade deal, there would certainly be a need to invest in customs procedures, but there could hardly be any need to prepare for coming out on WTO terms. An FTA and the WTO option are mutually exclusive.

Homing in on the crux of what Mr Johnson was telling us, therefore – his message was – whether intended or not – that we should opt for a "no deal" Brexit. That was the necessary consequence of scrapping the "backstop", taking effect on 29 March.

But, if the enthusiastic mob could be forgiven for failing, in the heat of the moment, to detect the confusion inherent in the oaf's speech, there is less of an excuse for the media charged with reporting the event to the rest of humanity. Yet, even in this relatively simple task, the fourth estate fails once again.

The Times, for instance, didn't mention Mr Johnson's alternative at all. The "backstop" didn't feature. There was no reference to the transition period (however named) and Canada was noticeable by its absence from the newspaper's report.

Oddly enough, though, another of Johnson's suggestions was allowed through, his claim that "the prime minister risked being prosecuted under a 14th-century law saying that 'no foreign court or government shall have jurisdiction in this country'".

This is the statute of praemunire, named by Johnson but not the paper, introduced by Richard II in 1393, primarily directed at papal courts which might challenge the authority of the Crown. But the oaf might have been more convincing if he had also noted that the statute had been repealed by the Criminal Law Act 1967 – before we joined the EEC and in preparation for our entry.

On the day, of course, the claim attracted "loud applause", affirming what one of our own commenters observed yesterday, quoting Flaccus Albinus Alcuin – that "the riotousness of the crowd is always very close to madness".

But, if the newspaper of record failed, the oaf's favourite journal and generous employer was hardly any better. Although the Telegraph's rendition of the speech had him call for the so-called Irish backstop to be scrapped, it made no reference to his subsequent negotiations.

Instead, it reporting him saying that the Government should "use the Brexit implementation period to drawn up designs for a 'SuperCanada' trade deal and technological solutions that will guarantee 'frictionless trade" with Europe". There was no mention of the WTO.

When it comes to the Guardian, this paper tells us that: "Boris Johnson doesn't hold back as he skewers PM's Brexit plan". But, on the issue of scrapping the "backstop" which will lead us to a "no deal" exit, the paper emulated The Times in its silence.

Even John Crace lets us down. Starting well enough, he tells us that the oaf "delivers a second-rate speech better than most other second-rate politicians", and then adds that: "Boris is essentially still second rate. A man who imagines himself to be a latter day Winston Churchill, but is nothing more than an ersatz Donald Trump with little to offer other than his own narcissism masquerading as cheap populism".

But, when it comes to the detail, Crace goes AWOL. The speech is "bumble bumble". The fact that Johnson would have us wrenched from the EU with only the WTO rules to sustain us passes without comment.

Johnson's main pitch, according to the Independent is the "total fantasy" of the idea that it would be possible to "bodge" Brexit now and then negotiate a better deal after leaving in March 2019. And Mrs May's blueprint would be "politically humiliating for a £2 trillion economy" and would prevent the UK from making its own laws and subject it to the directives of Brussels.

Nothing is said, though, of the inadequacies of Johnson's plan. It will come as little surprise, however, that the BBC also failed to pick up the "backstop" point, despite the former announcing that Johnson "slams Brexit plan as he sets out his Tory vision". At least it had that in common with the other broadcaster, Sky News, both as bad as each other.

As for the Mail, its lurid account tells of Johnson throwing "another hand grenade into the mouting (sic) Tory civil war today as he launched an excoriating attack on Theresa May's Brexit plan".

We are then allowed to know that "supporters of Mrs May claimed Mr Johnson had again failed to offer any realistic alternative", but we were not troubled by any detail of why it was not "realistic". Later in its report, the paper quotes the entire section of the speech on the "backstop", without any analysis.

But, by way of comment, we get former Tory leader Iain Duncan-Smith – who was sat in the front row watching Mr Johnson. He "heaped praise on the speech and warned Mrs May the Tory party ousts leaders who do not listen to its members". He then goes on to say: "'We need to tell [the EU] now – if you want free trade, you have got to break the backstop nonsense, otherwise we are going to WTO".

Perhaps the oddest report of all, though, came from the English-language version of DW online, which headlined: "Boris Johnson attacks Theresa May's 'humiliating' Chequers plan".

Johnson, it said, "went on to call for a completely clean break between London and Brussels. According to Johnson, that would mean leaving the bloc without a transition period until 2020, without the proposed Northern Ireland backstop agreement and on the basis of a free trade agreement akin to that the EU currently has with Canada".

This version would have us leaving the EU in March 2019 having concluded a Canada-style FTA – something not even Johnson is actually proposing. Maybe the DW writer simply could not make any sense of the oaf's actual proposal.

And there lies the rub. Johnson once again is given a free pass to take a pop at Mrs May and her Brexit plans. That is fair enough, but what is not acceptable is the failure to point out that the alternative on offer is wholly unrealistic. It is all very well for Johnson to "chuck Chequers", but when he would have the UK economy wrecked, something should be made of that as well.

Thus, while much opprobrium rests on the shoulders of Johnson, his partners in crime are the media. He is their creation, a man who so lacks credibility that the only way he can stand up in public without attracting gales of derision is because the media fails to do its job.



Richard North 03/10/2018 link

Brexit: changing of the guard

02/10/2018  


Denis Staunton, writing in the Irish Times, notes the obvious: "Nowhere in the endless arguing about Brexit in Birmingham", he says, "is there any serious discussion of how to break the deadlock in negotiations over the Border backstop".

And that has been the truth of the matter so far – not that it comes as any surprise. We expected a lot of noise out of the conference and that's what we're getting. But just to keep us entertained, we had chancellor Philip Hammond intervene with what was described as a blistering personal attack on the oaf Johnson.

This has been a long time coming but is a necessary corrective. Johnson has had a free pass for far too long. Hammond, though, almost makes the wait worthwhile as he reveals in an interview with the Mail that he has repeatedly told Johnson that his "Canada-style" plan would not work. Yet, despite that, Johnson has made no serious attempt to defend it.

In Hammond's view, Johnson's main political achievement was "Boris Bikes" in his days as London Mayor and he had no grasp of detail when it came to matters of state like Brexit. He openly mocked Johnson by doing an impression of his trademark "plummy vowels and stuttering bluff manner".

Asked about Johnson's attack on Mrs May's Brexit plan as "supine" and "deranged", his response was: "Boris is a wonderful character, but he's never been a detail man".

Mimicking the Old Etonian discussing the "Canada-style" trade deal, Hammond tells of him sitting there and at the end of it he says: "yeah but, er, there must be a way, I mean, if you just, if you, erm, come on, we can do it Phil, we can do it. I know we can get there". Says Hammond, "That's it!", pointing out that there is "No rebuttal of the arguments".

Resuming impression of the oaf, Hammond parodies his response: "We just have to want it a bit more, we just have to wish a bit harder, we just have to be a bit more bullish and it will all be fine". But, observes Hammond, "it won't all be fine because we are dealing with grown-ups here and we have to deal with the real world situation we face".

The worst of it is that we've been putting up with this dismal narrative for years, and the media has been letting our politicians get away with it. but we seem to be seeing the first fruits of the changing of the guard, with Geordie Greig at the helm of the Mail taking over from Paul Dacre. Arguably, Johnson would not have taken the same pasting from the previous editor.

It's too early to tell yet, especially as it is today that Johnson delivers his speech to a conference fringe event, but the feeling does seem to be strengthening that the former foreign minister is about to become a former leadership contender as well. He may well have shot his bolt, as the faithful rally round their leader.

The media day yesterday had started with a picture of Johnson gambolling in a field (above), appearing to mock the prime minister after her admission that the naughtiest thing she'd ever done was run through a field of wheat.

If that briefly caught the media imagination, The Sun maybe caught something else – the same change in mood that the Mail has sensed.

This paper records Johnson setting out plans for a six-month extension of the Brexit talks if he becomes prime minister. He has been telling Cabinet ministers privately that the UK needs more time to prepare for a "no deal" scenario to regain the upper hand in the negotiations. And, apart from the domestic impact, he thinks that the EU-27 would agree to an extension for this purpose?

The response of one of the Cabinet ministers (unnamed) is instructive. He accuses Johnson of misjudging the mood of activists the conference, suggesting that: "Boris is self-destructing at the moment. Everything he has said is badly miscalculated, because he is a man in a desperate hurry and it’s looking over the top and desperate".

Despite that, DUP leader Arlene Foster has praised Johnson's "positive vision" for Brexit, saying she would work with him if he became prime minister. Clearly, she hasn't received the memo.

All this, though, simply re-affirms Denis Staunton's observation that the Tory conference is looking inwards, barely lifting its horizons even for Dominic "Midair Bacon" Raab, as he told the faithful that EU needed "to get serious" if there was to be any hope of a deal being done. The UK, he says, could be left with "no choice" but a no-deal Brexit if the EU tried to "lock us in" to a customs union.

Nevertheless, in an interview with The Sun, Raab did state that the UK might be willing to compromise further to reach an agreement. The UK, he says, is looking at how regulatory checks on some goods could be used as part of a solution.

That, perhaps, is just as well with commission president Jean-Claude Juncker coming out into the open reminding us that "British planes may not be able to land in the EU if Brexit goes wrong".

This is the first time such a senior EU official has spoken directly of the consequences of a "no deal" Brexit, adding: ""I ask myself what is going to happen to the 250,000 dogs and cats who leave the European continent each year", as he pointed out that pets would have to undergo a four-day quarantine before being allowed into the EU.

Not without good cause, Juncker observed: "What I really regret in the context of Brexit is that there was no real Brexit campaign in terms of actual information in the United Kingdom". The people, he said, "are finding out now - including British ministers and ministers on the continent - how many questions it poses, all the things we need to resolve".

However, Raab is still complaining that the EU has not offered any "credible alternatives" to UK proposals, saying: “The ball is in their court”. But that has the Guardian offering one of those anonymous EU sources who says that both sides have to move if the talks were to progress. "In a way the ball is just as much in the UK's court as the EU's", he says. "We are at a point in the negotiations when neither side can say 'the ball is in your court'. If the UK doesn't pick up the ball, we will".

Something else which has emerged is a stern rebuttal of Mrs May's allegation that the EU has not explained its reasons for rejecting her Chequers plan. According to Brussels insiders, Barnier gave Raab a detailed briefing of the EU's objections, in a three-page briefing note.

Yet, things finally seem to be stirring in the undergrowth. For all that it is Mr Johnson's big day today, Mrs May seems to be preparing a rather plump rabbit to pull out of the hat, sidelining her soon-to-be erstwhile challenger. According to The Times, she is ready to propose a "grand bargain" which would keep Britain tied to European customs rules on goods after the transition period ends in December 2020.

The UK, apparently, will also accept demands that goods entering Northern Ireland from Britain must meet European standards, with the potential for checks in the Irish Sea, paving the way for a deal on the "backstop".

Needless to say, this will have the Moggites squealing, but if Mrs May has judged the mood right, the party will be prepared to accept compromise rather than go for the hard Brexit that the "ultras" so earnestly desire.

Support for a compromise solution would marginalise Johnson, with nowhere to go but the obscurity which he so profoundly deserves. And this can't come a minute too soon. A survey from the IHS Markit and Chartered Institute of Procurement and Supply purchasing managers' index has found that the number of employees working at large firms fell for a second successive month in September.

It appears that Britain's biggest manufacturers are cutting jobs and becoming increasingly reluctant to hire amid growing uncertainty over Brexit – something that has become all too evident from a growing range of sources.

Mrs May needs to use this conference to speak to the nation, and especially to industry, in an attempt to demonstrate something that might be almost impossible to prove – that she has a grip on the Brexit negotiations. Lightweights such a Johnson might have come out to play, but the prime minister has to attend to the serious business of government.

If, at the end of it all, the only thing that we do get out of the conference is noise, she will have failed once again in her duty. But it will be some small consolation if Johnson is not the beneficiary.



Richard North 02/10/2018 link

Brexit: cutting an absurd figure

01/10/2018  


Jeremy Hunt's speech to the Tory conference yesterday was particularly disturbing not just for the choice of words but for its illustration of the foreign secretary's lack of grasp of the issues.

If Mr Hunt really believes that the EU thinks that the way to "keep the club together" is to "punish a member who leaves, not just with economic disruption but even by breaking up the United Kingdom with a border down the Irish Sea", then we have a minister who is so far detached from reality that he is probably beyond salvation.

On one level, it would be possible to dismiss the speech as crass Tory dog-whistling, telling the conference faithful what they wanted to hear. That is certainly a context for the assertion that, "The EU was set up to protect freedom. It was the Soviet Union that stopped people leaving".

But then Hunt went on to say that: "The lesson from history is clear: if you turn the EU club into a prison, the desire to get out won't diminish it will grow, and we won’t be the only prisoner that will want to escape". Taken together, these phrases dragged the speech into a different dimension.

To appreciate this, all you have to do is look at Article 50 – and recall that once a Member State notifies the European Council of its intention to leave, withdrawal is automatic on the second anniversary of the notification – unless all the parties agree otherwise.

In any literal sense, therefore, it is simply not sensible to assert that the EU is a prison. When a Member asks to leave, the doors automatically spring open after an elapse of time needed to discuss exit arrangements, and the UK is free to walk away – with no conditions other than those to which it agrees.

It would be logical and acceptable to make the "prison" argument if Article 50 did not exist, but it was precisely because the "colleagues" did not wish to have their political union regarded as a "prison of nations" that the Article was introduced. To argue now that the EU is a prison is perverse.

But what Hunt is also doing is indulging in what amounts to blame transference, evidenced by his complaint that the EU intends to "punish a member who leaves, not just with economic disruption but even by breaking up the United Kingdom with a border down the Irish Sea".

Taking the issue of "economic disruption", this puts Hunt in a fantasy world of his own making. He needs to realise that the UK is leaving the EU – it is walking away from the non-prison. And no-one sensible will disagree that the consequence of that departure will be – as a matter of inevitability – an amount of economic disruption. The only variable is how much.

As to "breaking up the United Kingdom with a border down the Irish Sea", it is simply not correct to present the EU as the progenitor of any such effect. By seeking to make this the responsibility of the EU, Hunt is demonstrating that he simply doesn't understand what is going on.

This he has in common with many others in the Conservative Party, who simply do not seem to be able to cope with the idea that, after Brexit, the border between the Irish Republic and Northern Ireland becomes part of the external border to the European Union.

When you think about this – clearly – there should be no questions arising out of this new status. Border controls should automatically apply, the consequences of which should be that there will be a "hard" border, with control posts at every major crossing.

On that basis, the very fact that the EU is prepared to work with the UK to devise an exception to its own rules, allowing the free flow of goods across the border, is a major concession. If it wanted to be bloody-minded, it could refuse to discuss the issue, and remind the Irish Government of its obligations under the Union Customs Code and the requirements to impose border checks.

For the EU to waive checks at this border, however, does not relieve it of the obligation to protect the integrity of the Single Market, without opening itself to claims of a breach of WTO anti-discrimination rules. Thus, in acceding to the need for a soft Irish border, the EU is presenting itself with technical and legal problems which it could have avoided had it taken a more rigorous, inflexible stance.

Unfortunately, if the EU removes controls at the Irish border, that opens a potential back door into the Single Market for goods and services from the UK. They can be routed via Northern Ireland into the Irish Republic, whence they will be deemed to be freely circulating within an EU Member State. From there, they can be exported without any further controls to any other Member State.

Equally, if the UK decides to have a relaxed import regime with the rest of the world, goods (and to an extent services) flooding into the UK can then be re-exported to the EU, via Northern Ireland and the land border with the Republic, circumventing any of the controls that would apply if they were exported directly from their originating countries.

What the state of play is at present is an irrelevance. If there is a soft border on the island, and no controls on goods (or services) flowing from the mainland UK to Northern Ireland, then the EU is allowing a huge gap in its trade defence system. Obviously, this cannot be tolerated.

Looking at the problem from a technical perspective, there are only two realistic solutions. The first is to impose border controls on goods crossing over from the mainland into Northern Ireland, requiring full conformity with EU law before being allowed entry. This is precisely the option to which the UK government is objecting.

The alternative is for the UK as a whole to maintain full regulatory alignment with the EU, imposing controls on its own borders and preventing the entry of goods from third countries unless they also conformed with EU law. To all intents and purposes, that would mean the UK continuing to participate in the Single Market – something Mrs May has said she will not do.

As it stands, this leaves the EU in an impossible position. But, recognising that, the UK have been offering a variety of "fixes", with the standing proposal amounting to the Chequers plan. This accepts regulatory alignment for a limited range of products – but not services – confined to those products which are currently trafficked across the internal border.

For entirely understandable reasons, the EU is uncomfortable with this arrangement. To add to this, it sees itself as being asked to permit "frictionless" trade with the UK - a privilege given only to fully-fledged Member States (and Efta/EEA states, with some modifications), effectively allowing full participation in the Single Market without the UK complying fully with the rules.

This, the EU cannot do. It is not a question of "punishing" the UK. Rather, the UK cannot be given a better deal than Member States as a "reward" for leaving. Jeremey Hunt has got it arse about face. This is not keeping the club together by punishing a member who leaves. It is a refusal to reward a leaver with a better deal than the members enjoy. To do otherwise would most certainly weaken the "club".

This is where we have been right from the beginning of the negotiations and Chequers does not bring us anywhere near the finishing line. For a deal to be acceptable, Mrs May will have to ensure that the UK remains in full regulatory alignment with the EU.

Additionally, the UK will have to participate in the regulatory "ecosystem", with its provisions for joint market surveillance, supervision, enforcement and dispute settlement. This is not negotiable. Regulatory conformity alone is not sufficient to ensure frictionless. Furthermore, the UK will have to satisfy the EU that it has dynamic mechanisms for ensuring continued regulatory alignment. Divergence simply will not be permitted.

Now, when one sets this out in this fashion, it becomes embarrassingly evident how far behind the curve Mr Hunt is. He can blather all he likes about "Dunkirk spirit", but this is not about standing firm against an enemy which, when push came to shove, didn't have the military resource to invade this island.

This is about the technical minutiae of trade rules, where we have to interface with one of the most sophisticated and advanced trading blocs in the world. Standing on the cliffs of Dover and waving one's fist at the non-existent invading hordes doesn't cut it. The mental image is bizarre.

But this is the current foreign secretary who is saying: "… if the only way to deal with the UK leaving is to try to force its break-up, as someone much more distinguished than me once said, the answer is 'No No No'!".

When he then adds: "Let me say one more thing about these talks. Never mistake British politeness for British weakness because, if you put a country like Britain in a corner, we don't crumble – we fight", he does not come over as a heroic or even a resolute figure. This is a silly little man, cutting an absurd figure.

Really, if Hunt – to say nothing of prime minister May – can't do better than this, then we are looking down the nose of a "no deal" scenario. The EU will have no option but to walk away in despair, unable to negotiate with a nation represented by politicians who are so inept.



Richard North 01/10/2018 link

Brexit: derailing the conference

30/09/2018  


In the run-up to the Tory conference, Tim Montgomerie is putting the boot in personally to Mrs May, asserting that the prime minister "is the real source of the Tory party's woes".

Of course, the turmoil in the party has got nothing to do with the "disloyalty" of the "ultras". Montgomerie can simply wash his hand of the games they have been playing and dump everything on Mrs May. And to think that loyalty was once the defining characteristics of the Tories.

Mrs May, on the other hand, has come out fighting. She is accusing the critics of her Chequers plan of "playing politics" with Britain’s future and undermining the national interest, demanding that they back her plan.

Unsurprisingly, she gets some support from Matthew Parris. Writing under the headline: "May’s biggest threat is Tory lunatic fringe", he believes sympathy should get Mrs May past Birmingham, and better than many predict. Her doggedness wins her some admiration, and Johnson's "shin-kicking" has felt churlish.

According to Parris, leaver and remainer activists mostly agree on at least this: she's in unenviable difficulties which they don't think are her fault. Johnson's fringe speech will be over-hyped, and disappoint. As a speaker he's best when it doesn't matter, and the frame in Birmingham will be too heavy for his canvas. It's easier for a serious man to lighten his speech with a joke, than for a humourist to gain respect by lurching into gravitas.

On that basis, this intrepid columnist is confident that Mrs May will get through. She may even leave Birmingham a little stronger. But he thinks that she would be unwise to close down on the second referendum options, which could prove her only escape route. We'll see, he says.

Meanwhile, Booker is on the case (no link yet), remarking that there is one crucial figure which scarcely ever gets mentioned in our discussions of Brexit, although it should have been absolutely central to the debate all along.

This crucial figure can be found in the latest official statistics, which tell us that last year earned £279 billion from our exports to the EU, representing one pound in every eight of our national income, the annual GDP.

This is what is at stake as we lurch towards next March. Yet, whether we drop out of the EU without a deal or somehow manage to achieve one, in vital respects we are still no further forward than when negotiations began.

Says Booker, the fundamental reason why we have made such an utter shambles of Brexit is that our politicians have never really grasped the true nature of this strange entity we have been part of for 45 years.

The EU has only ever had one real agenda in all it does: to weld its member states ever more tightly together under an ever-growing thicket of laws which provide the legal authorisation for almost every kind of economic activity imaginable. As a country seeking to leave, we are only discovering how enmeshed we have become in that system when we are trying to leave.

That our government is belatedly waking up to this is evidenced by the series of "Technical Notices" it has recently been publishing, in answer to the Commission's “Notices to Stakeholders”. It is these which have been setting out the legal implications for months, covering one economic sector after another of our decision to drop completely out of that system.

In each case for the same reason, these make chilling reading. Take for instance, says Booker, the two documents on aviation published last week. Rather less fully than the Commission versions, these explain how every tiniest detail of what our aviation industry does, from making aircraft to the right of airliners to fly in and out of UK airspace, is now authorised, licensed and permitted by EU rules and international agreements to which we are party only by virtue of belonging to the EU.

Our government's view is that if we exactly transpose every last detail of all this into UK law, our airliners can continue to fly, our airports and factories can continue to function just as now. But again and again, like the tolling of a great bell, the notices then have to admit that the EU "takes a different view".

In fact what the Commission's versions repeatedly explain is that, from the moment we leave, these "permissions" will lapse and "cease to be valid" - no ifs or buts.

If we choose to leave the EEA we shut ourselves out from the entire legal system which allows so many of our most successful industries to continue exporting to the EU. We may replicate every detail of those EU laws but under the EU's own law it simply cannot recognise them.

As our government finally begins to admit, with or without a deal some "disruption", will be inevitable. And that is to put it mildly, The truth is that we have no real idea of the chaos that is coming down the track at us next year. It will not be pretty.

Nevertheless, we are getting some additional clues as to the fates awaiting us, with the news that: "No-deal Brexit 'could halt production at UK Toyota plants'".

Several newspapers have carried this, after Marvin Cooke, the managing director at the firm's plant in Burnaston, near Derby, told the BBC that production could be disrupted for "hours, days, weeks – even months". Uncompromisingly, he says "My view is that if Britain crashes out of the EU at the end of March we will see production stops in our factory".

This is the third manufacturer in the UK to issue warnings. Cooke follows Jaguar Land Rover and BMW in an industry which employs over 186,000 people directly and more than 856,000 indirectly.

And, for once this is being taken seriously. Greg Clark, business, energy and industrial strategy secretary of state acknowledged that the warning was "concerning", admitting that Britain would lose its potential as one of the world’s leaders in car innovation if there was no deal. "To see that slip through our fingers is something that we would regret for ever", he says.

No one can say, therefore, that they are unaware of the implications of a "no deal" Brexit – even if the likes of Rees-Mogg continue to claim that this is "Project Fear". But there is no-one in government addressing the realities.  Chequers is still on the table and Mrs May is going to drive it through conference, even though it has been rejected by the EU.

Yet, if Mrs May is still on an alternative universe, Johnson is busy creating one of his own. He has gone to war with his own prime minister, according to The Sunday Times, arguing that the Tories can win the next election by ditching HS2 and committing to building a bridge to Ireland. And he has the nerve to brand Mrs May's Chequers plan "deranged".

Clearly, the man is going to do his best to derail the Tory conference and the media are doing their best to help him. But there is nothing quite so inane as the Independent headline, which proclaims: "The Conservatives urgently need to talk to us about everything except Brexit".

This has Damian Green, the prime minister's former deputy, arguing that the next election will not be decided on Brexit, so his party needs to match Labour's attractive domestic programme. This must be the same intelligence that Johnson is working to, hence his comments on a bridge to Ireland.

Collectively, this must represent the final disconnect between politics and the real world. The Observer is running a story claiming that Britain’s bill for Brexit hits £500m a week, and rising, based on a CER report that the UK's economy is already 2.5 percent smaller than it would have been if the country had voted to remain.

This is almost certainly an exaggeration (as one would expect from CER), but it serves to underline the potential impact of Brexit, and the fact that it is unfinished business. A botched Brexit – which currently looks the most likely outcome – could well drive the UK into deep recession and keep the Tories out of office for a generation.

Yet, unable to resolve the most pressing UK political issue of the Century, these lightweights are casting around for distractions – perhaps deliberate misdirection in the hope that it will hide their failure from the general public.

No less than three current cabinet ministers apparently agree that the Conservatives need to focus on subjects other than Brexit, suggesting that there is a lack of awareness that is probably terminal. If they fear Corbyn's domestic agenda, they need to think what is going to happen when the economy crashes in the immediate aftermath of Brexit. There will be nothing else on the agenda.

One thing though is of great significance. This is the last Conservative Party conference we will be able to watch while we are still in the EU. By the next conference, we will be out. And there will be very different dynamics at play.

Whether even Mrs May will still be prime minister is a matter for conjecture, and we may even be wondering whether there is still a Conservative Party large enough to have a conference.



Richard North 30/09/2018 link

Brexit: parochial English and an uppity Frenchman

29/09/2018  


After the oaf Johnson yesterday refused to rule out challenging Mrs May for the leadership of the Conservative Party, some sense at last seems to be filtering through the system. This comes in an article in The Times what has former Tory deputy chairman Sir Alan Duncan declaring that Tory MPs will never let the Johnson lead the party.

The former foreign secretary, he says, mistakenly believes he can become "Britain's Trump" but has spent all his electoral appeal. His attacks on Theresa May risk seriously damaging the Conservatives and the country.

In a devastating attack on his former boss, he rates him as "an enormous character" but not "a team player", nor "intellectually focused". Further, "he's got a very untidy mind. And he doesn't know if he's a journalist or a politician - but he does know it's all about him".

Regarding Johnson's latest Brexit intervention, Duncan dismisses it as "doubling down into deeper nonsense". Twisting the dagger, he then says: "The more he repeats what everyone can see is not credible the more his own credibility disappears".

As for "his supposed solution", this is "neither workable nor on offer". Says Duncan, "If he thinks he can go into the conference and undermine [Mrs May] I think he's kidding himself. I think the party will be for her and not for him".

If that is the case, we will find out very soon, in which case Duncan's advice to Johnson is sound. He urges Johnson to abandon his ambition to lead the Tories, saying that he would fail to secure the nominations of enough colleagues at parliament. But even if he did, the Tory grassroots would not vote for someone so "reckless". If he pursued his course of action, "He risks bringing everything down".

Addressing party members, he asks them to realise that if they side with those who would attack Theresa May, "they are siding with a course of events which could destroy our prospects for many, many, many years and not be in the national interest".

Duncan is joined by Chris Heaton-Harris, a Brexit minister, who agrees that Johnson's "plan" is neither workable nor negotiable. "No deal is available without a guarantee that there would be no hard border in Northern Ireland in any eventuality, the so-called Irish backstop", he says.

And to complete a critical triumvirate, a government source adds that Johnson "was a member of the cabinet that agreed the December Joint Report - and praised the PM for doing so - and was part of the committee that agreed the customs backstop".

He adds: "The truth is that reneging on those two things would simply guarantee no deal. So this is just another very lengthy article which doesn't offer any answers, rather it regurgitates ideas which would damage our Union of nations and put jobs at risk".

In a sensible world, that would be the end of it, especially when one views the bumbling performance of Johnson when confronted with detail. The man isn't even sound on generalities and if someone would take him to task on his views on mutual recognition of standards, he would most surely fold.

Even without him, when his moronic supporter argues in public that "it is the Germans who usually have the casting vote on key European affairs and will do so on Britain’s exit", it is time to call it a day.

But then, if this was a sensible world, we would not have got into this mess in the first place. The charlatan would not have got as far as he has done; his supporters might have acquired some sense. And it is all very well seeing off Johnson – if, indeed, that is successful. But that still leaves Mrs May with her unworkable Chequers plan, and a clock ticking down to doomsday.

I don't know even if there is any comfort to be taken from the additional support of Sir John Major, who has rounded on the coterie of Theresa May's Brexiters, saying that their behaviour towards her goes far beyond acceptable political conduct.

Lambasting their "daily taunts and dishonesty", combined with a failure to come up with any coherent plan, Sir John said that her Brexit adversaries - whom he did not name, - were attacking Mrs May in a "lurid" fashion and were acting in effect as a party within a party.

This came last night at a public event in South Shields, as recorded by The Financial Times and it seems that the "ultras" are not the only ones who can co-ordinate a media response. And at least some of Sir John's words will have some resonance, when he expresses concern at the way "the prime minister is being attacked by some members of her own party".

It is very much in the nature of the Conservative Party, if it re-asserts itself, that party unity prevails at conference. So it could well be that Johnson has overplayed his hand. Having staked out his claim, he cannot keep playing the odds. At best he is a wasting asset and, if his moment hasn't already passed, it has not much longer to run.

What is different now, though, is that matters cannot be resolved by the parties patching up their differences and agreeing to work together. Beyond the horizon, there is the looming presence of Brussels and it appears that British politicians still haven't learnt the lesson that they can't fudge EU issues.

Thus, even if the outcome of the Conference is for the party to unite behind their prime minister and a single Brexit plan, this is not going to wash with the EU negotiating team. They will be looking to the longer term resolution of Brexit and will not be in the least interested in solving internal Tory party strife.

For once in their lives, therefore, British politicians will need to wake up to the singular fact that there is life outside Westminster and that there are tougher things in politics than an interview with Laura Kuenssberg. M. Barnier and his team are the ones that have to be satisfied.

That much, though, they seem incapable of learning. If they were, surely they would have learnt by now and would not be pursuing the almost child-like tactic of demanding compromises from the EU in return for notional compromises from Team UK – especially when the expectation is potentially damaging to the integrity of the Single Market.

Illustrating the great chasm, we have Liam Fox wibbling about the EU driving the UK towards a no-deal Brexit with its "intransigence", putting the "abstract purity" of the European project ahead of its own economic interests.

However, at least this one politician appears to understand a crucial point. He believes that the Government must now start detailing in public just how bad a no-deal Brexit would be, but then you realise that he hasn't joined up the dots after all. He is talking about the effect on the EU.

"I think", he says – unconscious of the exaggeration – "that it's time we started in public to make that case for why no deal would be economically harmful for European businesses". Fox concedes that, "It would be harmful to British businesses", which is why, he says, "it's better we get a deal". But he goes on to say that: "It's utterly fanciful that 'no deal' would not hurt our European trading partners".

There's an element of "straw man" here, in that few if any are arguing that the EU can escape a "no deal" scenario without damage. Furthermore, the "colleagues" have made it quite clear that they are prepared to take a "hit" rather than sustain damage to the Single Market.

Thus, there is no political gain to be made from accentuating the effects of a "no deal" on mainland Europe – and especially so as the European Commission seems to be in the advanced stages of preparing detailed contingency plans.

What should be done, of course, is properly to identify the full extent of the adverse effects of a "no deal" on the UK economy. As long as the weasel-worded "technical notices" continue, with no continuous effort from government, the enormity of the potential damage will not be appreciated.

The other thing that needs to be done is for Emmanuel Macron to shut up. He may be right in saying that Brexit is much more complicated than [some] Leave voters realised. He could even be right – although this has yet to be demonstrated – that Brexit could "for sure” be stopped.

But the very last thing that is going to have a benign effect on the coming round of talks is for an uppity French politician sounding off. The UK had enough with Charles "deux metres" de Gaulle, and a repeat is not going to go down well.

Macron does say that he does not want to meddle in the debate surrounding a fresh vote, saying: "I'm not the one to decide such a move and I do respect the choice of British voters. So I don’t want to interfere in this debate about a second referendum and so on". All he needs to do here is stick to his word.

If we're squeezed between the parochial English and an uppity Frenchman, we can only fail.



Richard North 29/09/2018 link

Brexit: the madness of Shanker Singham

25/09/2018  


Having flagged up the IEA/Singham paper yesterday, I am more or less committed to writing a review of it, even if it is a dreadful piece of work that is hardly worth the effort – and there are the latest "technical notices" to review, which will have to wait until tomorrow.

It has been billed by Jacob Rees-Mogg as the "most exciting contribution" to the Brexit debate in months yet, only a few hours after publication, Singham's "plan" had been trashed on Twitter and then ripped apart by John Crace with such verve that it should not survive. However, it still gets a better press from The Times than it deserves, which makes it all the more imperative that it is given a timely burial.

In fact, Crace gets it absolutely right. Under the headline, "Hard Brexiters' new plan gets A+ for idiocy", he derides the country's "leading trade lawyer", for "failing to grasp the basics of international trade". And having failed so spectacularly, Singham goes to prove "he really was as stupid as he sounded", suggesting that post-Brexit, "the UK might do some individual trade deals with separate EU countries".

This is part of the Singham fantasy where he advocates an "alternative approach" to the Brexit negotiations. He argues that the UK would seek to put "pressure internally on EU Member States", where there would likely be significant losses in the event of no EU trade deal. These, he says, include Bavaria (cars and dairy), Ireland (beef and dairy), Catalonia (cars and dairy), and Northern Italy (textiles and dairy).

This would amount to manipulating tariff rates, causing many EU producers to have different agendas, allowing divergence between Member States, which the UK could then exploit.

Clearly, we are being enjoined to adopt a variation on the strategy already adopted by the UK, where it has sought to split the Member States from the Commission and then practice its "divide and conquer" techniques to engineer splits in the unity of the members.

But, if we have learnt nothing else from the last two years, the one thing that should have sunk in is that the Member States are rock solid behind M. Barnier, and will not allow the UK to divide them.

Another illustration of the fantasy world in which the IEA and their favourite child, Shanker "Snake Oil" Singham, lives can then be seen in these immortal lines in his report, which address bilateral deals with countries where an EU FTA should be rolled over.

"Negotiations", Singham writes, "should be accelerated to roll over existing agreements and agree a new FTA with EFTA. the (sic) Department for International Trade (“DIT”) should seek to conclude these negotiations provisionally, so they can come into effect on 30 March 2019 in case of no Withdrawal Agreement and no Transition Period".

The reason why this is fantasy is not at all difficult to determine, especially if we take our cue from the Vienna Convention on Succession of States in respect of Treaties , which sets out the customary or settled law on the matter of continuity of treaties.

The essential point made several times in the Convention is that the law would have the effect of requiring the consent of all parties to a treaty before the UK could participate in treaties in which it had previously enjoyed participation by virtue of its membership of the EU.

Since in all the cases where the UK wants to roll over bilateral deals with countries where there is an EU FTA, the EU would, perforce, be one of the parties from which consent would be needed.

There lies the rub. In the event of the UK leaving the EU without a Withdrawal Agreement – a "no deal" Brexit – it is highly unlikely that the EU will give its consent to the UK's continued participation in its external trade deals. With no consent, the treaties simply cannot be rolled over. The UK would have to start again, and negotiate new treaties from scratch.

Given how vital these deals are to the UK, in enabling it to maintain its post-Brexit global trade, it is therefore, essential that we keep on good terms with the EU. And that effectively precludes the UK leaving without a Withdrawal Agreement and Transitional Period. Thus, the core part of the IEA/Singham case collapses.

The actual name of the Singham extravaganza is "Plan A+ - Creating a prosperous post-Brexit UK" but I prefer to call it "Plan A for amoeba", my title representing the number of brain cells expended in producing it. Mostly, it is a tired amalgam of regurgitated Legatum ideas which include the wholly impracticable proposition that the UK can trade with the EU on the basis of "mutual recognition", this giving us the fabled status of "regulatory autonomy".

"The UK", Mr Singham says, "should put forward an open and constructive offer of mutual recognition with the EU. Autonomy would be followed by recognition by the UK of EU regulation, standards, and conformity assessment, meaning institutional competition for the UK, commercial competition from EU imports, and avoidance of unnecessary trade barriers on imports".

Here, one does not have to rehearse, once again, the reasons why the EU cannot and will not accept mutual recognition. Suffice to say that there is no prospect, whatsoever, of this forming the basis of any trading relationship with the UK.

But, if the idea itself is fantasy, Singham then lurches into madness. "If the EU refuses to recognise UK regulations on day one of Brexit", he writes, "the UK should be prepared to take action in the WTO under the GATT and the SPS and TBT Agreements".

Setting out what is involved here, we have a situation in Brexit whereby the UK acquired the status of a third country, whence the EU then applies the full corpus of regulation applicable to third countries – as indeed it must under the non-discrimination rules of the WTO.

Under WTO rules, every contracting party is permitted to frame its own standards and require imported goods to meet them, with the further requirement that conformity may be demonstrated, by means of border checks.

The EU customs code, with the revised version now being implemented, works within the framework of WTO rules and, despite multiple challenges over the decades, has proved WTO compliant. There are no obvious or straightforward grounds on which the UK could base any action.

Yet Shanker Singham, hailed by some as "one of the most brilliant trade experts of his generation" asserts that these established points, which have so far resisted global challenge, can be taken on by the UK, acting on its own.

This silly, dismal, venal little man is so far from the real world that it has become a modern mystery as to why anyone could take him seriously. What he proposes it utterly barking mad, with not the slightest possible chance of success.

Nevertheless, he has just enough brain cells to understand that "such claims can take years to resolve". To Singham, though, that is not the point. The UK, he says, "should use threats of trade litigation to help support its negotiating objectives, as is normal practice around the world".

So here we go: the UK is supposed to re-enter the Brexit negotiations with an "alternative approach" which involves demanding the impossible from the EU against the threat of invoking the WTO dispute procedure, launching cases which would have absolutely no chance of success.

And, despite the EU being fully in compliance with WTO rules, Singham then goes on to tell us that "the purpose of these actions is not because we expect them to cause an immediate change in EU behaviour", but "because this is one of the ways we can highlight that the EU is in fact an outlier in its behaviour".

With only just over six months left for negotiations, just precisely where could that stance take us, except to an ignominious "no deal" outcome? But that then leaves The Times complicit in the Singham madness. "The Brexiteers' alternative comes late in the game", it writes, "and is short on detail, but would be better than no deal at all".

Singham's efforts, courtesy of the increasingly sinister IEA, are nothing but a recipe for a "no deal" Brexit. His facile, nonsensical nostrums go beyond unrealistic into the territory of lunacy, so bad that even the BBC smells a rat. They are an insult to all right-thinking people who have put the effort into exploring what is needed to secure a workable exit plan.

And those who support him, or fail to point out the fatuity of his work, are almost as bad as the man himself. For some, such as Ambrose Evans-Pritchard in the Telegraph - who sees that plan as "a breath of fresh air" - it represents a final retreat into bovine stupidity.



Richard North 25/09/2018 link

Brexit: a state of chaos

24/09/2018  


Having spent most of yesterday in the relatively sane environment of a Duxford air show (pictured, taken by Pete), I returned home to find the nation, politically, in a state of chaos over Brexit. Clearly leaving the scene for even this short period was a grave mistake.

Pre-eminent amongst the madness which has descended upon us, it appears, is a Cabinet with a majority determined to dragooning Mrs May into proposing a Canada-style deal for our exit settlement, despite Dominic Raab's warning that this would leave Northern Ireland "subject to a wholly different economic regime".

With the oaf blathering so inanely it is painful to read, we find we are to be treated today with some more insanity from "Snake oil" Singham, courtesy of the increasingly sinister IEA, supported by those intellectual titans, Johnson and David Davis.

I am not going to critique this fully until I have seen it, but the previews are sufficient for me to expect the worst. The only thing likely to be in its favour is that it will be so mad that not even Mrs May's government would be quite so stupid as to take it to Brussels.

That will not, of course, relieve us from the waste of time involved in assessing it, but then that is a feature of this Brexit so-called "debate", where we expend massive amounts of time on lunacy while perfectly good proposals largely ignored by the media and politicians.

Nevertheless, some of the more sensible issues are still being aired while the sterling Peter Hitchens talks more sense in one article than any thousand I have read elsewhere.

The more the idiots thrash around ignoring the issue, trying to devise an ever madder range of alternatives, the more obvious it becomes that the so-called Norway option is the only way to manage a sensible Brexit.

What we need to be aware of, though, is that the EEA Agreement is what Pete dubbed an adaptive framework. There is no single agreement – each of the three Efta states which are party to it have adapted it to suit their own specific requirements. The UK too will need to make its own adaptations and, because it is a far more complex (and bigger) economy – with more sophisticated needs – the adaptations will have to be considerable.

Thus, in my advocacy for the Efta/EEA option, the biggest mistake I made in the early days was to argue that it was an "off-the-shelf" arrangement. It isn't, and the process of negotiating the necessary adaptations would doubtless take a long time, with the expenditure of considerable diplomatic effort.

Furthermore, while the EEA Agreement would be a necessary step, it is not sufficient – even with adaptations covering such issues as freedom of movement, customs cooperation (with special reference to Northern Ireland), and technical matters such as rules of origin and external tariffs.

In addition, we will need separate agreements on a wide range of other issues. Norway, the largest of the Efta/EEA states, has 56 recorded bilateral (and more than 20 multilateral) treaties with the EU, including an all-important agreement covering administrative cooperation on VAT. In fact, on this one subject, we will need to go much further than Norway if we are to secure frictionless borders.

If we also include the negotiations required for us to rejoin Efta – which will be necessary in order for us to access the institutional structures of the EEA Agreement, without re-inventing the wheel – then it is unarguable that we do not have sufficient time between now and 29 March to conclude the necessary arrangements.

That really leaves us with only one realistic option. That is for Mrs May to bite the bullet and accept the draft withdrawal agreement, as it stands, complete with the (as yet unfinished) protocol on Northern Ireland.

The political declaration on our future relationship, however, should be very much simplified. It can be distilled down to a few sentences, based on a commitment to facilitate negotiations on adapting the EEA Agreement, with all parties acknowledging that UK participation would continue. This would then define our future relationship – although it would not preclude future changes to the nature of the EEA.

This notwithstanding, as long as we have legally withdrawn from the EU on 29 March – which would be the case if this option was taken – then the referendum vote is being honoured. The vote concerned leaving the EU – nothing more and nothing less. The official leave campaign ostentatiously avoided committing to a specific withdrawal plan, and was content to leave the mechanics of leaving to the government. So be it. It is time for government to govern.

The crucial thing is that we secure a legal separation, but do so with that all-important transition period. That will give us the space to secure Efta membership, the EEA adaptations and the additional agreements necessary to make for a successful working arrangement with the EU and its Member States.

Hopefully, it will also buy us time to organise and agree continuity with our global trading partners, to ensure that the current arrangements enjoyed as members of the EU are able to continue. The idea that we are going to be able to negotiate a whole raft of new trade deals with the rest of the world, in time for the ending of the transition period (which is what we would otherwise need to do), is facile to the point of being dangerous.

Furthermore, if we convey any sense that we are in competition with the EU for deals with the rest of the world, in an attempt to use them as leverage for a better deal with the EU, then we will be setting the scene for economic disaster. If they have a choice forced upon them, more of our trading partners will opt for the EU rather than the very much smaller UK market.

Nor can we assume that the Efta negotiations are going to be straightforward. To avoid complications arising from a mismatch with the EU's external tariffs (which, for the moment, we plan to adopt via the WTO and the tariff schedules), then we will need a special dispensation from the Efta states.

It maybe that we actually need a novel form of associate membership of Efta, sufficient to give us access to the institutional structures of the EEA, without being bound by the detailed provisions of the Efta convention.

All of this is complicated. But then leaving the EU was always going to be complicated, despite the asinine assertions of diverse pundits, ranging from Peter Lilley to Gerald Batten and Liam Fox. This much Mrs May will need to recognise. If that risks having her government collapses around her, she can put to her party that any seeking alternative will precipitate a general election. And does the Conservative Party really want another election just now?

But then, what do we do about the Labour Party – apart from shake our collective heads in wonderment? If the Tories are in chaos, a new word much be coined to describe the turmoil afflicting the UK's second party.

Looking at the disease corrupting the entire UK political process, though, Mrs May could probably get away with ignoring the opposition parties, and make her appeal directly to opposition MPs, as individuals. Here, she needs to grip the situation in a way that she has not done, and make clear to the nation the consequences of a "no deal" Brexit, inviting MPs of all parties to join her in fending off certain disaster.

Sadly, in her Friday statement she reaffirmed her original claim that "no deal is better than a bad deal", giving herself little room for manoeuvre.

Somehow, using whatever form of words necessary, she needs to claw back on that and make it clear that the actual consequences of leaving without a deal is not something that this country can afford. She may be assisted in this endeavour by the latest tranche of "technical notices" on the consequences of a "no deal" Brexit, due out today, including the long-awaited aviation paper.

But, it is probably there that the "bloody difficult woman" will fail. I cannot see her rising to the challenge. She has truly boxed herself into a corner, leaving herself no escape route.

And that leaves us in precisely the same place I found us in when I got home yesterday – in a state of chaos. Worse still, we can see the way out, but we are lacking the politicians who are capable of taking us there. The chaos of their making is so profound that they are incapable of resolving it.



Richard North 24/09/2018 link

Brexit: a lot to answer for

22/09/2018  


With virtually every national newspaper yesterday referring to Mrs May's "humiliation" in Salzburg, it is perhaps significant that the BBC's political editor chose to describe her experience at the hands of the EU leaders as an "embarrassment".

If anything, it illustrates the flexibility of political language, where words are not only used in a descriptive sense but also to define the stance of their authors. But what the use of the word "embarrassment" doesn't do is convey with any accuracy the nature of what transpired at the informal European Council.

Had it done so, one might have thought that Mrs May's self-indulgent statement would have been necessary. After all, the woman routinely embarrasses herself – as with her dancing displays in Africa – and we didn't have the BBC called in to hear statements each time she does so.

On balance, therefore, I think we need to stick with "humiliation", but I would stop short at suggesting that this was something visited on her by the "EU leaders". This is something she inflicted on herself by going to Salzburg and insisting against all logic that her Chequers plan was "the only serious and credible proposal on the table".

The only thing remarkable about the action of the EU-27 was the timing. That they would publicly reject the Chequers plan at the Salzburg European Council simply wasn't expected. But one should recall that it has only been in deference to Mrs May's political difficulties that they didn't reject it out of hand in July. The only real criticism one can have is that they took so long to do the inevitable.

That said, if the EU – or, more specifically, Michel Barnier – is to be criticised, it is in blurring the issues between the Single Market and the Customs Union and his insistence that the only way frictionless trade can be secured is through a combination of the internal market and the customs union.

We saw that, by way of an example, in November 2017 when Mr Barnier pointed out that the arrangement for Norway "still entails a system of procedures and customs controls, among other things in order to check the preferential rules of origin".

Technically, of course, he is right about Norway's rules of origin within the framework of the EEA Agreement – as set out in Protocol 4 to the Agreement.

But implementation of that Protocol does not require border checks. The system is based on a system of certificates proving origin and verification checks are undertaken by the customs authorities of the exporting countries, usually by auditing the certificate holders' processes at their places of business.

Bearing in mind that the EEA Agreement is an adaptive framework, and includes provision for the elimination of customs duties on imports and exports, and any charges having equivalent effect (Article 10), there is actually no need for Efta/EEA states to sign up to a customs agreement. There is nothing to be gained from it, in terms of improving the cross-border flow of goods and, as a result, none of the Efta states are members of a customs union with the EU.

This should be known to Mrs May and her negotiating team. The EEA Agreement, with specific adaptations to suit the specific needs of the UK, is a means by which we can get as close to frictionless trade with the EU as makes no difference. Such elements which might be "sticky" can be dealt with administratively – or be subject to separate agreements – and need not cause significant barriers to trade.

For Mrs May, therefore, to assert that the first (of two) options offered to the UK by the EU "would involve the UK staying in the European Economic Area and a customs union with the EU" is, by even the kindest measure, disingenuous. The less generous amongst us might consider it downright dishonest.

But where there can be no argument about her dishonesty is in her follow-up. "In plain English", Mrs May said, "this would mean we'd still have to abide by all the EU rules, uncontrolled immigration from the EU would continue and we couldn't do the trade deals we want with other countries".

Taking the first claim, it has long been established that continued EEA membership would involve accepting roughly 27 percent of the EU's acquis, most of which comprising technical rules instigated by global bodies that we would have to implement anyway – inside or outside the EU.

As to "uncontrolled immigration", even within the EU, that description does not apply. Within the framework of EU law, there are controls built-in – many of which the UK did not properly (or at all) implement. But, within the EEA, there are the Article 112 Safeguard Measures, which can be invoked unilaterally, affording some relief to freedom of movement measures.

Then there is also the option of following in the wake of Liechtenstein (and Switzerland, had it remained in the EEA) of brokering a country-specific amendment to the Agreement, allowing freedom of movement provisions to be tailored to the specific need of the UK, allowing a return of some of the control we are said to lack.

As to doing trade deals with other countries, even within a customs union there is no general restriction. Within the EU, that comes with the Common Commercial Policy. But the issue is far more complex than Mrs May would allow.

If we are going to enjoy continued access to the EU's trade deals, then there are going to be some limits on our ability to take independent action. And once we start making separate deals – as Efta/EEA states are free to do – that might have implications for our "frictionless" access to the EU – see "rules of origin", passim.

And, just to call Mrs May a liar, yesterday the three Efta/EEA states signed a Mutual Recognition Agreement (on conformity assessment) with Australia. Far from prohibiting such deals, MRAs are built-in to the EEA Agreement (Protocol 12).

Nothing in the Efta/EEA option, therefore, justifies Mrs May's claims or her rejection of the option. Her arguments are spurious, not supported by the facts on the ground. Furthermore, applied to the Northern Ireland border, as part of the overall Brexit package, that would obviate the need for a hard border.

As for the second option mentioned by Mrs May - a basic free trade agreement for Great Britain – she asserts that this would introduce checks at the Great Britain/EU border. And with this, I would not disagree.

But, in rejecting the first option (which she did in her Lancaster House speech), Mrs May has shut down the only workable option available in the short- to medium-term. This has forced her to engineer what she calls "a third option for our future economic relationship" – the so-called Chequers plan.

This, she says, is based on the frictionless trade in goods and it will "avoid a hard border between Ireland and Northern Ireland, while respecting the referendum result and the integrity of the United Kingdom".

In reality, it will do none of these things. More specifically, it demands that the EU should allow the UK to cherry-pick from the Single Market and, while the UK will not be part of the Single Market regulatory ecosystem, it is demanding all the access privileges that go with full membership.

Bizarrely, though, Mrs May complains that, "at this late stage in the negotiations, it is not acceptable to simply reject the other side’s proposals without a detailed explanation and counter proposals".

Yet, as Mrs Merkel said in Salzburg: "No-one can belong to the single market if they are not part of the single market", while Mr Barnier has explained many times the role of the regulatory ecosystem in the functioning of the Single Market.

Not in any conceivable way can the Chequers plan measure up to the requirements for securing "frictionless" access to the markets of the EU Member States, and if Mrs May doesn't already realise this, it was up to her senior ministers and her official team to tell her. That they have failed to impress on her the inadequacies of her plan suggests that they have a lot to answer for.

Then to demand counter-proposals from the EU is utterly absurd. It is not for the EU to decide for the UK what relationship we should secure. This is for our own government to decide, in consultation with the Parliament and the people.

What the EU should be doing is setting the parameters within which any arrangement must fit, for it to be acceptable. But that is precisely what it has already done. All Mrs May needed to do was listen to M. Barnier and any one of his innumerable speeches.

Thus, if Mrs May, "victim" of what is now being styled as an "ambush", had no idea that it was coming, that simply represents another of her failures. In Salzburg, she was at the back of the line but back in London, she is making a complete fool of herself. "We need serious engagement", she says. One of these days, she needs to try it.



Richard North 22/09/2018 link

Brexit: no more cake for Mrs May

21/09/2018  


On 7 July, in the wake of the now infamous Chequers meeting, I wrote of what has now become known as the "Chequers plan" that: "the precise reasons for the EU's rejection, when it comes, will not be at all difficult to work out".

It was always going to be the case that the EU would reject the plan but, at that point, I reasoned that it would be given the deep six by the European Council at the October meeting. What no-one reckoned on was it being thrown out at the informal European Council at Salzburg.

In fact, the balance of opinion was that the "colleagues" would give Mrs May a few soft plaudits to help her through the Tory conference, on the basis that weakening her at this stage might open the way to a leadership election and the prospect of Johnson moving into No.10.

This, the BBC's Katya Adler admits was on the basis of multiple briefings in advance of the European Council meeting, in "off-the-record conversations" with those ubiquitous, anonymous "European diplomats".

This had crystallised as the accepted narrative as early as 4 September, when we had the Guardian has the EU27 "planning a 'carrot and stick' approach to Brexit, offering Theresa May warm words on the Chequers proposals to take to the Conservative conference alongside a sharp warning that they need a plan for Northern Ireland within weeks".

That narrative was still current more than a week later when the Economist on 13 September informed us mere mortals that, "Next week Mrs May will lobby her fellow EU leaders at an informal summit in Salzburg. They will listen politely and are likely to avoid declaring Chequers dead".

But, for some pundits, this intelligence wasn't good enough to demonstrate their insider credentials. They had to go further. Pre-empting the Economist, we had Bruno Waterfield in The Times, on 6 September, followed by Alex Barker and George Parker, in the Financial Times on the 10th, with their own line.

Joined by the Parliament Magazine, they were predicting that the European Council was ready to give Michel Barnier a new mandate "to close Brexit deal", in what was described by the FT pair as "a conciliatory move" that would "bolster Theresa May as she suffers savage attacks from Brexiters at home".

Interestingly, the pundit's pundit, Tony Connelly – RTÉ's Europe editor – was having none of it, arguing on 15 September that such reports were "false". To him, "all the signals" were "that the most Theresa May can expect is some positive words, and at the very least, a hope that the EU-27 won't say anything that kills off her Chequers plan altogether".

Two days later, Laura Kuenssberg, the BBC's star reporter, on 17 September was also reporting that "we may see friendlier rhetoric this week at an EU leaders' shindig in Salzburg". That same day, ITV News correspondent Angus Walker was confidently asserting that: "There is feeling around Westminster and Brussels that a Brexit deal could be within touching distance".

Such was the mood that the Irish Times was retailing news that the pound had risen in value, "buoyed by reports of progress on the Border question, an obstacle to Brexit that diplomats will seek to overcome at a an European Union summit later this week".

A day later, in an analytical piece, Peter Foster, writing for the Telegraph, advanced the proposition that a resolution must be found "between Salzburg and November's 'emergency", merely conceding that: "No one should expect this to be easy".

For the Spectator on 19 September, that other star of stage and screen, Robert Peston, was prepared to guess the leaders at Salzburg "will conclude that ripping the heart out of the PM’s Chequers plan is simply too bad manners at this juncture – since they'll fear the PM would never survive".

Wunderkind James Forsyth, in the print edition of the magazine did not even get that far, focusing his predictive powers on the latest "bubble" obsession, the so-called "blind Brexit".

What is very clear, therefore, is that no one was expecting what has actually happened. Even on 20 September, with the European Council under way, the all-knowing Politico didn't see the storm coming.

Keeping in with the prevailing narrative, it wrote that, "despite continuing disagreements, particularly over Ireland, the contours of a deal on a withdrawal treaty seem to be in sight. More important, at the moment, seems to be to keep everything on an even keel until U.K. Prime Minister Theresa May gets through her Conservative Party conference, which begins later this month".

Summing up the actual events, we have the Guardian headlining: "May humiliated by Salzburg ambush as she fights to save Chequers plan", with the sub-heading, "PM on the defensive after EU leaders take turns to rubbish her plan – just a week before the Conservative conference".

After having gallantly offered cake but "no cherries" to Mrs May, Donald Tusk had cut off future supplies. In his post-meeting review, he broke the news that "Everybody shared the view" of the Chequers proposal that, "the suggested framework for economic cooperation will not work. Not least because it risks undermining the Single Market". The game was over.

French president Emmanuel Macron then plunged the dagger in, announcing that the plan was "not acceptable", then accusing: "Those who explain that we can easily live without Europe, that everything is going to be alright, and that it's going to bring a lot of money home" of being "liars".

Angela Merkel also pitched in, confirming that the EU was "united that, in the matter of the single market". There can be "no compromises", she said, adding: "No-one can belong to the single market if they are not part of the single market".

A "clearly nervous and angry" Mrs May was left to hold her own press conference, described in a devastating review by John Crace. Under his headline of "Theresa May in denial after her Salzburg ordeal", he had the prime minister pretending that nothing had changed.

Still arguing that: "Our white paper remains the only serious and credible proposal on the table for achieving that objective", she told reporters that EU leaders were engaged in "negotiating tactics " designed to throw her off course. "I have always said these negotiations were going to be tough", she added. "And at various stages of these negotiations, tactics would be used as part of those negotiations".

Needless to say, commentators have been quick off the mark to explain that the events of Salzburg were all so predictable, George Eaton of the New Statesman claiming that Chequers was always doomed and that, "The rejection of Theresa May's plan was inevitable".

Peter Foster ventures that, "in the absence of an 'easy solution', it seems as if Brexit enters a new world of hard choices in the run-up to the Oct 18 meeting of the European Council".

But, of course, there never was an "easy solution" and there is no new world. There were only the delusions of Mrs May and her advisors, who believed against all the odds that Chequers provided a solution. But, from the very start, it was obvious that it provided no answers, and now the delusions have come crashing down. And if the media didn't see it coming, neither did Mrs May.

Cynically, however, Katya Adler suspects that a theatrical play may be in progress. "If Theresa May can survive this next political storm at home", she writes, "it rather suits both the EU and the UK in the long term to have the public perception of Brexit negotiations now as fraught. So that if a Brexit deal does finally emerge later this autumn, the perception will be that it was hard fought and hard won".

That, though, would rather pre-suppose that there is an alternative plan that the two sides could agree on. But, as Pete avers (yet again), the only practical way out is the Efta/EEA option. And that has been so comprehensively ruled out by Mrs May that its resurrection is not a viable political proposition.

From the very beginning, to this current mess, we've had the politicians and the media faffing around, obsession over cod solutions, the latest one of which has crashed and burned. Now, collectively, they will need a new narrative to sustain them.

Of the next developments though, Tusk has made it clear that there will be an "emergency summit" in November, only if the European Council in October determines that there is a realistic chance of concluding as deal. With the "bloody difficult woman" in denial, there is little room for optimism.

The sins and failures of the past are now coming back to haunt us. The days of cake are over, and we'll soon be back to stale bread and water.



Richard North 21/09/2018 link

Brexit: of boosts and blows

20/09/2018  


In the wake of Barnier's press conference yesterday, when the EU's chief negotiator announced that the EU was ready to improve the "backstop" proposal, Sky News was chirping about the "boost" for Mrs May. Not 24 hours later, though, after Donald Tusk had warned that the UK proposals on the Irish question "will need to be reworked and further negotiated", the Guardian was writing about the "blow" to the British prime minister. 

That is a good measure of the roller-coaster ride we're getting from the media on Brexit. The narrative lurches from one extreme to the other as we progress (or not) through the negotiations, to the extent that the typical reaction is one of bewilderment, with people finding it increasingly difficult to work out what is going on.

Such responses are entirely understandable. No sooner had Barnier lodged his "washes whiter" proposal, up bobbed Mrs May to reject it as "unacceptable", refusing to accept any option that involves customs checks on goods moving from the mainland UK to Northern Ireland.

The reality, however, is that these wild fluctuations in the apparent fortunes of the negotiations are an artefact. As recorded by Reuters, the Irish prime minister, Leo Varadkar, is pointing out that there has been no progress in six months on the Irish question. And if there is no progress here, there is no progress at all.

If the Brexit talks were a patient on life support, therefore, it would be flatlining – showing no signs of life at all - with the relatives earnestly debating whether to pull the plug. Only the intense concern for the consequences is staying their hand.

Had the issues been set out clearly in the first place, we could perhaps have been spared the drama. We've spelled them out often enough and, when you do, it becomes obvious that progress is unlikely. The two sides have irreconcilable differences, stemming from Mrs May's Lancaster House speech and her determination that the UK should leave the Single Market.

The only real beneficiaries of the ignorance and confusion, therefore, are the media. As long as no one really knows what's going on, the hacks can spin to their hearts' content, filling space and the airwaves, giving the impression of an evolving story.

In fact, the more profound the ignorance, the greater the opportunities for strident copywriting, evidenced by the recent effort from Spiked. Writer and born-again "expert" on the EU, Ella Whelan, graphically misunderstands the nature of Barnier's improved "backstop" proposal, believing – as did many other hacks – that it applied to the border between Northern Ireland and the Republic.

This gave her 600 words of utter tosh to write on why the EU had been "lying about Ireland", demonstrating how the education system is producing English literature graduates who lack basic English language comprehension skills.

"Brussels bureaucrats are changing their tune", she asserts, relying on "newspaper reports" which supposedly tell us the EU is "secretly preparing to accept a frictionless Irish border after Brexit". So, Whelan smugly declares, "perhaps the Irish border wasn't such a big problem after all", adding: "The Times reports that, 'EU negotiators want to use technological solutions to minimise customs checks between Northern Ireland and the Irish Republic'".

But it is the collective ignorance, rather than the efforts of any particular individual, that has brought us to the pass where Mrs May was still able to tell the press on her way into the meeting that her Chequers plan was the only option that would deliver frictionless trade and resolve the Irish question.

One might recall at this stage that this is the "summit" at which some commentators predicted there would be a deal agreed, giving Mrs May a magnificent victory, right up to press where Philip Johnston, writing for the Telegraph, tells us that "the single-minded Theresa May can almost smell victory".

"What we are now seeing", he writes, "is a carefully choreographed exercise designed to let her claim some sort of domestic triumph without compromising the EU's cherished fundamental principles". Johnston goes on: "We can expect to hear more of this at Salzburg as European leaders seek to protect the integrity of the EU while seeking to maintain good future ties with the United Kingdom".

This, of course, was never to be. Austrian chancellor Sebastian Kurz, holder of the rotating EU Council presidency, set the scene, warning that Mrs May would need to compromise, declaring: "We stand ready to compromise but we also expect that from the UK and so I hope that in her speech today we will hear a step forward".

For that speech, all Mrs May was allowed was ten minutes after the dinner in the Felsenreitschule, a theatre familiar from the closing scenes in The Sound of Music (pictured). Somewhat less entertaining than the von Trapps, her initial pitch had been uncompromising. "If we are going to achieve a successful conclusion then, just as the UK has evolved its position, the EU will need to evolve its position too", she had said on her way in. 

After the actual dinner, she told her fellow leaders that: "The idea that I should assent to the legal separation of the United Kingdom into two customs territories is not credible", thus confirming her rejection of Barnier's initiative. Then we have the Guardian reporting that she "tried to threaten EU leaders", telling them the UK would not seek to delay Brexit – thereby hinting at a "no deal" outcome.

Prompting a remark from Jean-Claude Juncker that a deal remained "far away", this is hardly the sound of victory. And nor is the prime minister holding the domestic front. Being as unhelpful as possible, her former Brexit secretary, David Davis, has lifted bits from a speech he is due to give in Munich to keep the hacks entertained.

Dismissing her Chequers plan as "unpopular" and failing to represent what people voted for at the time of the referendum in 2016, Davis beat a familiar drum, declaring that the prime minister had previously promised to "return control over our law, our money and our borders".

But the Chequers plan, he said, crossed on all of those red lines. "The EU is often correctly described as having a democratic deficit", he added: "But Chequers is devoid of democracy altogether".

Unsurprisingly, when Donald Tusk spoke of there being "perhaps more hope", he was addressing the media before the meeting had begun. He hardly needed to observe that "there is surely less and less time", but he confirmed that he will be asking today at the meeting of the EU-27 for an additional European Council meeting in mid-November.

If that is agreed – and there are no indications that it won't be – this will probably be the only constructive thing on Brexit to emerge from Salzburg. The meeting will be held four days after the 100th anniversary of the end of the First World War. But, with the two sides as far apart as ever they were on the crucial Irish question, it is difficult to see how two more months will make any difference.

Perhaps, after all, something will be resolved from talks on the margins at Salzburg, between Mrs May and EU leaders. Inevitably, the hacks will attempt to keep the narrative going, with talks of rifts and separate deals. Failing that, there will be plenty of friction to report during the Tory conference, which is the next big event on the agenda. Since reassuring her Tory tribe will be her first priority, not a few are suggesting that we're not going to get any sense from Mrs May until after conference.

That leaves the October European Council from which to glean clues as to whether there is a mood change, and whether serious attempts will be made in November to conclude a deal. There will, of course, be much theatre and an amount of ritual posturing, but if there is victory to be had for either or both sides – the October meeting will be the one to watch.



Richard North 20/09/2018 link

Brexit: the moment of truth

19/09/2018  


Can it really be the case that our prime minister believes that Efta/EEA States are part of the customs union? Yet that's what she tells us in a promotional film for her Chequers plan, asserting that a relationship built on the one Norway has with the EU "would also involve membership of the customs union which means we couldn't strike our own trade deals".

If the woman isn't telling a deliberate, unconscionable lie, then she is more ignorant than we could possibly have imagined. Bluntly, I don't know which is worse. Possibly, it is the latter. We expect politicians – even prime ministers – to be economical with the réalité, but to have one who doesn't know even the basics of something like the Norway Option is quite shocking.

But, if Mrs May really is that ignorant, she is in good company. Her cabinet secretary Dominic Raab seems to display that same lack of grip of the essentials in arguing that it was the EU's turn to move on its red lines. Interviewed by a group of continental newspapers, he told them, "We have shown a lot of flexibility and we have been very pragmatic", adding: "So I think this is the moment to see that matched… The ball is a little bit in the other court now".

This is another of those wondrous moments, where it is difficult to believe that a man in his position could be so far adrift from his brief. But if he needs to get back on track, all he needs to do is read the latest report from the select committee on exiting the European Union.

"The European Commission", it says, "has now indicated that the Chequers proposals for a Facilitated Customs Arrangement and a common rulebook are not viable and if this remains the position then the Government will need to adapt its approach to the future EU-UK economic relationship".

For this, therefore, we don't need any secret squirrel briefings from anonymous "EU diplomats", or messages in a bottle floated up the Thames. And, if anything, the select committee is late to the party, articulating what we have known for an awful long time.

But if you did want any confirmation, the Evening Standard is the place to be, with Ann Linde, Sweden's acting Europe minister. Speaking to the paper, she adopts an emollient tone, telling us that the EU leaders "could see Chequers positively", but there are some "problematic big areas". She is not prepared to be so undiplomatic as to say it is a "non-starter" but observes that "some of the things give rise to difficulties because it goes against EU principles". In other words, it's a non-starter.

As to any likelihood of "flexibility" – the crucial issue remains the Irish border. And, in setting out the programme for Salzburg, Donald Tusk is being less than supportive of British fantasies.

As regards Brexit, the EU leaders are seeking to reach "a common view on the nature and overall shape of the joint political declaration about our future partnership with the UK". They will then discuss how to organise the final phase of the Brexit talks, "including the possibility of calling another European Council in November".

Finally, they will be asked to "reconfirm the need for a legally operational backstop on Ireland, so as to be sure that there will be no hard border in the future". Limiting the damage caused by Brexit is our shared interest, Tusk says, but, "unfortunately, a no deal scenario is still quite possible".

Interestingly, the European Council president goes on to talk of acting "responsibly" in order to "avoid a catastrophe", but he needs to direct that sentiment directly to Mrs May. Whether deliberately, with malice aforethought, or through a profound ignorance that she has no business allowing, hers is not responsible behaviour. Not under any circumstances can it lead to a happy outcome.

At least, though, if the EU leaders agree to the extension of the deadline, they have given the UK another month to settle an agreement. But, if Mrs May and her ministers are effectively in denial, no amount of extra time will be to any avail.

The point, of course, is that the EU cannot deliver the flexibility that Mr Raab wants, and there was never any likelihood that it could. Thus, if at this late stage, it is still being expected by the UK team, led by a prime minister spouting error-strewn propaganda about the Chequers plan, we must consider the possibility that we are dealing with people so ignorant that they haven't the competence to see the Brexit talks to a successful conclusion.

Mrs May certainly shares Raab's fantasy. According to Reuters, she has been writing in Die Welt, arguing that both sides needed to show goodwill to avoid a disorderly UK exit from the EU.

"We are near to achieving the orderly withdrawal that is the essential basis for building a close future partnership", she wrote, adding: "To come to a successful conclusion, just as the UK has evolved its position, the EU will need to do the same. Neither side can demand the unacceptable of the other, such as an external customs border between different parts of the United Kingdom".

Taking a break from her literary endeavours, the prime minister will be at Salzburg today and she will get a chance to address the EU-27 over dinner. What she will say to them won't be recorded, and there will be no journalists present. The media will have to rely on statements from No.10 and leaks from the meeting where, one presumes, Ireland will be discussed.

But, if Mrs May thinks she is going to drive a wedge between the Commission and the Member States, we already have one of those helpful senior EU officials to deflate expectations. EU leaders will show their "strong support for Michel Barnier and strong support for the position of Ireland", he says.

Mrs May won't be there to hear this. She gets to speak today, but there is no discussion on Brexit until tomorrow, by which time she will have left. And the substance of those talks won't be recorded either. There may not even be much by way of an official communiqué.

Meanwhile, Michel Barnier has been preparing the ground with a press statement following yesterday's General Affairs Council in Brussels. Emphasising the need to "move decisively forward" on the Irish question, he reminded us that the formal proposal for the backstop had been on the table since February.

Using slightly different words from Tusk in his written statement, we see him talk of the need for a functional rather than legally operational backstop, although when delivered, Barnier was fully on-message using exactly the same words.

Once again we heard of the need to "de-dramatise the checks that "are required and that are caused by the UK's decision to leave the EU, its Single Market and Customs Union", while in what has been hailed as a "boost" for Mrs May, Barnier stated that: "We are ready to improve this proposal".

"Work on the EU side is ongoing", the chief negotiator said, "We are clarifying which goods arriving in Northern Ireland from the rest of the UK would need to be checked and where, when and by whom these checks could be performed. We can also clarify that most checks can take place away from the border, at company premises or in the markets" – adding words in his oral delivery.

Sky News seems to have an even fuller account, with quotes that are not on the Commission recording. These have Barnier saying: "What we are talking about here is not a border - not a land border, not a sea border. It is a set of technical checks and controls".

That leaves, says Barnier, the October European Council, which he says, "will be the moment of truth". He adds: "This is the moment when we will see if an agreement is within our reach, as I hope and as we are working on it".

This clarification on the border issue is helpful, not least because it is clear that Barnier is referring to checks carried out between the mainland and Northern Ireland – something which Sky News doesn't seem to understand, and where the Independent seems confused. This is not the ERG solution.

The original BBC rendition was similarly flawed, the website wrongly claiming: "The EU's negotiator said he wanted most new physical checks to be carried out away from the border between Northern Ireland and the Republic of Ireland, a key demand of Conservative MPs". It has now been corrected.

Necessarily, the Commission's proposal still pre-supposes that there will be regulatory and customs harmonisation between Northern Ireland and the Republic. The only thing that changes is that the putative "wet border" between Northern Ireland and the mainland becomes a fuzzy transition where checks are not tied to a particular location. But checks there will be, to ensure the UK does not sidestep EU controls on British goods. Once again, the Guardian gets close.

Whether this is the fudge, or part of it, that will get Mrs May off the hook remains to be seen. But there may be some greater significance to her Die Welt piece, where she specifically highlights the "external customs border between different parts of the United Kingdom". The "fuzzy border" could be presented as the concession that lubricates a deal.

At the very least, this may add some dynamism to talks on the margins at Salzburg, from which more could emerge at the Tory conference when the prime minister gives her speech. Then, we could even see the fat lady preparing to think about whether she should consider singing – or not.



Richard North 19/09/2018 link

Brexit: closing the loop

17/09/2018  


So, speculation which lifted off in The Times in the earlier part of this month has died a death in the same newspaper ten days later. Thus, no more are the extravagant claims that the heads of state and governments were preparing to dump Barnier, rip up the draft Withdrawal Agreement and lay down a carpet of flowers to welcome Mrs May to Salzburg, where a sweetheart deal awaited her, decorated with a pretty ribbon bow. 

Sadly, there will be no flower-strewn paths for Mrs May. Rumours "swirling in Brussels" that EU leaders would agree a new mandate for Barnier at Salzburg have been scotched. "This expectation is totally wrong", says one of those ubiquitous, anonymous EU diplomats.

Instead, a new narrative awaits. EU leaders are now expected to offer the UK prime minister "little more than kind words". Hopes of a Brexit "breakthrough" at Salzburg are gone, leaving the prospect of meeting the "looming autumn deadline" somewhat hanging in the air.

The Times picks up Midair Bacon's claims that UK negotiators were "closing in on workable solutions to the outstanding issues" – already denied by Brussels - wrongly linking this with Barnier's supposed claim that a deal was "possible" within six to eight weeks, omitting to add the "realistic" qualification.

But, having given some credence to the hope that things were getting close, it then shoots that hope down in flames, restating what we already know – that the talks have made no progress on the most difficult issue - the Northern Ireland "backstop".

As expected, attempts to seek what is loosely termed as a "breakthrough" have been deferred until after the Tory conference. Seemingly, our "EU diplomats" are now so "wary" about any initiative they propose being twisted and used against May by "ultra" MPs that they have decided to hold off on new proposals until she gets through her annual jamboree.

In fact, there never was the slightest chance of a "breakthrough". The bubble of the Brussels hothouse is every bit as prone to fantasising as the Westminster equivalent. This still has Peter Oborne in the Mail on Sunday, earnestly declaring that he has spoken to "well-informed sources" close to the British and European sides of the Brexit negotiating teams, on which basis he detects "signs of a breakthrough". There's a mood of optimism, of friendship even, he says.

You pays yer money and makes yer choice on that one, as Oborne has Mrs May bypassing Barnier and dealing directly with Macron and Merkel. Otherwise, it looks very much as if the European Council meeting at Salzburg – once the focus of endless speculation – has reverted to its original status as a mere "stock-taking exercise". Another helpful but anonymous diplomat has been roped in to declare: "The less that comes out of this summit, the better for everyone".

With any expectations of progress at the October Council having already been discounted, the next milestone is a possible emergency meeting in November, yet to be agreed. A date may be the only substantive thing to come out of Salzburg, and even that may not be agreed.

All this puts the talks right at the edge. Barnier initially set October as the deadline and any extension cuts into the time set aside for ratification. The time allowance, however, undoubtedly had some inbuilt flexibility which means a delay is unlikely to be fatal.

The question then arises as to what might happen if the parties fail to reach a new agreement in November. We are led to expect that this will be the end of the process, but it beggars belief that everyone will sit tight, twiddling their thumbs until the time runs out in March and we leave without a deal.

Before we even get to November, though, Mrs May's plans have to run the gauntlet of Tory activism, with the oaf Johnson doing his level best to sabotage Chequers and undermine the negotiations from the London end.

His latest stunt is to mount a full-frontal attack on it in today's Telegraph column, asserting that it is a "constitutional abomination". If Chequers were adopted, he writes, "it would mean that for the first time since 1066 our leaders were deliberately acquiescing in foreign rule".

Launching such lurid hyperbole in the run-up to conference effectively amounts to Johnson declaring war on his own leader. There is no way back from this. The battle lines have been drawn and only one contestant is going to come out alive.

If Mrs May backs away from her Chequers plan, even her residual authority will be torn to shreds and she will have no option but to resign. On the other hand, Johnson needs to show he has the support of a sizeable number of Tory MPs if he is to force the issue – something which is by no means certain.

Yet, what makes this contest bizarre to the point of being unreal is that, even if Mrs May wins the day and emerges to take the Chequers plan to Brussels intact, she has no chance of it being accepted by the EU. The issue, therefore, will be whether she comes away feeling strong enough to offer concessions which will make the plan more acceptable to Mr Barnier and the European Council.

But here, one wonders if she has any intention of offering any concession, in any circumstances. According to a Sunday Times report, in a Panorama programme to be broadcast this week, she is to re-emphasise herself as a "bloody difficult woman". On that basis, she could still be negotiating in the expectation of a last-minute cave-in by Brussels – something that is unlikely to happen.

Even then, there is a further complication, arising from comments made by Michael Gove. He asserts that any relationship settled between the UK and the EU could always be altered in the future, an idea that might mystify EU negotiators. In their reality, an agreement reached will be locked in by way of a formal treaty, unchangeable without the agreement of both parties.

Nevertheless, unlike Johnson, Gove publicly supports Mrs May. "The Chequers approach is the right one for now" he says, adding that the responsibility rested with the EU to compromise, "because we've shown flexibility".

If this represents the settled view of Mrs May's government – and there is no way of telling for certain – then the negotiations are in serious trouble. There is little if any possibility of a compromise, if it involves the EU having to weaken its stance on the integrity of the Single Market.

Of course, that doesn't rule out the possibility of the Roger's "fudge", whereby some formula is found which enables both sides to save face and preserve their essential interests. But it is going to need a great deal of creative thinking to resolve the "backstop" and there are no obvious solutions on the horizon, unless you accept today's Times report.

From the same journalist who had it that the Salzburg European Council was set to consider new guidelines for M. Barnier, we now have it that the EU is "secretly preparing" a new plan for the Irish border.

This is drawn from an unpublished "diplomatic note", recording talks between EU ambassadors last Wednesday, where it suggested that "technological solutions" could be used to minimise customs checks at the border, while "goods could be tracked using barcodes on shipping containers under 'trusted-trader' schemes administered by registered companies".

Even though this looks suspiciously like the already rejected "Max Fac" solution, the new plan is supposed to remove the need for new border infrastructure. The proposals, it is claimed, are to be circulated to European governments after the Conservative Party conference on 3 October.

As we have seen in the recent past, such reports have a habit of springing up out of nowhere, and disappearing just as fast, while the news overhang means that people such as Oborne can be recycling speculation which has long been replaced by new, "washes whiter" fantasies.

In terms of the Irish border, we may actually be seeing attempts of what Barnier calls the process of "de-dramatising" the issue, emphasising the role of technical controls and highlighting the fact that some checks on the movement of animals and other goods between the UK and Northern Ireland already exist – with nothing of substance changing.

For all that, the only bankable certainty is that we are no further forward than the last time I wrote that we were no further forward. And with the media closing the circle on its Salzburg speculation, bringing us back to the starting point, the chances are that we will be no further forward next week.



Richard North 17/09/2018 link

Brexit: more secrets needed

14/09/2018  


If the government had wanted to maximise the publicity for its latest batch of "technical notices" on a "no deal" Brexit, I suppose, it should have marked them "secret" and leaked them to the media. I'm sure the intrepid Faisal Islam would have rushed to "reveal" his treasure, yet more evidence of how brilliantly clever he is.

As it stands, however, the government hasn't done too badly, with the media homing in on the "news" – as the BBC put it – that the "UK driving licence 'may not be valid in EU' after no-deal Brexit".

Never mind that I published this on 14 January 2017 – 20 months ago - based on information gleaned from looking up the relevant EU law. By far the best way to keep a secret is to "reveal" it on EUReferendum.com. Your average hack would prefer to poke out his eyeballs with a bent screwdriver rather than admit he read the blog. They prefer stale news, 20 months old, spoon fed from government releases - unless it's "secret".

Now the current "secrets" are out, real journalists like Andrew Sparrow can write about them. "Ostensibly", he opines, in his afternoon news summary (posted yesterday on the Guardian website), these additional 28 papers "are supposed to show that, although the government does not want or expect to leave the EU with no deal, it could cope".

But, he added, "it may also be the case that ministers would be happy for people to conclude that the documents show how unacceptable this option would be". Sparrow cites as supporting evidence the morning's Today programme where Dominic Raab said that MPs would ultimately have to choose between a Brexit deal modelled on Chequers and a "no deal" exit. Faced with this binary choice, he expected the potential Tory rebels to swallow their reservations and embrace Chequers.

Personally, I don't entirely buy the first theory. Digging into the detail of the notices produced to date, it is easy to paint multiple scenarios that the government simply could not mitigate. How, for instance, do you deal with the cancellation of "mutual recognition" rights on the export of goods to the EU?

On the other hand, if the government really wanted to spook potential rebels, it is doing a seriously bad job. If one takes the driving document, for instance, its main thrust is to advise readers that, after March 2019: "Your driving licence may no longer be valid by itself when driving in the EU". If there is no deal, "you may need to obtain an International Driving Permit (IDP) to drive in the EU".

Bluntly, though, the fact that large number of private motorists may have to acquire IDPs before venturing into the EU Member States is the least of our problems, when EU Member States no longer recognise our driving licenses.

By far the bigger problem is the commercial sector. As I wrote in my piece 20 months ago, truck and coach drivers will no longer be able to demonstrate that they have undergone the additional "periodic training" required under EU rules, because the "certificates of professional competence" (CPC) issued by the UK authorities will no longer be considered valid in EU Member State territories.

Furthermore, before most commercial vehicles can be used on the roads, the firms (or individuals) running them must have an operator's license, granted in accordance with Regulation 1071/2009/EC. After Brexit, UK-issued licences will go the same way as the CPC – worthless for operation on EU Member State roads.

The upshot of this is that no UK licensed commercial driver (in the band of vehicles covered) will be able to drive outside the UK, and no UK registered trucks can be taken into mainland Europe or be allowed to cross the Northern Ireland border.

Obviously, the practical and economic consequences of this are immense. But there is no refence to the problems in the government's technical notice, and not a single hack in the popular media has had the wit to make up for the omissions.

The Times attempts to up the "scare" quotient, writing that, despite their "neutral tone", the notices "do not mask the profound effect such a scenario would have on everyone living in Britain - and arguably the continent as well".

"From selling a car, to getting on a plane to Paris, to buying or selling any kind of good or service, life will not be the same in a very profound way", the paper says, going on to give a brief summary of some of the notices.

If from the 28, however, I was to pick the issue which had the potential to cause the greatest economic harm to the UK, I would perhaps go for the notice headed: "Trading under the mutual recognition principle if there's no Brexit deal". Yet, such is the determination of The Times to bring home the effect of a "no deal" exit that it doesn't even mention this notice.

The issue is important in several respects, but not least because mutual recognition of standards is one of the favoured components of a post-Brexit free trade deal between the UK and the EU.

The principle itself applies to manufactured goods traded in the EU's internal market. Where no harmonised standard exists, goods can circulate under the mutual recognition principle. This prevents EU Member States prohibiting the sale of goods that have already been legally sold in another EU State - even where there are different national requirements covering the same good.

As an example, the government's notice states that a bicycle made to comply with French national requirements and sold in France can then lawfully be marketed in other EU countries – even though those countries may have different national requirements for bicycles.

It is difficult to get data on the scale of application of the principle, but I have seen figures which suggest that anything from 20-50 percent of all manufactured goods traded in the internal market rely on mutual recognition.

When, after Brexit, UK exporters are no longer able to invoke mutual recognition, their products will have to conform with local standards. A bicycle manufactured in Britain intended for sale in Germany, will have to comply with any relevant German law. If it is shipped to France, it will have to comply with French law; in Italy, Italian laws will apply – and so on.

Theoretically, this could apply to as much as 50 percent of UK manufactured goods intended for export to EU customers. And, in businesses where economies of scale so often dictate whether a product is price-competitive, the costs of producing to multiple, different standards could be crippling.

That much would be known to only a very few specialists and, for the peril to register with the average hack, the government would have to spell out the implications, where possibly exports worth billions of pounds are potentially at risk. Noticeably, such detail is absent from the government document.

Regardless of the government's actual intentions, though, the media just cannot help itself when writing about regulation – obsessively trivialising it by labelling it "red tape". This is how the Mirror treats the subject of vehicle (and component) type approval, which is addressed in other technical notice.

"British carmakers and firms supplying car parts from the UK would face more red tape to sell their vehicles and components on the continent" as "EC type-approvals issued outside of the UK, would no longer be automatically accepted on the UK market".

By way of analysis, we get a quote from the Best for Britain anti-Brexit group. It claims this could be "another blow to the motor industry" - which employs thousands of hard-working Brits. Yet, that "blow" could prove the last straw which makes it no longer viable to produce cars in the UK for the export market.

Of course, one can't expect much from a tabloid, but the Telegraph doesn't fare much better. It reports that "British businesses will be hit by a 'sledgehammer' of red tape that will increase costs for companies and damage trade", relying on the CBI for that description.

Industry really doesn't help itself here. The paper cites Stephen Phipson, chief executive of the manufacturers' organisation EEF. "Clearly a 'no deal' Brexit would increase the burden of red tape on business", he says, wrongly going on to state: "Firms that manufacture products in the UK under the basis of mutual recognition will be required to have that product certified in both the UK and the EU in the event of a no deal Brexit".

Not only is this wrong – it doesn't even begin to capture the nature of the handicaps confronting British firms seeking to export to the EU, which could face the nightmare of producing goods to meet 27 different sets of standards.

To an extent, though, we can have a little sympathy with the media. Comprehensive reviews of 28 documents, each covering issues of some complexity, is far more than most newspapers can deal with. The BBC tries to provide an overview on its website, but a precis alone can't possibly capture the flavour of a "no deal" event.

When you think about it, Mrs May declared that "no deal" was better than a bad deal in her Lancaster House speech of January 2017. She has had 20 months to prove the point, but only now is her government attempting to explain what is involved in a "no deal" scenario.

Then to bring out all these documents in a rush is not an exercise in communication, but one of obfuscation. And in giving the media a task which it cannot do adequately, it doesn't improve the public's understanding of the dynamics of the Brexit process.

Most of all, as Phipson points out, this instalment of technical notices has still not addressed some of the critical issues for business: "trade continuity, borders and customs arrangements, mobility of workers, services, aviation and energy". In ducking these crucial issues, one wonders what the government's real agenda really is.

Like as not – to judge from recent performance – it doesn't know itself. My guess is that, even in the anodyne form presented in these notices, much of the information will come as a rude shock to ministers and MPs, those that take the trouble to read them. If they rely on the media, though, they will be no better off.

Obviously, we need more secret documents before the media can do its job.



Richard North 14/09/2018 link

Brexit: the fourth division

13/09/2018  


Four recent examples of groups trying to come to terms with the complexities of EU law and Brexit indicate how primitive is the collective understanding, suggesting that in matters relating to the EU, British players are stuck firmly in the fourth division. The first example comes with a Sky News broadcast on Tuesday on pilot's licenses.

As it happens, I've been writing about aviation issues in relation to UK withdrawal from the EU since July 2014. I wrote an index piece in January 2017 and specifically referred to the loss of recognition of UK-issued pilots' licenses in November 2017. Then, in April 2018, the European Commission published its Notice to Stakeholders pointing out specifically what we'd already written about, confirming that UK-issued licenses would no longer be recognised in the EU in the event of a "no deal" Brexit.

Yet, despite the information being in the public domain all this time, it has taken until now for Sky News to "discover" what we already knew. Via Faisal Islam, political editor, and Zach Brown, political producer, in their self-important way of which the legacy media are so fond, the news channel "reveals" this information, not from the publicly-accessible Commission website but from a "leaked Civil Aviation Authority document".

Needless to say, this intrepid duo don't really understand the detail of what they are reporting, nor the devastating impact where upwards of 35,000 license-holders will no longer be able to fly aircraft registered by EU Member States, nor fly any aircraft at all in EU Member State airspace.

Instead, they launch off at a tangent, wrongly stating that licenses would have to be reissued by the UK's Civil Aviation Authority "which would cost millions" – making this the thrust of their story – with the unstated implication that the reissued licenses would be recognised by the EU.

This error paved the way for a huffy "rebuttal" issued by the CAA, claiming: "It is misleading for Sky News to say that pilots would need to renew their pilot's licence in a 'no-deal' Brexit scenario".

The CAA goes on to say that both commercial and private UK pilot licences would remain valid for use on UK-registered aircraft "as the United Kingdom is a signatory to the International Civil Aviation Organisation (ICAO) Chicago Convention". Our licences, they say, "are internationally recognised - including by the European Aviation Safety Agency (EASA) - both now and after 29 March 2019".

These weasel words, however, omit some important information. Firstly, as I've already pointed out, while (most) holders of UK-issued licences are currently permitted to fly aircraft registered anywhere in the EU, after Brexit they will no longer be allowed to do so. Secondly, no UK-license holder may fly in EU airspace and, because recognition with other countries is often agreed via the EU, these pilots will be excluded from most territorial airspace, including that of the United States.

Compounding the confusion and misinformation, we then get other media stories, highlighting the "rebuttal", including the Mail which runs with: "British aviation chiefs deny report that the UK will have to spend millions of pounds reissuing thousands of pilot licences after Brexit if the country crashes out of the EU without a deal".

Thus we see illustrated the almost complete inability of the legacy media to report coherently on Brexit, leaving industry up in the air as the uncertainties multiply and the time gets shorter.

But if we go higher up the tree, so to speak, into the upper echelons of government, things are no better. Only recently, we saw an extraordinary report that transport secretary Chris Grayling was planning to negotiate 27 separate aviation deals with individual EU Member States in the event of a "no deal" Brexit, supposedly so that civil aviation operations could continue uninterrupted.

My immediate response was that Member States no longer had the freedom to negotiate bilateral deals with third countries, making one wonder why on earth Grayling thought such deals were possible. Why, for instance, hadn't his own civil servants warned against such an ill-advised move?

Within days of this second example of the fourth division at work, however, we learn that Barnier has "reprimanded" Dominic Raab over this action, whence we also learned that Grayling had been told less than two weeks ago by the European Commission's "most senior trade official, Violeta Bulc", that "without a deal this autumn, there would be no other agreements made to protect the UK economy".

On the ball as always, Sky News then moved in to "reveal" that Grayling had sent the letters - six days after the same news had been reported by the Mail.

Still we have not plumbed the depths. Such inept moves – from politicians and media - are easily matched by the ERG proposals for the Brexit settlement of Irish border question, published at a press conference yesterday, with David Davis and Jacob Rees-Mogg in the chair, supported by former Northern Ireland Secretary Owen Paterson. It provides our third example of the fourth division at work.

Quickly dismissed by the Irish government's Brexit committee chairman, Neale Richmond, as "simplistic and ignorant", the ERG believe they can solve the issue of animal and animal product export to the EU by agreeing "equivalence" between UK and EU regulations, with "conformity assessment" based on "mutual trust".

By this means, they argue that we could sell such goods to the EU (via the Irish border) without having to submit for veterinary inspection at Border Inspection Posts (BIPs), the need for which makes a hard border inevitable.

As Michel Barnier has consistently pointed out though, the only way such frictionless trade could happen is within the context of a strict treaty framework which encompasses the full "regulatory ecosystem". This goes far beyond mere "equivalence", which rests on allowing differences between laws as long as the regulatory objectives are the same.

Before even the ERG press conference had been held, Jean-Claude Juncker had delivered his State of the Union address in Strasbourg, reminding the British Government that someone who leaves the Union cannot be in the same privileged position as a Member State. "If you leave the Union", he said, "you are of course no longer part of our single market, and certainly not only in the parts of it you choose".

To enable us to avoid BIPs, the UK would have to commit to dynamic regulatory conformity – where we not only adopt existing EU law but future law as well - common enforcement systems and strategies, common surveillance system and data sharing, technical and legal supervision from the Commission and European Food Safety Agency, and judicial oversight.

Basically, the only countries outside the EU which enjoy such frictionless trade are Efta/EEA states and Switzerland. No other country in the world is exempted from the BIP/official controls regime. Not even New Zealand, which has special arrangements with the EU, is able to avoid directing products to BIPs before they can be even submitted for customs clearance.

No one with the slightest understanding of how the EU "official control" system works would even think of proposing a madcap scheme where goods are allowed through on the tenuous grounds of regulatory equivalence. Their proposal firmly cements the ERG as members of the fourth division.

Yet, for all that, UK produce – initially, at least – will not even cross the border. Until the British Government has successfully convinced the EU to list the UK as an approved exporter, with separate entries required for each range of products, all exports of animals and products of animal origin will be prohibited. This is not an academic issue, but is clearly stated in relevant EU law and set out in a European Commission Notice to Stakeholders published on 1 February of this year.

Despite this, the very real prospect of the export trade collapsing has been almost completely ignored, whether by select committee, the Commons Library or, in the latest example, by the National Audit Office (NAO). This puts our research and information capability very much in the fourth division, marked down by the inability to process important facts, even when they are easily accessible.

Across the board, encompassing politics, the media, industry, think tanks and academia, the collective failure is creating a perfect storm in terms of the information deficit. Add to that an indifferent and untutored voting population, many of whom are more concerned to have their prejudices reinforced than they are to acquire information, and we have a nation which is largely unable to cope with the challenges of Brexit.

It is said that we get the governments we deserve. Even more worrying, there is an increasing risk that we might get the Brexit we deserve. We've put ourselves in the fourth division and there we will remain.



Richard North 13/09/2018 link

Brexit: "ultras" on the back foot

12/09/2018  


Yesterday should have been a big day for the "ultras". Despite the 140-page "alternative" to Mrs May's Chequers plan, produced by the European Research Group (ERG), having been dumped, they had managed to find another three-letter acronym to produce a plan, ready to show the world that they mean business.

This last-minute substitution was the Economists for Free Trade (EFT), led by Patrick Minford who gave a presentation to the House of Commons, in a press launch fronted by Jacob Rees-Mogg.

Their task was to launch the EFT's latest report, this one termed the "World Trade Deal: The Complete Guide by the Economists for Free Trade", a 27-page guide which purported to be a "major new academic study" aimed at demonstrating that the UK would be better off trading with the EU under WTO rules, the so-called "no deal" option.

Outside the "ultras" Holy Trinity of the Express, Mail and Telegraph, the media tends to ignore material produced by the EFT, but this was not to be the case yesterday – and rather to their disadvantage.

Normally, the absence of widespread publicity does not particularly bother the "ultras". Generally, they are not looking for a debate: the case for their form of Brexit that they have managed to concoct is based on a limited set of lies, repeated at intervals by themselves and their allies.

Their technique is the one adopted by the propagandists through the ages. Having told the lies, they repeat them consistently, over and over again, in the certain belief that their supporters and the weak-minded (if there is a difference) will imbibe their doctrines and accept them as the truth.

That aside, their purpose is not to inform or educate. It is simply to create noise, in this case giving that all-important impression that there is a genuine counter to Mrs May's Chequers "plan". And although their "plan" is on their website, few will read it. Most journalists – those that are interested - will work off the shorter press release.

And despite claims of the report being a "new" study, it should come as no surprise that there is precious little new in the 27-page document. Mostly the claims are a rehash of arguments already aired and long-since challenged and discredited.

But then this doesn't normally matter. Even where their claims are so fantastic so as to stretch belief almost to breaking point, the purpose is served. The propaganda aims to muddy the waters and, most times, when their assertions are given an airing by a media schooled in binary narratives based on adversarial politics, they will convey the appearance of a two-sided debate over arguments of equal merit.

Doubtless, that's what Rees-Mogg and his allies hoped for yesterday, reheating the same hackneyed lies in the expectation that the repetition would cement the lies. And in this case, those lies are given added force by the personal intervention of Rees-Mogg, conferring to them his acquired prestige.

To add media appeal, the EFT had invented a publicity "hook" for him, a claimed "boost" to the UK economy of £1.1 trillion over fifteen years that supposedly would come in the wake of a "no deal" Brexit.

Here though, madness is to the fore. Although this headline figure is a dramatic claim, running contrary to every other estimate one can imagine, it isn't actually mentioned in the press release on the website. And in the main report, there is only one mention to the £1.1 trillion.

When one explores the provenance of this sum, however, it emerges as a composite of £650 billion gains to the UK economy, when measured into the "distant future", as against a loss of about £500 billion to the EU (presumably over the same indefinite period). The two added together makes £1.1 trillion. That is their idea of a boost to the UK economy.

And if that is a taste of what the EFT have to offer, not a few journalists have got the message. With Minford the only economist in the room, the Independent remarked that: "Jacob Rees-Mogg's Economists for Free Trade event had only one economist, and that was the least ridiculous thing about it".

As a sub-heading, it offered: "There is no one in the the (sic) Treasury, the Bank of England or on the economics desk at any major bank or investment firm who would consider Jacob Rees-Mogg's analysis to be anything other than deranged", making it fairly plain as to what it thought of the EFT's report.

If any more was needed, it was helpfully supplied. The report, demoted to the status of a "leaflet" was deemed "such bizarre jibberish" that it was "difficult to know where to begin". "This was", said writer Tom Peck, "even within the dire context of the present day, a truly low point of post-shame politics. Absolutely nobody thinks this stuff is true".

To Peck, this went "some way to explaining why Mr Rees-Mogg stared into the middle distance throughout, then launched a sixth-form style attack on 'Project Fear', and how things have not turned out as badly as was foreseen two-and-a-half years ago, chiefly because of a great international economic boom on which Britain missed out".

But, if the work to the Independent was "deranged", to John Crace of the Guardian calls the work "the Brexiters' theatre of the absurd".

"Every other economist", said Crace, "had predicted a no-deal Brexit would lead to a seven percent decline per year in GDP over the next 15 years. But Minford had news for them: they had all been looking at their graphs the wrong way up. If you turned them all upside down then the UK would see an unprecedented seven percent year-on-year increase in GDP. It was simple, if only you knew how. Far from being broke, we were going to have an extra £1.1 trillion to spend".

When it comes to analysis, one might expect the Financial Times to be less colourful, but columnist Chris Giles is only marginally so. "The latest pro-Brexit analysis has got its sums badly wrong", is the headline under which he writes, with the sub-heading: "Assumptions used for the Economists for Free Trade paper are absurd".

He spoils it with his reference to a "pro-Brexit" analysis. There is nothing favourable to Brexit in the "ultra" pitch. But there is little to argue with his assertion that the Economists for Free Trade "achieve their positive results simply because they assume leaving the EU has no trade costs and only potential benefits". There are also no costs associated with deregulation and only benefits.

While there are other commentators who also pitch in with various shades of condemnation – and even the BBC says that the EFT's claims "are based on a number of calculations and assumptions, not all of which stand up to scrutiny" - what makes the difference this time is that the natural supporters afford little comfort. The Telegraph for instance, obsessed as it is with its own man, hijacks Rees-Mogg's "show" to turn it into Johnson launching "a fresh attack on the Prime Minister's 'humiliating' Chequers plan", after he made a surprise appearance at the launch.

Half of the Telegraph's report is written before it breaks away from personality politics, but then only to repeat one of the EFT's more egregious lies. "The EFT report argued", says the paper, "that leaving the EU on World Trade Organisation terms would not be a leap in the dark but rather a 'leap into the normal' because Britain already trades with more than 100 countries under WTO rules".

Nevertheless, the paper does allow Michael Deacon to remark that Rees-Mogg had previously dismissed Treasury economics forecasting as "absurd", saying: "To think you have any idea where the economy will be in 15 years is erroneous".

This Deacon contrasted with what appeared to be "a change of heart", where Rees Mogg was now presenting "a group of economists" which, he assured the public, "had forecast that a no-deal Brexit 'would result in a £1.1 trillion boost to the economy over 15 years…'".

For Rees-Mogg, there must at least be some consolation from The Times, which describes him (and not Johnson) as "leader of the rebels".

Today, he is to hold a press conference on Northern Ireland where he will insist that a hard border is unnecessary. Yet, we are told, "he understates the seriousness of the border question and overstates the capacity of a Canada-style free trade deal to preserve the just-in-time supply chains on which British manufacturing and the British food industry depend".

According to this newspaper, Rees-Mogg would do well to recognise the flaws in his own argument. And, "if that means ending up with a version of Brexit that is not his preferred one, that is democracy at work".

Irritating, mendacious, slovenly and intellectually derelict the "ultras" most certainly are. But, despite their obvious and repeated faults, this might have been their finest hour. As it is, they have come away more than a little bruised. And if Mrs May isn't winning the argument, she is perhaps losing it less badly, while the "ultras" seem to be on the back foot.



Richard North 12/09/2018 link

Brexit: clash of the pygmies

10/09/2018  


There is no Brexit debate in this country, at least not in the legacy media. We merely have opposing sides parading their ignorance. The role of the media is to provide an uncritical platform, the effect of which is to block the flow of information with a cascade of never-ending noise.

A classic example of this we saw yesterday in the Mail on Sunday with a "he says, she says" confrontation between the oaf Johnson and Jeremy Hunt, the current holder of the office of foreign secretary.

The oaf's contribution quickly gained for the Mail a desirable level of notoriety with an ill-judged assertion that Mrs May's Chequers plan has "wrapped a suicide vest around the British constitution", with the "detonator" handed to Michel Barnier. 

Apart from anything else, the analogy is muddled. If Barnier activated the detonator, it wouldn't be suicide. Literally, it would be murder. And that's what Johnson is arguing that Mrs May is giving him the means to do. 

The theme is typical Telegraph/"ultra" rhetoric, with Johnson demanding: "Why are they bullying us?", and "How can they get away with it?" "It is", he goes on to write, "one of the mysteries of the current Brexit negotiations that the UK is so utterly feeble".

He argues that we have a massive economy; the sixth largest in the world. We ought to be able to do that giant and generous free trade deal the Prime Minister originally spoke of. Yet, the oaf complains, "And yet it's, 'yes sir, no sir, three bags full sir'". And so continues the litany:
At every stage in the talks so far, Brussels gets what Brussels wants. We have agreed to the EU's timetable; we have agreed to hand over £39 billion, for nothing in return. Now under the Chequers proposal, we are set to agree to accept their rules – forever – with no say on the making of those rules.

To this man, "It is a humiliation. We look like a seven-stone weakling being comically bent out of shape by a 500 lb gorilla. And the reason is simple: Northern Ireland, and the insanity of the so-called 'backstop'".
And there's the crunch. According to the oaf, this has opened us to "perpetual political blackmail", whence we get the "suicide vest" jibe which then becomes a "jemmy with which Brussels can choose - at any time - to crack apart the Union between Great Britain and Northern Ireland".

Johnson interprets the "backstop" as Northern Ireland remaining in the customs union and the Single Market, in other words part of the EU, with a border down the Irish Sea and then sees the Chequers plan as "our own version of the backstop". If we can't find ways of solving the Irish border problem, then the whole of the UK must remain in the customs union and Single Market".

This then is what the Mail calls a "blistering denunciation of our Brexit strategy", but if we're to evaluate it, we have to start from the basics – of which Johnson has never shown any grasp.

Starting with point one: when we leave the EU, the UK becomes a "third country". Point two: the border between Northern Ireland and the Republic of Ireland becomes part of the external border of the European Union. Point three: at the EU's external border, extensive border controls automatically apply to goods imported from third countries, making for what is known as a "hard border". Point four: under normal circumstances, the EU cannot vary these controls for any one third country without falling foul of the WTO's non-discrimination rules, potentially damaging the integrity of the Single Market.

However, because of the special situation and history of Northern Ireland, neither the UK nor the EU wants to establish a "hard border", to which effect the EU has asked the UK to come up with a plan which can allow existing border arrangements to continue, in the absence of which it want a formal commitment to a "backstop" which will enable a "soft" border without the potential to damage the Single Market.

By any measure, this is an extremely difficult situation, where there are very limited technical options - made even more difficult by Mrs May's insistence on leaving the Single Market. And since the very beginning of the talks, the parties have been struggling to find a mutually acceptable solution, with the UK yet to make a formal proposal while rejecting the EU's current text for the "backstop".

Not in any sense could any rational person thus describe the EU's stance as "bullying", and neither could this be construed as an intention to break open the United Kingdom and detach Northern Ireland from it.

The problem could be solved by what one might call Norway-plus, the Efta/EEA option with additional deals to cover areas which are not part of the EEA Agreement. But since Mrs May has ruled this out – as have Mr Johnson and his "ultra" colleagues – it is hard to see what other way might achieve the desired end.

In an attempt to square the circle, Mrs May has come up with her "Chequers plan" which, bizarrely, doesn't solve the problem. For all Johnson's squealing about suicide vests, it is a weak shadow of the Single Market which cannot be accepted by the EU.

Thus, we have Johnson going over the top in his characterisation of the EU, while complaining about a "solution" from Mrs May which is never going to fly, leaving us with an impasse, where the risks of a "no deal" exit are very high and increasing.

His complaint thus stands that: "we have managed to reduce the great British Brexit to two appalling options: either we must divide the Union, or the whole country must accept EU law forever". Both options are exaggerations, and he fails to acknowledges his own role in preventing a solution from being found.

Instead, Johnson dwells in the land of unicorns, asserting that, since "we live in a world of smartphone apps and electronic forms and Authorised Economic Operator schemes", there "is no need for any kind of friction at the border at all".

This leaves us with his catch-all solution, which is to "scrap the backstop, fix the borders for frictionless trade, and get back to the open and dynamic approach outlined in Theresa May's original Lancaster House speech - with a big Canada-style free trade deal". Failing that, he asserts, "we should tell our friends they won’t get a penny".

That then leaves Jeremy Hunt to counter – something he should never have done. The very fact that he engages with the stupidity gives it a level of credibility it does not warrant. But, since the government holds an untenable position, he can only offer a lame defence which lack conviction.

"The Government's overarching aim", he says, "is to restore Britain's sovereign control over our borders, laws and money, while protecting jobs by ensuring our exporters can trade as freely as possible with the EU". He then claims: "We will also protect the peace in Northern Ireland and firmly resist attempts by some in Europe to divide our United Kingdom with customs posts down the Irish Sea".

As for an objective (or any) defence of the specifics of the Chequers plan, we search in vain. There is none. All we actually get from Hunt is an assertion that Mrs May is "better than anyone I know at holding the line in the face of intense pressure", with an appeal for unity.

As a country we can help, too, because her efforts to achieve the best outcome for Britain will be greatly strengthened if we are united behind her", the man says. And Parliament will have the chance to debate and vote on any agreement. Thus, the message is "we should not rush to judgment on a deal that is still under negotiation".

Looking at these contributions together, we have to ask what the Mail has achieved. It has juxtaposed a wildly exaggerated, distorted account of the current state of negotiations with what amounts to an uninspiring call for unity. The paper has filled space and given it the controversy it so loves, but what constructive purpose has it served? Does anyone walk away from these articles better informed, or any more capable of understanding the issues?

Then as the Independent points out, this is not really about Brexit. These are the opening shots in the developing Tory civil war, in which we have become unwilling bystanders.

And at the margins, we are treated to a discussion on Brexit which is so uninformed and uninspiring as to be excruciatingly tedious. In what is for the UK the most important political development of the century so far, the paper has managed to turn it into something unspeakably banal.



Richard North 10/09/2018 link
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