Brexit: a deal or no deal?

17/08/2018  


In the murky waters of the current Brexit impasse, there is little of substance from which firm conclusions can be drawn, especially in terms of the growing debate about the "no deal" scenario and whether it might happen.

The resultant uncertainty thus provides unending opportunities for speculation from a wide range of pundits. These have free range to parade their own lack of knowledge with varying degrees of authority, drawing plaudits from commentators who know even less then they do.

Many rely on our distressingly low-information society to promote their agendas, repeating known falsehoods with Goebbels-like consistency. And lies told often enough by a wide enough range of people acquire a patina of legitimacy that approximates truth. By this means, the familiar lie outlasts attempts to rebut it.

Yet, despite all that, there are constants that rise above the uncertainty, the ignorance and the lies. They can impart clarity to otherwise muddled and disingenuous arguments and contradict the sirens which, for their own particular reasons, are hastening to inform us that a "no deal" scenario cannot and therefore will not arise.

In a sense, though, we are dealing with a false dichotomy. I myself have written that not only is the "no deal" scenario not an option – it does not even exist. There are no circumstances short of war, I wrote at the end of June, where the UK can cut off relations with its European neighbours. Brexit is not about "leaving" Europe. It is about redefining our relationship with the EU and its Member States.

In practical terms, I asserted, we need to make arrangements for the movement of goods and people, to maintain our electronic and communications, to ensure our mutual security and the myriad of other linkages that make modern society a reality.

The point here was (and still is) that there can be no such thing as "no deal". We have to deal. The question is whether we negotiate before or after we leave the EU – whether we do it in a controlled fashion or in crisis conditions after things have stopped working and chaos has descended. Either way, we end up with deals.

The issue which ten arises is that, if we find ourselves making deals after Brexit day, they will be made in a crisis atmosphere and can hardly be more favourable than anything we agree before we leave.

Now that these obvious truths are beginning to dawn, we get the Johnny-come-latelies such as Iain Martin in The Times, burbling about a "no-deal Brexit deal".

His thesis - so lacking in originality that it is shared with others to a greater or lesser extent – is that if the Brexit talks fail in October of November, there will be an attempt to improvise a transition period, so that from March 2019 regulation can essentially stay the same for a limited period.

This, effectively, is a status quo scenario which would supposedly give business and security services on both sides certainty and time to prepare for no deal, or a free trade arrangement and security partnership in 2020. Then, from December to March, the two sides would "work quickly" through key areas such as aviation, finance, pharma and security, to come up with working arrangements.

However, if we apply known constants to this Pollyanna scenario, certain points emerge which define the EU position. The first point is that there can be no withdrawal agreement without a settlement of the Irish border question. The second, which follows from the first, is that there can be no transitional period without a withdrawal agreement.

Significantly, in Mr Martin's article and his advocacy of a "no-deal deal", there is no mention of Ireland. He thus deals with the border question by ignoring it. Instead, he wants us to believe that the EU, having set out its unalterable conditions for a transitional period, would then abandon its conditions and enter into a completely new set of talk covering issues which, hitherto, it has refused to discuss in detail until the UK has left the EU and become a third country.

Measured against the constants, the Martin thesis – supposedly drawn from discussions with Ministers – is absurd. A similar idea, promoted by Lee Rotherham - of last-minute talks to deliver a "Strongly Mitigated No Deal" - is equally absurd, while an error-strewn article by plagiarist Ben Kelly is also devoid of realism.

The point that all these pundits completely miss is that, even if M. Barnier wanted to entertain talks on the issues which are so important to the UK, he has no mandate to do so. He would have to go back to the European Council with a proposal for a new mandate.

This would have to be kicked around the member states and then approved in principle by the General Affairs Council, before being submitted to a full European Council meeting for approval. Only then would a new round of talks start which – within the context of Article 50 – would have to be incorporated in a withdrawal agreement and ratified by the European Council and the European Parliament.

Assuming that the current talks do fail in October – and this is widely expected – it is also expected that there will be further rounds, stretching into November and even to the December Council. There is even a possibility that a final attempt could be made in early January.

In the event of the expected breakdown, it is then that a new mandate would have to be discussed and formally proposed. And even if agreed – which is unlikely – there simply isn't time for further rounds of talks and the ratification of any agreement.

Airily, Martin thinks he has pre-empted such minor difficulties. He resorts to a clever-dick parody, writing: "Can’t be done, comes the cry from the Brexit nerd industry in the UK and the fanatics in Brussels".

"On the contrary", declares our pocket genius, seeking to put his ignorance on equal footing with our expertise, "elected governments can get a lot done rapidly when they need to", adding, "look at the response to the financial crisis of 2008". But, when it come to how this response can be managed, we get no detail at all.

All we actually get is high-flown references to "the primacy of common sense" and the "spirit of constructive co-operation", but nothing of the powdered unicorn horn and the fairy dust that will be needed to make his fantasy happen.

Sadly, that puts us back in the land of uncertainty, where no amount of clever-dick speculation is going to substitute for cold, hard analysis, based on known facts – the most salient of which is that the EU and its Member States are no more ready for a "no deal" Brexit than is the UK.

But those who then take this as a situation which will force the EU back to the negotiating table with the UK are lacking in vision and understanding. We need to think in terms of what has been advocated for the UK by the likes of the "ultras" – that we should take certain unilateral actions to safeguard our national interests.

Not once though does it seem to have been mooted that unilateral action cuts both ways. If the UK can act unilaterally, so can the EU. And here, its most obvious action might be a unilateral extension of the treaties to the UK, treating it as a Member State for the purposes of trade and related matters. The agreement of the UK is not necessary and need not be sought.

From the stance of the EU, unilateral action has an obvious advantage. What is conferred unilaterally can be withdrawn in like manner. In its own time, the Commission can initiate the legislative adjustments needed to accommodate the withdrawal of the UK, and it can undertake sectoral negotiations to aviation agreements and like matters.

On a practical level, the Member States can make the arrangements, such as building and staffing the Border control Posts (as they will then be called), and hiring the extra customs officers.

When it is good and ready, the EU can then stage a phased termination of what amounts to its own unilateral transitional arrangements, keeping what it needs in place in accordance with its own timetable. It would not need any specific approvals from the UK beyond the sectoral deals that are negotiated.

All of this, I would not argue, will necessarily (or at all) come to fruition. The only point I make is that the EU is not bound to respond to UK initiatives and is quite capable of pursuing its own agenda to suit its own needs and convenience. By that token, we may well get our no-deal deals (plural), but they may well be on terms dictated by the EU.

As to the terms, most of them are already set – those that apply automatically to third countries. The EU is not going to re-write its rule book for our convenience, and no amount of fevered imagining by our self-important pundits is going to make the slightest bit of difference to the final outcome.



Richard North 17/08/2018 link

Brexit: the Dunkirk Option

13/08/2018  


According to Philip Davies, Conservative MP for Shipley, the only way Mrs May can survive as prime minister – and then only until the next general election – is to walk away from the Brexit negotiations "and start preparing properly for the fact that we're going to leave without a deal".

This is a measure of the stupidity of the man. While evidence of the dangers of the "no deal" scenario continues to accumulate, Davies and his fellow "Ultras" continue with their delusions, impervious to the reality which is all too evident to anyone with eyes to see.

It is doubtless true that, by opting for a "no deal" exit, Mrs May would enjoy a brief spell of popularity with a section of her party and the "kipper" tendency. But that would be short-lived. It would last just as long as it would take for the effects to become apparent.

With that, the Conservative Party should expect electoral annihilation. Even against Corbyn – should be not be deposed by his own members – the Tories would struggle to win. Received wisdom suggests that they would be out of office for a generation.

One supposes that, with this as a prospect, wiser heads within the May administration will prevail. An attempt will be made to secure a deal with Brussels, on whatever terms can be agreed. But these terms are not going to be favourable, creating their own stresses within the Conservative Party.

Either way, this is a lose-lose situation for Mrs May. But, in terms of short-term survival, Davies is probably right. Going for a "no deal" exist is probably the only way the prime minister will survive to the next election. But even then, she will need to act quickly. The forces of opposition are mounting.

From the likes of the Daily Mail, for instance, we see reports of dark conspiracies, the latest being a "secret plot" to oust Mrs May, and install David Davis as an interim prime minister – with the oaf Johnson waiting in the wings, ready to take over once we have left the EU.

Whether Johnson really has enough support to take over leadership of the Conservative Party is difficult to judge. There is a certain madness abroad at this time which is infecting the minds of men, obscuring the fact that this crass man at the helm of the party would be electoral suicide. Even if he did secure the leadership, he would never bring the Conservatives to electoral victory.

Politically, this leaves the UK in an interesting position. If Mrs May attempts to do the right thing, she will almost certainly be deposed. If she or her successor implements a "no deal" exit, that will ensure that neither of them remain in office. As such, Brexit represents an existential threat to the Conservative Party.

Despite the wishful thinking of those in continuity remain, seeking to stay in the EU – revoking the Article 50 notification – isn't an answer either. Not only are the "colleagues" unlikely to want us back, a serious attempt by a Conservative government to remain in the EU would precipitate an unreconcilable split which would also keep it out of office for a generation.

On the face of it, therefore, we seem to be looking at a problem to which there is no solution – not in the current political environment. The media have lost the plot, most of the expert groups are compromised when it comes to devising solutions, and industry representatives are not in a position to proffer anything which is politically sensitive.

Given this situation, and the enthusiasm for inventing new, named "options" to supplement the Efta/EEA, Swiss and WTO options, perhaps we ought to recognise the disaster scenario, to which we seem to be heading, by giving it its own name.

Both Pete and this blog has referred to Dunkirk (as in the evacuation of the BEF in 1940), whence I have remarked that we need a real, full-blooded disaster on the scale of Dunkirk or the loss of Singapore to the Japanese before we can get to grips with what is needed.

If such a disaster is needed to create the political environment in which change can be proposed and accepted, then we need to stop beating about the bush and start planning for disaster in what we might call the "Dunkirk Option", going for this as a deliberate choice. 

Oddly enough, the end result of the Dunkirk Option would look very much like the Swiss Option, with a succession of bilateral agreements made with the EU over a prolonged period, the totality amounting to the single treaty that we will have failed to secure.

The great danger of this – apart from the obvious economic damage – it that it cedes the initiative to the EU. In a crisis situation, we will be pressing for the deal(s), and the EU will usually be in a better position, able to bide its time.

However, there is no point in seeking an alternative if the political will is not there. Creating the conditions where the parties can come together to make an agreement is often as important (and sometimes more so) that the substance of the agreement itself.

The great handicap under which we labour at the moment is that not enough people understand, or are prepared to accept, quite how damaging a "no deal" scenario will be, and we are running out of time to convince the majority of the perils they face.

As late as yesterday we saw a senior meat industry representative (and former colleague), blithely assert that the post-Brexit beef industry "will be trading with the EU on the same basis as we are now". And even where there is some recognition that problems lie ahead, there is often a lack of understanding of their nature or severity.

In short, many people lack the imagination, the experience or the understanding that will enable them to visualise for themselves what the consequences of a "no deal" might be. Thus, they must actually go through the experience before they will accept the need for countermeasures.

Looking at the bigger picture, we need not assume that the EU would necessarily reject the crisis management approach embodied in the Dunkirk Option. After all, it was Juncker who said of the 2008 financial crisis, "we all know what things need to be done. What none of us know is how to get re-elected after we've done them".

In the main, we are dealing with mature, experienced politicians who will fully understand that there is often a gulf between defining what needs to be done and getting the backing needed for implementation.

Clearly, a politically enfeebled Mrs May lacks the political support needed for the implementation of a rational Brexit solution. Any new leader will need help if they are to achieve anything useful. And, if nothing else, continental politicians are fully aware of the concept of the beneficial crisis.

Another aspect of the bigger picture is the need to remember that Brexit is not an event but a process. Crashing out on day one may be disastrous in the short-term, but it doesn't have to be the last word. If we can absorb the damage and come back for further developments, then we can still end up where we wanted to be, albeit incrementally over a longer time period.

In fact, looking for a "big bang" solution was probably never on the cards. Governments simply do not have the absorptive capacity to deal with multiple, complex policy changes in such a short period as a couple of years. They need the flexibility to deal with issues sequentially, one at a time, without overloading the system.

This makes the prospect of a prolonged transitional period by far the most attractive option. But if there is no political support for the idea, then there is no point in hankering after something which is unattainable. If we need a crisis to clear the rubbish out of the system and create the political space for a workable solution, then we have to factor in the crisis as part of the process.

It thus seems to me that the best way out of the current impasse is to allow a crisis to develop, and manage it as best we can to minimise the damage, while using the political space created to pursue a longer-term objective.

Such a strategy may be considered very far from optimal, although in the real world, the politically attainable must always take precedence over the unattainable ideal. Pragmatism must be the watchword. If we need a crisis in order to achieve long-term goals, then that must be considered as part of the price we must pay for a sustainable, long-term solution.



Richard North 13/08/2018 link

Brexit: you can't even fool Tories all of the time

09/08/2018  


The Twittersphere is all agog with Mrs May's latest charm offensive, trying to sell her Chequers plan to her party faithful. Published by Conservative Councillor Phil King, deputy leader of Harborough District, so far it boasts exactly zero "likes" and a similar number of retweets.

At least Conservative Home have given it an airing and the Guardian is on the case, using Cllr King's helpful publication.

Meanwhile, it takes no great genius to work out what really excites the legacy media and the social media. The oaf's genius for self-publicity has got him the headlines and the attention he so desperately craves.

That said, it is not easy to get worked up about Mrs May's latest contribution to the debate. We've been there before, and she has very little new to say. Even the mantras are the same.

Our revered prime minister starts by telling the faithful – just in case they needed reminding, that in the referendum on 23 June 2016 – the largest ever democratic exercise in the United Kingdom – the British people voted to leave the European Union.

"And that", she says, "is what we will do", adding the now-familiar litany: "We will take back control of our money, laws, and borders". All this, she declares, begins "a new exciting chapter in our nation's history".

But Mrs May, having acquired a reputation for not listening to anyone outside her own tiny inner circle, now has it that "it now falls to us all to write that chapter". And that is why, over the last two years, she has travelled up and down the country listening to views from all four nations of our United Kingdom and every side of the debate.

I don't know if she has read these words – words which she has put her name to – but she set in stone her Brexit policy on 17 January 2017, when she committed the UK to leaving the Single Market. And she hasn't altered her position one iota. If she's been listening to views from "every side of the debate", she has a funny way of showing it.

I need not then trouble you with the platitudes about making "this great country … fairer and more prosperous than ever before", which means we can cut to the chase and learn how the Government is delivering on the result of the referendum, and the pledges made at the general election, to leave the EU and build a strong new relationship with the EU from outside.

Startlingly, though, she admits that "our negotiations on our future relationship have reached an impasse" and that the two options on offer from the EU at the moment "are not acceptable to me, or to the United Kingdom".

The first is a standard free trade agreement for Great Britain – with Northern Ireland staying in the customs union and parts of the single market. This "would break up the UK" and, as a proud Unionist, Mrs May is "very clear" that it would be "unacceptable".

The second, membership of the customs union plus an extended version of the European Economic Area (EEA), would mean free movement, vast annual payments and alignment with EU rules across the whole of our economy. This, says Mrs May, "would not be consistent with the referendum result".

While remaining "clear" that "no deal is better than a bad deal" – to which effect the Government is stepping up its "no deal" preparations, Mrs May avers that the "best path to delivering Brexit" is to "get the EU to consider a third option".

I suppose we can be grateful that she did not – in the manner of Tony Blair – call it the third way, but nonetheless that is what the White Paper has become. It "honours the result of the referendum, maintains the constitutional and economic integrity of our United Kingdom, and sets us on course for a productive relationship with our closest trading partners".

The need to preserve my own sanity prevents me from then delivering verbatim what Mrs May then has to say - for the reason that we've heard it so many times already. If I hear it once more, my head will explode.

Suffice to say that her "plan" is in no sense a concession to the EU's "demands". She is rejecting the two models they have put forward. Instead, "we are asking them to accept a bespoke model which meets the unique requirements of the United Kingdom", she says. And a "key part" of that bespoke model:
… is the creation of a free trade area on goods between the UK and the EU. This would protect the uniquely integrated supply chains and ‘just-in-time’ processes which have developed over the last 40 years, and the jobs and livelihoods dependent on them. It would ensure that businesses on both sides can continue operating through their current value and supply chains. It would avoid the need for customs and regulatory checks at the border, and mean that businesses would not need to complete costly customs declarations. And it would enable products to undergo only one set of approvals and authorisations in either market, before being sold in both.
There is more – there always is. But, with that, Mrs May has just buried us. Actually, it's more in the sense of a traditional burial where the earth in the plot is left to settle for a year before the headstone is positioned. That's what she's done: she's set the headstone.

Just for once, it would be such a relief for our prime minister to acknowledge that, when we leave the EU, we become a third country – with all that that entails. This is not a status reserved for the "no deal" scenario. It happens automatically, meaning that barriers already in existence and applying to all third countries will apply to us.

Mrs May holds that her proposals for partial adoption of the "common rulebook" will bring us frictionless trade at the border. But they won't. They can't and the EU has already rejected them. Yet the Conservative Party is supposed to be stupid enough to buy into something that the "colleagues" have already kicked into touch. Even some Conservatives will be offended by this.

Given the evidence that Mrs May is not taking a blind bit of notice of the Party, they may be further offended by the affirmation that she and the Party Chairman, Brandon Lewis, "are always keen to hear the views of Party members. Questions or comments are thus invited".

Even Conservative Home finds that hard to swallow. Responses received from correspondence already exchanged between members and the centre "have been universally bland", often simply copying and pasting arguments that have already been sent out as press releases and mass emails.

As you can imagine, says CH, "getting such a discourteous reply from Downing Street or from one's own Party is frustrating or even insulting for committed Conservatives who are seeking to express their deep concern about what they believe to be a serious error".

But members, doubtless, are expected to rise above all that. "As Conservatives", Mrs May says, "we should be proud of the role we are playing at this crucial time for our country. We are the Party which gave the British people their say in how they are governed. We are the Party which respects the decision they made. We are the Party which will take the UK out of the European Union next March".

And therein is the ultimate lie. "We are the Party", she says, "which will secure a strong, secure, and prosperous future for the United Kingdom as an independent country standing tall in the world while maintaining a deep and friendly relationship with our closest neighbours".

Conservatives anxious for a repeat dose are then given access to a propaganda sheet on the Party's website. This is just as well as you would have to be a Conservative member to be stupid enough to believe it – and even then, that's pushing it.

There is that saying with which we are all familiar:" you can fool all of the people some of the time …". But this variation ends, "you can't even fool Conservatives all of the time".

It is hard to imagine what Mrs May is even thinking about. Even if she could fool her party members, she can't fool Brussels. And that is going to have a far more profound effect on her life (and ours).



Richard North 09/08/2018 link

Brexit: the "no deal" penalty

08/08/2018  


With the prospect of a "no deal" exit from the EU being taken more seriously, we are starting to see a number of newspapers attempting to predict what the UK would look like in the event of us "crashing out" of the EU.

With the best will in the world, though, there are too many variables to anticipate, which remove any certainty. The precise outcome will depend on the assumptions made, the degree to which known factors are accounted for, and then the mitigation - both pre-emptive and reactive – undertaken by government, business and even individuals.

As far as variables go, there is probably no more volatile a situation than our food supply, with the more lurid commentators suggesting that we could run out of food within days (or certainly weeks), with the very real prospect of rationing to avoid starvation.

Yet, in this one area, mitigation is a practical proposition. Furthermore, given the destructive effect food shortages would have on the maintenance of law and order – with food riots, looting and civil disobedience – it is my view that the government would take any and every effective measure it could to ensure that food supplies are maintained (even if costs of some commodities do increase).

Largely, as we see from this article in the Telegraph - where James Rothwell writes a rather lame "explainer" headed: "What does a 'no deal Brexit' mean - and how would it affect the daily life of Britons?" – the media doesn't have a clue.

Here, Rothwell actually errs on the side of suggesting rather vague "magic wand" solutions, having noted that Mrs May says voters "should feel reassured", as the government plans to stockpile food.

On the basis that the government is set to hire an extra 1,000 customs officers to deal with extra checks, he argues that, "if large numbers of staff are hired, alternative supply chains are put in place and any outstanding legal issues are addressed - all in time for March 2019 - then the adverse effects could be mitigated".

However, no one with any sense is going to accept that the government (or even commercial enterprises) will be able to stockpile food, other than for a few very basic commodities. And nor is rationing a workable idea. There simply isn't time to set up a scheme, and nor would it be possible – barring the imposition of draconian emergency powers – to exercise sufficient control over the food chain to make it work.

Furthermore, no amount of UK border staff are going to make any difference. As I have pointed out so many times – latterly endorsed by the Road Haulage Association – the problems will arise in the continental ports, over which we have no direct control.

Looking at possible scenarios – which is not at all difficult, as we know most of the operating parameters and how they will be affected by Brexit – we can be fairly well assured that, if we control (i.e., limit) the amount of goods presented to ports for clearance in EU Member States, then the flow of imported food will be unaffected. Health checks in the UK can be waived (temporarily at least), invoking the WTO national security exemption (Article XX1 (b)(iii)).

The price we will have to pay for this is a massive reduction of goods exported to EU Member States – which may be to an extent mitigated by stockpiling goods on the continent (and in non-EU states) to keep customers supplied after Brexit.

But bearing in mind that the export of live animals and products of animal origin to EU Member States will be prohibited in the event of a "no deal" Brexit, we can expect a glut of certain commodities as they find their way onto the domestic market, and even a price crash. This dynamic will, however, drive many producers out of business, leading to shortages in the longer term.

If there is any likelihood of food shortages, the most probable cause will be panic buying. This has the capability of stripping supermarket shelves bare, even when there are no actual shortages. The government may need to impose emergency limits on the amounts of specific commodities any one individual can buy, and even make hoarding them a criminal offence.

In the absence of government action, the supermarkets may voluntarily impose their own limits, which could have the effect of damping down demand.

There is then the matter of medicines, where some pundits are also suggesting that shortages may occur. In this sector, though, stockpiling is a realistic proposition. Perversely, EU Member States are at greater risk, as medicines produced under the control of UK establishments (even if they are manufactured in EU Member States) may not be authorised for sale in any of the EU states.

Of all the headline issues that may become apparent, post Brexit, is aviation. Once we drop out of European Common Aviation Area (ECAA) and the aviation safety acquis, administered by EASA, the effects on UK aviation will be widespread and profound.

Rothwell, for the Telegraph relies on the view of chancellor Philip Hammond, who said: "It is theoretically conceivable in a no-deal scenario that there will be no air traffic moving between the UK and EU on 29 March 2019. But I don't think anybody seriously believes that is where we will get to".

For my part, it is extremely difficult to see how the legal issues in civil aviation can be resolved without intensive negotiations and a complex raft of agreements. In the event of a "no deal" Brexit, therefore, some disruption is inevitable and the odds favour a complete shut-down, even if only for a matter of days while emergency agreements are stitched together – allowing limited UK services.

The approach to aviation, however, typifies the way many pundits handle a "no deal" Brexit. Many of the consequences are so extreme that disbelief sets in. As with Hammond, the view is taken that because they are so extreme, they cannot be allowed to happen and therefore, that they won't happen.

Nevertheless, I think we must prepare for the likelihood that the export of motor vehicles will cease. Even where manufacturers have been able to transfer type approvals to EU Member State regulators, production supervision arrangements will not be in place, rendering existing approvals invalid.

The same goes for any civil aviation products, including finished aircraft and assemblies such as Airbus wings and aircraft engines. One cannot simply offshore the regulatory approval here, because controls are embedded right throughout the design and manufacturing processes.

Across the board, the export of many manufactured goods will cease. This will apply where they require third party certification from "notified bodies" and have relied on certificates from UK bodies. These will no longer be valid. Chemicals which lack REACH approval will also be excluded from the European market.

Live animal export will, of course, be prohibited, but this will probably also apply to the movement of pet animals without quarantine, and the transport of racehorses direct to France and Ireland, without veterinary control and supervision. Also on the sporting front, Formula 1 racing will be badly affected.

Recently, we have learned that a substantial amount of recyclable domestic refuse is exported to EU Member States, particularly Poland. This will no longer be possible.

Once we get into this sort of detail though, the legacy media is nowhere to be seen. Their journalists lack the capability (or the motivation) to offer anything other than the most superficial of pictures.

The closest I've seen recently is oddly enough in the The Telegraph, where Jeremy Warner reports under the heading: "Let's be honest about a no-deal Brexit; it has nothing to offer but blood, toil, sweat and tears".

Denying that there problems related to a "no deal" Brexit is, he writes, "verging on the delusional". And although Warner's grasp of the detail is sketchy – as is understanding of the legal background to the application of non-tariff barriers, he does at least recognise that the EU makes it plain that Britain becomes a third country from the moment it exits. 

Without some form of dispensation, he writes (not appreciating that this is not possible in a "no deal" scenario), he warns that "all those myriad tariff and non-tariff barriers to trade immediately kick in". And although he thinks this "may be legalistic and irrational", this "is the law. There is almost no business that takes place outside a legal framework of this sort".

One example he offers is selling medical equipment in the EU, which requires a certificate – or Conformité Européene marking – to show required standards are met. These certificates, he notes, are pretty much automatic for EU members, and as it happens are substantially written here in the UK for the EU as a whole, but would cease to be valid for UK suppliers when Britain becomes a third country. UK certification authorities will no longer be recognised.

Even if the UK said it planned to remain fully compliant with the EU, including ECJ rulings on such matters, the EU could "if it wished to play hardball" either refuse such certificates or subject British medical equipment to vigorous border controls to ensure compliance". 

Wrongly, Warner asserts that "some countries – Switzerland, Australia and Turkey – enjoy mutual recognition with the EU on medical equipment standards" - which is not the case. The man is confusing recognition of standards with recognition of conformity assessment.  He is right, though, is saying that such recognition, "by definition" requires a deal to be struck. 

As to the WTO, so long as the EU can show it no more discriminates against the UK than any other third country, it would be within the rules. This, says Warner, will be easy enough in all the high value-added trade the UK does with the EU.

Here, he hasn't quite got it. The man does not seem to understand that the EU is obliged to impose these controls, in order to avoid discriminating against other third countries. Thus, he wrongly sees the EU approach as "vindictive, economically irrational and self-harming", even if he acknowledges that the EU "shows no sign of giving way" without fully understanding why.

To raise these points is not to succumb to Project Fear, Warner concludes – in a flash of honesty that is rare in the Telegraph. But what no newspaper (or broadcast media) has yet to do is fully confront the consequences.

Obviously, the government will do everything it can to take the high-profile issues off the front pages. But what they will not be able to avoid is the torrent of news about business shut-downs and job losses. With the loss of access also to the EU's trade deals, we are effectively looking at the collapse of the UK's export trade.

An unresolved, "no deal" scenario could, by the end of next year, have unemployment running into millions. This will be partially disguised by EU immigrants returning home but, while the government may be partially successful in keeping the queues of lorries off the roads, it will have less success in concealing the size of the dole queues.

That will be the ultimate "no deal" penalty and one which could be with us for a very long time.



Richard North 08/08/2018 link

Brexit: Kamikaze pilots

02/08/2018  


You would think that, with all the resources available to him, and after all this time, the Telegraph's Allister Heath might have learned something of the way the European Union works.

But, in an utterly mad article, headed: "The kamikaze Brexit strategy of this Government beggars belief", the man manages to display a staggering lack of comprehension that, had it not been part of a continuum, would simply beggar belief.

At least, however, the article does one thing – it portrays a common view of Mrs May's administration. Thus writes Heath, "Its incompetence in its handling of the greatest question of our times is now so extraordinary, so mind-boggling, that it is at times hard to believe that any of this is actually happening".

But, from there, it's all downhill. Mr Heath asserts that we have ended up with a "kamikaze government" that appears to have – deliberately or inadvertently – "put itself in a situation where the only way it thinks it can convince us to buy its ridiculous Chequers plan is to highlight all the problems, real, inflated or imaginary, that a no deal with zero preparations would entail".

And this is where the man starts going so spectacularly wrong in assuming that it is at all possible to prepare for a "no deal" scenario. Heath actually asserts that it is this government's job to ensure such preparations are made. He wants it "to identify and implement policies to eliminate or minimise disruption from a 'no deal' outcome.

And this supposed lack of action has the government "in effect campaigning against itself, exposing or even exaggerating its own failings". An administration, says Heath, that once claimed to believe that "no deal is better than a bad deal" has tacitly allied itself with the most extreme of Remainers, and through its inactivity, blundering and silence, is doing their work for them.

From here, we then descend into a bizarre fantasy as Heath declares that a "normal government" would have worked out exactly what needs to be done to keep planes flying and supermarkets stocked.

This, he says, "is not about succumbing to the fear-mongers: a series of tricky yet solvable technical problems would arise from terminating our membership of the EU while not replacing it with any other legal arrangement" He then continues:
A sensible government would not be shy about telling us, in extreme detail and accompanied by extensive legal advice, how it would resolve these issues: all of this would be public information, and directed at UK as well as European audiences. Better the truth than have to rely on the sewer that is the Twittersphere for gossip and rumour. Some good, technical work may indeed have been done under the leadership of some ministers, but unfortunately not in a visible way, and it has been overshadowed by the failure of central government to communicate with local authorities or business.
Mr Heath lambasts civil servants who want to use the M20 as a lorry car park and asks why there is no truly sustainable solution. Why "hasn't the government purchased or rented vast amounts of land in the proper place, and used emergency rules to bypass planning red tape? There are powers available on the statute book for the government to act during times of emergency.

And so the fantasy develops: "why hasn't it recruited 1000 vets from abroad, to make sure that checks on meat and other foodstuffs can be made at the border - paying them massive bonuses if need be? Why hasn't it worked out what to do at Dover, supposedly the key port health authority? Why hasn't it earmarked £5bn or £10bn in emergency funding, with massive cash prizes for contractors that work 24 hours a day to deliver what must be done?

But here, it gets truly surreal. Why, asks Heath, can't the government negotiate a bridging mini-deal with France to ensure than none of this is necessary? Why isn’t that the sole purpose of Theresa May’s trip to see Emmanuel Macron?

Why, he adds, can't the Prime Minister calmly point out to Mr Macron and the rest of the EU how the UK would respond to a one-sided imposition of full third-country customs checks on UK exports? And ditto any decision by the Irish to attempt to cut off Northern Ireland's electricity supply? Will this government ever be firm, or can it only beg?

And therein lie the core misunderstandings of the man. Does he not realise that France is a Member State of the European Union? Does he not understand that the country is not a free agent and that, in particular, the customs union and the common commercial policy are exclusive competences of the Union. Even if it was willing to do so, France can't negotiate a "bridging mini-deal" with the UK.

Then there is the canard of the "one-sided imposition of full third-country customs checks on UK exports". Heath and his fellow travellers just cannot seem to cope with the concept that no-one is imposing third country checks on the UK. These checks are already in place and apply to all third countries, with any modifications that might arise from bilateral trade agreements.

In this context - as Michel Barnier has so often observed – it is the UK which is leaving the EU and, by that action, is according itself the status of third country. The third country checks are not being imposed on the UK – the UK has elected to change its status where they automatically apply.

The point is simple enough. I have used the analogy of a medieval walled city, inside which the traders happily do business – with the public and between themselves – secure within the fortifications. When a trader (unhappy with the rules and regulations) decides to move his stall outside the walls, he cannot then complain that he is no longer able to trade freely with the people still inside.

It is Mr Heath's complete inability to understand this point that leads him astray. As long as he believes that the controls, the checks, the restrictions and everything else are things the EU is doing to us, he can allow himself to believe that change is possible and can be negotiated.

This is a man, incidentally, who favours "WTO rules", but in another lapse of understanding, does not seem to realise that, under WTO non-discrimination rules, the EU cannot make exceptions for the UK on the application of its third country rules, unless it applies them to all other third countries. And, to do so, would effectively demolish the EU's external policy. This it simply cannot do.

On this basis, if the UK exits without a deal, third country checks will automatically apply to its exports to the EU. There is absolutely nothing Mrs May can do about this. Her government may employ 1000 vets from abroad to check foods coming into the country, but what matters (when we are finally allowed to export) is how many vets the governments of EU Member States are prepared to hire, in order to check foods of UK origin coming into their countries.

Here, also, there is another major conceptual failure, shared widely by politicians and media alike. It is not the checks in the UK which will cause the delays. The UK government can indeed exercise emergency powers to make sure that goods flow freely once they reach our borders. And there is no problem with the WTO. The UK can always apply a national security waiver.

What matters are the checks made at the Member State borders. One would not think that we would have to spell this out but the point is that – if we take the Dover-Calais route - there are only so many ferries and only so many berths and, at Calais, there is only so much space in the port area.

What will happen is that, as checks are applied at Calais, there will be a backlog of vehicles awaiting clearance, causing increasing port congestion. As spaces fill up, newly arrived ferries will not be able to unload, and will have to sit idle awaiting their turn. This means that no more ferries can enter the port, and no more vehicles can be loaded or transported to the UK.

This is why I'm suggesting that, if delays are to be avoided, the number of vehicles that are sent to the EU Member State ports must be restricted to a level where their authorities can process them. And if that means having ferries going to France empty – or with just returning empty vehicles – that will be the price we have to pay to keep food and other vital imports rolling in.

Yet Mr Heath's mad idea is that the UK Government would be telling us that it would keep the border entirely open with France for an extended period, allowing all goods, food and medicines to come in freely. In his distorted, uncomprehending view, this would make shortages impossible and keep supply chains going.

Mrs May's Government would "also be explaining the legal basis for such an approach, whether any new legislation would be needed and how any objections from the WTO would be ignored until the proper infrastructure is constructed" – not that any of this would matter in the least.

The real madness, then, is in Heath's expectation that the Europeans would reciprocate. But, of course, they can't and won't.

This madman's answer to that is that our government could promise to indemnify all agricultural exporters, and perhaps others too, or help them in some other way, in the short run, in full knowledge of the legal issues.

It could encourage retailers to source far more of their goods and produce from outside the EU, and to shift supply chains as soon as possible, inflicting immediate pain on EU producers. It could cut VAT and other taxes to cushion any disruption.

So, according to Mr Heath, we turn our backs on £270 billion-worth of trade with the EU and, at the drop of a hat, arrange alterative suppliers for, amongst other things, 40 percent of our food supplies. Good luck with that.

The real madness then is in the Telegraph Group giving this man a platform and the power – as editor of The Sunday Telegraph - to spread his ignorance. The cartoon shows Mrs May at the controls of the bomber, but the real Kamikaze pilots are the likes of Mr Heath and the target is the UK.



Richard North 02/08/2018 link

Brexit: panic is the right thing to do

30/07/2018  


As the media start to pick up the stories of shortage of food and vital medicines arising from a "no deal" Brexit, one wonders what it will take for the likes of the IEA to express any remorse over their part in making it happen.

Certainly, if Mark Littlewood, director of the IEA had any shame, after this report, now would be a good time to show it. Touting for donations in exchange for access to Ministers, even if not strictly illegal, is an abnegation of democracy, and an affront to all right-thinking people.

However, since the great clean-out after the Chequers "summit" – with the resignations of Davis, Johnson and Baker, there are only Gove and Fox to hold the standard aloft for the right-wing free trade paradigm. The influence of that group within government is considerably diminished.

Nevertheless, this latest "cash for access" scandal does again highlight the sinister role of Sanker "Snake Oil" Singham, and especially with Littlewood, albeit unwittingly, admitting that he had been used as a "slight shill" to conceal some of Singham's meetings with Baker.

The way this was done is that Littlewood would tag along at meetings alongside Singham, so the minister could officially record visits as "Mark Littlewood and staff", thus reducing the number of times Singham's presence would have to be recorded by name.

The fact that this was even thought necessary tells us something sinister is going on. And when much of the material produced by Singham and his team is so obviously technically unsound – which would be rejected by any sensible person – one really has to wonder how this group has acquired such influence at the heart of government.

If this reflects the way government is run now, then we are moving into a post-democracy period, without ever having really enjoyed a fully functioning democracy.

The sense of unease is further reinforced by the interim report of the Digital, Culture, Media and Sport Committee, on its investigation into "Disinformation and ‘fake news". And while one doesn't necessarily have to buy into the entirety of their "fake news" thesis, the reference to Mr Cummings's "contemptuous behaviour" - unprecedented in the history of this Committee's inquiries – leaps out of the page.

Hailed in the immediate aftermath of the EU referendum as the genius who won the campaign for "leave", Cummings is very much tarnished goods these days, especially after recent disclosures from Facebook about the nature and timing of Vote Leave's targeted adverts.

Even one of the latest recruits to the May government, Dominic Raab, is getting a bad press with accusations of bullying – even if from a less than unimpeachable source. And it goes without saying that the erstwhile foreign secretary is up to no good, having breached the ministerial code in returning to his Telegraph column.

Altogether, we get a sense of fin de siècle, the same sort of Tory sleaze that brought down John Major's government in 1997, when so many people were sick to the hind teeth of the Conservatives that they couldn't wait to see the back of them.

The difference between then and now, of course, is that back in 1997, we had a fresh, young Labour leader in the form of Tony Blair and his punchline of "things can only get better". Looking at the grey sleaziness of the Major administration, that wasn't hard to believe.

Now, by way of a complete contrast, we have Corbyn – probably the only thing keeping Mrs May in office – apart from a terminally split Conservative Party where no single faction can command a majority and the groups so loathe each other that they could never unite behind a single challenger.

That leaves ordinary voters (and the rest of us) in a sort of no-man's land, disenfranchised, disillusioned and marooned by the incompetence of the political classes and the low-information media. The idea of a democratic vote is meaningless. There is nothing to vote for. We don't need whiffling academics to tell us we've got a problem.

With parliament having closed down for their holidays though, that leaves idle hacks with nothing very much to report – which probably explains why we're getting a rash of food shortage stories, complete with a headline for the Guardian proclaiming: "Brexit provides the perfect ingredients for a national food crisis".

Having ignored the potential problems in cross-border trade in food, it comes as no surprise to find that the media is now overstating the problems – or at least misdiagnosing them.

A point I've made several times now is that any an interruptions in our supply of food, post-Brexit, are entirely preventable. As long as the government keeps our ports clear of outbound traffic, unless it can be shown that their consignments will be cleared once they arrive at the EU border, the flow of goods into the country (and medicines, for that matter) will be relatively secure.

Indeed, as it may well prove impossible to export some foods to the EU, there may well be local surpluses and food normally produced for export is diverted onto the home market. Only later, as producers go out of business, will we experience shortages in certain commodities.

As it stands, the biggest risk is probably panic buying. But that is a real enough risk. Given the almost complete loss in confidence in the government's handling of Brexit, there is likely to be a significant number of people building their stockpiles. Enough people doing this can cause shortages in the shops even when there is no blockage in the pipeline.

That assumes that the government has got and is able to put an effective contingency in place. If it does, we could end up with the worst of all possible worlds: shortages of some commodities and panic buying.

There is also no particular reason why we should experience any shortages of medicines, whether home-produced or made abroad – including those, like insulin, which are made in Europe. Come Brexit day, the EU approval system will still be recognised by the UK government so, as long as the ports are clear, imports should get a free passage.

If the worst comes to the worst, emergency supplies can be brought in by military cargo aircraft, or by civil aircraft operating under humanitarian aid licenses, operating out of military airfields.

Perversely, in this, it is the EEA members who will have the greater problem, in that they will no longer allow the import of products carrying market authorisations issued by the UK authority. Where disruption to the UK system might occur is where we rely on medicines made abroad using British ingredients, which are no longer available.

But any confidence in there being continuity of supply has to rest on the belief that the UK government is capable of formulating effective contingency plans and of implementing them in good time. But then, when you see the quality of people in government, and those advising it, it would be extremely unwise to place any trust in systems continuing to work.

What gives us faint hope is that EU Member States will variously suffer from supply interruptions. Whether they be Spanish vegetable growers who will suddenly lose their markets, aircraft manufacturers who will be unable to secure much-needed components or assemblies, or – as in the case mentioned above – patients in urgent need of medicines, there will be a strong constituency which wants Brexit to be trouble-free.

A graphic example of this comes in a statement from Pascal Lamy who warns Ireland that a "no deal" Brexit could be catastrophic, to the extent that the country might need emergency aid to tide it over the worst.

Lamy also dismisses the idea that there won't be a border after Brexit. Exiting the internal market has a cost, he says, so there is no way there won't be a border. "If you exit the internal market you have to have a border".

Asked if there are any borders anywhere in the world where there is no physical infrastructure, he replied: "No. The most open systems of trade which exist are either in South Africa, where there is the South African Customs Union since the early 20th century, and there is a border. And if you look at for instance Norway-Sweden, there is a border. "So the notion that there would be no border is pie in the sky".

For all these reasons, this is why I expect the EU to devise some sort of transition period, even if it means making unilateral concessions, just to buy time and allow more preparation.

Sadly though, we must conclude that no amount of planning or organisation could even begin to compensate for the incompetence of the May government and the people advising her and her ministers. Anyone who lets people like Sanker Singham within a hundred miles of Whitehall has to be all bad.

Thus, whatever the logical part of one's brain might tell one, there are times when panic is the right thing to do.



Richard North 30/07/2018 link

Brexit: low information individuals

28/07/2018  


It is interesting to see the Independent's Andrew Grice pick up on the chatter on the EEA, with an article headlined: "Now that the Chequers deal is off the table, even the Brexiteers are turning towards the single market and the EEA".

The headline (and the content) is a testament to bubble-speak, studiously sticking to the binary narrative and blanking out the moderate middle which has been in favour of the Efta/EEA option since forever.

With the vocal elements of the politico-media nexus having previously rejected this option, it must somehow be reinvented so that it can be once again "owned" by these bubble-dwellers, detached from its original band of advocates who remain just as invisible as they ever were.

Needless to say, the likes of Grice don't bother with detail. There is a sort of identikit version of the Efta/EEA option doing the rounds which repeats the standard errors and misunderstandings with such remarkable consistency that there must be a crib-sheet somewhere to keep the witless hacks on-message.

Nevertheless, that the option is suddenly finding limited favour in some circles speaks volumes for the dawning realisation that the Brexit talks, with the White Paper on the table, are going nowhere. It stands to reason, therefore, that some should be looking for another exit – even if none of those who are temporarily attaching themselves to the received version of Efta/EEA have the first idea of how the real thing works in practice.

In the absence of the necessary knowledge, it follows that they cannot know that their fictional alternative has not the faintest chance of working. Despite the latter-day enthusiasm of James Cartlidge MP, the Efta/EEA option cannot and will not provide a last-minute lifeboat to get us off the hook on which Mrs May's government has impaled us. It most certainly will not take the place of the transition period.

The point that would-be owners of the option need to realise is that, even if the government was suddenly overwhelmed with enthusiasm for it, there is neither the knowledge within the system, nor the time, to implement it.

In fact, there are only two realistic opportunities for implementation. The first would be for the government to seek a substantial Article 50 extension, to give time for the negotiations to be concluded. Politically, though – even if achievable – this could hardly be tenable. It would mean staying in the EU, probably for another two years.

The second could be even less politically tenable. The government would have to eat humble pie and give to the EU everything it demanded in order to secure a transitional period, during which the Efta/EEA negotiations could be concluded. Even then, we would probably have to ask for an extension to the period. Two years is likely to be the very minimum needed.

Given the response of Michel Barnier to the White Paper, however, it seems increasingly certain that the UK will reach the Article 50 deadline without having concluded a formal Withdrawal Agreement. And, since the EU has made it very clear that a transitional period is conditional on the Withdrawal Agreement, a crisis exit looks to be unavoidable.

Anyone who believes that the EU can be prevailed upon to "compromise" or be "pragmatic" could be described in the vernacular as "blowing goats". Similarly the tired and inept ploy, where the UK government tries to "divide and rule" by appealing over the head of the Commission to the leaders of the Member States, simply isn't going to work. Already, we learn, Member States are lining up to back the official EU position.

The Independent tells us that the Czech Republic, a traditional British ally, has been the latest to endorse the Brussels line. It did so yesterday, just hours after Barnier ruled out the agreeing to the White Paper.

French officials in Paris are said to be "puzzled" at why the EU would be expected to accept a British plan that was so complex, risky and burdensome for it and its businesses, to no benefit. Nathalie Loiseau, France's European affairs minister, said: "There should be no mistake. Michel Barnier does not represent only the Commission. He is the negotiator for the European Union.

She reminds us that: "He gets his mandate and his guidelines from the heads of state and government. And we have discussed it regularly at the level of ministers. We meet with Michel Barnier on a regular basis. So do the heads of state and government. So there is no difference between what Michel Barnier says and what we would say individually, each and every member state".

Then, it would appear that, even if the Member States support a deal, the European Parliament might step in and refuse to give its approval.

Rather than be chasing after the impossible, a more logical approach for the UK government, in the few months of talks remaining, might be to explore the possibility of coordinating contingency plans between the EU and the UK, to minimise the disruption confronting us.

Here, a certain amount of realism is needed. While the focus at the moment is on the "backstop", Mr Barnier's recent emphasis on the Common Commercial Policy (CCP) presents a hurdle which, even if all the other issues were resolved, would prove insurmountable.

To appreciate this one just needs to look at Article 207 of the Consolidated Treaties. This sets out the CCP's "uniform principles", with regard to "changes in tariff rates, the conclusion of tariff and trade agreements relating to trade in goods and services, and the commercial aspects of intellectual property, foreign direct investment".

It also includes the achievement of uniformity "in measures of liberalisation, export policy and measures to protect trade such as those to be taken in the event of dumping or subsidies".

The idea that Mrs May could agree to this is inconceivable, even if (or especially if) it just applied to Northern Ireland. The ability to conduct our own independent trade policy is writ though the Brexit mantra, and runs in the DNA of the red-blooded "Ultras".

That would suggest that, in the current circumstances, the absolute priority must be the short-term, keeping the show on the road after Brexit, stabilising the situation so as to avoid a meltdown. Longer-term considerations will need to take their turn.

Even now, though, while the pundits are beginning to be aware that a "no deal" Brexit does involve a certain amount of disruption, the collective remains lamentably inadequate when it comes to identifying the specifics.

One of the latest to blunder into a crowded field is Ian Dunt. Describing the fate of cross-border movement of foods of animal origin, after all this time he still hasn't got to grips with the details.

On the one hand, he tells us that "March 30th 2019 becomes Year Zero. Overnight, British meat products cannot be imported into the EU. To bring these types of goods in, they have to come from a country with an approved national body whose facilities have been certified by the EU. But there has been no deal, so there's no approval".

Then, on the other hand, he tells us that "a container full of pork loins" sent from Leeds to Amsterdam after Brexit day "will need to be signed off by a vet to say that the meat was slaughtered, stored, quality assured, sealed and despatched (sic) in a certain manner, with appropriate documentation proving compliance". Can meat be exported, or can't it?

Entertainingly, Dunt proudly announces that his piece "is based on conversations" with certain prestigious persons, rather than to reference to primary sources. This so typifies the "oral culture" approach of what passes for journalism, with not even a passing reference to the Commission's Notices to Stakeholders.

It is probably this superficial, prestige-driven approach which defines the popular Efta/EEA narrative. The average journalist would have a nose-bleed if they ever had to look at a copy of the EEA Agreement. In-depth "research" means looking up back copies of the Financial Times. As for the politicians, they seem to make it up as they go along.

Regardless of the "noise" from the politico-media nexus, therefore, the wisest course of action is to treat these people as low-information individuals. As a collective, their grasp of detail is so demonstrably poor that they must be regarded as wholly unreliable.

Short of a miracle, we are set to crash out of the EU without a deal. And any idea of adopting the Efta/EEA option this side of Brexit is a fantasy. Even then, for it ever to become a realistic option, a lot of people will have to break the habits of a lifetime and find out what they are talking about before expressing their opinions. For many, that could prove impossible.



Richard North 28/07/2018 link

Brexit: an unbridgeable divide

27/07/2018  


Another day and another round of press conferences – this last one being the debut for midair bacon (aka Dominic Raab) as he bearded the Brussels monster.

Cutting through the usual clichés and pleasantries, Raab managed to tell us what we already knew about the current talks, then averring that the customs element contained in the White Paper represented "a practical way forward".

But, on a sultry evening when the temperature refuses to go down, Raab's speech blurs into a jumble of words which sounds just like this - and just as impossible to take seriously. This is a man going through the motions.

One couldn't say though that Barnier started off any better. And when one hears talk of "constructive meetings", the alarm bells automatically start ringing. So much in tune are the two protagonists (not) that while Raab had three heads for his talks, Barnier has whittled them down to two. 

In the UK corner, therefore, we had completion of the Withdrawal Agreement, completion of the Protocol on Ireland and Northern Ireland, and the need "to work up a clear and precise vision for our future relationship, and set this out in a political declaration to be signed alongside the Withdrawal Agreement".

In less florid language from the EU corner, however, Barnier appeared to be saying the same things: finalising "the outstanding issues of the Withdrawal Agreement, including a legally operative backstop for Ireland and Northern Ireland", and agreeing on a political declaration on our future relationship.

But, whereas he had the " legally operative backstop" up-front, Raab was keen to make it clear that the backstop, "if it were to be exercised at all, could only be for a time-limited period before the permanent future arrangements would become operational". Said Raab, it "would not give rise to an extended limbo".

And here, there seems to be an unbridgeable divide. The EU wants a backstop – a permanent feature of the Withdrawal Agreement which does what it says on the tin, coming into play when the main agreement no longer fulfils the necessary conditions.

The UK, on the other hand, wants a temporary measure that can be dispensed with when a permanent solution is agreed, with nothing there if that agreement subsequently breaks down. In other words, it is talking the talk, but doesn't actually want a backstop at all.

But that is blurring the issues and preventing agreement, our "future economic relationship" is also proving problematical, hence Barnier stating the obvious. While there has been some accord on security issues, "finding common ground between the EU27 and the UK is more difficult".

And here, the clarity which has mostly characterised Barnier's approach to these talks seems to have deserted him. We (the UK and EU), he says, "have agreed already on a common denominator: we both want an ambitious Free Trade Agreement".

But these are just words. Between that label and the practice lies another of those unbridgeable gulfs. It is clear that the UK's idea of an ambitious Free Trade Agreement is entirely different from that of the EU – insofar as we have any real idea of what the UK government wants.

Untypically, Barnier also hides behind a screen of words when he talks of "another area of convergence between the EU and the UK", this one being "the need for ambitious customs arrangements".

Previously, though, he has talked about a – and sometime "the" customs union. At other times, he has talked about cooperation. We are never very clear as to precisely which are he is talking about, or how he wants to achieve it.

But in this case, Barnier was laying the foundation for a sharp barb, which will undoubtedly leave Mrs May's government grievously wounded. "We share a clear understanding on a core principle that will define our future economic relationship", says Barnier: the UK and the EU will both preserve the autonomy of their decision-making. Both will preserve their regulatory autonomy.

And then it comes: "The UK wants to take back control of its money, law, and borders", he says. "We will respect that", he adds, then drawing blood: "But the EU also wants to keep control of its money, law, and borders. The UK should respect that. So, we share an objective in that regard".

Rubbing salt in the wound, Barnier discusses the "future relationship in financial services", noting that "future market access will be governed by autonomous decisions on both sides". This "autonomy", he says, applies not only at the time of granting equivalence decisions, but also at the time of withdrawing such decisions.

There are strong coded messages here, but they all amount to one thing. The UK cannot decide what its laws are going to be, and then expect the EU to recognise them. And if the UK, having reached an agreement with the EU on standards, then moves the goalposts, the EU reserves the right to rescind any agreements.

Broadening the field, Barnier then moved on to the EU's customs policy, basically telling Mrs May to take a running jump with her White Paper proposals. "The EU cannot – and will not – delegate the application of its customs policy and rules, VAT and excise duty collection to a non-member, who would not be subject to the EU's governance structures", he said.

And here, I'm pretty sure he is introducing something that has not been specified before. Barnier starts off by saying: "Any customs arrangements or customs union – and I have always said that the EU is open to a customs union – must respect this principle". But then he adds: "In any case, a customs union, which would help to reduce friction at the border, would come with our Common Commercial Policy (CCP) for goods".

Previously, that may have been implicit in Barnier's talk of "the" customs union, but he has never spelled it out. And neither is it in the draft withdrawal agreement. Methinks the EU is moving the goalposts – and most definitely into territory where he must know the UK can't follow. It is the CCP more than the customs union which prevents Member States following independent trade policies. Mrs May cannot possibly agree to this.

Moving on, Barnier then explains why the UK pitch on the "backstop" is unacceptable. "We have a clear agreement between the EU and the UK", he says, "that the Withdrawal Agreement must contain an all-weather insurance policy. We share the goal of avoiding a hard border on the island of Ireland".

As we agreed in December, he reminds us, the absence of a hard border has to be guaranteed no matter what the future relationship will be. Of course, a better solution in the future EU-UK relationship could replace the backstop, which explains the "unless and until" provision of the backstop to which the UK has agreed.

But without a backstop as a permanent fixture in the Withdrawal Agreement, there will always be uncertainty over what would happen if the UK unilaterally changed the rules. This is the sticking point. "Continued uncertainty on this issue after the UK's withdrawal". Says Barnier, "would be unacceptable for Ireland, for Northern Ireland, for the UK as a whole, and obviously for the EU27.

Referring back to last March, Barnier recalls that the parties had agreed on the scope of the issues to be solved in the backstop. As to the customs element, the UK wants this to be UK-wide and Barnier has no objection in principle to this.

But the EU has doubts that this can be done "without putting at risk the integrity of our Customs Union, our Common Commercial Policy, our regulatory policy, and our fiscal revenue".

With that, the talks are packing up until mid-August, when Barnier expects the UK "to come back to us with concrete proposals on how to address our concerns". With no mincing of words, this means – as far as the EU is concerned, "We must advance and agree on a legally operative backstop solution to conclude the Withdrawal Agreement".

This is what it has come to. All Mrs May's posturing has come to nothing and, far from being "flexible and pragmatic", the EU's position has, if anything, hardened. Mid-August will see no new offer from the UK. This truly is an unbridgeable divide – and the EU has just made it bigger.



Richard North 27/07/2018 link

Brexit: an irresponsible use of power

26/07/2018  


In today's post I'm going to stay with aviation, not specifically to rehearse the issues once again but because its treatment by the BBC in a recent web report provides a graphic example of just how badly Brexit is being reported by our state broadcaster.

The report is from BBC News in Northern Ireland but available on the national (UK) website, and is written by broadcast journalist Ciarán Dunbar. It picks up on the "outcry" when it was reported that the Irish prime minister had "threatened to halt British planes landing in Ireland".

Dunbar notes that The Sun said Taoiseach Leo Varadkar was a "big mouth and a fool", with an editorial declaring: "It has exposed beyond doubt both his crass naivety and the cynical deceit of the EU masters he cravenly obeys".

With the scene thus set, we get the typical self-importance of the BBC, as the article addresses the "the facts in the case", setting itself up as the arbiter, purporting to give us the factual analysis that will leave us correctly and fully informed.

It starts by rehearsing what Varadkar had to say in his fateful press conference in County Kerry on 18 July. We are thus informed that he started out by declaring that the UK was "part of the Single European Sky and if they leave the EU they are not".

That meant, according to the prime minister, "if there was a no-deal hard Brexit next March, the planes would not fly and Britain would be an island in many ways - and that is something they need to think about".

In classic "he says, she says" style Dunbar then refers to the Downing Street spokeswoman who responded to the statement, by saying that Leo Varadkar "was wrong to suggest British aircraft would be barred from Irish airspace in the event of a no-deal Brexit".

So-called "overflight rights" were guaranteed by international treaties rather than EU membership, the spokeswoman averred, then rather incongruously adding that the UK was confident of reaching a deal that included "aviation access".

From this, we got specific quotes, with the spokeswoman saying: "It's wrong to claim that Ireland could simply stop the UK from flying over its land as a result of Brexit", followed by, "The reason we say that is because overflight rights are not guaranteed by the EU, rather by multilateral treaty which both ourselves and Ireland have signed up to".

With the "he says, she says" framework now set up, the way is clear for Mr Dunbar to come in and tell us what he will present as the actual position. For this he uses the sub-heading, "What's the legal position?"

With no references offered, or direct citations, Dunbar tells us that the international treaty referred to by the UK government is the Chicago Convention which 52 states signed on 7 December 1944. And then he goes off the rails, declaring: "It effectively guarantees the right of civil aviation to fly over the air space of signatory states without permission, but not necessarily to land".

In this short sentence, what we are seeing is Dunbar making two major errors. Firstly, as I explained here, the Chicago Convention does not guarantee any rights. That is not the way it works. It requires the contracting states to grant to the other contracting states what are known as the "freedoms of the air".

Thus, such rights do not take effect until contracting states formally agree between themselves bilateral or multi-lateral treaties, generically known as Air Service Agreements. Furthermore, the Convention deals with five (of nine) rights, which include the right to land at the airports of other contracting states.

With this being the second error, Dunbar now goes on to make the false conclusion that, when Mr Varadkar talks about "planes flying over our sky", he "is probably wrong on that point - and the UK government correct".

In actuality, as we know, the five Chicago freedoms are given effect by Regulation (EC) No 1008/2008, which lapses immediately if the UK leaves the EU without a deal. Without a new deal, no UK civilian aircraft would have overflight or landing rights in Ireland, or any other EU Member State (and many other countries besides.

Nevertheless, Dunbar decides that the "real issue" would be "planes landing and taking off at EU airports if the UK leaves European Single Sky and the European Aviation Safety Agency with no deal to replace their regulations".

Mr Varadkar, we are told, was speaking in terms of a "no-deal Brexit", while the UK government was responding in terms of reaching a deal. Thus, according to Dunbar, his "planes would not fly" remark could in theory become a reality if there was no deal, the need for which is tacitly implied in the UK statement. Finally, therefore, we've got there – after a fashion.

But Mr Dunbar hasn't finished. "Was it a threat?", he asks, then noting that The Sun certainly took Mr Varadkar's comments as a threat, as did some unionist politicians in Northern Ireland.

"Given that the Irish State is dependent on the RAF for its air defence in the event of a terrorist attack it is obviously exceedingly unwise for Varadkar to pompously and arrogantly suggest that Dublin could deny civilian aircraft from the UK access to Irish airspace," said Traditional Unionist Voice leader Jim Allister.

DUP MLA Christopher Stalford countered that the Republic of Ireland gets its gas supply through the UK. "Remember this the next time Leo decides to threaten the UK over airspace", he tweeted.

However Mr Varadkar was defended on social media by the Irish government's spokesperson on the EU. "To be fair he merely reiterated a factual statement that Philip Hammond also made earlier this year", said Senator Neale Richmond.

In actuality, this is sloppy reporting. Because Dunbar has failed to understand how the Chicago Convention works, he does not realise that the freedoms of the air lapse automatically if the UK leaves the EU without a deal. By not rehearsing the important facts of the case, the BBC journalist misses the key point and leaves his readers uninformed.

For want of diligence, though, Dunbar relies on the standard cop-out for lazy journalists, trotting out a series of quotes from prestige figures, whom he calls "experts".

First in line is Eamonn Brennan, chief executive of the Irish Aviation Authority. He said as early as February 2017: "Air connectivity all over the world is based on Air Service Agreements and once the UK leaves the EU a new Air Service Agreement will have to be put in place between the EU27 and the UK".

Next, we have the trusty Michael O'Leary, boss of Ryanair. He has repeatedly warned that the UK is running out of time to agree a new open skies agreement with the EU, saying there is a "real prospect" that there will be no flights between the UK and Europe for a period beyond March 2019".

Third in line is the head of the Aerospace body ADS, who said in July 2017 that the UK must remain an EU member during a post-Brexit transition period.

Not content with that, Dunbar introduces another space-filler - aviation expert Paul Everitt. He says the UK would struggle to sign the necessary agreements with global safety regulators before then, risking disruption to air travel.

He adds, "If we don't have a transition arrangement and if we aren't a member of the EU as part of that transitional arrangement, then we have chaos because we don't have a system to ensure that our products are safe and secure to fly and a regime that is acknowledged around the world".

Without any explanation or understanding, therefore, Dunbar has introduced the entirely separate safety regulation issue, which creates its own tranche of problems. These are not explored in any way.

Instead, Dunbar now feels equipped to go for his conclusion, which he heads, "Theoretically possible - but unlikely", introducing "aviation consultant" John Strickland. This talking head is used to say that, " in the event of a no-deal Brexit, the current aviation traffic rights framework would no longer apply.

"Theoretically", says Strickland, "at midnight on that day planes would be grounded". But, Dunbar says, he questioned the likelihood of that happening: "Even if technically a deal comes to an end it wouldn't be logical that you would just accept that that commercial airline traffic stops just to make a political point because you would be starving the economy," he added.

"Whether you are on the UK side, or the Irish side, or the remain side, or the leave side", he concludes, "I don't see anybody that wins from the suspension of air services".

That's it. That's all you get. This superficial, badly constructed piece meanders through the territory to allow the conclusion that suspending air services "wouldn't be logical" and therefore it won't happen. The fact that the UK in this scenario has walked away from a deal without a financial settlement does not seem to be material. We simply have to assume that there is going to be an aviation deal.

And although Dunbar has been given the clue about safety regulation, he hasn't followed this up and is thus unaware of the implications of the UK's status as a third country. By default, he (and by inference the BBC) has offered a complacent view which almost certainly understates the impact of a "no deal" scenario on civil aviation.

If, as is doubtless the case, the BBC has misled the public, one might then ask whether this matters. And the answer is unequivocally "yes". A recently published Ofcom report has the BBC as the dominant news provider in the UK, with almost two-thirds of online news users claiming to use the BBC – as opposed to a mere nine percent referring to the Telegraph website.

If the BBC gets it wrong, it matters. And here it is getting it seriously wrong: whether by incompetence (as in this case, I would aver) or through biased coverage, it is understating the damage caused by a "no deal" Brexit. The Ofcom report proves that it wields a huge amount of power. This example (one of many) demonstrates that it is not being used responsibly.



Richard North 26/07/2018 link

Brexit: arguing black is white

24/07/2018  


Rising to the defence of the prime minister, the Irish Aviation Authority (IAA) has confirmed that flights between the UK and the rest of the European Union will be grounded by a hard Brexit - unless a separate deal to cover aviation is struck with London.

This is our old friend the Chicago Convention. As explained on Sunday, the freedoms of the air which are given effect by Regulation (EC) No 1008/2008 automatically lapse when the UK leaves the EU. And, with regard to that, a spokesman for the IAA has said: "There would need to be a new agreement in place to maintain the existing level of connectivity between Europe and the UK".  

Asked to clarify whether this would mean another agreement would be needed for UK flights to land in the Republic and other EU states, the spokesman said: "Regarding EU-UK flights, yes, another agreement or the reinstatement of old bilateral agreements would need to be in place if a hard Brexit occurs, to provide for connectivity between Europe and the UK".

This is not entirely correct as the old bilaterals were rescinded when replaced by the EU accord when many of the bilateral aviation agreements between Member States and third countries were declared discriminatory by the ECJ and had to be replaced.

Since that judgement, individual Member States no longer have power to sign such agreements. For the freedoms to be reinstated, there must be an EU-UK agreement.

However, the spokesman was correct in pointing out that "there is no World Trade Organisation (WTO) fallback position for aviation traffic rights in the event of a hard Brexit", a fact which has been conveyed to the Irish government and the European Commission.

This is affirmed by the European Commission, which has no hesitation in backing the Irish position, It says that EU rules in the field of air transport will no longer apply to the UK after Brexit, which would have "consequences in the different areas of air transport". Not least, of course, EU Member State carriers "will no longer enjoy traffic rights to or from the territory of the United Kingdom".

An IAA spokesman explained that this means that Irish airlines would not be permitted to land in the UK, saying: "in effect, as in the absence of no new agreement being reached between the EU and the UK that provides for air access, then there would be an interregnum in the period post March 29th, 2019".

In order to enjoy the freedoms covered by the regulation, airlines must hold EU operating licences. The European Commission says that in order to keep these, certain conditions must be met. "The conditions include, among others, the need to have one’s principal place of business within an EU member state", it says.

The airline must also be "majority owned and effectively controlled" by EU member states. "If the conditions are no longer fulfilled as a consequence of the United Kingdom becoming a third country, the operating licence at issue will no longer be valid".

Thus, "air carriers of the United Kingdom will no longer enjoy traffic rights under any air transport agreement to which the union is a party, be it to or from the territory of the United Kingdom, be it to or from the territory of any of the EU member states".

But that also means that UK airlines will not be enjoy the rights afforded by the EU-US "Open Skies" agreement, one of the horizontal agreements covering 41 countries and one regional organisation with eight member states.

For these reasons that low cost carrier EasyJet has established a headquarters in Austria but other British carriers who will be caught include Flybe, Jet2, Virgin Atlantic, and British Airways.

Nevertheless, there is every reason why the EU should want to deal, as the removal of UK airspace for overflights would severely inconvenience international airlines – and not just EU operators. Thus, we might expect to see fairly rapid arrangements to secure continuity of the Chicago Convention freedoms as is actually required of the convention signatories.

However, the 1944 Convention only covers five of the nine freedoms enjoyed by the UK, the ninth covering cabotage, the right of an airline to pick up passengers in a state other than its own and to transport them to another non-domestic state.

Then, even if the "freedoms" are resolved, this does not settle the safety issues. UK airlines will be obliged under EU law to apply to EASA for Third County Operator (TCO) approval. And then there is the question of the lapse of airport certification and the wide range of licenses which the EU will no longer recognise.

Without these being settled, aircraft operating out of EU Member States could regain overflight rights but would not be able to land at any UK airports. Nor, until the safety issues have been sorted out, will UK airlines be able to land at the airports of EU Member States, or at the airports of any country were recognition of safety certification relies on bilateral agreements with the EU.

These latter aspects, though, are not being openly aired by the media or politicians, who still seem to be hung up on the "freedoms". But, as the aviation regulatory "onion" is gradually unpeeled, it will become apparent just how complicated the issues are. And it is very far from clear how the situation will be managed in the event of a "no deal" Brexit.

All of this, of course, makes a nonsense of the idea that the UK can simply walk away from the Brexit negotiations and rely on WTO rules. For aircraft to continue to fly, the UK must negotiate a number of complex deal with the EU. It must also make arrangements with the 49 other countries covered by EU agreements.

This is being recognised by even the most rabid of the "ultras" such as Patrick Minford where we see the WTO option being characterised merely as having a "no trade deal".

This, we are told, is not the same as having no agreements on a wide range of non-trade areas where there have to be arrangements. These include visas, citizen rights, security, airline permissions and much else that is needed for citizens of the UK and the EU to carry on their ordinary lives. By this means, the likes of Iain Duncan-Smith feels justified in arguing that the WTO option is not a "no deal".

For all that, we've been there before. Last year, the same siren song was being heard, where effectively the "no deal" scenarios involved collecting together multiple smaller deals cobbled together. Yet this again is just the sort of cherry-picking approach that the EU has already rejected, and here we are back again with the idea of dipping into certain issues to craft a deal and leaving out other matters, on a schedule dictated entirely by the UK.

What is lacking is any sense of this being a negotiation where the other side might have a view, especially when Minford argues that these partial deals, without any trade deal with the EU, can be done "all at once and without paying them that £39 billion for a trade deal that has not materialised".

This alone renders the concept a non-starter. Even areas such as aviation, where the absence of a deal will inconvenience EU actors, one can see a strong element of conditionality that, at the moment, does not exist.

But this is without taking into account the more obvious defects of the WTO option where, despite the evidence that no major economy on the planet trades with EU on WTO terms, we see the persistence of the claim that the UK currently does upwards of 60 percent of its trade on WTO terms.

In support of that argument, there is much reliance on the canard that, because we start off after Brexit with regulatory alignment, there will be no need for border checks of manufactured goods. This neglects entirely the need for mutual recognition of conformity assessment, without which exporters will lack the means to demonstrate that their goods do in fact conform with the necessary standards.

The name of the game, though, is quite evidently an attempt to normalise the "no deal", projecting it as a tenable option instead of the disaster which it so obvious would become. I get intensely irritated by the likes of Owen Paterson lauding Minford, describing him as "unerringly correct on the major economic questions of the last 40 years", dispelling "the myths and ignorance surrounding a World Trade deal".

Thus do I write about the WTO option in my Monograph, written two years ago, is that it is a very dangerous and potentially expensive option which could do significant damage to the EU and UK, the effects of which could be long-lasting. Nothing has changed in those two years, except the increasingly frenetic attempts to argue black is white and that a Brexit disaster is something we should embrace.



Richard North 24/07/2018 link

Brexit: playing with fire

23/07/2018  


One of the most interesting moments of the Dominic Raab (aka midair bacon) interview with Andrew Marr yesterday was the line of questioning on the EU-US open skies agreement.

Marr specifically put to the Brexit secretary that: "with no deal we fall out of that", to which Raab said quite simply, "Yes". As a follow-up, Marr asked: "That does mean that the planes can’t carry on flying in at the moment doesn’t it?", to which Raab responded: "I think we would resolve that issue".

There we have it in blunt terms. Yes, a "no deal" Brexit would mean that UK airlines would lose their access to US skies. And while Raab blandly assures us that "we would resolve that issue", can we really be certain that President Trump would give us the access we want, immediately, and without asking for significant concessions elsewhere?

But had Marr been on the ball (something he's never been), he might also have asked about the US-EU bilateral agreement on safety in civil aviation – the so-called BASA. Even if the open skies agreement could be resolved, this is a far more complex issue, where there is no obvious or simple resolution.

And then, rather than confine his questioning to just the EU-US agreement, why didn't he ask about Varadkar's comments about the Single European Sky and the loss of access rights to the airspace of EU Member States?

Furthermore, rather then accepting the bland assurance that such issues would be resolved, Marr might have probed a little more deeply and asked how precisely the UK government intended to resolve issues in the event of a "no deal". Are we even to take it that "no deal" means "no deal" or, as we have generally surmised, just a phase where we start a new round of talks – albeit in a crisis atmosphere.

As regards the aviation issue, Dominic Grieve has certainly "got it", arguing that "It wouldn't be possible, for example, for someone to fly to Rome because the overflying rights over the other countries of the EU are regulated by EU law".

But he points to the possibility that, if an all-encompassing agreement is not reached before March next year then "side deals" would address some of the issues of a "no deal" Brexit.

This is indeed possible, if not likely, but the initiative would remain with the EU and the Commission might be expected to drive hard bargains – more so if, as Raab has indicated it might, the UK government has drawn back on the financial settlement.

And it's all very well relying on these "side deals" but the sheer volume of issues to be address, and the very obvious complexity of some, suggests that we are not going to resolve them in a matter of days. One can see this crisis process lasting weeks and then stretching in months as harassed UK negotiators commute between London and Brussels.

Understandably, therefore. Grieve believes that a "no deal" Brexit would be "absolutely catastrophic" and precipitate a state of emergency. But, with John Major repeating the "catastrophic" meme, we are getting the wrong people make the point, simply adding to the polarisation of the debate.

Thus, on the one hand, we have the "ultras", masquerading as Brexiteers representing the 17.5 million "leave" voters, happily declaring that "no deal" will be a breeze, as we adopt the WTO option, while prominent "remainers" are stating the opposite.

In the middle, we have the media playing their dire, "he says, she says" games, providing uncritical platforms for each side to parade their wares, never getting to grips with the issues or even trying to resolve the dispute.

A story I heard recently comes to mind, where a journalism lecturer tells his students of their responsibilities when confronted with conflicting witnesses. If one says it's raining and the other says it's dry, he says, you don't just record the views of both and call that a report. Your job is to look out of the window and see who is telling the truth.

If that story is true – and I hope it might be – it is a lesson the legacy media have yet to learn. There is a certain moral cowardice in the reluctance on the media stars to confront their "witnesses", and to establish where the truth lies.

Instead, we get the boorish Rod Liddle in the Sunday Times writing his column under the headline: "Ireland's Leo roars like any EU bully but his UK flights threat is all hot airspace", going on to state of Mr Varadkar that, "the man is plainly a moron".

Of the threat of aircraft excluded from Irish airspace, Liddle says: "this is another paper tiger, a chimera, a false threat occasioned by spite and pique, which has rightly been ridiculed across the world on social media". It is then worth staying with Liddle for a brief moment, to record him saying:
The entire process of negotiating our exit from the EU has been accompanied by much the same sort of stuff: empty threats and vindictiveness flung at us each week by the rabble of drunkards and lawyers the EU employs to make sure that anyone who wishes to leave the benighted institution gets first of all a punch in the face and then, later, a punch in the face.
That attitude is not untypical of a certain type of commenter. Were they to direct this sort of venom against approved victim communities, they would no doubt be arraigned for "hate crime", but it's open season on taking cheap shots against our negotiating partners, from whom the UK government is expecting considerable concessions.

Finally, though, while the politicians posture and the pundits prattle, we see a whiff of the real world in The Times, with Doug Gurr, UK manager for Amazon saying that there could be "civil unrest" within two weeks if Britain leaves the European Union with no deal.

We could have told them that, and the paper could have worked that out for themselves but, in accordance with conventions of the legacy media, nothing said is of any consequence unless it is uttered by a person of prestige.

The person in question gave his warning at a meeting on Friday organised by Dominic Raab, where representatives of the UK's biggest businesses were present. This worst-case outcome, Mr Gurr said, formed part of his contingency planning.

Yet, this seems to have had little overt effect on Raab. Returning to his performance on the Marr show, this man even went so far as to accuse Brussels yesterday of "irresponsibly" stepping up pressure by setting out the potential consequences of leaving the EU without a deal. His view, incredibly, is that we ought to be trying to reassure citizens on the Continent and also here".

Taken straight from the horse's mouth, this patronising, crass statement is so typical of the way government (and especially Tory governments) treat their voters. Faces with a crisis of major proportions, where it is absolutely vital that we have an informed citizenry, and all this silly little man can do is blather about reassurance.

Mr Raab, whose full name also sports the anagrams "bionic drama" and "rabid manioc", wants us to know that he is "focused relentlessly and unflinchingly" on getting the deal. And that means "we don't have to be concerned" about the technical details.

One might surmise, however, that Mr Amazon is in closer touch with the capabilities of the British people than Mr Raab. When we have been so royally shafted by incompetence of his government, we should not be surprised if the more violent amongst us express their displeasure in the only way left to them.

To that extent, it is good to have a little whiff of reality. Our politicians need to know that they are playing with fire, with the order and stability of our society at stake. Should the day come where they do lose control, one also hopes that the media will get their share of the attention. Their incompetence easily matches that of the government.



Richard North 23/07/2018 link

Brexit: dog days

22/07/2018  


Inside the mind of Jacob Rees-Mogg is not a place any sane person would want to be. This is the man picking up on the obvious - that we are heading for a "no deal" Brexit and that leaving on WTO terms is now likely. But he then loftily declares that WTO is "nothing to be frightened of".

Elsewhere, on Channel 4, he is asked whether he would resign his post as an MP if he was wrong about the glowing economic opportunities Brexit presented, he declined to answer, saying that: "We won't know the full economic consequences for a very long time, we really won't... The overwhelming opportunity for Brexit is over the next 50 years".

This is very much the Minford approach to Brexit, where we are supposed to accept the short- to medium-term damage caused by a "hard" Brexit in return for a place in the sunlit uplands on a timescale which means that, by the time the benefits accrue, nearly half of the population currently alive will be dead.

As always, though, the media are asking the wrong questions. What we really need to know is whether it is necessary to take the most damaging route to Brexit, when a staged approach designed to minimise the immediate damage arising from Brexit could achieve similar long-term results, without causing the long-term pain.

The thing is, though, if Rees-Mogg truly believes that the WTO option is "nothing to be frightened of", we are dealing with a man who is either nurturing a staggering level of ignorance or is setting out to deceive.

Either way, this has his co-conspirator, John Redwood, asserting that, under his fabulous WTO regime: "Planes will fly & lorries will move thru ports the day after we leave just as they did the day before.

Bearing in mind just the one example of exports of foods of animal origin, where (when such exports are permitted) goods must be submitted for inspection at the ports to a Border Inspection Post, one wonders whether these ERG zealots have asked themselves why the Port of Calais has brought 17 hectares (42 acres) of land, which could house inspection posts for sanitary checks and logistics warehouses.

In this Brexit debate, to ignore such details is irresponsible. And, for someone of the status of Rees-Mogg – with all the resources at his command – it is almost inconceivable that he could be unaware of them. For him not to take them into account in his public pronouncements suggests a man setting out deliberately to deceive.

The same must also apply to his recent comments on aviation in the wake of Leo Varadkar's observation that the UK is part of the single European sky. If we leave the EU a "no-deal", hard Brexit next March, he said, the planes would not fly, adding: "You cannot have your cake and eat it. You can't take back your waters and then expect to use other people's sky".

This elicited a front-page headline from The Sun, proclaiming: "AIR HEAD Ireland's PM has been branded 'mad' for threatening to stop British planes flying over Ireland as revenge for Brexit".

There are several issues which arise from this, not least the idea common in the media that somehow things such as restrictions on airline flying are something which are imposed on Britain, either by the EU or Member States such as Ireland, effectively amounting to a "ban".

The point, of course, is that freedom to fly for UK airlines, variously a right or a privilege, is specifically granted by virtue of EU legislation, in this case Regulation (EC) No 1008/2008. When we leave the EU, that regulation – as it applies to the UK – lapses. There is no ban as such. It is Brexit and the UK's decision to leave the EU which will have the effect of removing the permissions for its airlines to operate outside domestic airspace.

Some pundits who should know better point to the 1944 Chicago International Air Transport Agreement, arguing that such rights are conferred by this agreement, upon which the UK can rely.

But here one has to understand that the Chicago Agreement does not in itself confer any rights. Rather, it requires contracting states to grant to the other contracting states what are known as the "freedoms of the air". Thus, such rights do not take effect until contracting states formally agree between themselves bilateral or multi-lateral treaties, generically known as Air Service Agreements.

In the EU context, as between Member States, these have been absorbed into the regulation, the benefits of which will no longer apply to the UK after Brexit. Unless there is then a specific air service agreement between the UK and the EU, there will be no reciprocal rights. The result, as Varadkar quite rightly says, is "planes would not fly".

It is quite true, of course, that such rights are reciprocal, so that – in theory – aircraft registered in EU Member States will not be able to access UK airspace. However, since under the Withdrawal Act, we will be re-enacting the EU law, that will have the effect unilaterally of granting access.

One can imagine that the EU will quickly respond after Brexit. Although I am open to correction, I see no reason why the EU could not also act unilaterally – for what it is worth. The problem is that there are also the safety certification issues to address, and these cannot under ICAO rules, be resolved unconditionally. Even with the "freedoms", UK aircraft could not operate in the airspace of EU Member States.

Nevertheless, to Jacob Rees-Mogg, the issue is simplicity itself. He tells The Sun: "Air traffic control continued between Russia and the Ukraine after Russia invaded the Crimea so this idea is just silly", then adding: "On the other hand most flights from the EU to America pass through our air traffic control so this rather lightweight Irish gentleman is proposing an absurd act of a masochistic nature. His words are those of an airhead".

Thus does The Sun get its headline epithet, and Rees-Mogg cements his reputation as the all-purpose know-it-all, in fact spreading misinformation far and wide.

Interestingly, it is a senior UK government source who brands Varadkar's comments "mad", but if there is madness here, it is not to be found in the Irish prime minister. Booker actually puts his finger on it, observing in his column (no link yet), that the last days of July were known to the ancient world as the "Dog Days", associated with oppressive heat and drought, causing human affairs to become feverishly unreal and men (and dogs) to lose their marbles.

Certainly, he says, recent days have lived up to that billing, most obviously in the ever more glaring shambles we are making over Brexit. First, we had Chequers and Theresa May's tortuous "final offer" White Paper, not only prompting a stream of ministerial resignations but almost immediately dismissed by the European Commission as wholly unworkable. Then came those fractious Commons debates which showed that scarcely a single MP has any idea of what an impossible situation we find ourselves in.

This was followed by Liam Fox warning the EU that, unless it accepts Mrs May's "fair and reasonable" offer, several of its economies, such as that of Ireland, would face severe damage, amounting to tens of billions of pounds. No mention of the far greater damage we are risking to our own economy.

Finally, Booker says, any sense that we might be fast approaching a denouement to the mess we have made of our negotiations could only have been confirmed by the Commission’s 16-page "Communication" on Thursday, warning all concerned that they must urgently prepare themselves, with or without a deal, for the very serious consequences of the UK's decision to withdraw itself from every aspect of the EU's economic system, to become what is termed a "third country".

This followed the now-68 Notices to Stakeholders issued by the Commission since March, setting out the legal repercussions of our decision to become a "third country", for almost every sector of our economic activity (how many British politicians have read them?).

This latest paper reminds us that our decision to leave not just the EU but also the wider EEA makes it inevitable that, even with an agreed deal, we shall face often fatally time-consuming border controls all along our new frontiers with the EU (including Ireland).

So enmeshed have we become with Europe over four decades that previous Notices to Stakeholders have already pointed out just how much of our national life is now only legally authorised under EU regulations, from our driving licenses and our right to fly into EU airspace to those "passporting rights" which have helped London to become the financial centre of Europe.

Yet we now have barely three months to sort all this out before October when we were supposed to have signed a final deal: all because our politicians have frittered away 17 months putting forward nothing more than fantasy "non-solutions" not one of which could have worked.

Barely imaginable economic chaos now seems inevitable. And this will be the result of a quite unprecedented failure by our entire political class, so lost in its soap bubbles of wishful thinking that it has never begun to appreciate the reality of what we were up against.

Worst of all is the realisation that virtually all of this mess was avoidable, if only Mrs May had not made her fateful Lancaster House decision to leave the EEA, our membership of which could alone have ensured that continued “frictionless” trade “within the market”, which until them she told us was what she wanted.

The full implications of leaving the EEA were never explained in the referendum campaign, and they have never been understood by our politicians to this day. But in eight months they will begin to be brought home to us. To put it mildly, Booker concludes, we will not be pleased.

Sadly, though, this may not happen. The Sunday Telegraph is parading the headline "Dominic Raab: Britain will refuse to pay £39 billion divorce bill to Brussels if the EU fails to agree trade deal", a special kind of madness which speaks for itself.

The "Dog Days" look set to continue into the New Year and thence into March, where the "no deal" Brexit will confirm that madness is stalking the land, one which Rees-Mogg so wantonly represents.



Richard North 22/07/2018 link

Brexit: two Bs are not to be

21/07/2018  


In Belfast, Mrs May was nothing if not entirely predictable. The White Paper, she said, represents a significant development of our position. It is a coherent package.

Early in this process, she said, both sides agreed a clear desire to find solutions to the unique circumstances in Northern Ireland through a close future relationship. We have now developed our proposals and put an approach on the table which does precisely that.

Then came more words: "It is now for the EU to respond. Not simply to fall back onto previous positions which have already been proven unworkable. But to evolve their position in kind. And, on that basis, I look forward to resuming constructive discussions".

Five hundred miles roughly to the southeast is Brussels. There, Michel Barnier was saying different words. "We are open to any solutions as long as they are workable", he said. But everything he had already said pointed to the huge divide between him and Belfast.

You can analyse the words said to the end of time – but there is little point. They mean only one thing: there is no workable solution. A deal is not to be.

Whether those words can stand, only time will tell. Maybe, as each side looks over the precipice, wise heads decide that the consequence of a "cliff edge" Brexit is unacceptable. And the talks take a different direction. But one would have to be a very brave optimist to believe that will happen.

However, if we may adopt Churchillian terms, this may not be the end, or even the beginning of the end. It may only be the end of the beginning.

Perhaps, it is embedded in the English psyche that, in order to deal with a major policy change, we need more than a sense of crisis. We need a real, full-blooded disaster on the scale of Dunkirk or the loss of Singapore to the Japanese before we can get to grips with what is needed.

Whatever else, we are not going to see the adoption of the Efta/EEA option under our current prime minister. This stupid woman has convinced herself that it "would mean continued free movement, ongoing vast annual payments and total alignment with EU rules across the whole of our economy, and no control of our trade policy".

If that was true, it would be unacceptable. That Mrs May believes it to be true makes it unacceptable to her and her followers. And that puts it out of reach as a solution for the time being.

Actually, this is one area where Barnier has made a major misstep. In indicating that the EEA might be part of the solution to Brexit, he has added the idea of continued membership of the customs union, to make it EEA-plus. But the customs union is neither possible nor necessary. The EEA Agreement has within it provision for tariff-free trading and a few bolt-on extras would give us the "frictionless trade" that everybody needs.

By introducing the customs union as part of the package, Barnier has in fact made it easier for Mrs May to justify saying "no" to the EEA. She needed little excuse as it was, and now she has wiped out the last vestiges of any chance that she could adopt the one option that has the slightest possibility of working.

With Barnier continuing to insist that the "backstop" is the precondition for the Withdrawal Agreement to be concluded, he has quite obviously rejected Mrs May's plea for compromise. It was always unrealistic that she should expect anything different so she has painted herself into a corner. There is no escape.

The "ultras", meanwhile, are preening themselves about their clever little plan that will bring them to what they believe will be the end game of a "no deal" scenario. Having convinced themselves that the WTO option is tenable, the "no deal" hold no terrors for them.

However, they are being too clever for their own good. No amount of managing can entirely mitigate the effects of leaving the EU without a firm withdrawal agreement.

The EU may take measures, in its own interests, to reduce the immediate impact of withdrawal, and there are things that the UK government can do as well. These could reduce the headline effect of a "no deal" Brexit, even to the extent of making the situation less damaging than it actually is.

We know, for instance, that the Port of Calais has purchased additional land, on which it plans to build a major Border Inspection Post (facility). It will be some time before that is operational, leaving the possibility that the Commission devises legal waiver which will allow UK produce to enter the EU without the full range of checks that normally apply to third country goods.

On the other hand, it would be unwise to expect, or rely on this. The Commission instead might stick to the letter of its own law, and exclude the import of live animals and products of animal origin from the UK, until the British government has gone through the formal procedures required for listing as approved exporters. By the time that has been completed, the Calais BIP could be up and running.

In the interregnum, however – before EU Member States had fully committed the investment needed to deal with the UK as a third country – there might be a short window of opportunity. Having acquired the status of a third country, there would be nothing to stop the UK applying to join Efta and then bidding to become part of the EEA. In other words, the Efta/EEA option is not dead until the fat lady sings.

What might reactivate the possibility of us exercising this option are two things. Firstly, the effects of a "no deal" Brexit needs to be so damaging that the UK population demands that something be done to resolve the ensuing crises. Secondly, the political pressure arising, in an atmosphere of bitter recriminations, must mean that Mrs May is forced to relinquish her post as prime minister.

A not-unrealistic outcome of this could very well be a general election and, in crisis conditions, a cross-party government of national unity cannot be ruled out. There are good historical precedents for such an event.

Whatever the actual outcome, the new government would then have to approach Brussels with an outline proposal which, if accepted, could pave the way for the Efta/EEA option, by which time the dose of hard reality in the "no deal" purgatory would make the option politically tenable.

All this pre-supposes that a "no deal" scenario would be a disaster – and of sufficient impact to motivate politicians to seek remedies that lie in the direction of working with our European neighbours. In the febrile atmosphere of the moment, though, we could see sentiment turn the other way, as the blame for any hardship is focused on the European Union.

If that led to an upswelling of hostility, we could find the nation embracing isolation, despite the consequences. Once such a mood takes hold, policy is not necessarily going to be driven by rational people.

Furthermore, as the EU and its Member States are force to invest in systems and infrastructure to deal with the UK as a third country, they will become increasingly less interested in helping us to find solutions to what they will regard as self-inflicted wounds. The post-exit window of opportunity, therefore, may be very short.

One hopes that that prospect could focus minds over the next few months, lending urgency to the search for a workable solution to Brexit. But, as we see from the latest contributions from Mrs May and M. Barnier, the gap seems to be so great as to be unbridgeable.

Despite that, we can all live in hope that a last-minute solution will be found. But only fools will embrace the current situation or look upon it with any degree of optimism. We are sleepwalking into a political crisis, the like of which has not been experienced in living memory.

From our point of view, we must never accept that a "no deal" is the end of the matter, or abandon hope that, some day, we can get things moving in the direction of the Efta/EEA option. This requires an intensification of effort, to overcome the ignorance and misinformation that has so damaged perception of the option.

But this is the time also to think seriously about personal survival. It is not at all alarmist to be thinking in terms of stockpiling food and other essentials, including torches, and the basics in life from toilet paper to washing up liquid and even, closer to Brexit day, bottled water.

The very fact that we are thinking in such terms, though, underlines the extraordinary situation in which we find ourselves. In a time of plenty, and in the absence of war or natural catastrophe, to be thinking in terms of shortages of food and other essentials says volumes about how badly the Brexit process has been managed so far.

And, for this, there must be a political price to pay. Come what may, things can never be the same again. There must be a reckoning – the sooner the better while there are still opportunities for peaceful change.



Richard North 21/07/2018 link

Brexit: heads in the sand

20/07/2018  


It was Mrs May's in her Lancaster House speech who declared that "no deal for Britain is better than a bad deal for Britain".

That was on 17 January 2017, almost exactly eighteen months ago. Natural curiosity alone might suggest that one should start exploring precisely what that entailed. Certainly, it set me off on a trail which produced multiple posts all pointing to one inescapable conclusion: "no deal" is not a credible option.

About a year later the European Commission started its series of Notices to Stakeholders, setting out the consequences of the Brexit without a formal, ratified agreement. Largely ignored by UK politicians and media alike, the Commission has now upped the ante with the publication of COM(2018) 556 final - a communication on: "Preparing for the withdrawal of the United Kingdom from the European Union on 30 March 2019".

Accompanying the Com is a press release and an annex listing the 68 Notices to Stakeholders so far published, plus a downloadable factsheet which sets out "Seven things businesses in the EU27 need to know in order to prepare for Brexit".

Collectively, this bundle of documentation paints a far more comprehensive picture of a "no deal" scenario than I ever could, but one could only draw the same conclusion that I did. There is no mistaking the severity of those consequences, across a wide spectrum of economic activity.

Yet, for all that, The Times, once known as the paper of record, seems to have ignored the Commission initiative, instead opting for a story headed: "Brexit - civil service chief John Manzoni warns no deal could have 'horrendous consequences'".

This is classic British media, obsessed with "planting the flag" on its reports, using UK sources for its reports rather than relying on anything of foreign origin. It is hardly surprising, as a result, that the population is so ill-informed about the European Union.

As to this Times report, we are told that the UK will be ready to crash out of the EU but there will be "horrendous consequences" if co-operation breaks down completely. We then get Manzoni, chief executive of the civil service, stating that while preparatory planning was being put in place for a "no deal" scenario, "not everything will be perfect" if it happens.

Manzoni was sharing his complacency with the public administration and constitutional affairs committee, to which he was giving oral evidence. The UK was doing what it could but it was difficult to determine how "third parties" such as EU member states, their local governments or private companies would act - and whether they would be "spiteful or ignorant" about the consequences.

There were, he added, "some things that really are very complicated in the absence of co-operation" such as data sharing, which is currently covered by EU agreements. And, in Manzoni's view, "These things are all in everybody's interests to get right but, on the other hand, we have to prepare in the event that there are either spiteful or ignorant or whatever activities by third parties".

That would make it "very uncomfortable" and could have "some horrendous consequences" but "that's what we have got to try and do our best to mitigate against". Nevertheless, he indicated that more work was needed before March 2019, saying: "I'm not sitting here today saying it's all going swimmingly well and we are ready, because we are not".

Then, to cement in this stunning level of complacency, we got a comment from Sir Mark Sedwill, the acting cabinet secretary. He though, "That puts it very well - we will be ready but we shouldn't assume it will be smooth, if it's a disruptive outcome".

So that's what we're getting from our supposedly Rolls-Royce civil service: if we are hit by a "no deal" scenario, "not everything will be perfect" and "we shouldn't assume it will be smooth".

Predictably, not a whiff of this or the Commission communication touches the Telegraph which continues to project the myth that the WTO option would be an acceptable outcome, with suggestions that this is actually being planned as a fall-back option if Barnier doesn't accept the White Paper – which, of course, he can't.

But, while the Europhile Independent does cover the Commission communication with its own report, it downplays the consequences. Offering scarcely any detail, it blandly observes that contingency plans are needed to prevent a "complete meltdown" if talks with the UK fail to reach agreement by October, while having senior EU officials warning that the "volatile" political situation in the UK made the outcome of talks hard to predict.

This, though, is positively alarmist by comparison with the piece in the Guardian by Simon Jenkins, who grandly declares: "Don’t worry, a no-deal Brexit won’t be allowed to happen".

"Even if Britain does leave the EU on WTO rules next March, life will still go on largely as normal", he writes. "Nothing will change. Planes will keep flying. Ferries will keep loading. Channel Tunnel officials will wave vehicles through. Orders will go out to keep moving, and await further instructions".

In this, Jenkins is entirely at one with John Redwood, who gaily tweets: " There is no cliff edge. Planes will fly & lorries will move thru ports the day after we leave just as they did the day before. We'll carry on trading, travelling, investing in EU countries as we do in non EU countries".

Several papers, including the Mail as well as the Independent give more coverage to IMF warnings on damage caused by a "no deal", preferring theoretical modelling to real-life detail, while the Mail, which seems to have ignored the Commission com, also runs a piece on an NAO report on the effects of Brexit on transport.

This report, covered by most national dailies, deals with – amongst other things – the lack of agreement on driving license recognition. Oddly, this was one of the first issues I dealt with on this blog, a few days before Mrs May's Lancaster House speech.

In the Mail piece there is also an "explainer". "Anodyne" would be a fair description. For sure, we get: "Customs checks on cross-Channel freight would cause havoc at ports, hitting food supplies and other goods", but on "aeroplanes", we are told: "Fears of planes not being able to fly appear far-fetched – unless the EU is determined to destroy both business and tourism".

Hardly anyone in the politico-media nexus, it seems, is prepared to lay out with any clarity the full extent of the consequences of a "no deal" Brexit, the overall impression being that it is somehow tolerable, with maybe a few problems round the edges.

Perhaps one slight (and temporary) exception this time is the BBC, which reports on the obscure business section of its website that the arrival of the Commission com is "timely". It coincides with a palpable shift in the minds of UK business leaders on the probability of leaving without a negotiated deal. It has gone up - and many UK companies are intensifying and accelerating their contingency plans to mitigate potentially severe disruption.

Nevertheless, the cultivated ignorance which dominates the media allows Mrs May to go to Ireland and utter bellicose statements about not accepting the EU's plans for the border. In Belfast today, she is expected to brand the EU's insistence on regulatory alignment north and south of the border as a "backstop" solution in the event of no deal as "unworkable", repeating her assertion that a border down the Irish Sea is unacceptable to any British prime minister.

By so doing, she is set to lock the Brexit talks into an impasse, the inevitable consequence of which is a chaotic "no deal" exit. And the only way this could be politically sustainable, this side of Brexit, is by playing down or obscuring the effects of such an outcome.

If people really had the first idea of what "no deal" actually meant, in detail, there would be such a storm of protest that no politician could even think of pursuing this line. But as long as they have their heads in the sand and, with the complicity of the media, practice mushroom management on the rest of us, the coming disaster will be on us before the majority realise how damaging it will be.



Richard North 20/07/2018 link

Brexit: closing in

19/07/2018  


If something particularly unmentionable had legs and could speak in the House of Commons, it would possibly look rather like the erstwhile foreign secretary. And, in delivering his wormtongue personal statement in the House yesterday, Johnson illustrated the great divide between himself and the prime minister.

While he harped on about the Lancaster House speech, which marked the collapse of any sentient Brexit policy, Mrs May has been progressively forced to inch closer to reality, ending up with the White Paper. But getting closer to what is needed – but by no means close enough – this has the oaf Johnson throwing his toys out of the pram, unable to cope with a world of which he has never really been a part.

One way of describing Mrs May's current approach is to picture a wide estuary up which a ship must be piloted. The prime minister imagines that the navigable channel runs up the median line – a course she has charted with the White Paper. But, in fact, the deep water skirts one bank. Anything wide of that risks running aground.

If one takes one bank to be her Lancaster House "vision", the other is Efta/EEA. Johnson would have us running aground well before the ship reached its destination. The trouble is that Mrs May isn't going to get much further.

That much is evident from a report in the Guardian which seems to have taken time out to do some real journalism.

It is telling us that the EU's team of officials, led by Michel Barnier's deputy, Sabine Weyand, has picked apart the most contentious parts of the White Paper when it was presented to them by Olly Robbins this week. Discussions, apparently, were "difficult", with the Brussels team voicing the oft-deployed accusation of "cherry picking".

An EU diplomat representing a Member State says: "What the UK has proposed is unacceptable. We have had no progress on the issue". He adds: "it is good that the UK has tabled the White Paper but that is not what we are talking about at the moment. The withdrawal agreement and Irish protocol in it comes first".

The outcome, according to another of those omnipresent but anonymous senior EU diplomats, is that: "the White Paper is not going to form the basis of the negotiations". Nevertheless, there is still a reluctance in Brussels to speak out in open criticism of the White Paper. The feeling is that a full-blooded rejection would prove an existential threat to Theresa May's premiership, and hasten the collapse of the talks.

With this in mind, Barnier is expected to pull his punches on Friday when he addresses reporters at the end of a meeting of ministers from the 27 member states, where they are expected to be presented with a dossier drawn up by the European Commission laying out how to plan for a "no deal" Brexit. Instead of anything specific, Barnier is expected offer anodyne comments about the need to make progress on the Irish "backstop".

But, with concerns being expressed at the chaotic events unfolding in Westminster, British government sources are admitting to "growing despair" over what they regard as the "intransigence" of their EU counterparts. The new Brexit secretary, Dominic Raab, is preparing to make public detailed plans on how the UK would deal with a lack of agreement by 29 March and a cliff-edge Brexit.

This means both sides are making preparations for a "no deal", although there are no indications that British officials understand the gravity of the situation. A UK source told the Guardian: "Of course both sides have to be ready for no deal and we have made extensive plans. The difference is that our plans include sensible mitigations to alleviate some of the worst imaginings that some people have".

Despite this, it seems the UK pharmaceutical industry is preparing to stockpile medicines and medical supplies against the possibility of the UK crashing out of the EU. This is one of many signs of a growing sense of urgency, which even seems to be pervading the Brexit negotiations, with the Commission about to propose that the talks continue through the usual holiday month of August.

Furthermore, both UK and Brussels sources are suggested that an informal European Council in Salzburg in September could become a "crunch moment" when EU leaders will have a chance to revise the negotiating guidelines and instruct Barnier to take a more flexible approach. Alternatively, they could send the UK back to the drawing board.

Either way, it is thought, agreement in October on the withdrawal deal and the political declaration on the future relationship is highly unlikely. An emergency Council meeting is being pencilled in for early November.

In anticipation of failure, real world measures are being taken, with the Dutch government hiring nearly 1,000 customs officials to deal with Brexit. Pieter Omtzigt, the rapporteur on Brexit for the Dutch parliament, confirmed the recruitment had taken place. 

On the basis that the Netherlands are, after Germany, the second trading partner with the UK within the EU, he declared: "That means that because of the political uncertainty within the UK, I asked my government a year ago to start hiring new customs officials. They've hired almost a thousand customs officials just in case Britain crashes out".

Warming to his theme, he said: "We're a trading nation; we cannot afford our customs system to completely get stuck because from one day to the next we also have to check all the British exports of goods and services. We also hired veterinary officials because if you crash out, you also have that problem".

Not to be left out, the Irish government is also in the thick of it, apparently gearing up for a major confrontation with the WTO over the commitment to retain a soft Border in Ireland in the event of a "no-deal" Brexit.

It is understood that among the contingency plans being considered is a resourcing of the Revenue (Customs) to deal with the increase in customs-checked transactions that will take place after Brexit. It is investing in new data storage systems, security and staff to facilitate the increase.

Now government sources are saying they are prepared for major confrontation with WTO officials, who will insist on a border with the North as part of strict trade laws. "That's just not politically deliverable; we won't be doing it," a source said. "Brussels knows we can't go back to the borders of the past; it'll be a very difficult and different conversation".

This seems a confused situation as I would not expect WTO officials to be directly involved here. This is more a matter for the Commission and the WCO, which hosts the many customs conventions. However, the very fact this this issue is being raised is a sign of the increasing tensions over Brexit plans.

Even then, this is just part of the bigger picture where Ireland is quite deliberately stepping up contingency plans for a no-deal. Heavily influenced by the instability in Westminster, Leo Varadkar, believes that even if the withdrawal agreement was agreed in Brussels, there is no guarantee that it would get passed in London.

Varadkar also warns that the UK will be restricted in flying aircraft in European airspace in the event of a no deal Brexit. "The situation at the moment", he says, "is that the United Kingdom is part of the single European sky, and if they leave the EU they are not and that does mean that if there was a no deal hard Brexit next March the planes would not fly and Britain would be an island in many ways and that is something that they need to think about".

In a rather tart comment, he observes: "You cannot have your cake and eat it. You can't take back your waters and then expect to use other people's sky", adding, "In the unlikely event that we have a hard Brexit next March, with no deal, I think every country will struggle to put in place the necessary infrastructure and customs and veterinary officials in their ports and airports. It won't be just us".

With this dawning realisation of impending chaos, we now see even in the strangest of places, signs that the rats are seeking ways of abandoning the Mrs May's stranded ship. Thus we have Paul Goodman of Conservative Home sniffing round the edges of the Efta/EEA option. But, in common with a number of latter-day quasi-coverts, he sees the EEA as a temporary safe harbour, while the UK gets its act together and looks for something better.

Notwithstanding that the complexities of adapting the EEA Agreement to the needs of the UK would probably take a couple of years to negotiate, I can think of no better way of being rejected by Efta States than for the UK to expect them to roll over and accept the disruption of its presence, just so that we can sort out our own self-inflicted problems.

This points to an almost complete lack of any appreciation of what the Efta/EEA option actually entails, typifying the general approach of so many pundits to Brexit, where knowledge of the issues is treated as a handicap.

Not even their profound ignorance, though, can subdue the impression that the walls are closing in. Any confidence in the ability of the May administration to resolve Brexit has drained away, like that ebbing tide which will most certainly ground her metaphorical ship.



Richard North 19/07/2018 link

Brexit: a scorpion's work

15/07/2018  


Having regard to Theresa May's response to Nigel Dodds concerning the Irish "backstop", which I mentioned in yesterday's piece, there can be little doubt that, on this point alone, there can be no Withdrawal Agreement.

If that wasn't enough, though, a gimlet-eyed reader also noted another important intervention last Monday, this one by the DUP's Sammy Wilson. Addressing the prime minister, he noted that it had been argued that the policy agreed at Chequers "was necessary to protect the constitutional integrity of the United Kingdom, because it would avoid the need to implement the backstop arrangement with the Irish Republic".

Thus, Wilson asked: "Is it part of the agreement that the Government will sign a legally binding protocol with the EU that would treat Northern Ireland differently? If not, why is it necessary to have a divisive future trade arrangement that is designed to protect the constitutional integrity of the United Kingdom if that was never in jeopardy?

The prime minister's response to this was, to say the very least, instructive. "We have rejected the European Union's proposal in relation to the protocol", she said, then adding:
The expectation is that there will be a protocol in the withdrawal agreement, but we have always made clear our belief that the best resolution of the issue of the border between Northern Ireland and Ireland will come within the overall trading relationship that we develop between the United Kingdom and the EU, and that is exactly what this plan delivers.
Again, we see another interesting use of the indefinite article – experienced in the Brexit debate when discussing the customs union as against a customs union.

Here, we see the distinction between the protocol and a protocol. Explicitly, Mrs May is saying that the current text has been rejected, but she keeps open the proposition of another text being agreed. Implicitly, this has to be different to the original text. It could hardly be the same, otherwise Mrs May would be agreeing the protocol.

If we go back to December's Joint Report and the infamous paragraph 49, we recall the statement that: "The United Kingdom remains committed to protecting North-South cooperation and to its guarantee of avoiding a hard border. Any future arrangements must be compatible with these overarching requirements".

It was intended at the time (and remains the intention) that these objectives would be achieved through the overall EU-UK relationship. But, if this was not be possible, the United Kingdom would "propose specific solutions to address the unique circumstances of the island of Ireland".

Then, in the absence of agreed solutions, the UK would "maintain full alignment with those rules of the Internal Market and the Customs Union which, now or in the future, support North-South cooperation, the all-island economy and the protection of the 1998 Agreement".

With respect to the commitment to maintain "full alignment" with the rules of the Internal Market and the Customs Union, this did not pre-suppose that Northern Ireland would remain in either the Internal Market or the Customs Union – merely that the relevant rules should continue to apply.

Clearly, the "overall EU-UK relationship" as set out in the White Paper is not sufficient to avoid a hard border, whence there must be "specific solutions to address the unique circumstances of the island of Ireland", failing which there was the so-called "backstop", which was set out in the protocol to the draft agreement.

With that protocol now firmly and unequivocally rejected, there is no "backstop" in place. Before there can be any further progress on the Withdrawal Agreement, a new protocol text must be produced and agreed.

Given that the "backstop" was supposed to have been settled in June and that there are no new proposals on the table, it does not seem possible that a new draft could be prepared and agreed by the time of the next European Council in October, even if the EU was prepared to discuss the issue.

And it must be remembered that, if any proposal from the UK lies outside the EU's current negotiating guidelines, M. Barnier must go back to the European Council for a new mandate. His first opportunity to do that would be in October, which necessarily precludes an agreement by that Council of a protocol which differed substantially from the original.

However, even with that hurdle out of the way, we still have the overall relationship to address. And that gives Booker his theme for this week's column (no link yet).

Ever since 17.4 million of us voted to leave the European Union, he says, we have been confronted with one question overriding all others: how could we free ourselves completely from the political structures of the EU without doing irreparable damage to our economy?

Through more than 40 years of European integration, the UK economy has become so enmeshed with those of the rest of the EU, that a vast tranche of our economic activity is only legally authorised by a thicket of EU laws.

Was it possible, he asks, that we could extricate ourselves entirely from the EU, while holding on to that economic relationship which, in exports alone, provides 14 percent of our national income, also yielding a hefty slice of Government tax income?

Even before the referendum, he reminds his readers that some of us were urging that there was only one practical way we could get pretty well all we wanted: to become a fully independent country, freeing ourselves from three quarters of the EU’s laws, while continuing to enjoy "frictionless" trade, and also free to sign trade deals across the world, and even to exercise some control over EU immigration.

This was to remain in the wider European Economic Area (EEA) by re-joining Norway in the European Free Trade Association (EFTA). Membership could have solved virtually all the problems which have proved so intractable, including the Irish border, But Theresa May chose instead to leave the EU's economic system altogether, to become a "third country".

Thus have we wasted 17 months discussing entirely fanciful proposals, each of which contradicted the "core principle" which the EU made clear even before we triggered Article 50: that “it will not be possible to cherry-pick and be a participant in parts of the Single Market", to enjoy a uniquely privileged status not open to any “third country” outside the EEA.

Yet, Booker declares, what is Mrs May’s latest proposal, which has provoked such uproar, but again exactly that. It is so detached from reality that it can only end next March in the ultimate disaster, where we crash out without an agreement. Few people in Britain yet have any idea of the chaos which will ensue, as we are shut out of our largest export market and much besides.

Whole industries will go into meltdown. It would be the gravest economic crisis in our history. And we shall have brought it entirely on ourselves, because those in charge of our affairs have never begun to understand the technical realities of what we were up against.

That sums up the Booker view, but it is clearly not one shared by his own newspaper. The Telegraph view is that Brexit needs to be "urgently renegotiated" and, if the EU refuses, the Government has other options at its disposal.

One of the few positives to emerge from the Chequers meeting, the paper says, was a commitment to step up plans for "no deal". These, it says, must be accelerated massively. The Government should be publicly preparing to inject billions into the economy to mitigate any short-term economic uncertainty.

Then, according to the Telegraph, the government should make it clear that "bizarre threats" to, for example, "cut off electricity supplies to Northern Ireland or prevent British planes from landing in European airports are insulting and unacceptable, and will receive a resolute response".

And this is as far as it gets although, symbolically, the clown Hannan would vote for Mrs May's Brexit plan – not that he would get a chance, being a lowly MEP.

Taking on the Telegraph's response to the "bizarre threats", though, it should be aware that there are laws made by the EU, with the active participation of the UK, which prohibit the sale of electricity to third countries via an interconnector, unless there are specific agreements in place to manage the transfer. Equally, no third country airliner may land at an EU/EEA airport unless it conforms with the Third Country Operator safety checks, as administered by EASA.

These are laws which, to date, the UK has been entirely content to have applied. Yet it appears that, when those same laws apply to the UK as a third country, they become "insulting and unacceptable".

Nevertheless, the chances are that the UK will not get a chance to decide whether it wants to be "insulted" by "unacceptable" laws. Mrs May has to resolve the "backstop" and, if it is anything close to being acceptable to the EU, the DUP will most certainly reject it.

There are those who say that, for the DUP to stand its ground would bring down the Conservatives and thus, also, deprive the DUP of its influence. But we are not looking at rational behaviour here. The DUP is the scorpion to Mrs May's frog. It will sting her to death midstream, and drown itself – because "that's what it does".



Richard North 15/07/2018 link

Brexit: the Irish conundrum

14/07/2018  


It was inevitable that the Trump visit was going to distract the media from the detail of Mrs May's White Paper. But then, it takes very little to distract the legacy media. But when it comes down to it, Trump is just noise. We are not negotiating Brexit with the United States. What its president says, in the short-term really doesn't matter.

What does matter, and really matter, is Ireland. Whether we like it or not, the outcome of Brexit depends on resolving the Irish border question. And upon that depends the fate of the United Kingdom. For, despite the fatuous, malign ignorance of the likes of Liam Halligan, "no deal" is not a walk in the park.

In fact, Halligan, in asserting that Britain "already conducts most of its trade outside the EU, largely under WTO rules", is lying. And he must know he's lying. Furthermore, what he's doing is irresponsible. It's equivalent to shouting "fire" in a crowded cinema auditorium – dangerous public misinformation on an industrial scale.

What we really need to know is whether our Government is going to do enough, in the words of the White Paper, thereby "preserving the constitutional and economic integrity of the UK and honouring the letter and the spirit of the Belfast ('Good Friday') Agreement" (GFA).

But therein lies the essence of the Irish conundrum. Honouring the letter and the sprit of the GFA means avoiding a hard border between Ireland and Northern Ireland. On the other hand, "preserving the constitutional and economic integrity of the UK" effectively prevents the establishment of a "wet" border, which is the necessary outcome of adopting the so-called "backstop" solution.

As far as Mrs May is concerned, the "partnership" outlined in the White Paper "would see the UK and the EU meet their commitments to Northern Ireland and Ireland through the overall future relationship". Yet, despite that, the UK is prepared to accept the "operational legal text the UK will agree with the EU on the 'backstop' solution as part of the Withdrawal Agreement will not have to be used".

This convoluted wording is to be found in the Chequers statement and it is repeated verbatim in the White Paper. And, to say it is ambiguous is not an overstatement. On the face of it, it could mean that Mrs May is prepared to accept the protocol on Ireland/Northern Ireland, something to which, she has said, "no British prime minister could ever agree".

That she might be prepared to backtrack was certainly something that concerned Nigel Dodds, MP for Belfast North and deputy leader of the Democratic Unionist Party. Last Monday, in questions following her statement on the Chequers cabinet meeting, he tackled the prime minister on "the continuing obligation of the Government to the so-called backstop arrangement".

Dodds asked her to "make it clear that as far as the backstop is concerned she stands by her rejection of the EU's legal interpretation and there will be no constitutional, political or regulatory differences between Northern Ireland and the rest of the UK".

The prime minister's response was unequivocal. "I am happy to say", she told Dodds, "that I continue to reject the protocol proposal of the so-called backstop put forward by the European Commission earlier this year". Continuing, she said: "The fact that it would have effectively carved Northern Ireland away from the rest of the UK and kept it in the customs union and most of the single market would have meant that border down the Irish sea - that is completely unacceptable to the Government of the UK".

This was picked up by the Irish Times but scarcely, if at all, by the UK press. Even then, the significance was not explored and, since then, reportage on Brexit has been swamped by the rush of resignations, followed by the Trump visit.

But what Mrs May has affirmed is that the "operational legal text" in the protocol has been junked by the UK government. The text to which it "will agree" is something that has yet to be tabled and, if it is ever agreed, the UK expects that it will not be used.

From our partial evaluation of the UK's proposed partnership agreement, however, it is manifestly clear that it does not offer a solution to the Irish border – not least because the "Single Market in goods" does not have the slightest chance of being accepted by the EU.

The net effect of the Chequers cabinet meeting, the statement and then the White Paper, is to put us back to a position before the draft withdrawal agreement was published – on 15 March. To think that we were back to square one would be optimistic. We have landed on the "go to jail" square, and don't even get to pass "go".

So far though, we can see Barnier and the "colleagues" playing this low key. This is entirely as expected, and very much accords with what we were led to believe was the way it would be played. Even Leo Varadkar is restrained in his response. He describes the White Paper on Brexit as an "evolution" of the UK's position, but does not see it as a solution to Brexit.

Understandably, the EU collective has no interest in pulling the plug on the talks until preparations for the UK crashing out are very much more advanced. And then, it will be tactically more appropriate for the UK to be seen as jumping, rather than being pushed. We need not, therefore, expect much drama over the next few months.

An indication of the way things will be played comes here with a report that the European Commission's "preparedness unit" has given Member States "strongly worded guidelines" on stepping up contingency planning to cope with a "no deal" scenario. This, it is understood, was drafted after the publication of the Chequers statement.

The guidelines warn Member States to make preparations across a range of areas, including customs, aviation and controls on food, animal and plant products, and financial services.

"Although the withdrawal of the United Kingdom may appear to be playing out at a very high and rather abstract level between the United Kingdom and the EU,” they say, "its consequences will be very real for citizens, professionals and business operators".

Under the "no-deal" scenario, the guidelines advise Member States that, "the EU must apply its regulation at all borders with the United Kingdom as a third country, including checks and controls for customs, sanitary and phytosanitary standards and norms verification, movement of persons (potentially including visa requirements) purposes".

Thus, while the absurd UK legacy media frets over how the Conservatives are reacting to their leader's White Paper, and whether it might be acceptable to Parliament, the real world focus is elsewhere, on how to cope with practical problems of considerable magnitude.

Here, though, there has been what could have been taken as a flash of realism, with The Sun reporting that ministers have drawn up "secret plans" to stockpile processed food in the event of Brexit talks collapsing. Similarly, there is some recognition that supplies of electricity might be at risk, through loss of the interconnectors.

However, rather than examples of sensible planning, responses are being cast as gesture politics, to show Brussels that "no deal" is not a bluff. Yet, Brussels is way ahead of the game. With the White Paper being framed by some as the last and best "offer" from the UK government, the Commission is taking it as the most explicit confirmation that the Brexit negotiations are on the rocks.

And, as if we needed reminding, we are all conscious of the sequence: if there is no settlement of the Irish border question, there is no withdrawal agreement. And if there is no withdrawal agreement, there is no transition period. We crash out of the EU on 29 March next year.



Richard North 14/07/2018 link

Brexit: porcine aviation

13/07/2018  


The Government, says Mrs May's White Paper, "is determined to build a new relationship that works for both the UK and the EU". This is a relationship, the paper says, "which sees the UK leave the Single Market and the Customs Union to seize new opportunities and forge a new role in the world, while protecting jobs, supporting growth and maintaining security cooperation".

It goes on to say that the Government "believes this new relationship needs to be broader in scope than any other that exists between the EU and a third country". It should, it says, "reflect the UK's and the EU's deep history, close ties, and unique starting point".

Before the White Paper had been completed and signed off, though, it might have been a good idea if Mrs May had reviewed the EU position a little more carefully. A good start might have been Michel Barnier's speech to the Committee of the Regions in Brussels on 22 March 2017, only a week before the UK was to deposit formally its Article 50 notification with the European Council.

This speech was of special significance as it was entitled: "The Conditions for Reaching an Agreement in the Negotiations with the United Kingdom". And, as described by the label on the tin, that is precisely what Barnier did.

The challenge, he said, was "to build a new partnership between the European Union and the United Kingdom on a solid foundation, based on mutual confidence". That meant "putting things in the right order: finding an agreement first on the principles of the orderly withdrawal of the United Kingdom, in order to discuss subsequently – in confidence – our future relationship".

As to the partnership, Barnier readily conceded that there would be a free-trade agreement at its centre. This, he said, we will negotiate with the United Kingdom in due course. But, he added: it "cannot be equivalent to what exists today. And we should all prepare ourselves for that situation".

Re-stating the obvious, to give emphasis to the position, he noted that the UK "chooses to leave the Single Market and the Customs Union. It will be a third country in two years from now". And, by making this choice, the UK "will naturally find itself in a less favourable situation than that of a Member State". It will not be possible, Barnier said, "to cherry-pick and be a participant in parts of the Single Market".

If there was any doubt about the sincerity of this statement, and whether it represented EU policy with the full backing of the Member States, this was dispelled by the European Council's negotiating guidelines, published on 29 April 2017 – a month after the Article 50 notification.

This was M. Barnier's negotiating mandate, which remains in force right up to today. And right up front, it is "core principles", it stated:
A non-member of the Union, that does not live up to the same obligations as a member, cannot have the same rights and enjoy the same benefits as a member. In this context, the European Council welcomes the recognition by the British Government that the four freedoms of the Single Market are indivisible and that there can be no "cherry picking".
These principles were to be repeated and emphasised many times by many different speakers, and M. Barnier remained true to them, throughout. In Berlin, on 29 November 2017, Barnier was saying: "A third country, however close it may be to the Union, may not lay claim to a status that is equivalent or superior to that of a Member of the Union". And, on 13 March of this year, Commission President Jean-Claude Juncker reminded us that cherry-picking was not possible.

This was followed up by supplemental guidelines published by the European Council on 23 March. Here, it is stated:
… the European Council has to take into account the repeatedly stated positions of the UK, which limit the depth of such a future partnership. Being outside the Customs Union and the Single Market will inevitably lead to frictions in trade. Divergence in external tariffs and internal rules as well as absence of common institutions and a shared legal system, necessitates checks and controls to uphold the integrity of the EU Single Market as well as of the UK market. This unfortunately will have negative economic consequences, in particular in the United Kingdom.
The thing is, these are not just words. It is a serious weakness on the part of generations of English politicians to dismiss statements of continental politicians as rhetoric, devoid of meaning. But even if one wants to ignore the speeches, there is no getting round the negotiating guidelines. These are immovable.

Thus, when Mrs May expresses via her White Paper that she believes the "new relationship" that the UK wants to negotiate "needs to be broader in scope than any other that exists between the EU and a third country", she is tilting at windmills. She will get a "bog standard" FTA, the so-called Canada-dry deal – no more, no less.

Yet this has not percolated Mrs May's brain. She does not seem to be able to cope with the idea that Brexit means Brexit. It means we leave the EU and, when we do, we become a third country.

In this context, I have written many times about the EU's system for type approval of vehicles. Any and all third countries that want to sell cars within the territories have to submit their products forEU approval to a certification authority. After Brexit. UK certification will no longer be valid.

Yet, we see the White Paper blithely prattle about this subject, offering an "example" of mutual recognition of Vehicle Type Approvals. With the proposed "common rulebook", it says, the UK and the EU would continue recognising the activities of one another's type approval authorities, including whole vehicle type approval certificates, assessments of conformity of production procedures and other associated activities.

Furthermore, it says, "Member State approval authorities would continue to be permitted to designate technical service providers in the UK for the purpose of EC approvals and vice versa", and "Both the UK and the EU would continue to permit vehicles to enter into service on the basis of a valid certificate of conformity".

This is pure, unmitigated fantasy. There is not a single country outside the Single Market that is permitted this facility. And, at the very least, if the EU permitted the UK to certify vehicles, it would be forced under WTO non-discrimination rules to permit every other nation the same rights – driving a massive hole in the Single Market.

There are no possible circumstances, therefore, where this is going to happen. Mrs May and her government are deluded in even suggesting this as a possibility.

But the delusion does not stop there. The UK is also proposing a "common rulebook on agri-food", which "encompasses those rules that must be checked at the border". Its adoption, it says, "would remove the need to undertake additional regulatory checks at the border – avoiding the need for any physical infrastructure, such as Border Inspection Posts (BIP), at the border between Northern Ireland and Ireland".

Again, this is fantasy. Outside the Single Market, with the one very special exception of Switzerland - which adopts in its entirety the food-related Single Market acquis and has all its imported goods run through BIPs – there is not a single country anywhere in the world that is permitted to by-pass the border inspection system.

There is an outside possibility that, if the UK adopted the entire acquis, plus the surveillance and enforcement systems, and opened up his premises and government agencies to EU inspection, and also undertook only to import foods which conformed with EU law, inspecting them at the border through BIPs at it does now, then the EU might waive border inspection.

However, that would trash the idea of "taking back control" and also any idea of separate trade deals on agri-foods with the United States and other potential partners. Already in trouble with the "Ultras", Mrs May would be torn apart if she conceded such a scheme.

The trouble is, it doesn't stop there. Pharmaceuticals get the same delusional treatment. So do chemicals under the REACH regime, and aviation safety is treated as if Brexit will not exist. The UK government blithely assumes that it can continue to certify those functions it already does, while EASA will retain its current functions and third country provisions will not apply.

Here, the very special case of Switzerland is cited, which again requires the adoption of the whole acquis and regulatory oversight implemented via a formal agreement with the EU, which comes under the jurisdiction of the ECJ.

Even if the UK could accept this, and thereby breach its own red lines, it is unlikely that this agreement would be repeated for the UK, as there are new legislative provisions which set out the parameters for international cooperation.

In short, this White Paper is a litany of delusion – and we haven't even looked at the Irish issue, much less the other matters. We'll attend to this tomorrow, but already we see the porcine aviation out in force. There is not the slightest chance of this being accepted by the EU.



Richard North 13/07/2018 link

Brexit: plunged into the dark

09/07/2018  


On the very day when I really could have used a written record of the Gove-Marr interview, the BBC decides not to do a transcript. Only very much later in the day did we get to hear of the resignation of "reluctant conscript" David Davis (with Steve Baker and maybe Braveman following him). And, while the impact of that is tremendous, Gove still remains very much in the frame for his comments.

I could, of course, write up my own narrative from the recording of Gove, but certain things are above and beyond the call of duty. Wading through 18 minutes of his interview to write up a transcript is one of them. For the key excerpt, therefore, I'll have to rely on the highly unsatisfactory rendition from the Telegraph. While not offering a verbatim transcript, it at least gets the gist of things.

What we get is Gove telling Marr that the UK was " generous to the EU", with the addition that "we're showing flexibility". Thus said Gove, "If the EU is ungenerous and inflexible, then we may have to contemplate walking away without a deal".

Gove further asserts that: "One of the things that we agreed at Chequers is that we should step up preparations for that outcome", then making what can only be regarded as the quite staggering claim that: "We will be in a position in March 2019, if we don't get the deal we want, to be able to walk away".

Ministers, he said, had agreed on Friday to step up planning in their respective departments. They were now hiring "a significant number of people" to ensure that the UK was prepared to crash out of the bloc.

Taking first things first, I noted on Twitter that there were definitely elements of a cunning plan in Gove's approach. You confront the EU with impossible demands, calling for things that they have already rejected, demand that they show "flexibility" and then have an almighty strop when they don't roll over.

The Defra secretary is a politician who is supposed to be brighter than average – although as a Conservative MP, that sets the bar pretty low. But then, this is the man who, according to friends, had to be stopped from using an ordinary household vacuum cleaner to unblock the toilet in his London flat.

But, if the Chequers statement is his idea of the "flexibility" that should motivate the EU towards a Brexit deal acceptable to the UK, then clearly he is struggling to demonstrate that his IQ is anywhere near approaching three figures.

Where the man gets especially dangerous, though, is in claiming that we will be in a position in March 2019, to be able to walk away if we don't get the deal we want. No one who has the first inkling of what a "no deal" Brexit involves could possibly assert that we could ever be prepared, much less be ready by the coming March, less than nine months away.

I suppose that, if we wanted a historic parallel, we could look at the despatch of the BEF to France in 1939, a force so ill-equipped that tanks were being loaded at the docks fitted with makeshift wooden turrets instead of steel, their most formidable weapons being the service revolvers of the officers riding inside them.

Had our politicians at the time realised how badly equipped and trained their "army" was, one wonders whether they would have been so keen to send it into the fray against the most modern and experienced military machine of the age. Similarly, if our politicians really understood the potential impact of a "no deal" Brexit, would they be so keen to expose us to the peril?

For some little time now, I've been arguing that we should have a coherent report, pointing out what is involved. The cabinet ministers before they attended Chequers on Friday last are said to have been furnished with one, but clearly it has failed to have much effect on Gove. Perhaps he should stick to unblocking toilets with vacuum cleaners.

Nevertheless, from his unregarded ghetto in an obscure corner of the Telegraph, Booker at least is trying his best, this week in yesterday's column writing about the possibility of our lights going out if we leave the EU without a deal.

He starts by observing that when future historians seek to explain "why Britain made such a disastrous shambles of its bid to leave the EU", nothing may surprise them more than to discover how little the British seemed to understand the basic workings of the organisation they wanted to leave.

Few things define better the nature of the EU, Booker writes, than its rigorously rules-based "internal market", which allows its members to enjoy "frictionless" trade with each other. Yet, however often this was pointed out to the British, they seemed incapable of recognising the inevitable consequences of their decision to leave the entire European Economic Area (EEA), to become what is termed a "third country".

Yet another example of this inability to grasp the relevant facts relates to our increasingly precarious energy policy. The more we close down our reliable fossil-fuel-based sources of electricity, to depend instead on unreliable wind and solar energy, the more our ability to keep our lights on relies on importing power from abroad via interconnector cables.

The previous Wednesday evening, for instance, when only one percent of our power had been coming from wind and none from solar, 60 percent had come from gas and 26 percent from nuclear.

As often happens, to keep our grid functioning, we also have to import 11 percent of our power from France and the Netherlands. And over the next 12 years, according to National Grid, we plan to more than quadruple the current 4 gigawatt (GW) capacity of our interconnectors (to 18.5GW) via new cables from France, Belgium, Norway and Iceland.

These new power supplies will be vitally necessary to keep the grid functioning when it is planned that 68 percent of our generating capacity will derive from weather-dependent wind and solar, which can plummet towards zero at any time. However, the ability to buy power from our neighbours relies on the fact that we are part of the "European Energy Market", which sets the complex rules that allow it to operate.

This is something I wrote about in my blogpost of 3 July, drawing attention to the European Commission's Notice to Stakeholders on cross-border trade in electricity. This makes it clear that, once we become a "third country", the EU could refuse to certify us as continuing participants. Once again, if we had chosen to remain, like Norway and Iceland, in the wider EEA, our dependence on imported electricity would have been assured.

However, neither I nor Booker are the only ones to have written about this. On 11 June, the specialist website Energy Voice ran an article written by Bloomberg, headlined "No Brexit for energy as UK set to draw more power from EU".

The article notes the planned increase in dependence on imported power but then observes that the Brexit process may undermine the economic and logistical case for using interconnectors. To maintain flows after 29 March next year, it says – in a caution later echoed by Booker, the UK must agree to remain part of the EU internal energy market.

That, the Article says, must be written into Britain’s agreement with the EU on Brexit, and that hasn’t happened so far. What happens to electricity if there’s a "no-deal" Brexit, it adds, "would add so much friction to the system that utilities think it's unthinkable".

Much the same is suggested in a long report (128 pages) on the EU energy system for the European Parliament. It is even less concerned than Energy Voice, suggesting that "it is reasonable to expect the UK's and neighbouring countries' transmission system operators to continue their long-lasting cooperation on the basis of their respective regulatory frameworks". This is aided by the fact that the UK is connected only though asynchronous interconnectors, which means they do not fall under the EU regulatory regime.

However, as national regulators are involved in negotiating arrangements for cross-border transmission of electricity, even the European Parliament does not rule out the framework coming under "additional examination" after Brexit.

Its whole case for suggesting continuity of supply, though, rests on all sides continuing to speak with one another, on which basis it argues that, "Brexit does not seem likely to have any noteworthy negative impact on either UK or EU electricity energy security".

On the other hand, it concedes that Brexit is increasing market uncertainty. In the event of a "no deal" scenario, where parties no longer are allowed to communicate directly, disruptions in supply cannot be ruled out. And that is without factoring in any unilateral changes made by the EU to the regulatory system, following Brexit.

Even if the risks of outright disruption are slight, they nevertheless cannot be entirely discounted. Given the way coal-based power stations are being wound down, with the increasing unreliability of our nuclear fleet and the intermittent nature of wind and solar, the loss of power from our interconnectors could be significant.

Thus, concludes Booker, to add to all the other risks we run by deciding to leave our largest single export market, we must contemplate the possibility of our lights going out. Truly may we be about to take a[nother] leap in the dark, one also taken by David Davis, in deciding to resign after telling the prime minister he could not support her Brexit plan.

This, with nearly the entire Brexit ministerial team quitting, has plunged the May administration into the dark – one not caused by the absence of electricity. It is precipitating a crisis the extent of which we know not yet.

And just to add to Mrs May's joy, Simon Coveney, Ireland's foreign minister has warned that Barnier will find it "difficult" to accept her Chequers plan. "The EU has never been keen to facilitate a breaking up of an approach toward the single market in terms of keeping all of the elements of the single market intact and consistent", he says, "so I think Britain will find it difficult to persuade the EU to support the approach they're now proposing".

Coveney adds that Barnier "will be a very, very strong defender of the EU interests here, in terms of protecting the integrity of the single market and the integrity of the EU customs union".  With that, it's almost as it the lights are going out in Downing Street. The light at the end of the tunnel was a train coming the other way.



Richard North 09/07/2018 link

Brexit: Mrs May's kiss of death

07/07/2018  


There is only one thing remarkable about the statement released by the government in the wake of yesterday's cabinet meeting. And that is – compared to what we were led to expect – that it is completely unremarkable. It is exactly as predicted.

What went on at Chequers, in terms of the arm-twisting or whatever else was needed to get agreement to the statement, is of absolutely no interest. If this sets the terms for the UK's proposal for a formal agreement with the EU, covering also the Irish border question, then it spells the end of any expectation that we might have had of a negotiated settlement.

Who will pull the plug, and when and under precisely what conditions it will be pulled is a matter of detail. Like as not, the European Commission – which holds the front line position – will play the long game. This would involve it passing the decision as to whether to reject the expected White Paper on to the European Council in October.

In the meantime, the odds are that it will not say yes and it will not say no. It will keep the talks grumbling along at officer level, keeping statements as anodyne as possible and not making any statements that can be regarded as definitive.

The precise reasons for the EU's rejection, when it comes, will not be at all difficult to work out. Firstly, at the core of the proposal is "the establishment by the UK and the EU of a free trade area for goods". This supposedly entails the UK and the EU maintaining a "common rulebook" for all goods including agri-food, but it will cover only those areas "necessary to provide for frictionless trade at the border".

The government, says the statement, would then "strike different arrangements for services", the criterion being that it is "in our interests to have regulatory flexibility". And, on that basis, the government recognises that "the UK and the EU will not have current levels of access to each other's markets".

This, as I have already pointed out, is cherry-picking at two levels. At one level, the UK is retaining the option to extract service provisions from the Single Market and, at the second level, the UK is deciding to apply only part of the acquis, on grounds of its own choosing.

Yesterday, even as the cabinet was meeting, Michel Barnier was speaking at the Institute of International and European Affairs, declaring that the Single Market was the EU's "main economic public good".

Said Barnier, "We will not damage it. We will not reverse what we achieved with the UK". Thus, he said, "we must find solutions that respect the integrity of the Single Market".

Yet, right up front, in attempting to split off services from goods, and then cherry-picking the goods, the UK is challenging the integrity of the Market. If this was to proceed, the acquis would become precisely the à la carte menu that the EU has refused to entertain.

The next objection will be found in a sleight of hand by the UK government, on the way EU law is to be adopted. The statement says that the UK will make "an upfront choice to commit by treaty to ongoing harmonisation with EU rules on goods" – something which would be essential in any agreement.

But this apparent commitment is then substantially watered down by the assertion that, where the UK had chosen to apply a common rulebook, "Parliament would still have a lock on incorporating rules into the UK legal order". It could choose not to pass the relevant legislation, accepting that this "would lead to consequences for market access, security cooperation or the frictionless border".

What this means is that the UK is planning to put to the EU a proposition that it will select those parts of the Single Market acquis that it wants, but even then will reserve the right to refuse to adopt individual measures within the groups that it chosen.

This could be couched in terms of "safeguard measures", with a defined procedure as in the manner of Article 112 of the EEA Agreement, but the more likely response of the EU – in the unlikely event that it was still on board – would be to demand a guillotine provision, similar to that adopted by the Swiss.

Any such provision would mean that a refusal to adopt a measure would effectively terminate the agreement, thereby – to all intents and purposes – negating the Parliamentary lock. What might be just acceptable to the EU would surely by overturned by Parliament.

The next major – and probably insurmountable – hurdle is that proposal that the UK and the EU "would also agree to maintain high regulatory standards for the environment, climate change, social and employment, and consumer protection – meaning we would not let standards fall below their current levels".

Here, one has to read between the lines, although deciphering is not too difficult. What has to be appreciated is that a significant (and increasing) part of the Single Market is law on environment, climate change, social and employment, and consumer protection.

Taking that at face value, the UK is proposing to set a further level of cherry picking and, although not directly stated, is rejecting regulatory alignment and going for equivalence. This is yet another departure from the Single Market ethos and one which is probably so significant that the EU would almost certainly reject market access over a whole range of goods.

Then we have the statement glibly asserting that the UK and the EU "would work together on the phased introduction of a new Facilitated Customs Arrangement". This, the government says, "would remove the need for customs checks and controls between the UK and the EU as if a combined customs territory".

But the point here is that, at a pinch, it might just remove the need for customs checks, but would not eliminate other border controls – in particular the sanitary and phytosanitary checks that apply to third country goods. A "facilitated customs arrangement", therefore, would not deliver frictionless trade and thereby avoid a hard border between Northern Ireland and the Republic.

There is also an assumption that only goods might need to be checked at the border, allowing services to be controlled at the point of delivery. But this is a false assumption, based on the government's limited view of the nature of services.

Imagine, for instance, that an aero engine is removed from an aircraft at Dublin airport and then sent by road to Belfast for servicing. Barring any parts used, this would be a services transaction, with the return of the engine to the Republic entirely dependent on conformity with EU law.

At a more pedestrian level, we might see ordinary cars driven across the border for servicing, as well as tractors and other agricultural machinery, and even small marine craft, to say nothing of electrical appliances and the like. Without an agreement on the provision of services, customs officials might even find themselves examining the maintenance books of ordinary cars, turning back those where work has not been done in accordance with EU law.

The accumulation of checks, not allowed for in this statement, means that the requirement to avoid a hard border would not be satisfied. The "backstop" would have to apply. However, in the statement, there is the confident assertion that the "backstop" solution as part of the Withdrawal Agreement "would not need to be brought into effect".

This would doubtless constitute yet another insurmountable hurdle, as there seems an absolute certainty that the EU would demand the application of the "backstop". Especially, it would refuse to allow the remaining Withdrawal Agreement issues to be rolled into the wider, post-Brexit trade agreement.

Without going into more detail, and – for example – assessing the dispute resolution proposals, and the nature of the institutional framework, there are already more than enough serious impediments for the EU to reject this proposal out of hand.

The indications from Brussels, though, is that the EU will play the long game. It is said to have given up any hope of reaching an agreed Brexit settlement, and has already discounted this latest mad endeavour on the part of Mrs May.

But there are many arrangements to be sorted out, to minimise the potential damage caused by the UK crashing out of the EU, so the Commission and Member States will want to take their time, only pulling the plug at the last possible minute, if they are forced to do so.

We can, therefore, expect a fairly muted response to the UK White Paper, when it finally appears. If it follows the form of this proposal, M. Barnier will not say yes, but he will not say no, either. Instead, after low-level talks through the summer, it will be left to the October European Council to do the deed – which may even delay the final rejection to the New Year.

Either way, it is at this point that we must consider any meaningful negotiations to be over. Mrs May, in pandering to her cabinet, has ignored the only parties that matter in these talks – the EU institutions and the Member States. Whether wittingly or otherwise, she has given a rational Brexit the kiss of death. Chaos will necessarily ensue.



Richard North 07/07/2018 link
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