Brexit: a leap in the dark

22/08/2017  


For those of you who have Netflix, you need to play "Whatever happened to Monday?" and run the sequence from 1:12:30 to 1:14:11. The man holding the gun is Barnier, just after reading our Government's position paper on "Continuity in the availability of goods for the EU and the UK", published today.

One can't keep saying this or it really does get boring, but there is no way of dressing it up. The Government has blown it, demonstrating a complete inability to understand (or accept) the consequences of leaving the Single Market and acquiring the status of a "third country".

The key elements of its paper, that confirm we're going to dive off the edge, are set out in the section covering the "principles for an agreement on goods", and in particular, the second section (b) of paragraph 15. This section is expanded into paragraphs 21-28.

What paragraph 15 does is address in brief the post-exit scenario where UK businesses will want to continue exporting goods (and services) to EU Member States. It suggests to the EU negotiating team that:
… to avoid unnecessary duplication of activities and provide legal certainty, where (UK) businesses have undertaken compliance activities prior to exit, they should not be required to duplicate these activities in order to place goods on the UK and the EU market after exit. This includes recognising the validity of type approvals, certificates and registrations issued prior to exit.
In the more detailed passages in paragraphs 21-28, it is then argued that "compliance activity" is on-going and, to avoid unnecessary disruptive transfer of activities between the EU and the UK, the Government proposes that UK assessment bodies should be able to continue their work. It then says that "approvals, authorisations, certificates and registrations issued prior to exit should continue to be recognised as valid".

As any changes to current arrangements could potentially cause a huge amount of disruption, these proposals make a certain amount of sense, except for one small problem. They effectively constitute a proposal that the UK continues to benefit from the advantages of Single Market membership, without being in the Single Market. Once again, the UK Government wants to have its cake and eat it.

By way of an example, the UK wants all medicines with market authorisations which are held by UK firms to continue in force, so that products can be freely exported throughout the EEA. However, as it stands, Union law in the form of Regulation (EC) No 726/2004 requires that the holder of a marketing authorisation "must be established in the Community".

This we pointed out in a long piece in the end of January and then in June we noted that the provisions had been amplified by the European Medicines Agency (EMA). In a terse "questions and answers" document, the EMA had stated unequivocally that market authorisations held by UK pharmaceutical companies would have to be transferred to "a holder established in the Union (EEA)".

This, we remarked, is by no means a simple process (nor cheap) and, with other changes, had the Association of the British Pharmaceutical Industry (ABPI) very worried indeed. Dr Virginia Acha, executive director of research, medical and innovation at ABPI, described the EMA's paper as the "opening chapter" in what she described as a "crisis".

If there were any doubts about this, the Commission on 12 July issued its own position paper on "Goods placed on the Market under Union law before the withdrawal date". In general terms, it stated, that "any good lawfully placed on the single market before the withdrawal date can, after that date, continue to be made available on the market of the United Kingdom or on the single market under the conditions set out in the relevant Union law".

The crucial point here is that goods can only be made available (i.e., supplied for distribution, consumption of use) "under the conditions set out in the relevant Union law". In respect of market authorisation procedures, therefore, the Commission paper stated that:
The Withdrawal Agreement should ensure that risk assessments, approvals and authorisation procedures of biocidal products, plant protection products, and medicinal products (human and veterinary) led by a United Kingdom authority which are ongoing on the withdrawal date are transferred where appropriate to another national competent authority.
In effect, the Commission has already rejected the UK proposal, in general terms and in specific instances. It will not accept that "approvals, authorisations, certificates and registrations issued prior to exit should continue to be recognised as valid". And, just to remind us of this, Michel Barnier posted a link on Twitter to the position paper.

That goods "made available" on the Single Market will be subject to the "conditions set out in relevant Union law" captures a huge swathe of UK exports. As regards the chemical industry and REACH, for instance, UK manufacturers will no longer be able to hold registrations for their products. They will have to appoint "only representatives", based in the territory of an EU Member State. These will then assume all the responsibilities of registrants, as set out in the regulations.

As regards live animals and animal products, the UK wants the EU to all products that have been "placed on the market" to continue to be made available. On the other hand, the Commission position is that "the withdrawal agreement should specify that live animals and certain germinal products, the movement of which has been initiated before the withdrawal date, can be allowed entry into the single market area on the basis of rules governing intra-EU movements".

However, it says, all animal-derived food and animal-derived feed, as well as animal by-products entering the single market as of the withdrawal date "should be subject to the applicable rules for importation". In other words, there are to be no concessions. The goods can be made available, but the full range of Union legal requirements have to be satisfied before that can happen.

There can be no other way. To change its own laws to accommodate the UK would present the EU with considerable problems. Concessions given to any one nation would trigger demands from its other trading partners to treat them in the same way. If it failed to do so, under certain circumstances, the EU could even find itself in breach of WTO non-discrimination rules.

Despite all this, we have the UK Government, with David Davis in charge of this particular bit, actively proposing something that has already been rejected. This is a form of madness for which there is no easy explanation. All one can suggest is that Mr Davis (and his close advisers) simply cannot come to terms with the concept of the UK as a "third country".

Hard to believe, though, it actually gets worse. Following on from the article by Davis in the Sunday Times which we reviewed, we have the Government's position paper reaffirming his views on the Irish border question.

"The border between Northern Ireland and Ireland is the UK's only land border", it says, adding: "It is essential to avoid a return to a hard border, and trade and everyday movements across the land border must be protected as part of the UK-EU deal".

Yet, as I pointed out in my piece yesterday, for the EU to make concessions that permits a "soft" border between Northern Ireland and the Irish Republic, the settlement must be one of a kind, entirely separate from a general UK-EU deal. If it has general application, it will set a precedent, again triggering demands from the EU's other trading partners for equal treatment.

For that powerful reason, the EU cannot accept a bundled deal any more than it can combine the negotiations. The Irish border question must be settled separately and first, before the talks can move on to general trade issues. Furthermore, as Barnier points out, the EU has made its positions "clear and transparent since day one".

By insisting on bundling therefore, looking for a solution that is part of the UK-EU deal, Davis is effectively preventing the talks from progressing. He is creating a situation where time is being spent uselessly on sequencing, instead of actually addressing the issues.

This has the makings of a classic impasse. Barnier will not talk about trade until the Irish question is settled, while Davis insists that we can only settle the question in the context of trade discussions. With Brussels already refusing to change the sequence, these talks have nowhere to go.

The extent of the impasse, though, seems to have eluded the media. Nowhere are we seeing alarm expressed as what amounts to the publication by the UK government of a blocking agenda that will drive the Bexit negotiations to failure.

We see plenty of coverage about what the UK "wants", but nothing of the fact that its demands are entirely irrational and will not be met. The best we get from Sky News is: "UK Brexit plan for goods may not be good enough for Brussels".

The negotiations, therefore, are like a giant container ship run aground. At high tide, only the lack of movement betrays its predicament, but the legacy media hasn't noticed. By the time the waters recede and we see the damage, it may be too late.



Richard North 22/08/2017 link

Brexit: it ain't going to be boring

21/08/2017  


Parading a classic lack of self-awareness, the Sunday Times has published a lament from the minor tele-sleb Neil Oliver, whingeing that he is "now as bored as it is possible to be by the very mention of Brexit".

He cannot, he says, be the only "regular person" who does not understand why it has to be so difficult, so ludicrously incomprehensible. "Maybe", he adds, "I am hopelessly wrong but I firmly believe the vast majority of the citizens of the EU member states must be as bored by it all as I am".

If there is boredom to be had, though, it is in the lacklustre media coverage. Only our media could take the most important and most interesting political events of the century, and turn it into something which the luvvy Oliver could find so boring.

Not least of the reasons why they have managed to achieve this remarkable feat is the predilection for repeating the same limited set of stories, failing to expand its repertoire or deal with the more complex and interesting issues that arise from our quest for Brexit.

So it is that the BBC is running the tiresome zombie idea from Patrick Minford of unilateral free trade. We thus see a rehash of the same tired claims which have been debunked again and again, only to see them re-emerge essentially unchanged.

In true debate, of course, this would not happen. The sequence should be thesis, antithesis and, from that, synthesis as a new position emerges from arguing out the issues. But this isn't the way the Minfords of this world operate. His style is to launch his mad thesis and, when it gets slapped down – as indeed it should – he goes quiet for a while, only then to pop up with exactly the same arguments.

A media which was able to exercise editorial judgement would be wise to this. It would host the debate, see it through to a resolution and use the newly-forged synthesis as the baseline for the next stage in an ongoing debate.

But what we have now is children at the keyboards, with neither wisdom nor corporate memory, controlled in the main by malevolent agenda setters who have their own interests at heart. And for them, each repetition is an opportunity to fill space and to advance the original agenda.

Another wholly undesirable development in the decline of the media is its penchant for ceding its space to government ministers, given over to propaganda (at our expense when it is tucked behind a paywall), where it is immune from critical analysis by virtue of it being editorial content.

A classic example of that is also in the Sunday Times this week, a scurrilous article from David Davis, exploiting the criticism-free opportunity to spin the government's case on the Brexit negotiations.  Of particular concern to Mr Davis is the UK's argument that talks around our withdrawal cannot be treated in isolation from the future partnership we want. In his view, "many questions around our withdrawal are inextricably linked to our future relationship".

"Nowhere", he says, "is that point truer than on the question of Northern Ireland. It is simply not possible to reach a near-final agreement on the border issue until we've begun to talk about how our broader future customs arrangement will work".

Furthermore, he adds, "if we get the comprehensive free trade agreement we're seeking as part of our future partnership, solutions in Northern Ireland are easier to deliver". Therefore, he asserts, there is "real value" in discussing a few issues upfront.

Although our chief negotiator might have a point, he is paying the price for Mrs May's failure to set out our position when she invoked Article 50. Had the position papers we've seen recently been attached to the papers sent to Brussels in March, the tenor of the current negotiations might be very different.

However, what he clearly doesn't yet seem to have understood is that, even with a free trade agreement with the EU – as deep and as comprehensive as you like – the UK still takes on the status of a "third country" and border checks will apply between Northern Ireland and the Republic.

On that basis, fixing in advance the idea that we will be seeking a free trade agreement does absolutely nothing to resolve the border question. Essentially, if the UK is determined to work from outside the Single Market, it needs to agree a special political status for Northern Ireland which allows for free movement to and from the province.

Possibly, what we could be looking at something like declaring the whole of Ireland a single administrative area for customs and immigration. At the moment, Ireland effectively acts as the UK's external border when dealing with the movement of people under the CTA.

Post-Brexit, the position would have to be reversed, with the Irish Sea between Northern Ireland and the rest of the UK becoming the "hard" border, in order to allow free movement within the Irish island as a geographical entity.

Such a settlement, on the other hand, is so fraught, especially as the Conservatives are reliant on the DUP for their parliamentary majority, that it has clearly been rejected without even a formal discussion. And to reduce the potential political embarrassment, Davis is now attempting to depoliticise the question by lumping in Northern Ireland with the overall UK settlement.

Even if this sleight of hand has been glossed over by the UK media (and missed by the Irish journals), I doubt it has gone unnoticed in Brussels, where they clearly have a better idea of what is needed to keep the goods flowing.

On the other hand, we can be fairly well assured that we will not be offered a general concession that addresses all our border issues, just to make life easier for the Northern Irish. For the EU's own political reasons, a border deal on the Emerald Isle must be seen to be one of a kind. If it is applicable elsewhere, it creates a precedent. Then the EU will be under pressure to make concessions with its other trading partners, creating undesirable stresses in its wider neighbourhood policy.

Thus, while Davis writes glibly about the UK-EU Brexit talks needing to take a "big leap forward", asserting Britain's readiness to do just that, he is once again looking at the negotiations from a narrow UK perspective. He has not factored in the EU's own "red lines".

Now that he has boxed himself in, Davis is going for broke, and attempting to work the Northern Ireland settlement in with the rest of the UK. If he succeeds, he can kiss goodbye to the idea of an invisible border. With the UK a "third country", the Irish border becomes the EU's external border, and it will have to be policed.

Of course, once Davis - and the UK Government generally – is forced to come to terms with the practicalities, he may well have to rethink his current stance. The land border cannot be effectively policed. The seaports and airports can be. Go figure.

If this is being glossed over by the UK media, though, the growing legion of complications has not entirely evaded the Irish Times. There, Chris Johns writes of the UK's stance being "madness without method". As a matter of EU law, he observes, all of the infrastructure necessary to police this new customs frontier between the EU and the rest of the world would have to be placed on the Irish side of the Border.

"Think about that for a second and appreciate the ironies", he says, "the discomfort and the expense. All of the border checks inside the Republic. Nothing on the UK side".

Somebody in Whitehall, he suggests, "is willing to bet that the Government will put pressure on Brussels to compromise, to do anything to avoid this outcome". He thus asks whether the British have finally discovered some negotiating leverage.

The tack has changed towards minimising the costs by changing as little as possible, giving the world (not just the EU) tariff-free access to the British economy and dumping all of the consequential blame on Brussels. "This could, at a very long stretch", concludes John, "be described as a well thought out strategy but for one simple problem: it's nuts".

If that is the best the Irish can offer by way of analysis, though, they have a long way to go. On the continental mainland, national politicians are at last beginning to appreciate that manning a hard border with the UK has considerable resource implications, while the necessary infrastructure will require huge investments.

There is talk, therefore, of Macron punching numbers into a special, wide-screen version of his calculator, ready to present the UK with a bill that will dwarf the amount expected from Brussels by way of a financial settlement. By the time all the Member States have added theirs (not forgetting that air freight also has to be processed), we are looking at three figures, with a billion attached to it.

With that, Minford and his pals can prattle away all they like about unilateral free trade – with the active and growing support of the Telegraph Muppets, while Davis, in his naïve innocence, believes that the "key question here is how we fairly consider and solve disputes for both sides".

In fact, they are about to get the benefit of a master class in how to stuff Britain. When the complications come, they come in legions, and we haven't even begun to understand how bad it is going to get. For starters, the Slovenian prime minister is indirectly answering Davis's plea, stating that there is no chance of trade talks in the autumn. 

If there is one consolation, though, at least we can assure Mr Oliver that he ain't going to be bored for very much longer. As for us, we never were.



Richard North 21/08/2017 link

Brexit: no solution at all

17/08/2017  


One of the great lies perpetrated by remainers and "Ultras" alike is the claim that pursuing the "Norway" (Efta/EEA) option would require us (the UK) to continue obeying EU laws, with "no say" in their creation. That never was true, even within the constraints of the EEA institutional arrangements, but it doesn't stop those opposed to a "soft" Brexit trotting it out at every opportunity.

With no doubt unintended irony, however, it is exactly that scenario which the Government is proposing in its latest "position paper", this one on the Irish border, in respect of cross-border movement of animals and foodstuffs.

So desperate is the Government to avoid a hard border in relation to checks on particular types of goods, those it terms "Sanitary and Phytosanitary (SPS) measures for agri-food" that it is suggesting that the EU allows us to adopt the "Swiss option", which "could ensure that there would be no requirement for any SPS or related checks for agri-food products at the border between Northern Ireland and Ireland".

You have to look quite carefully for the Swiss reference as it is confined to a footnote – the one exception outside the EEA where routine border checks on these products have been all but eliminated.

But the price paid for this "freedom" is one which the "Ultras" are seriously not going to like – and nor it is going to be without complications. Firstly, as with Switzerland and the EU, the UK will have to be defined as a "common veterinary area" for the purposes of disease control.

This though rests on a comprehensive EU-Swiss treaty known as the Agriculture Agreement which includes 11 Appendices covering 37 pages on animal health matters, bringing Swiss law into line with the lengthy list of EU legislation.

This agreement also creates a Joint Veterinary Committee between the EU and Switzerland which has the authority to frame joint "acts" binding the parties, one purpose of which, as illustrated here is to keep Swiss law updated and in line with EU provisions.

This is not simply a question of "equivalence", as the UK Government would like it to be, but more-or-less complete harmonisation of law, systems and procedures, with the EU setting the agenda.

Sanitary and Phytosanitary agreements between the EU and third countries are by no means unusual, with the Commission website thirteen such, of which the Swiss agreement is clearly the most comprehensive. Mostly, such agreements are either free-standing treaties (as with the Swiss) or built into broader free trade agreements. Special "simplified procedures" apply to Efta/EEA states.

To ensure effective collaboration between Switzerland and the EU in the event of the detection of a listed animal disease, Switzerland is fully linked via a computerized network to the veterinary authorities of the European Commission and individual Member States of the EU through the Trade Network and Expert System (TRACES) and the Animal Disease Notification System (ADNS). Furthermore, Switzerland participates in different working groups and meetings of the Standing Committee on the Food Chain and Animal Health (SCFCAH).

All this could be replicated to form an agreement between the UK and the EU, with the added proviso (also built into the Swiss agreement), that any agri-food products entering into the UK from other third countries has to be subject to the same import regime as applied by EU member states to similar products entering their territories.

This would include the provision of Border Inspection Posts and the diversion of imports to them before they were submitted to customs clearance. Any goods coming into to Ireland with a final destination in the UK or an EU Member State must be inspected by the Irish authorities at a BIP (or other approved location). The combined effect of this regime would be to rule out independent trade deals in the agri-food sector with other third countries, where more relaxed or different standards were applied.

As far as agri-food products go, this would certainly give us the "invisible border" that the UK Government so much wants. What is not going to happen though, is the EU exempting traders and farmers from checks – as the Guardian avers.

The UK will have to maintain the full spectrum of internal checks, and paperwork, applying EU law to its fullest extent. But the effect would be that, in respect of this major sector, the UK would gain no relief from Brexit. To all intents and purposes, it will not have left the EU.

As to whether this would political tenable in the UK remains to be seen but it would quite obviously contradict any claim to us having regained control over our laws.

One possible advantage though is that, in the Swiss agreement, there is no judicial element in relation to dispute settlement. The Joint Committee acts as an informal arbitration body. Failing that, there is always the WTO dispute settlement procedure. Thus, there is no problem with ECJ jurisdiction.

Whether the EU would allow the same informal approach to apply in an agreement with the UK also remains to be seen. If it wanted more, then this could become a sticking point. That aside, a comprehensive sanitary and phytosanitary agreement (whether or not part of a more general agricultural agreement) would be a complex and time-consuming thing to negotiate.

Now that the UK has tentatively put it on the table, by way of its position paper, it is open for the parties (the EU and the UK) to place it firmly on the agenda. However, Barnier has already made it clear that he is keeping to the sequencing outlined in his negotiation mandate, so it is unlikely that we could see talks on this complex subject start until the end of the year, if not later.

Then to conclude an agreement before Brexit day would be possible, given that our laws and systems are already fully integrated with the EU- provided there are no unexpected glitches. The key though is whether the parties can find a slot in what will be an increasingly crowded agenda. The sheer volume of issues to be negotiated is going to make that difficult.

And that is just one small part of the whole, which will have to go to making the Irish border "invisible". All the other sectors, from aviation to chemicals, pharmaceuticals and engineering, each with their own specific regulatory requirements, will require their own agreements, on top of broad-ranging mutual recognition agreements on conformity assessment.

At least, though, for these position papers, the UK government is beginning to think in concrete terms about what is necessary to secure a working settlement with the EU. But, as it does so, the complications multiply rather than fade away while, as Mr Barnier keeps reminding us, the clock keeps on ticking.

Many of the problems, of course, would melt away should the UK – even at this late hour – adopt the Efta/EEA option – which offers a far better deal than the UK is seeking through its position paper. This is a bizarre example of negotiators turning down an option only to go for something less advantageous.

And even then there are countless other issues which need to be addressed, with the Irish Times recording that IT experts are dismissing the idea of a frictionless border altogether.

When push comes to shove, the border will form the EU's external border and the EU is not going to allow Northern Ireland to become a "back door" into the single market. With agri-foods as the model, that could see the Irish tail wagging the British dog, with the UK having to erect barriers at the borders between itself and third countries in order to preserve free movement across the Irish border.

And on that basis, the Irish solution that we have seen outlined yesterday could end up being no solution at all.



Richard North 17/08/2017 link

Brexit: on the brink

15/08/2017  

 
So far, the only thing that has stopped us from completely disowning the government's Brexit policy is the lack of detail. Although we have our dark suspicions, no one can be absolutely sure what its policy is. But, with the imminent publication of a dozen or so "position papers", this looks set to change.

Already, there have been a number of limited leaks, but nothing firm enough to be definitive. What we see, though, does not bode well. It appears the Government is about to commit openly to a series of proposals so devastatingly unrealistic that they don't have any chance of making it alive into the real world.

Already, we see from diverse rumours of the paper on the Irish border question which is going to have the Irish government vehemently opposed to the UK's plans and ready to veto everything in sight unless Mr Davis can come up with something better.

Sometime today, though, we expect to see a proposal for transitional arrangements on customs which, according to the Independent, will seek continued alignment with EU customs rules for an "interim period" after Brexit.

This, the paper has it, is Ministers telling Brussels they want a "temporary customs union", so that "little would change on the ground" in terms of trading with EU Member States. Apparently though, there is "absolutely no detail about how such a miraculous new system will be achieved".

In the first instance, if the Government is perpetuating the confusion between a customs union and the Single Market (something which even the Commission managed to do yesterday), then it will be in real trouble, expecting "frictionless trade" just by eliminating tariffs.

But equally problematical is that, to settle on a post-Brexit customs union with the EU will require a separate treaty. However, since trade is an exclusive EU competence, the deal can be made between the Commission and the UK, but it must be formally agreed by the Council (under QMV) and the European Parliament.

Keeping an agreement just a customs union level, though, will do little to smooth the passage of UK goods into EU Member State territories (or the EEA for that matter), and even then it remains to be seen whether the EU will commit the resources to agreeing a customs union with the UK for a temporary period that may be no longer than two years. And, of course, the UK cannot require the EU to agree. If it says "no", that is the end of the matter.

On the other hand, if a treaty is to go further, covering aspects of the single market, it could end up being a mixed agreement, with all that that entails in terms of unanimity and ratification. Any one country – such as Ireland – could block an agreement, either at signing or ratification stage.

For "frictionless trade", though, any treaty would have to go massively further than a mere customs union, as the Turks are well aware. They have a customs union with the EU and delays at the Kapikule Border Gate are routine and can extend to several days for vehicles waiting to cross.

As to the longer-term arrangements, the Guardian has it that the government is examining two options.

We are either to have a highly streamlined new arrangement "in which the UK would manage a new customs border" but would seek to make any checks minimal; or a new customs partnership, which would see Britain replicate the EU's approach so closely that it would "negate the need for a customs border".

The former, if the EU agreed, would require considerable organisation and expenditure on infrastructure, with the appointment of thousands of additional officials. How far it could progress would be up to the EU to decide, and it is unlikely that customs controls on the EU side would be completely waived. Then, there are the veterinary and other sanitary checks, which need special provision.

As to the second option, this seems to perpetuate the myth that all the UK has to do is maintain regulatory convergence and goods will flow freely. From all appearances, there continues to be this total blindness as to the consequences of the UK leaving the EU and assuming "third country" status.

Then, there is the massive issue of the continuation of the trade deals with other third countries, where the EU's approval will be needed before they can be allowed to continue. Continuity can be sought, but it is by no means automatic.

Predictably, before they have even been published, the position papers are taking a hammering from the opposition. Keir Starmer says they are "incoherent and inadequate proposals designed to gloss over deep and continuing divisions within the cabinet". But then, he would say that, wouldn't he.

Returning to the Irish, Sinn Féin and SDLP describe them as "unworkable" and "back-of-envelope", although we will have to wait until Wednesday before the full horror becomes visible.

Nevertheless, SDLP Leader Colum Eastwood is dismissive of some of the expected content of the paper. "Advance leaks indicate that Theresa May's government intends to stubbornly stick by its hard Brexit position of leaving the customs union and the single market, threatening a hard border in Ireland", he says.

"Back of the envelope proposals on "very advanced CCTV cameras" at the border don't even enter into the realm of a serious suggestion or a credible solution", he adds. "It is almost laughable that it took the British government over a year to come up with it. Anyone who knows anything about the Irish border knows it's a non-runner".

Without yet seeing any of the detail, though, one gets the impression that we are, as a nation, on the brink. With nearly fourteen months since the referendum, the government is demonstrating that it has learned perilously little and is as far now from a coherent exit plan as it ever was.

But what is even more disturbing is the apparent inability of government ministers to learn anything, or to understand the hurdles they are up against.

Further, bolstered by their Tory fan boys, and the increasingly bizarre statements from back-bench "Ultras", they are demonstrating a lack of understanding of the nature of the EU, leading them to the belief that their completely impracticable ideas will be accepted by the EU.

Eastwood's dismissal may have very much wider application than just the Irish border issue, marking the entire spectrum of Brexit policy proposals our as a "non-runner". From the brink, where we are now, we are about to see the UK tilt over the edge of that cliff, and plummet to economic chaos.

And yet, these people still think they know what they are doing.



Richard North 15/08/2017 link

Brexit: so shall we perish

14/08/2017  


It doesn't take very much these days to find out the official rules for many things. Most governments are internet savvy and tend to post the details on their websites.

So it is with importing and exporting horses. If you want to know the rules for bringing in a horse from another EU Member States, all you have to do is look here and you'll find them all set out – including details of The Tripartite Agreement (TPA) which applies to racehorses.

If you want to know how imports from non-EU countries are treated, however, you need to look here. For a start, it says: "You can only bring live animals or animal products into the EU from countries on the EU’s approved list". And then there is the requirement to use a Border Inspection Post.

This you might have read on this blog. And that's going to be the situation when we leave the EU. We will be a "non-EU country" and rules which are set out will apply to UK movements.

Rules for the movement of racehorses throughout the world vary widely, but an illustration of how other countries do it can be gained from the US website. So varied and complex are they that the advice given to those planning to transport a horse into or out of the UK is get a professional to do it for you.

That would not apply at the moment to the movement of racehorses to and from Ireland, either from the mainland or across the Northern Ireland border. The bloodstock industries in the UK and Ireland are so closely integrated that they are essentially one. With EU rules and the TPA, cross border movement is very easy.

However, when an Irish government vet raises the alarm about the post-Brexit situation, which I reported on this blog recently, it is perfectly valid for Booker to pick up the story and run its in his own column.

Across the Irish Sea, he writes, they are finally waking up to a disaster looming over the future of one their chief economic sectors, which also has huge implications for Britain.

At last week's Dublin Horse Show, a "Brexit Equine Forum" discussed the consequences for Ireland's horse racing and bloodstock industries of Britain’s decision, by leaving the European Economic Area, to become what the EU calls a "third country".

This, the audience heard, will bring an abrupt end to the arrangement whereby they and their British and French counterparts can, under EU law, move tens of thousands of horses a year freely in and out of each other's countries without hindrance.

As a senior Irish government vet explained, this threatens Ireland's £2 billion a year industry, so closely enmeshed with those of Britain and France, with what he called "an absolute nightmare scenario". Up will go border inspection posts to ensure that any horses entering the EU from Britain must carry an EU health certificate and be subjected to full veterinary inspection. Building new facilities and training staff could not be completed by Britain's exit date.

According to a leading Irish trainer, the new procedures could create delays long enough to make movements impossible under animal health rules. So, no more Irish horses at Cheltenham, and much else.

Booker notes that similar EU rules requiring border inspections posts, vets and delays will severely hamper all traffic of animals and "products of animal origin" across the border with Northern Ireland.

He thus concludes that they may at last in Ireland be waking up to all this. But in Britain there is little sign yet that our own politicians are aware of just what a problem they seem bent on creating.

And in that piece there is nothing particularly contentious. It is largely factual apart from the observation that there will be no "more Irish horses at Cheltenham". That is classic hyperbole, but entirely justified given the massive impact an unmitigated Brexit will have on the Irish industry.

To read the comments on the Telegraph website, though, is to enter a different world, where Booker is a "remoaner" who is "plumbing new scaremongering depths with this absurd dross", or writing "nonsensicle (sic) anti-Brexit articles".

The absolutely classic response, though, was this from John Bowles, who wrote: "I'm not a horse racing expert, or even a fan, but surely horses already travel from Ireland all over the world - Hong Kong, UAE, America and other far flung NON EU destinations. If so then where is there a problem?"

Although we often see the same names, and the number of comments is way down (less than the comments we recorded yesterday), this still represents a significant part of the "leaver" sentiment – the faction that will not accept that there is any down side to Brexit and no problem that cannot be solved either by the EU abandoning its rules, or by the Irish defying Brussels.

If there was a predominating view, it is that for more rigorous rules to apply to the movement of horses would be just an example of Brussels being "bloody minded". The solution, quite obviously, is for the EU not to apply its own rules.

The trouble is that this seems to represent the views of many politicians, many of whom seem to think that EU Member States prize their access to our market so greatly that they will prevail on the EU institutions to waive their rules when it comes to the EU. The belief is that, just prior to exit day, the EU will "cave in" and afford us access to the markets of its members on much the same terms that we have now.

One must hope that our government is able to negotiate a transitional deal that will have the desired effect, otherwise we are going to be in serious trouble. Largely, except where EU legislation itself gives them some flexibility, the EU simply cannot waive its rules. To do so would put it in breach of its own treaties, and would doubtless conflict with WTO rules.

Racehorses, though, are but one issue. There are hundreds if not thousands of similar issues, where export from "third countries" is covered by a myriad of technical rules. Other countries, that have grown up with the EU system, have had decades to attune their systems to EU requirements, so none have had to start from scratch.

For the UK, if it comes to having to agree on this vast range of technical rules, we will be starting from scratch, a process that could hardly be completed in less than a decade. And it is that to which Booker is drawing attention.

If, however, the politicians and a significant faction of the commentariat don't believe this, then we are in serious trouble. They will take us over the cliff edge for the very reason that they don't accept that it exists. Problems are simply inventions of the "remoaners", who are trying to keep us in the EU.

So bad has it got that anyone who even suggests that we may encounter some problems when we do leave is immediately branded a "remoaner", who must then be disbelieved. Add to that inability of the media to see this issue in anything other than binary terms, we end up with "leavers" who think that getting out is easy, and "remoaners" who don't.

Grown-ups would recognise that the position is far more nuanced, and that we have many technical problems which we need to overcome. To ignore them is to ensure that they overcome us. But then, the "leavers" have an answer to that - it's all the fault of the EU for not changing their rules.

And by this stupidity, so shall we perish.



Richard North 14/08/2017 link

Brexit: "an absolute nightmare scenario"

10/08/2017  


Ever since I first ran the story in February of the effect of Brexit on the horseracing industry, I have been watching the press (and especially Irish sources) for indications that they have become aware of the issues.

After Booker had followed up, there was a brief flicker of interest in the Irish Times and the Irish Independent and since then, there have been occasional mentions of the potential problems, mainly in respect of tariffs that might apply to exports.

What has been singularly missing, though, has been any reference to the requirement for veterinary inspection at the Irish border, or the absence of facilities. Like our own MPs and media, there seems to be black hole when it comes to border inspections by veterinary officials.

That more or less held until yesterday (apart from an opaque report by Reuters in July) when both the Irish papers mentioned carried stories, as last breaking the news that there was a major problem in the offing.

The trigger was the Dublin Horse Show, which hosted a "Brexit equine forum", leasing to the Irish Times headlining a story with "Brexit poses 'formidable' challenges for Irish equine industry".

With the Irish Independent also running "Post-Brexit border checks on animals at ports 'a nightmare scenario'", we learn from John Melville, superintending veterinary inspector at the Irish Department of Agriculture of the nature of the coming problems.

He refers to the tripartite agreement which currently allows free movement of racehorses between the UK, Ireland and France. Currently, the rules for most EU member states require that horses travel with an inter-community health certificate and also that there is an electronic notification of the movement of the animal from one country to another.

But the tripartite agreement between Ireland, France and the UK means the countries can operate a simpler, alternative system which doesn't require the generation of a health certificate prior to moving an animal.

The agreement is given legitimacy under EU law by having the provisions embodied in a directive but Melville notes that the directive does not make any reference to "third countries". This would mean that the directive could no longer apply to the UK, without it being amended.

The thing is, though, you're not going to get much sense from a vet on EU law, much less an Irish vet. Having spent a significance part of my professional life dealing with MAFF and then Defra vets making a complete Horlicks of EU slaughterhouse legislation, I'd sooner go to the dry cleaners than the veterinary serve for a definitive view.

Says Melville, "If the UK becomes a third country, my fears are that we might end up with the need for a border inspection post in Northern Ireland, at Dublin Port for movements from Holyhead, [and at] Rosslare Port for movements from Fishguard".

Does this man not know that of all the places in Ireland, there is actually an inspection post in Dublin Port? But the thing we really need to pick him up on is his reference to "fears", as if there was going to be an option.

"The thoughts", he says, "of having to equip and staff a border inspection post for the many thousands of horses from the UK is quite a formidable challenge to contemplate". But this, according to the report in the Independent would apply only if the UK did not reach an agreement with the EU and reverted to WTO rules. This, he says, is the "absolute nightmare scenario, the worst possible outcome".

What this man hasn't realised is that this scenario is going to apply to trade between Ireland and the UK, come what may. The 2014 Tripartite Agreement on Racehorses is mandated by Council Directive 2009/156/EC, but it takes effect by derogating EU animal health law – a provision which can only apply to Member States.

On Brexit, this would fall unless a separate agreement was made within the Article 50 framework, but it will need much more than a simple amendment to the Council Directive.

For the UK to resume exports, it must satisfy the conditions set out in Council Directive 90/426/EEC on animal health conditions governing the movement and import from third countries of equidae. The UK must make a formal application to the Commission for authorisation to export, and then must be formally included on the list established by Commission Decision 2004/211/EC.

The specific difficulty for the EU is that if makes concessions on this legislation, some if not all of the "third countries" to which it applies will be asking for similar treatment – especially the United States.

At the moment, says Mr Melville, horses entering any EU member state from a third country, have to enter through a border inspection post. Every week, he adds, a number of horses enter Ireland from the United States and have to undergo a formal procedure at Dublin Airport involving document and identity checks, and sometimes physical checks.

Since there is no example of a third country being exempted from these checks, the chances are that they will be applying from the date when the UK leaves the EU.

At the "Brexit equine forum" there was also Dr Alan Fahey, associate professor of animal breeding at the school of agricultural and food science at UCD. He outlined the economic impact, saying that an update due to be published soon on a study he carried out in 2012 would likely show that the industry was worth in excess of €700 million to the Irish economy.

Fahey says that Brexit would have a disproportionate effect on rural Ireland, where it could be a "disaster". About 60 percent of horses sold at Irish sales were moved to the UK.

"If it's going to be more difficult for UK buyers to bring horses over, or it's more difficult for us to sell horses over there, we are going to reduce our market so then we are going to be left with a glut of horses on this island or in the Republic at least. Demand is going to fall as a result and prices are going to plummet", he added.

But, typically of the breed, he too is in cloud cuckoo land. His view was that, if the sport horse industry and the racing industry got together it would be a "louder voice" at the table representing a €2 billion industry and about 28,000 jobs.

Echoing this unreality as David Carson, the Brexit lead at Deloitte. There is a whole raft of these people charging a fortune for derivative and largely useless advice to industry, relying entirely on the prestige of their employers to command exorbitant fees. And in a classic example of the fatuity of so much of the highly-priced advice given, he says that all industries needed to be "proactive" in engaging with the consequences of Brexit.

"You should be planning for maximum change and you should be planning now, and not wait. Because if you wait, the chances are it will be too late", he then says.

But it is already too late. The Irish government is not equipped to deal with the "absolute nightmare scenario" that is not only about to hit the sport horse and racing industries, but also agriculture and food processing. And even if it started now, and could afford the enormous costs and turmoil that the changes will bring, there is no time to put the infrastructure in place, or to recruit and train the specialist staff.

And, needless to say, the fog of unreality pervades the UK as well. Even though it is the "silly season" and newspapers are struggling for copy, filling their pages with ever more crass report, nothing of this, in the Irish papers, has managed to cross the Irish Sea.

It is not only, or even, the horses that are wearing blinkers – if that is an appropriate analogy. We're facing a bizarre situation where the responsible officials and politicians might just as well we wandering around with their heads in sacks, for all the note they are taking of the coming disaster.

And to emphasise that, we go back to the Reuters report, which cites Jessica Harrington, trainer of champions including Sizing John. She recalls when the border was marked by checkpoints before a 1998 peace deal ended Northern Ireland's sectarian conflict. Racehorses, highly sensitive animals bred for their flight response, would sometimes be stuck in boxes at the frontier for hours.

"If we are going to go back to what it was, it's madness," Harrington told Reuters. She was also concerned for the British land bridge trainers who have traditionally transported their horses to mainland Europe after an overland drive through Britain to save them a lengthy boat journey direct from Ireland.

"Are they going to say that you have to have a sealed horse box? Has anyone thought about these things? Horses can't do that, you can't do that. By law they are only allowed to do so many hours and then they have to rest," she asked, then adding: "We've talked about it in the trainers association and nobody knows. It's now damage limitation more than anything else... No one has a plan".

And that is what is going to be marked on the gravestone of Brexit: "No one has a plan" – the real reason we're looking at an absolute nightmare scenario.



Richard North 10/08/2017 link

Brexit: stresses on food safety

08/08/2017  


The squeals of protest about having to accept "less safe" US food supplies are beginning to look a bit thin of late as several stories on food safety and related issues emerge on the continent. The biggest of these is the pesticide in eggs scandal initially affecting Holland where last week hundreds of thousands of eggs were declared unfit for human consumption.

The issue of concern is high levels of fipronil a pesticide supplied in liquid form for application to dogs in order to prevent or treat lice and flea infestations. The product is not cleared for use on food animals or poultry and is moderately toxic to humans. In high concentrations, it could have dangerous effects on kidney, liver and thyroid gland function.

Yet it has been found in hens' eggs in such high levels that the Dutch food and product safety board (NVWA) is concerned that "their consumption represents a serious danger to public health". It has advised purchasers "not to eat them and throw them away".

With investigations ongoing, some 180 poultry farms have been forced to suspend sales, but there are also reports that tainted eggs have been available for some considerable time. Some eggs have been sold to Germany and almost certainly elsewhere, including Belgium. Limited quantities have been sold in the UK.

By late last week, supermarket shelves in the Netherlands and Germany were being cleared, with suggestions that the damage to the Dutch egg industry could run into millions of euros. Millions of hens, it is reported, may have to be culled.

It is believed the substance got into the food chain via a Dutch business, named Chickfriend. Somehow, we are told, it got mixed in with "Dega 16," a sanitizer used on many poultry farms. The "additive" was provided by a Belgian supplier and there is now an ongoing investigation to ascertain whether the Dutch company knew this was a prohibited ingredient.

But, in a development redolent of the 1999 Dioxin scandal, when seven million hens and 60,000 pigs had to be destroyed, it now emerges that the Belgian authorities have been aware of a potential problem with fipronil in the poultry sector since June, but withheld information while a fraud investigation was being carried out.

The significance of the Dioxin scandal – as Booker and I point out in our book Scared to Death - was that it was influential in provoking the EU Commission to take a stronger hand on framing food safety legislation, and instrumental in creating the European Food Safety Agency.

By this means, the succession of food scares which had riven the food industries of Europe since the late 1980s were to be dampened down as a new control regime was introduced throughout the EU (and Efta EEA states). But now, it seems, we are back where we started.

And this seems even more the case with Poland experiencing a significant upsurge in Salmonella food poisoning, much of it attributed to the consumption of poultry meat and eggs.

Moreover, as of 31 July, 29 cases of Salmonella originating from Polish products have been reported by 14 other EU Member States to the Commission's Food Safety Alert system. This compares to a total of 27 for the whole of 2016 and 17 in 2015.

It was, of course, the Salmonella in eggs crisis triggered by then junior health minister Edwina Currie in December 1988, which set off a wave of food scares lasting well into the 1990s, culminating in the "mother of all food scares" in March 1996 when health minister Stephen Dorrell, officially announced that there was a "probable link" between BSE and the neurological disease, vCJD.

Just over 20 years later, after more than a decade basking in the warm glow of EU food safety controls, it seems we may be poised a re-run, especially if the US gains access to UK markets and we see a resurgence of food-related disease in this country – whether or not it is associated with imported foods.

Ironically, the Polish salmonella epidemic comes at a time when the Commission has withdrawn its support for the authorisation of formaldehyde as a feed additive - said to be "the most efficient tool to fight against the bacteria in animal feed".

Formaldehyde is used as a feed additive in poultry and has been on the EU market for several years but its authorisation expired in 2015 The issue has been stuck in the Standing Committee on Plants, Animals, Food and Feed for two-and-a-half years, with France and Italy blocking re-authorisation due to worker safety concerns.

As a result, several member states stopped using formaldehyde in animal feed, including Poland, putting at risk what is described as one of the Commission's biggest food safety successes in the past decade – the eradication of salmonellas in poultry.

Formaldehyde is not the only product being blocked. The Commission is also experiencing difficulty re-authorising the herbicide Glyphosate, after Member States failed to give it the go-ahead.

In another area, it is reported that Europe is "under siege" from a wave of imports of "fake" pesticide, with a further report that Greece has just seized more than 700kg of illegal pesticides that originated from Turkey.

From the UK perspective, these events have several implications for Brexit. While we have been writing extensively about EU sanitary controls on UK imports, we have also suggested with its high level of health controls, EU produce will get free access to the UK.

However, if EU Member States are still failing to deal with adventitious food additives, as in the fipronil scandal, if it is banning products that the UK would wish to use – thus creating regulatory divergence – if we are seeing a resurgence of epidemic salmonelloses on the continent, and if the EU border is porous to illegal pesticides, then we are going to have to consider whether a light touch on EU imports is entirely appropriate.

Then, if we start using pesticides and other chemicals which are not permitted in the EU, we can expect a higher level of border checks before UK food products are allowed entry.

This can also work in other ways. The long-running issue of contaminated beef in Brazil has not yet been resolved by the Commission, after imports were suspended from 21 meat packing plants. However, Hong Kong and China have resumed imports, and an independent UK might have decided to do likewise – a move which would have required intensified origin checks on UK exports to the EU.

Bearing in mind that there is a chance that we will no longer be a full part of the EU's food safety system, and may not have access to its market surveillance data (with the EU also cut off from UK intelligence), there is a further likelihood of intensified border checks.

Putting this all together, it seems events are conspiring to maximise food safety stresses between the UK and the mainland – also providing a harbinger for the difficulties we may encounter. On the basis of what we are seeing, few could be confident that maintaining the free flow of foodstuff and animals across the EU external border (also comprising Ireland) will be an easy option.



Richard North 08/08/2017 link

Brexit: a symptom of a broader failure?

07/08/2017  


And so it goes on with tedious predictability. The Sunday Telegraph or some other self-important version of the legacy media runs a front-page story "revealing" … whatever. Hours later, a No 10 spokesperson denies the story, which is then run in a number of newspapers, even while some papers are still reporting the original story.

The result, of course, is that we're no further forward then when we started. The only fleeting outcome is that the media have managed to fill their allotted space for another day, ready for the start of another cycle of claim and denial.

Meanwhile, as older leave "martyrs" are accused by the 74-year-old Vince Cable of "shafting" the young, the NHS faces ruin as it runs out of immigrant nurses and doctors, the City is looking at "slow suffocation", celebrities are planning to back mass anti-Brexit rallies, the port of Holyhead is counting down the days to chaos and Northern Ireland is wondering whether its border will be diamond hard or merely iron hard.

In other words, just another day in the crazy world of the post-referendum nightmare which we are living through, where Groundhog day combines with the Muppet show to give us a ride to nowhere while the eternal Brussels clock counts down to oblivion.

But, short of the Government opening the books and telling us exactly what it has in mind – assuming it even knows itself – then it cannot be any different. We are all out of the loop, awaiting the pleasure of our political overlords who, if they are so minded, will eventually deign to acquaint us with their intentions.

The greater reality is, most probably, that the dwarfs temporarily at the helm of the great ship of state don't have the first idea of their destination or the direction of travel. Even if they did, there isn't time to get there before that Brussels clock self-destructs (whereupon it is no longer eternal, one presumes). 

That's the only coherent thing we can deduce from the turmoil of the fourteen months since the referendum. Having not had a plan from the very start, the government is now faced with a task way beyond its capability. In the beginning, had the people currently involved known what they were doing, and immediately set about executing the only effective plan available, we might have stood a chance. But they left it too late.

If there was something to hide, apart from their own incompetence, one might accuse ministers of creating a smokescreen. But the only thing they need to hide is the biggest secret of them all – that there is nothing to hide. In the resultant political vacuum, all they have to do is let the media play and they will serve up all the confusion needed, which is precisely what seems to be happening.

The most difficult thing to do at this stage, though, is to admit that the current confused state does stem from a political vacuum. There is always the tendency to look for the underlying logic in any situation and, when it is not immediately apparent, to invent it.

In normal politics, though, the drivers of events are usually apparent. There is no such thing as leak-proofing so, whatever plans government might have, someone will know of them and the information will find its way into the public domain.

But if we're looking for leaks on Brexit, the one consistent thing that comes out, from multiple sources, is that ministers don't know what they are doing. We ought to listen to that refrain, especially as any intelligent analysis of government performance to date would tend to confirm it. To see any sense in the current government stance is to indulge in wishful thinking.

One also needs to inject an element of caution into the continental scene. Generally, the supposition is that politicians outside the UK (even those in Ireland) are better informed than our sad crew. That may be true at a comparative level, but when working from such a low base, that does not necessarily imply that the political classes from abroad are well informed.

Even amongst EU commissioners there tends to be some confusion as to the period in which the UK will still be liable for payments, and the nature of those payments.

Unless something has drastically changed, I believe I'm correct in asserting that the RAL cannot be calculated until the end of the current MFF period and only then can a firm UK liability be calculated.

But the financial settlement based on RAL is very different from long-term programme costs, including subscription to the EU's agencies. We are going to have to decide whether we still want to finance Galileo and whether we stay with the European Defence Agency (which is managing the A-400M programme) – to say nothing of participation in the European chemicals and medicines agencies.

The very inability of our government to grip the financial issues tells us all we need to know. Amongst the Muppet tendency – the likes of Jacob Rees-Mogg - there seems to be a belief that international relations are a cost-free exercise which can be neglected without penalty.

Yet, administration of activities carried out by nations in pursuing cooperation will have a distinct cost while, as between Canada and the US, trade transaction costs remain in the range of two to 15 percent of trade transaction value. That top level, imposed on UK trade with the EU, would far exceed the costs of annual UK contributions to the EU budget.

What that suggests is that it is possible to make a sound economic case for continued payments to the EU. This could be expressed in terms of cost-savings, protecting existing investments (such as Galileo), and the normal costs of doing business – where costs are borne by all developed nations in pursing relations with their neighbours.

The point here, though, is that the case has not been made. While it was entirely predictable that the UK would have to meet some separation costs, there has not been the slightest effort to justify continued payments, or pave the way for what will become an essential component of the Article 50 settlement. In fact, we've seen the opposite, with bellicose rhetoric from ministers, denying any liability.

Yet the EU negotiators have made the financial settlement a key part of the settlement, and that underlines its importance to them. There can be no room for doubt that no settlement is possible until an agreement is reached. That the UK government is doing so little to make this possible provides ample evidence that it is not taking the negotiations seriously.

Further evidence, if it was needed, comes with the endless talk of "cabinet splits". Where collective responsibility is the defining characteristic of cabinet government, what else is one supposed to infer from the inability of ministers to agree amongst themselves as to where we are going. What other issues of this importance are allowed to spill over into public disagreement?

If one now takes this a stage further and looks for explanations as to why these negotiations are not being taken seriously, incompetence does not fit easily as providing a complete answer. Maybe the real reason is that the government expects so little of them that it is not prepared to put the effort and political capital in to them, to make sure they succeed.

If that is the answer, it would mean that the government has already given up – but even then it seems to be making no plans to deal with failure. Generally, as a government, the one thing that seems to be missing most is government. As the coherent entity, it seems to have gone AWOL.

Maybe that is what really lies at the heart of the burgeoning train wreck that is Brexit. Rather than a failure of Brexit, per se, we could be looking at just one symptom of a broader failure of government. It shows up more because it is more important, and where it has to deal with the "colleagues", it is more difficult to conceal the failures.



Richard North 07/08/2017 link

Brexit: an ocean of incoherence

06/08/2017  


As our confidence in the handling of Brexit deteriorates by the hour, Politico is telling us that our government is shortly to counter suggestions they are underprepared by releasing a series of position papers.

These papers, it would appear, will "reveal" that the UK wants a smooth route out of the European Union and will seek a "transitional customs agreement" before moving to a new permanent relationship.

This dramatic disclosure, we are told, has been pencilled in for the week of 14 August, then to be followed by a paper outlining the government's long-awaited solution to the Northern Ireland border problem. This is considered to be bound up with its customs relationship with the EU.

London is insisting that the Irish border question is considered alongside future customs arrangements, cutting across the EU's own priorities. It hopes to persuade Barnier that the two cannot be dealt with separately.

Alongside this, up to a dozen papers will form part of what officials describe as a "big push" to counter a perception among the EU27 that the UK is underprepared for Brexit, the first dozen to be published over the next two months, ahead of the European Council meeting in October.

With no real detail being offered, we are to understand that the government is seeking to preserve trading relations, although it is not clear whether the transitional arrangement to be proposed would allow the UK to strike trade deals with third countries outside the EU.

According to Politico, the bulk of the work on the position papers was completed some time ago, but in recent weeks there has been a discernible "pickup of the pace". There is an "awareness" that the UK has to show "seriousness" to the European Council, which has seen the "machine" being cranked up into another gear.

At talks scheduled for later this month, the UK will make a concerted effort to agree on a final package on expats' rights. Officials say that there is a determination to put the issue "to bed as soon as possible". Supposedly, "We will exert some pressure to get that one over the line at the next round".

However, in an almost certain show stopper, it seems that the government is still not prepared to agree a financial settlement. That would seem to render all this inside information somewhat redundant. Until the money question is settled, this ain't going anywhere.

Even that may not be cut and dried. The Telegraph (no paywall) claims that the UK might pay about €40 billion, which is not so very far from the the figure we suggested in April last year. Here, though, it is paid off over three years, rather than the seven years I suggested. Needless to say, a Number 10 official tells the Independent that the figure is "speculative and wrong".

Racking up the pain in other directions is former Commission President Romano Prodi. He has been telling the Observer that Britain will be committing economic suicide unless it is prepared to compromise to reach a comprehensive Brexit deal. He also says that more and more people are suggesting to him in private that a second referendum may be needed.

Prodi believes a "historic compromise" will eventually be reached because the Europe-wide economic consequences of failure had been heavily underestimated. "Maybe I am biased, being an economist", he says, "but it may be that there is still an imprecise [understanding] of the real economic consequences of Brexit". A compromise must be found "to avoid suicide", he says, justifying the "strong language" because of "the damage for the UK” that would come as a result of crashing out of the EU with no deal".

Looking at the EU side, Prodi is calling on Brussels to preserve as much trade with Britain as possible to avert serious economic damage. "It is so clear that it is impossible to dismantle this type of agreement without real damage on both sides", he says. "In this case, the weight of damage is probably heavier on the UK side, but there is damage on both sides".

As an interesting counterpoint to the Politico report, and the Telegraph, his intervention – says the Guardian - comes with no sign that the EU is prepared to cut a deal that would dilute the principle of free movement. Barnier, we are told, is signalling that he may not even sanction the beginning of talks in October unless the UK begins to compromise over finance or the expat issue.

The plot then thickens with Britain's most senior union bosses calling for free movement to remain in place. This is Dave Prentis, general secretary of Unison, saying: "The government must give European workers the right to remain, or face losing skilled and experienced health and social care staff for ever".

Prentis thinks that any trade deal should be without tariffs and guarantee future free movement of EU labour. He adds: "It must protect employment standards, jobs, and economic growth. It should also provide for well-funded public services safe from any further privatisations".

Adding more noise to the mêlée is Nigel Farage, telling an American audience that he thinks "the great Brexit betrayal has already begun". He says: "I'm hearing British Ministers speaking about fisheries, speaking about financial contributions, speaking about immigration and frankly doing so in a way that is backsliding, is gutless and is weak and I think we're gonna get Brexit but we may finish up in two years' time with Brexit in name only".

That is actually a possibility, not least through the failure of the likes of Farage to frame or endorse a workable exit plan. Wedded to their empty mantras, he and his followers have no ideas of their own, beyond wanting out "yesterday" and at any price.

His noise, though, is no more coherent than the input from Mervyn King - another "former" – this one having served as Bank of England governor. His great contribution to a debate, that is also deteriorating to the point where it's getting surreal, is to argue that more work needed to be done to show the European Union that the UK was serious about walking away if there was no agreement.

"If you are going to have any successful negotiation", he says, "you have got to have a fallback position which the other side understands and believes is credible. So we need to able to say if we can't reach an agreement we will nevertheless leave and we can make it work". Needless to say, he doesn't go so far as to tell us what this fallback position should be. It is simply "a practical thing that the civil service ought to be taking a lead on".

Clearly, he hasn't been reading Andrew Adonis who bemoans the lack of expertise in the very same civil service. Without saying as much, he argues that our people couldn't negotiate their way out of a paper bag – which augers ill for them devising some amazing fallback plan that would overcome the disaster of leaving the EU without a deal.

In this ocean of incoherence, you will find few islands of sense, although this on the Efta/EEA option is worth a read. Otherwise, the only constant is that those who believe there are simple solutions, such as Mr Fysh-out-of water, are the ones who don't have the first idea of what is going on.

Those are the ones that you find trotting out the Legatum briefing notes, telling us that regulatory conformity, mutual recognition and trusted trader schemes are the answer to a maiden's dreams. The higher they pile the jargon, the more it is clear that they lack even the most basic of understanding.

But, if we leave the Express to add its unique brand of incoherence to the rest, with the observation that, "Theresa May 'will not compromise with Brussels' and be pushed into a soft Brexit", we end up with a picture of almost total confusion – just another synonym for the incoherence that is swamping the Brexit debate.



Richard North 06/08/2017 link

Brexit: dross from on high

02/08/2017  


"Following the EU Referendum result and Mrs May's election of the Conservative Party", says the Policy Exchange in its 2016 report to the Charity Commission, "the Trustees agreed that the priorities and character of Policy Exchange's research agenda should be adjusted to take account of the radical change in the UK's political landscape". It continues:
At the heart of this is the nexus of policy issues thrown up by the UK's departure from the EU. These range from constitutional and legal questions, to issues around trade and the future of UK foreign policy and Britain's place in the world.

The new political landscape and change of administration has redefined the objectives and purposes of policy. They will now principally focus on matters relating to Brexit, the economy and industrial strategy, and social reform Central to this readjustment is a much greater emphasis on economic research.
The no doubt accidental omission of a couple of words in the first sentence, those referring to Mrs May's leadership status, is rather a poor show for a supposedly leading think-tank, as is the erroneous assertion that Mrs May was elected to the office. After her rivals fell away, her candidature was uncontested and no election was held.

Small things sometimes tell their own story, and the lack of attention to detail from a think-tank reporting a £2.5 million income for the year could be considered revealing.

It is certainly something to bear in mind as we begin to see the fruits of the "research" on Brexit this organisation is producing, the latest of which is a report called Farming Tomorrow, offering views on a post-Brexit agricultural policy.

Here, though, the think tank avoids making small mistakes, such as leaving out a few words. Instead, it goes for the grand slam, filling 70 pages with what could easily be described as unmitigated trash – if one was of a kindly disposition. It includes a turgid repetition of the CAP hagiography, which could have benefited from a read of The Great Deception, helping them understand the politics of the EU's agriculture policy.

This report isn't just trash, though, it's Tory Boy trash, that unique meld of arrogance and ignorance in which the London Tory think-tank scene excels, churning out the same tired nostrums which are treasured by the bubble they inhabit. 

Page 29, for instance, takes us to this classic piece of dissimulation where lead author Warwick Lightfoot and his seven co-authors tell us:
In the case of a UK/EU FTA, assuming it is the wish of EU27 to reach an agreement with the UK, then negotiating an FTA should be straightforward. The UK and EU are deeply integrated with completely free trade as the starting point, and the UK's rules and regulations are currently based on the EU acquis.
Once again, we are seeing the classic Tory myth, the blithe assumption that, because we have regulatory convergence, hooking up with the EU in an FTA is going to be easy. These people are children.

Recently, Oliver Norgrove picked up this theme, calling in aid Professor Grey at Royal Holloway University, to debunk the myth.  But not for one minute does Policy Exchange look beyond their simplistic mantras and explore the real situation where, as I wrote recently, regulatory convergence is just a starter for ten. Their idea of "research" is to collect up the mantras from their peers and to regurgitate them.  

The point one should not evade is that Lightfoot and his colleagues are the cream of the Tory think-tank research establishment. And even though none of them can claim any agricultural experience, they regard themselves as competent to write a report on the highly specialist and complex area of agricultural policy. This takes arrogance into new dimensions. 

Predictably, all you get is the repetition of discredited myths and not the slightest attempt to verify their assertions. The factoids have become the perceived wisdom, cast in stone. 

The arrogance is their undoing. For instance, they know of my work, and occasionally they read it. But they ignore it. They know better than me with my 30 years experience in the food, farming and related industries, and years working on EU policies. Sixteen years ago, I wrote Death of British Agriculture, which is still ahead of the game on policy, much of which is reflected in Flexcit. But we have superior beings here. They need nothing from us lesser mortals.

And then there's the tribal loyalty. The regulatory convergence myth has been perpetrated by none other than Liam Fox and, since he is one of their own, he cannot be contradicted. By such means is error reinforced and disseminated, to be repeated by all the derivative Tory Muppets and wannabes, as the gospel from on high. And this is why the work from Tory think-tanks is worthless, even where, in this case, the over-generous donors have spent £2.5 million on it.

For that money we also get another of their treasured little mantras, to the effect that a "significant cause of higher prices" of food in the UK "has been the combination of tariffs and agricultural support", from the CAP, "increasing costs and subsidising inefficient methods of production".

Lightfoot and his team particularly vent their spleen on the high rates of agricultural tariffs protecting EU produce, point out that it averages 8.5 percent across the board. Against this, they compare tariffs with Australia and their poster child, the subsidy-free New Zealand, which applies the equivalent of only a 0.4 percent tariff to agriculture.

What these precious little Muppets never seem to do, though, is look at the comparative price of a grocery basket between their heavenly New Zealand and the subsidy-ridden, protectionist UK, in the thrall of the CAP. Yet, only in June, the New Zealand Herald was complaining that a typical grocery shopping bag in Auckland was twice as expensive as it was in London. A comparison two years earlier came out at 46 percent higher on nine basic items.

This compares with the cost of living generally in New Zealand, which is only 17 percent higher than in United Kingdom. And New Zealanders in Australia are united in saying that Kiwis pay too much for food.

The way Lightfoot et al get round this inconvenient problem is by comparing UK prices with global commodity prices, claiming that UK consumers also pay above the odds for food indirectly through the tax system and wider income support. In the European Union, they say, this is equivalent to another 20 percent boost to farm prices.

The fact is, though, that global commodity prices bear little direct relationship to supermarket prices, which are affected by so many other factors that actual raw material costs can be the smaller part of the finished price. Furthermore, there is considerable variation between retail food prices throughout the EU, even where the subsidy system is supposed to be uniform.

And, outside the EU and the CAP, Norway, Iceland and Switzerland all pay higher subsidies than Brussels allows for its farmers, deciding that it is in their national interest to keep the countryside populated, and traditional farming methods alive. 

While the EU average total subsidy is about 18 percent of farming income, Norwegian farmers gain just short of 60 percent, slightly ahead of Switzerland, while Iceland farmers are paid just short of 50 percent. All three are at the top of the list for food prices, yet consumers pay less in the shops than New Zealanders do for their food.

Across Europe, retail price indices range from 58 (Macedonia), where the EU-28 = 100, to 173 (Switzerland). Denmark, with its country name synonymous with bacon, comes in at 148, compared with the UK at 98, slightly below the EU average. Eurostat offers further interesting statistics.

In short, the subsidy argument, in the way presented by the Tory right, is utterly crass. The removal of subsidies, per se, will not necessarily – or at all – see a reduction in retail prices. With other factors taken into account, we could in fact see major increases in some commodities.

What will certainly be a consequence of precipitate tampering with the subsidy system, though, is considerable damage to farming. Furthermore, Lightfoot and his friends talk glibly of the CAP "subsidising inefficient methods of production". Yet, it is the more inefficient methods which produce the most spectacular scenery, which underwrites a £12 billion rural tourism industry. It keeps the countryside populated and provides much-needed jobs.

Not once in 70 pages does the Policy Exchange report mention the economic value of scenery, or that this is a tangible by-product of farming. It is created by farmers, for which they receive no direct compensation. And not only does scenery have a significant economic value, it shapes our perception of ourselves, and contributes to the quality of life. 

Instead, they quote Matt Ridley, prattling on about "gardening", completely failing to understand that the scenery that makes England (Scotland, Wales and Northern Ireland) stems from its farming practices. To preserve the countryside, you must preserve "inefficient" farming - not turn farmers into gardeners.

Without more than a sideways look at such issues, which should actually be driving a post-Brexit agriculture policy, the Policy Exchange argues that "the UK should work to phase out direct subsidies and tariff protection for production, and instead look to create a more productive, innovative and ultimately sustainable sector". Do they not realise that production subsidies have been almost completely phased out already? Forgive them Lord, they know not what they do. 

And in that category, nowhere at all do we see any reference to the probable impact of Brexit on agricultural exports to the EU. This is a huge lacuna, as the impact of border controls could bring UK exports to an end for a considerable period, and have a massive effect on the economic health of both agriculture and the food industry.

Unbelievably, there is not a single reference to border issues, or inspection requirements or any of the related issues. And Ireland, it seems, is to be addressed in the next report.

But this simply underlines the obvious. We are not going to get anything sensible from the Tory right on agriculture, and this think-tank has totally lost the plot. All you get from it is dross from on high. What they are offering is wrong, and dangerously so. They would destroy British farming as we know it, for no gain at all.



Richard North 02/08/2017 link

Brexit: a terrifying vacuum at the heart of the debate

23/07/2017  


"How exactly do Brexit ministers plan to avert what is likely to be a wholesale catastrophe?" That's the headline which accompanies the Booker piece this week as he returns to Brexit with a vengeance.

"There is a terrifying vacuum at the heart of our weirdly trivialised debate over Brexit", he writes. "Ministers are completely failing to explain to us the immense practical implications of their decision that Britain will leave not just the single market but also the wider European Economic Area (EEA), to which we send between them £230 billion a year of our exports".

That's actually a useful way of putting things – and different. We've seen and heard an enormous amount about the downside of the Efta/EEA from every Tom Dick and Harry you can imagine. Just about everybody with a pulse and an opinion has been on the job.

But, as Booker writes, "The facts of what this faces us with are inescapable. By choosing to become what the EU calls a 'third country', we will also exclude ourselves from that complex system of 'Customs Co-operation' which enables us to move our goods unimpeded to any country in the EU or the EEA".

For some many months on this blog we've working up to this, describing what can only be the coming shit storm. Any which way we look at this, it doesn't end well.

What scares me most is that, as I review all those different sources which should be sending out distress messages, there is silence. From academia we get confusion, muddle and an extraordinary level of ignorance – staggeringly so. And what emerges from the quarter is an almost pathological insularity which keeps otherwise intelligent men and women detached from reality.

Academics are supposed to be the people who have the skills and resources to work things out for themselves and speak the truth to power. Instead, we see highly qualified people from prestigious institutions churning out derivative tosh that should have them stripped of their posts.

Where they are challenged, we find that academic integrity has degraded so substantially that the self-important figures, caught out in multiple errors, deny even the possibility that they could make mistakes.

Business representatives, on the other hand, are no better. With very few exceptions, they are delusional. There is an air of madness abroad. Those who should at this very moment be gripped by panic are strangely lethargic, untouched by the looming disaster that is about to bring their little worlds crashing down.

There is an almost naïve belief that government knows what it is doing and will bring back a deal which will safeguard business needs. Yet this believe rests on no more substance than the view that, since the consequences of a "no deal" will be devastating, the government will pull something out of the hat.

As for Government, there is not the slightest indication that Ministers are on this planet or anything closer than the next galaxy. They, like far too many people, are convinced that the EU will do a deal and, come the 29 March 2019, everything will pan out fine.

And where the media should be tearing the Government's bland assurances apart, with clinical analyses which demonstrate quite how precarious our situation is, we get trivia, utterly superficial stories and no serious attempt at anything that could approximate responsible journalism.

That leaves Booker to writes that, as Michel Barnier, the EU's chief negotiator, has repeatedly pointed out, on exit day, as with any other "third country", our goods will face strict "border controls", complete with inspections and lengthy delays. Along with much else, this will bring an abrupt end to the system whereby 12,000 trucks a day can immediately roll on to ferries at Dover and off at Calais, a crucial part of our export trade.

Before we go any further, the Government should be carrying out a serious (and honest) impact assessment. If we can work it out, then it should not take the financial geniuses in the Treasury that long to play with their calculators and bring up a bottom line of their very own.

But what the Government can't do force France and other countries, including Ireland, to build the new customs facilities, staffed by hundreds of newly recruited and trained staff, needed to handle UK export traffic and the millions of passenger checks.

And no one on this planet has the ability to turn back the clock. But, even Booker is able to tells us that putting in place the necessary infrastructure will inevitably take more than two years, at a cost of hundreds of millions of euros (for which we will inevitably be asked to pay).

Even more horrendous, he writes, will be the consequences for our £12 billion-a-year export trade in all "products of animal origin", including live animals, cheese, fish, eggs and much beside. Under the strict rules, of which Mr Barnier reminded us on 6 July, these will all have to be submitted for inspection by veterinary officials at a border control posts, involving further delays which could last days.

And even before we can export any food products into the EU at all, under the same rules Barnier referred to, we would, like any other "third country", have to wait six months before being put on an approved country list.

On day one after Brexit, all such exports, including those over the Irish border, could come to an immediate halt. Yet, if Ministers believe we can avoid such devastating disruptions to our trade by being given a unique exemption from the rules, this simply confirms their residence status on another galaxy.

It is here that there is this sense of unreality at its strongest. They have already been told what they stakes are, but they choose to believe that the EU negotiators are bluffing. At the last minute, they believe, Mr Juncker will give the nod, all the "colleagues" will roll over and the trucks will be waved through as the come off the ferries at Calais – all because "they need us more than we need them".

This fantasy has as much substance as Scotch mist in a hurricane. Mr Barnier has already made it crystal clear that there will be no concessions from the EU. On the day, as Davis and his idiot crew will be told, this is simply not possible. Any other third country could protest that this would be "illegal discrimination" under WTO rules.

Says Booker, it is high time our Ministers were pressed to explain just how they imagine such a wholesale catastrophe can be averted. But there seems no-one in government who is grown up enough to face reality. Booker himself has had his column all but halved and banished to the back page of the supplement, while the "Ultras" are given free rein in the main pages.

Meanwhile, the clock ticks and the countdown goes on. The grown-up have left town and there is little else to do but to keep reminding people of the impending disaster. But when we do it, we are ignored. When Booker does it, he is relegated to the back page of the supplement. And when the EU's chief negotiator does it, he isn't believed.

The nation is in a coma. The awakening is not going to be pleasant.



Richard North 23/07/2017 link

Brexit: a surplus of stupidity

22/07/2017  


One of my seminal experiences when researching for The Great Deception was to follow the media coverage of our applications to join the EEC and then to compare the public record with what was being said in secret by officials and politicians.

One also sees how, in crucial areas, a lack of knowledge or communication distorted contemporary perceptions of events. People, doubtless, were making statements which they believed to be truthful which, with hindsight, were (at best) misleading.

The experience, for me at any rate, serves as a reminder that nothing about Brexit currently coming out of Brussels, or leaking from Cabinet, can be trusted. Even discounting the normal fog of war, there may be active attempts in play either to confuse, distract or even misinform.

In this respect, the recent media reports on transitional periods, and extending freedom of movement past exit day, must be taken with more than a sprinkling of salt. And this is especially so, given that the latest source is Michael Gove, a man not exactly known for his non-partisan views.

However, the leaked report that Philip Hammond is pushing for a lengthy transition period is credible, especially in view of the context, where he was apparently reassuring jittery bankers that the government was seeking to avoid a "cliff-edge" Brexit.

Even the BBC, which dismisses many of the reports as "kite flying", concludes that there appears to have been a "hardening of opinion" in Cabinet around the concept of a transitional period, with greater willingness to accept that certain aspects of EU membership (such as free movement of persons) must continue after exit day.

This is borne out by the Irish Times which writes of a significant change in mood around the British Cabinet. It has it that "senior sources" have suggested that a major shift in opinion is under way that will delay the full implementation of a Brexit deal until 2022.

The irony of this is that, if the Cabinet is indeed willing to accept an extension of free movement, then this rather undermines the Prime Minister's case for leaving the Single Market. During her Lancaster House speech on 17 January, she specifically made the linkage, arguing that we could not continue with the Single Market, as that "would mean complying with the EU's rules and regulations" that implement the four freedoms.

However, it is not only the badgers who seem to be moving the goalposts. Owen Paterson is arguing that the problem with the Single Market – in the form of continued EEA membership – is that "we need to have authority over domestic regulation in order to strike new trade deals".

This is a rather odd assertion, especially coming from one who previously favoured EEA membership, but it pales into insignificance with the Moronic Mogg who is actually arguing that those advocating a transitional phase are seeking to undermine the result of the referendum.

The man told Newsnight: "If we are subject to the rules of the single market and the regulations of the single market, and subject to the fiat of the European Court of Justice, we are paying for the privilege and we can't do free trade deals with the rest of the world, then we are in the EU".

This bovine stupidity gainsays the fact that the Single Market/EEA acquis comprises less than a quarter of the EU legislation in force – and ignores the fact that a large and increasing proportion of rules originate at global level. In or out of the Single Market, we would still have to comply with them.

Mogg also fails to recognise that Efta/EEA members are subject to the Efta Court rather than the ECJ, a confusion that clearly irritates former ECJ Judge David Edward. The EU treaties don't apply directly in the Efta/EEA states, he says, so a soft Brexit wouldn't necessarily mean that the UK would be within the scope of the ECJ jurisdiction any more than Norway is. He then goes on to say:
But if you're going to trade and the whole point of being in the single market is to have freedom of movement, then the ultimate authority on what the rules are within the EU 27 is the ECJ. So for example if there's a question over pharmaceutical standards and there's a dispute as to what the directive on particular pharmaceutical standards says, then the ultimate arbiter is the ECJ. And to that extent traders in the UK who want to trade with the EU 27 have to obey those standards. And the same thing applies in all aspects of freedom of movement.
The other element of Mogg stupidity encompasses the finances. The bulk of Efta State payments (such as Norway/EEA Grants) are not even paid to the EU, yet this venal man wants to turn them into Single Market budget contributions. And as for free trade deals, if he is not aware that Efta/EEA States make their own agreements across the world, then he is competing with cabbages in the IQ stakes.

Most bizarrely of all, with talk of a transitional period lasting five years, during which we will be subject to some EU rules – and thereby fall under the jurisdiction of the ECJ – the one way of ensuring a clean break, taking us out of the EU completely, would have been the Efta/EEA option. Membership of Efta is practically and legally incompatible with EU membership.

And nor, as we keep having to say, do Efta/EEA states adopt EU laws. The EEA Joint Committee takes the laws and converts them to EEA laws, adding them to the relevant annexes, thereby making them integral parts of the EEA Agreement. Once the changes are ratified, they become binding – as treaty obligations.

Sadly, the Moggish tendency to over-simplify (to the point of being grossly over-simplistic) reflects what appears to be a similar tendency in the legacy media. They have managed to turn the debate into a fight between "remoaners" on the one hand, who want a "soft Brexit", and "leavers" who are pushing for a "hard Brexit".

This binary treatment takes no account of nuances, which means that Flexcit supporters have been "disappeared" (along with all other "leavers" who want a "soft" Brexit). The simplistic narrative favoured by the media can only handle a black-and-white representation. There are only "leavers" or "remoaners" and nothing in between.

Nonetheless, the Government does seem to be capable of taking a more nuanced view and looks to be funnelling its thinking down the obvious and necessary route of a transitional agreement. But if that is what it is doing, it is only coming to the same conclusion that we reached over four years ago, having wasted more than a year thrashing around trying to avoid the obvious.

What no one seems to be doing, though, is revisiting the Liechtenstein solution, and exploring means by which freedom of movement can be limited. That has been well and truly buried by the legacy media and the noisemakers who provide most of their copy.

Even now, its adoption could transform the debate, to the extent that one really does wonder whether any of the major players actually want a solution. When one thinks it through, though, even if the UK Government did negotiate limits on citizens of EU Member States, the Borders Agency and the Home Office are so inept that they most likely would fail to enforce them.

The spectre of hard-won concessions from the EU (and the cost of reduced mobility for UK citizens), which are then undermined by enforcement failures, could almost be enough to deter the Government from seeking a settlement.

Still, there are two more glaring omissions. The first is the absence of any clearly defined "vision" from the Brexit team, highlighting the obvious but scarcely discussed premise, that one cannot define a transition agreement until we know what we are transitioning to. We are in very great danger of letting the process define the destination, which can only lead to the mother and father of all messes.

The second omission is one to which we have made constant references, but which is even more invisible than Flexcit. This is the need for a secession treaty to implement a transitional agreement. So far, I have seen nothing written (outside this blog and a brief reference on Booker) on the mechanics of an agreement. This could cost us dearly, if the agreement founders not on content but on execution.

Yet, for a nation that only woke up the detail of Article 50 some months after the referendum, and seems to have difficulty telling the difference between a customs union and a customs agreement, the lack of focus should perhaps be unsurprising.

After all, it has taken long enough for the idea of a transitional period to take root. It is far too much to expect there to be any broad understanding of how this should be achieved – especially in a political community where Rees-Mogg is actually regarded as intelligent.

But this laborious process of discovery, dealing tardily with issues only as they emerge rather than pre-empting the pitfalls and planning for them, does not auger well for the negotiation process as a whole. If it takes to the end of the year before we even start discussing the need for a secession treaty, we will have left it far too late. At the current rate of progress, it will probably take longer.

In the broader scheme of things, though, it probably is already too late. The train left the rails half a mile back and, in truth, we're just waiting for it to grind to a halt. We can handle anything in this country, I have averred – except Tory stupidity. And that we have in surplus.



Richard North 22/07/2017 link

Brexit: a council of ignorance

20/07/2017  


Two weeks ago, on 6 July, Michel Barnier gave a speech in Brussels, addressing the issue of Brexit. We reported it the following day, but it was largely ignored by the media.

"For a third country", Barnier said, "one hundred percent of imports of live animals and products of animal origin … are and would remain subject to EU border controls". To this, he then added: "Moreover, before these products can be exported from a third country to the European Union, the sanitary and phytosanitary conditions for these exports to take place would have to be established".

On 29 March 2019, the UK in relation to the EU becomes a third country and, says Barnier: "One sees clearly, to speak frankly, the constraints that this entails for the agri-food industry". And one does indeed see "clearly" the constraints this entails. Specifically, these constraints are set out in Regulation (EU) 2017/625 and, in respect of animals and products of animal origin, Regulation (EU) 2016/429, carried over from previous legislation already in force.

According to Article 229 of Regulation (EU) 2016/429, no animals and products of animal origin may be admitted into the Union from a third county unless that country is officially listed as one permitted to export to the EU. Similar provisions apply to foods of plant origin although we do not yet know what rules will apply as they are under revision.

Country listing, though, is not automatic. Those who want to be vastly entertained can find the criteria set out in Article 230 of 2016/429. This cross-refers to Article 266 and, if I have understood this correctly, six months must elapse between the Commission approving a listing and it taking effect.

Clearly, the UK is not currently on the third country list. It cannot be, because it is a member of the European Union. Nor will it be when we leave the EU, or for some months thereafter.

Because of this (and the restrictions on other foods), I was confidently able to assert on 18 July that: "As near as can be certain, on exit day – 29 March 2019 – UK exports of food to EU member states are going to stop". I added: "This is not a matter for negotiation and nor can it be avoided. It is an inevitable consequence of the UK leaving the Single Market and becoming a 'third country'".

What I was actually doing was putting clothes on Barnier's statement. The effect of what he was saying is exactly that which I assert openly – that from exit day and some time thereafter, there are going to be no food exports to the EU. And for the foreseeable future, exports are going to be heavily restricted.

Now, if you don't accept that, then we're no longer talking rational politics. It can only be that you do not believe M. Barnier, in which event we're dealing with belief systems. You must believe that the EU's chief negotiator is bluffing and that the EU will not apply its own law to the UK when it becomes a third country.

But, if this is really the case, as one commenter asks: "why are we not hearing from the likes of Asda or Tesco?". Possibly though, because these supermarket companies are mainly importers, they are not the ones we should expect to hear from. However, we should certainly have heard from the likes of the NFU, the Food and Drink Federation and the trade bodies representing the meat industry.

Yet, in a strange vacuum of information, organisations such as the NFU have made no mention of crucial issues such as the need for inspections at the point of entry. The best I can find is a powerpoint presentation from Alan Matthews, Professor Emeritus of European Agricultural Policy, Trinity College Dublin.

Headed: "Implications of Brexit for the UK and EU meat sectors", this was delivered to the Agriculture and Horticulture Development Board Meat Export Conference, on 29 June 2017. And if it truly represents meat industry (and farming) thinking on Brexit, they are in very serious trouble.

On one of his slides, Matthews asserts that "we want to avoid or minimise … inspection and sampling at Border Inspection Posts", whence on another he states that it is: "Highly desirable to have a series of Mutual Recognition Agreements attached to [a Free Trade Agreement] to allow for equivalence and mutual recognition of inspection procedures".

It is certainly possible to reduce inspection and sampling but, on the basis of EU law, it cannot be avoided altogether. And even if inspection is minimised, the goods must be presented to a Border Control Post (to use the updated terminology) for document checks and the issue of a Common Veterinary Entry Document (CVED) – see also Commission Regulation (EC) No 136/2004.

As regards mutual recognition of inspection procedures, as the Canadians are finding, there is no such thing. The exporting country either has to adopt EU procedures in full, or the goods will not be admitted. And, while there is provision in EU law for pre-export controls to be carried out by third countries, these are normally confined to specific checks, such as the determination of aflatoxin levels in groundnuts.

In actuality, seeking approval from the Commission for pre-export controls might be a way out – although widescale application would be an unprecedented concession. But, again, approval cannot be given automatically. Formal applications must be made for all the categories of product for which approval is sought, and the Commission must carry out extensive investigations to ensure that the condition set out in EU law are satisfied.

Should this be an option, then one would expect the relevant trade bodies to be pushing for precisely this sort of thing to be included in the Article 50 settlement. But, on this, there has been total silence, with no indication that the industry is even aware of this possibility.

Looking at this in the broader context, this very much gels with the observation of Karen Briggs at KPMG that businesses are "in denial" over Brexit, with some refusing to acknowledge the "significant risks" that will accompany the UK's departure from the EU.

These organisations tend to argue that there is too much uncertainty and complexity or, post general election, they have unrealistic views on the Brexit outcome. As a result, they have yet to take measures to protect themselves from the imminent Brexit fallout, in what is becoming "an increasingly risky and untenable strategy". Ducking major decisions, Briggs added, was no longer an option and firms must make contingency plans immediately.

Analysis of the food industry, though, would suggest that this is not just a question of denial. There also prevails an extraordinary level of ignorance and complacency, the latter bolstering a firm conviction that everything will be alright on the night.

What price then Theresa May's new plan to chair a new advisory group, a so-called "business council", comprising the representatives of major businesses and trade bodies, in the expectation that they will keep her appraised of business sentiment.

Rather, it seems, she will be exposed to that lethal combination of ignorance and complacency, fortified by a strange naivety exhibited by many business figures who become involved in political issues. The hard business sense that drives them in their own enterprises seems to desert them, and they become as gullible as any ingénue when exposed to the blandishments of politicians.

Certainly, we are not getting the alarm signals from business that we should be getting. One of the few trade bodies on the ball being is that representing the pharmaceutical industry but, that apart, all Mrs May will be getting is council of ignorance.

As to the smug, self-satisfied academics on the Brexit trail, these are scarcely making an impact. Briefly, though, we saw in the Independent yesterday (before it was pulled) an article inspired by a report from "UK in a Changing Europe" which asserts that a "no deal" Brexit would be "a political mess, a legal morass and an economic disaster".

Covering only a fraction of the territory we've already covered, and six months after we started to address the issues, it tells of chaos at UK customs due to new checks, tariffs on exports, UK nuclear plants unable to operate, British airlines unable to fly to Europe, UK developed drugs denied approval for sale in Europe. legal limbo for British citizens abroad and EU citizens in the UK and Economic crisis in Northern Ireland.

These and many more such issues should be the stuff or urgent debate and be dominating the media. The cliff-edge looms and all we get is unguided prattle, with talks potentially stalled over the so-called divorce bill.

Nothing it seems, is capable of penetrating the unreal world of the politicians, while the businesses which depend for their survival on an effective Brexit have largely gone AWOL. Their silence will be their undoing.



Richard North 20/07/2017 link

Brexit: grooming unicorns

14/07/2017  


It is rather predictable that the legacy media should turn the publication of the 66-page European Union (Withdrawal) Bill into a biff-bam match between Whitehall and the devolved administrations - the lurid headlines braying accusations of a "naked power grab".

This is a media which simply can't do detail any more. The fabulously wealthy BBC, with resources us mere mortals would die for, only manages 183 words of "analysis" on the Bill, half of which is given over to quotes from politicians.

The sometimes informative Reuters falls at the first fence, telling us that "the passage of the Bill through parliament could make or break Theresa May's future as prime minister".

Even the supposedly alternative media, such as Spiked does a dismal job - as Pete points out.

According to the BBC, the Bill "amounts to a giant exercise in cutting and pasting - taking the laws made in Brussels and that apply here, and turning them into UK law".

But the first and most important thing the Bill does is repeal the European Communities Act, the instrument which gives EU its force in the EU, and empowers the government to implement the full range of treaties, legislation and ECJ rulings. This is the law which sets us on the path to independence, removing the supremacy of EU law.

As to that "cut and paste" process, this is only one part of a process in what truly is complex, "under-the-bonnet" legislation. Detail can be found in the explanatory notes, where we see outlined the concept of "retained EU law", split into the two categories of "preserved" and "converted" legislation.

The former is the cut and paste job but, as I pointed out with this piece on converting the fishing acquis, this is only the start of it. Much of the EU law, as it stands, simply won't work in the UK context and will need to be converted, with substantial adaptations, in order to turn it into functioning legislation.

This is not simply a question of taking out the many references to "European Commission" and such like, and inserting appropriate replacements. In many instances, sentences, paragraphs and whole sections will have to be re-written before they can make any sense and, in the words of the Bill, function "appropriately and sensibly".

This is where the "power grab" supposedly lies, but it is hard to see how the government could do things any differently if we are to end up with a functioning statute book.

In fact, the real question is whether this can be done in the time. With the EU's legislative acquis running to just short of 20,000 instruments, there are hundreds of thousands of pages to be vetted – all of it obscure technical jargon – with perhaps millions of words to be re-written.

The greater problem, though, is that no amount of re-writing will solve the inherent problems. In an earlier piece, I pointed to post-independence experience in Ireland and India for precedents, where each administration simply adopted laws made while their countries were under British control, and carried on with them unchanged, until they had time and resources to bring out new laws.

But that process for some can be somewhat protracted, with a report in 2014 that India was still going through its statute book, weeding out archaic laws stemming from the Raj.

And if repatriating laws is a problem for India, it is far more complex for the UK, arising from the way the different sets of laws have been conceived and applied.

When the UK produced laws for India and the other colonies, they were most often produced by the Viceroy/governor general in India, and by governors in other territories. At state or subordinate level, you would also have law-making powers, by lieutenant-governors or some such. Even though they were made under British rule, they were still local laws, specific to the territories to which they applied.

With the EU, though, not only is the scale of legislation different, with massively more laws currently in force, it is also a rigidly centralised legislature intent on creating EU systems.

Unlike the British Empire, law-making is centralised, with the right of proposal reserved for the European Commission in Brussels. The completed law is then administered by the European Commission in Brussels, backed up by a single court in Luxembourg.

In this centralised EU system, EU law imposes a common system on all Member States which have to work together as part of a whole. When a Regulation is "done in Brussels" and enters into force, it applies immediately to all 28 Member States, having direct effect without any intervention from national legislatures.

The law that applies in one Member State simultaneously applies in all others. It is system-wide law aimed with the aim of integrating the Member States into a single administrative body.

That was never the case in Commonwealth and Empire. Law was made for each of the territories. Thus, law made for Australia would not apply to India, nor to South Africa - there was no Empire law, as such, a single body of law made in London which would apply to the UK and then equally and simultaneously to the rest of Empire.

Thus, in attempting to convert EU law when this Bill comes into force, the government is going to have great difficulty in separating out the functional aspects of the law and those dealing with the establishment of the EU systems, which are worked into the law. It will need to keep the one and remove the other. And that's not as easy as it looks.

As we've seen the fishing acquis, referred to earlier, where the core regulation does not just regulate fishermen but also sets up the Common Fisheries Policy, empowering the European Commission to perform certain functions, and imposing the duty of co-operation on (multiple) Member States.

Had the fisheries policy been written on the lines of Indian colonial legislation, it would have been framed by a "governor" based in London but appointed by Brussels, yet would have applied solely to UK waters. That we could have adopted, pro-temp, until we had something better. But the core legislation, Regulation 1380/2013, as it stands, is unusable without very substantial amendment.

I have pointed out similar problems with the Lift Directive. This is also dual-purpose regulation Not only does it legislate for lift safety, it is one of the "New Legislative Framework" package which sets up a Brussels-based system of control over a wide range of products. As such, once again, it empowers the Commission and places cooperative duties on Member States.

Other examples range from chemical regulation to Air Traffic Management, and there are many more. And so I was writing at the beginning of this year that the government had vastly under-estimated the complexities of repatriation. It was not at all geared up to dealing with the problems arising.

Yet, of this, not a word from the media. There is not the slightest hint from the massed ranks of hackery of stupendously challenging nature of the task ahead – rewriting legislation acquired over 44 years of EU membership, all in the space of less than two years, to be ready for the off in April 2019.

Months down the line, there are still no indications that the government has got the measure of the problems, or is in any way gearing up to meet the unique challenges presented. In effect, therefore, this Bill is a fiction. It is lining the government up to do something that cannot be done – something about as feasible as grooming unicorns.



Richard North 14/07/2017 link

Brexit: the dyslexic option

13/07/2017  


Having watched yesterday's exchange on Brexit in PMQs between Emily Thornberry and Damian Green, amid the baying and jeering of our mindless MPs, one cannot help but be struck by the difference in style and tone of Michel Barnier's press conference on the state of play on the Article 50 negotiations (pictured).

Now imagine having to explain to a visitor from another galaxy the difference between the two systems responsible for each of the events.

One, you could say, is the weekly event in a democratic system where elected representatives scrutinise and hold to account the leader of the government – keeping the people informed on how they are governed.

The other, you might say, is the daily ritual of a secretive, dictatorial institution, where unelected officials rule the oppressed peoples of Europe with a rod of iron – totally unrepresentative and unaccountable, hiding everything and deceiving the people about their intentions.

And how would you argue that one system was so much better than the other – democracy (of a sort) versus the Platonic guardians?

In fact, at every possible level. a case could be made that the "undemocratic" Platonic guardians came out better. In Brussels, there was M. Barnier, intelligent and forthright, delivering information and courteously, answering questions and doing his best to be open.

Back in Westminster, we had the spectacle of yah-boo boorishness, with the parties intent on obscuring the issues, while the government representative went out of his way not to answer the questions put, refusing to give us any indication of the true intentions of government.

Perversely, when Mrs May uses what has become her catch-phrase, "let me be clear", we have learnt that this is the prelude to another bout of obscurity and obfuscation. But when M. Barnier, representative of the secretive and undemocratic European Commission says, "the EU positions are clear", we can take this as a generally accurate statement of the state of play.

In fact, not only are the positions clear, they have been delivered in writing in a series of nine position papers, published between 12-29 June. So far, from the UK government, we have seen just one formal response. That was on "rights of EU citizens", published on 26 June.

The first round of negotiations was on 19 June and the next is due on the Monday coming – 17 July. Predictably, with nothing more forthcoming from London, M. Barnier is getting a little anxious.

We now need to know the UK's position on each of these issues", he says, "in order to make progress". He adds, not unreasonably, "We need to know what we can do, and [then] we can negotiate in earnest". In a statement of the obvious, he went on to say: "We cannot remain idle as the clock is ticking".

In this, the first phase of the talks, there are three elements – known to us all. The first is "rights of EU citizens" and the second is the Financial Regulation. On this, Barnier says: "It is essential for the United Kingdom to recognise the existence of financial obligations which simply stem from the period during which it is a member of the EU, and in particular from our current multiannual financial framework".

Only once the EU gets this [formal] recognition, he says, can we "begin work on the methodology and agree in this first phase of negotiations on this methodology".

Of the third - issues related to Ireland - " we want to start discussions quickly on the maintenance of the Common Travel Area between Ireland and the UK, defining precisely its various relevant aspects, and also on the protection of Good Friday commitments Agreement , in all its dimensions".

In what might be a glimpse of the iron fist in the velvet glove, Barnier then says: "On subjects of such importance, it is essential to ensure that we are on the same political line before seeking technical solutions". He adds: "I want to be clear again on these issues: these three priority subjects for the first phase of the negotiations are inseparable".

"In other words", says Barnier, "progress on one or two of these three topics will not be sufficient to move on to discuss our future relationship with the United Kingdom" From this, we get the conclusion: "The sooner we actually make progress on all these issues in phase 1 of the negotiations, the sooner we can start talking about our future relationship".

There is nothing intrinsically unreasonable in this and, in the absence of any initial proposals from the UK, or any formal response to their position papers (bar one), it is difficult to know how else the EU might respond.

Certainly, in response to the cretin Johnson, his line is retrained. Asked by the Irish Times whether he would "whistle us a tune" – a clear reference to the Johnson intervention, Barnier responded with a broad grin, only then to resume his stern façade. Officially, he had no comment, but he did add: "I'm not hearing any whistling – just the clock ticking".

This came in the question session after the statement - accessible here, where Barnier expanded the them to talk about "trust". What he wanted, he said, was to build a new relationship with the UK, but for that to work it needs trust. And trust means giving security to the four million British and European citizens, it means settling accounts".

It was, he said, a difficult problem for the UK. He knew that, but it was difficult for the 27 as well. As 28, when we were together, we entered into commitments to finance a series of forward projects. Thousands of programme, thousands of commitments have been made – a joint commitment, a mutual commitment between the UK and the 27 others.

"What happens with those programmes?" Barnier asks. What happens is the UK share, which the UK is committed to providing, is no longer there? That, he says, is a "question of trust". He does not accept Farage's description of "ransom". It's not an exit bill, he says. It's not a punishment. It's not a revenge. At no time has it been those things. It is simply settling accounts. Any separation involves settling accounts – no more, no less. We're not asking the UK for a single euro or a single pound more than they have legally undertaken to provide.

The UK, he thus declares, has to start by recognising that they've entered into commitments with us. And that's why he's saying that "we have to settle the accounts of the past before we start talking about the future".

The closing question is taken from Mark Stone from Sky News who asserts that the UK has said it would meet "its legal obligations". Some might, therefore, say that the UK has already accepted that there is a bill to pay, a commitment. What more do you need? he asked Barnier 

We listen to David Davis, Barnier responded. We've heard him say that we've noted certain financial obligations. That's the least one would expect. But they are based on agreements provided by the UK government when the financial perspectives were produced.

He (Barnier) had published a list of the financial obligations. He could not imagine that a very great country like the UK would not also be a responsible country and respect its commitments. It's a condition for trust that we need in building the next stages.

Thus, in the final part of this session, vagueness had crept in, except that Barnier again referred to the lack of any position papers from the UK. There is much rhetoric from UK politicians but nothing in writing. The EU's chief negotiator, it seems, wants something bankable – quite literally – and in writing.

This brings us back to the Westminster bear garden where, in terms of knowing what the UK government's position really is, we are totally in the dark. Thornberry was trying to establish whether the "no deal" scenario was still official policy and, if it was, whether there were any contingency plans in the event that it was invoked.

In the light of contradictory answers, Thornberry asserted that Johnson, in particular (who had stated there were no plans) was "making it up as he is going along". Damian Green, standing in for the prime minister, noted the number of different plans coming from the Labour Party – nine counted so far - which included wanting to be both in and out of the single market, in and out of the customs union.

Despite this, Labour concludes (as do we all) that the government has no idea how even to begin negotiating Brexit.

Then to accuse the government of going for the "no deal" scenario seems a little premature. At the moment, we have having to confront the "no plan" scenario, where the government doesn't even know if it wants a deal or not. If the government was able to settle on one of those options, that would be progress indeed, whence it  might take the trouble to inform M. Barnier of its intentions.

But, if "no deal" is chosen, it would be the nuclear option. For the moment, though, we seem to be veering towards the dyslexic option. Whatever we seek to ascertain the government's intentions, we find that they are "unclear".



Richard North 13/07/2017 link

Brexit: Barnier - "that is not possible"

07/07/2017  


In the wake of Mrs May's Lancaster House speech in January, I wrote that her idea of a "bold and ambitious" free trade agreement with the EU inside two years was not just difficult. "It is impossible", I said. "It cannot be done. And it doesn't matter how many times it is discussed amongst the chattering classes, it still can't be done".

Just to re-emphasise the point, in March, I wrote a whole post under the title "impossible means impossible", where I reminded people of my view, that the commitment to securing a free trade agreement (signed and ratified) within two years, was akin to a British commander addressing his troops on Salisbury Plain, telling them they were to invade Iraq the next day – but they had to walk all the way from the UK.

But then who am I? Just a mere "blogger", with the best part of 40 year campaigning under my belt and 14 years devoted to writing about the EU – with the most comprehensive published exit plan yet written under my belt. Clearly, I'm a know-nothing – not even an "expert" who knows so much more than us mere plebs.

Mostly, people like me, therefore, can either be ignored (apart from the inconvenient fact that we've had upwards of 50,000 people in a day on this site). If we persist, the bubble-dwellers excel in treating non-conformist views with utter contempt.

But then, some four years after we first started writing seriously that the "free trade" option for Brexit is a non-starter (only to have the wondrous IEA, along with Lord Lawson, reject the warning), we now have somebody else pop up and say more or less the same things.

This time, though, it just happens to be Michel Barnier, speaking in Brussels to the European Economic and Social Committee. As the chief EU negotiator for Brexit, this man has a certain status – and in this man's world, status is everything. To get a hearing, you must have status (aka "prestige"), and once you have it (or been given it by the media), the media listens.

At this event, speaking "frankly and sincerely" on the theme of Brexit, M. Barnier pulls no punches, taking his line straight out of the Flexcit playbook. "There will be no business as usual", he says. "The UK will become a third country at the end of March 2019".

The number of times we've seen the Muppets on the Booker column comments and elsewhere deny this is legion. There is nothing quite so calculated to wind up the kippoid tendency as to point out this simple fact. I even wrote a post on precisely this point, but they still don't get it.

Anyhow, here we have M. Barnier stating the obvious (and not for the first time), but this time he goes further. The UK government, he says, has defined a number of "red lines" for the future relationship. Mrs May, Davis and the rest of the motley crew, want no more free movement for EU citizens, full autonomy over UK laws, autonomy to conclude its own trade agreements and no role for the ECJ.

This, says Barnier, implies leaving the single market and leaving the EU Customs Union – and he's not wrong in saying that. But he goes on to say that, "on the EU side, we made three things very clear". The particular point he and others have been making is that "free movement of persons, goods, services and capital are indivisible", on the basis that "We cannot let the single market unravel".

Not to put too fine a point on this, however, the doctrine of indivisibility applies only to EU Member States. It does not apply to Efta/EEA states, where both Iceland and Liechtenstein have modified the "four freedoms" without causing the Single Market to unravel.

Nevertheless, Barnier lays out his pitch: "There can be no sector by sector participation in the single market: you cannot leave the single market and then opt-in to those sectors. You cannot be half-in and half-out of the single market". He then adds:
The EU must maintain full sovereignty for deciding regulations: the EU is not only a big marketplace. It is also an economic and social community where we adopt common standards. All third countries must respect our autonomy to set rules and standards. And I say this at the moment when the UK has decided to leave this community and become a third country.
That is fighting talk if ever I saw it. It's also bullshit – but never mind, Barnier probably believes it. He is, at his heart, a French politician – and they have the ability to believe ten contradictory things before breakfast. They then rest until dinner, so the end of the day count is the same. But a pre-breakfast count is so much more impressive.

However, those are his red lines, and one can almost hear the echoes of Verdun: Ils ne passerons pas. These three points, he says, were already made clear by the European Council and the European Parliament. But, he says, "I am not sure whether they have been fully understood across the Channel".

That is something of an understatement, but deserves repeating: "I am not sure whether they have been fully understood across the Channel". This is what is known as diplomacy. Barnier knows full well that they haven't been "fully understood". All he has to do is tune into the drivel filling the UK media, day after day, after day.

Thus, he says: "I have heard some people in the UK argue that one can leave the single market and keep all of its benefits", to which he adds, with disarming frankness: "that is not possible".

He then says: "I have heard some people in the UK argue that one can leave the single market and build a custom union to achieve 'frictionless trade'", to which he adds, with disarming frankness, "that is not possible".

"The decision to leave the EU has consequences", says Barnier. "And we have to explain to them, the businesses and civil society on both sides of the Channel, what these consequences mean for them". He adds: "Let me be clear: these consequences are the direct result of the choices made by the UK, not by the EU. There is no punishment for Brexit. And of course no spirit of revenge. But Brexit has a cost, also for business in the EU27".

Rubbing the salt in the wound, Barnier says that, "Whatever the outcome of the negotiations, at midnight on 29 March 2019, the United Kingdom will at the present stage be a third State, which will therefore not have the same facilities and rights as a State Member of the European Union. It's its choice. Not ours".

This, apart from anything else, is as clear a statement as any that we will not have anything like the "bold and ambitious" free trade deal that Mrs May wants". All Barnier is prepared for is travail préparatoire, with no question of concluding a deal.

As to trade in general, he reminds us that Member States benefit from a "frictionless" trade for goods because they form part of the internal market. This, he says, has made it possible to harmonise the rules or to ensure their mutual recognition by ensuring that goods lawfully produced in one Member State can be sold in all the other Member States without further formalities.

He further argues that there is little use in having no customs duties if at the same time divergent national regulations prevent products from circulating freely – thus highlighting the problem of non-tariff barriers. Only the combination of the Customs Union and the rules of the internal market allows us to trade freely, "without friction". One does not go without the other.

By choosing to leave the Union, Barnier then says, the UK moves to the other side of the external border. This not only delimits the customs union, but also the space for the adoption and application of internal market rules. That is exactly the point I made in February, using the analogy of a medieval walled city. And, as Barnier says, it's our choice."

Inevitably, Barnier concludes, "a trade relationship with a country that does not belong to the European Union obviously involves frictions". For example, economic operators from third countries do not enjoy the same facilities as the Member States on VAT returns.

For another country, he says, 100 percent of imports of live animals and products of animal origin - and this is a former Minister of Agriculture who is talking - is and will be subject to controls. There it is – for the first time from a public figure, you get what I've been saying on this blog again and again and again. What price the racehorse industry now?

Barnier goes to some trouble to emphasise this point. The border of the European Union, he says, it is one of the challenges that we must face in Ireland's unique case, without recreating a hard frontier. He adds:
On the other hand, the general sanitary and phytosanitary conditions of such exports must always be established before the export of a product of this nature from a third country to the European Union is possible. We can clearly see, if I speak frankly, the constraints that are there, especially for the agri-food sector.
He then further reminds us that these constraints apply equally to all companies that derive their dynamism from the integration of production centres in Europe within the common market.

As to the "no deal", scenario, this says Barnier, means a return to the status quo. In the case of Brexit, "no deal" would be a return to a distant past. It would mean that our trade relations with the UK would be based on WTO rules. It would be a good idea to have the customs duties of almost 10 percent on an average of 19 percent for alcoholic beverages, and an average of 12 percent on lamb and also fish, for which the vast majority of British exports go to the EU.

While leaving the customs union in any case involves border formalities, "no deal" would mean very cumbersome procedures and controls, without facilitation. This would be particularly damaging for companies operating on a "just in time" basis.

In practice, he warns, "no deal" would worsen the "lose-lose" situation which is bound to result from Brexit. Objectively, he thinks, the UK would have more to lose than its partners. He is thus entirely unequivocal. "I therefore want to be very clear", he says, "to my mind there is no reasonable justification for the 'no deal' scenario. There is no sense in making the consequences of Brexit even worse".

Whether this sinks in, I don't know. But for many months, on this blog, I've been attempting to spell out the problems and consequences of leaving the Single Market, and going for the "no deal" scenario – only to be derided or ignored. Booker has had much the same treatment, with his own management undermining him in the letters pages.

Now, chickens are coming home to roost. Says Barnier: "Business should assess, with lucidity, the negative consequences of the UK's choice on trade and investment. And prepare to manage them". Of course, most of business hasn't. With some honourable exceptions, they've had their heads in the sand – or been pursuing a far more sinister agenda.

Ironically, one of my commenters yesterday posted on my article about Grenfell Tower some detail on Cameron's Damascene conversion to the Norway option. He prefaced it by saying: "to move away from Grenfell and back to Brexit for a moment…".

I can quite understand the point, but my response was that, in pursuing the truth behind Grenfell Tower, "we never left Brexit". Forces which brought us the Grenfell disaster are the key to understanding Brexit.

Note here that Barnier refers to the UK "red line" of "full autonomy over UK laws", reflecting the Vote Leave slogan of: "Let's take back control". But what we also have to recall is that Vote Leave was not a people's campaign. It was funded mainly by a small number of very rich business people, who saw in Brexit an opportunity to promote a "deregulation" agenda for their own commercial advantage.

It is no coincidence that these same people are inimically hostile to the "Norway option". In an attempt to stop it happening, they are supporting the Leave means leave campaign, the Tory "ultra" European Research Group" and, latterly, the secretive Red Tape Initiative.

These groups are supporting their paymasters who see in Brexit profit-creating opportunities which would be limited if we were still bound by the Single Market acquis represented by the Efta/EEA (aka "Norway") option.

Deregulation, of course, can be no bad thing (although I have long preferred the term "re-regulation"). But, as we've been seeing with Grenfell, the problem can just as easily be that existing regulation is not rigorous enough, with progress held back by the EU.

Thus, while returning control of the legislative agenda affords the chance to make our own laws (as long as they don't conflict with international standard-setting), this does not necessarily imply getting rid of laws. Many should stay, and be tougher – remember horse meat, anyone?

The thing is, "Let's take back control" never did mean restoring control to the people. Whether in the EU or supposedly as an independent nation, in Vote Leave's scheme of things, we don't get a look in. In the view of its wealthy business backers, control goes to born-to-rule Tories, who will look after their friends by reducing their legislative "burdens".

In this, Monbiot does have a point, except that he just wants the control to pass from "big business" to his green NGOs. He and his likes are no more interested in giving power back to the people than are the Tory right.

Thus – even if for the wrong reasons – Monbiot has correctly identified Grenfell Tower as a key Brexit battlefield. But if the question is: "who rules Britain" (or the UK) - as between business and unelected NGOs (his preferred NGOs) – he wants his green NGOs to take the prize. Nowhere in Monbiot's scenario do the people even feature.

Our battle, therefore, is in ensuring that we have a measured exit from the EU and that when powers are eventually returned from Brussels, they go back to the people, rather than just to a different set of masters. That is why Flexcit in its Phase 6, includes The Harrogate Agenda.

For the time being, though, the "mad deregulators" are driving the Brexit agenda up a dangerous cul-de-sac. It is that totally selfish agenda which is blocking a sensible approach to the Article 50 talks and is the real reason why the right is blocking the Efta/EEA option. But, as Pete points out , deregulation is not a viable option. It isn't going to happen. Thus, if we are going to make any progress, we are going to have to reclaim the agenda, and put the "deregulators" back in their box.

And that has to be possible, or Brexit will be a disaster. But then, readers of this blog already knew that.



Richard North 07/07/2017 link

Brexit: the Brexit victims

27/06/2017  


The Prime Minister made a statement in the House. It was followed by a Government press release announcing formal proposal in the form of a White Paper on "Safeguarding the Position of EU Citizens Living in the UK and UK Nationals Living in the EU". For citizens of EU Member States, there is then an explanatory booklet.

Putting all this prodigious effort together, it seems the Government has really gone the extra mile in the communication stakes. Yet, it seems, more than a million foreign workers are preparing to leave the UK within five years, and the Independent thinks it's a "sinister deal".

As for me, I neither know nor care. When I look at the details, my eyes blur. But then, neither I nor anyone else in the UK matters. The test will be how the EU negotiators respond. If they buy into it, then we've made progress. If they make it a sticking point, we could be wasting many months while we attempt to reach a common position.

Whatever else, this is not precisely what the Commission wants. It was looking for the rights of all expats to be preserved in full – which isn't going to happen. And it wanted any deal to come under the jurisdiction of the ECJ. And that isn't going to happen. Thus, at a very early date, we're going to see the colour of the Commission's eyes. And either the "colleagues" are going to back down, or we are. I'll let you guess who.

As it stands, citizens from EU Member States are going to have to go through a shed-load of bureaucracy to get to keep their places in the rain, and there is plenty of scope for anomalies and any amount of bureaucratic cock-ups – enough to give the Guardian and its fellow travellers a prolific new source of copy. In fact, we could be in on the creation of a whole now genre of journalism: the "Brexit victims".

Already, this champion of everybody's rights (unless you're a white, Anglo-Saxon male who isn't called Jeremy Corbyn) is talking about a "sour taste", while Barnier is calling for "more ambition".

Meanwhile, Mrs May has bought off the mad Ulstermen (and women) with a £1 billion bribe – which, I suppose, is better than giving it to the "colleagues". Together with the growing number of high-rise blocks which have their cladding fail the fire test, this is keeping the legacy media busy. Citizens' wrongs look to be a slow burn.

But then, forest fires burn harder during the late summer which, perversely, may be just what we need. Over the water, in Ireland, RTÉ's flagship current affairs programmes are finding Brexit coverage a problem as it is considered boring and a "turn-off" for viewers.

This is according to David Nally, managing editor. News bulletins are ratings-sensitive and, while some of the state broadcaster's current affairs coverage competes well with football or entertainment shows on other channels, staff are finding that Brexit is an audience "turn-off".

Nally says: "You have to bear in mind that those programmes have 30 seconds at the top of the programme to persuade people to watch them. One answer as to why Brexit coverage comes over as "boring" because it is "complex and it lacks real people", but the better answer is that, over the year the issues haven't really changed.

"It is a difficulty", he adds, "to keep saying the same thing over and over to people, especially when you can't show them that it's affecting real people's lives, that it's changing, or that the big players, the big decision-makers are appearing on the programme".

Actually, I can understand the sentiment here, even if I don't agree with it. The problem with Brexit is that neither journalists nor politicians understand the underlying issues. They thus keep churning over the basics without bringing anything new or interesting to the table. There are only so many times one can listen to idiot politicians explaining how little they know about customs unions.

At least we seem to have a sort of an ally in Fionnán Sheahan, editor of the Irish Independent. He "disagrees strongly" with anybody who suggests that Brexit is a boring topic". "What happened 12 months ago was a game-changer across this country and if we're not going to cover a topic like that comprehensively and throw any and all available resources at it, then I don't know why we are in journalism", he said.

Paul O'Neill, the newly appointed editor of the Irish Times', said the paper had published around 1,000 articles on Brexit over the past year. He added: "There is interest, but it really is nothing extraordinary".

Sebastian Hamilton of the Irish Daily Mail says that journalists need to employ critical thinking around their coverage – something for which they are not exactly famous. But Ian Kehoe, editor of the Sunday Business Post said Brexit had impacted everything while affecting nothing. He said newspapers ran the risk of "Brexit fatigue" with their readers.

In a nutshell, though, Brexit isn't boring – it's the media coverage that makes it so. For most of my adult life, it has been a family ritual to have the evening meal early, while we watch the six o'clock evening news. But more and more, I find the coverage so superficial as to be irritating, while the way broadcast media these days report the news I find patronising and lightweight. Minutes in, I'm reaching for the programme changer.

This is exacerbated by the politicians who have nothing interesting to say on a subject of very great interest, driving people away through repetition of the same limited repertoire.

This issue of expat rights is a case in point. It seems to have been on the agenda forever, getting nowhere very slowly. All the substantive issues are waiting in the wings but virtually nothing is said of them, concealing a sombre truth that few politicians or journalists are capable of saying anything of any great interest about them.

As to the media attitude, there is a clue in the comment from Nally in his saying that the subject is "complex and it lacks real people". This reflects the inability of journalists to get to grips with the complexity, and their obsession with personalities.

On any one day collectively, the Discovery documentary programmes attract millions of viewers – I sometime find myself watching them instead of the news. Yet these are the very essence of issue-led broadcasting, which journalists can't seem to master. Unless their clips have "slebs" or "victims" which can be cobbled together to represent "human interest", they're all at sea.

With the expat issue now to the fore, I fear the worst. Potentially, it combines all the undesirable features of modern journalism under one cover. The media have got their "real people", who can take centre-stage as a never-ending procession of "Brexit victims". There will be no stopping them now.



Richard North 27/06/2017 link

Booker: Brexit shambles

25/06/2017  


In a truncated piece (it was originally meant to be longer until the management intervened), Booker writes this week on the Brexit talks which "have proven to be a shambles from the off".

Exactly a year after the referendum, he says, our Brexit talks have finally groaned into action, prefaced at the insistence of the EU's chief negotiator Michel Barnier by discussion of the three issues which he had ruled must be resolved before there can be any talks on a trade deal.

On the first, the post-Brexit status of EU and UK citizens, despite our being told that this is going well, much still remains to be argued over, such as the role of the European Court of Justice. The second issue is the so-called "divorce bill" we have to pay for our share in all those ongoing financial commitments under the EU budget we have already signed up to as members.

This, Booker was estimating here last summer, is likely to end up at £30-40?billion. But the final figure cannot be calculated until the end of the EU’s current Multiannual Financial Framework period in 2020.

The third issue, the Northern Irish border, cannot be resolved until we have agreed the nature of our future trading arrangements with the EU. So by a Catch-22, we can't discuss trade until we've agreed about Northern Ireland, which we can't discuss until we've agreed about trade. What a shambles, he says, it is all already becoming.

That's all we get from Booker this week but it's a good topic hook on which to base a discussion on how we got to this parlous state. Anything of this nature is bound to be complex. There could never be a simple explanation of why the government has made such a mess. Incompetence alone could never be enough. There has to be more – much, much more.

What I don't think we can do is look at the current events in isolation. As much to do with why things have gone wrong (if you accept they have) is the way the Eurosceptic movement has developed and how it has influenced the Conservative Party.

Arguably, what has contributed to the shaping the current government's handling of Brexit are its perceptions (and the distortions) of what it believes the European Union to be. I don't for the life of me imagine the Mrs May and her ministers are negotiating with the EU as it exists. Rather, they are basing their actions on the cardboard cut-out pastiche of what they believe the European Union to be.

Another major contribution is the lack of preparedness, where neither this government nor its predecessor have been able to craft a credible Brexit plan, all in the context of the failure of the "information nexus" to come up with acceptable alternatives.

I remarked the other day on how, in the beginning, work on this had been relatively easy as there were generally only three recognised options. But now, barely a day goes by without some self-important luminary of body coming up with a new idea or variation of something that has already been floated – each less plausible (or more troublesome) than the last.

Those of a conspiratorial bent might even begin to suspect that this process on the part of the "remainers" is deliberate. As the complications multiply, ordinary people lose patience and, confronted with the perils of a "botched Brexit" will be willing to accept something that sounds as if it takes us out of the EU, but doesn't really.

Right up front, when we were warning that Brexit was going to be complicated, our purpose was not to suggest that it couldn't be done – of which some accused us – but to identify the problems early so that we could overcome them. I have long held that the first (and most important) step in problem-solving is to define clearly the nature of the problem. We look to raise problems in order to explore ways of dealing with them.

With that, I aver that, had the UK government held off its Article 50 notification until we had secured a commitment from the Efta states that it would accept our rejoining them, and then worked on a schedule of amendments to the EEA Agreement – to be presented to the EEA Joint Committee – we would be well on our way to securing a Brexit within the constraints of the two-year Article 50 process.

In that sense, while I've always been up-front in arguing that Brexit is difficult, I've never said it was impossible – unlike Mrs May's comprehensive free trade agreement, which resides in the land of the fayries.

As a result (and I'm not afraid to make the link), we are seeing an emboldened commentariat argue that Brexit should be reversed. With honeyed words coming out of Brussels suggesting that penalty-free reversal is possible, it may be only a matter of time before it lodges on the political agenda.

It is here that my loathing of Vote Leave cannot be suppressed. The arrogant fools who hijacked the long-standing campaign thought that they were just dealing with the mechanics of winning a referendum, seeing that as the objective rather than just a step in the right direction.

Winning, as is now becoming painfully evident, was necessary but not sufficient. Without a clear (and realistic) idea of what we wanted from Brexit, there was always a risk that we'd be all over the place in the event of a victory. There is now danger (and always has been) that we fall at the final hurdle and never actually get to leave the EU.

If there is a better word, then I'd like to see it. But it has always struck me as the ultimate in stupidity for the "Ultras" to reject the Efta/EEA option as not leaving the EU, when probably the only realistic way of ensuring that we make a clean break is to follow that path.

But where we go now is anybody's guess. With the May administration in turmoil and the prime minister's unerring clumsiness, we cannot rule out the prospect of an autumn general election and the emergence of Jeremy Corbyn as leader. It would then be difficult to argue that his Brexit team was any more incompetent than May's team, given that we have absolutely no confidence in the current team avoiding a Brexit disaster.

Much of this does has to stem from the initial incompetence of the official leave campaign, the cowardice of Arron Banks in not supporting an effective exit plan and, of course, the inept behaviour of Nigel Farage whose use-by date must have expired a decade ago.

The issue we now have to address is whether the situation is recoverable. And while I do believe that there are stratagems that we could adopt, which could deliver a favourable outcome, I do not believe there is either the competence or the political will within the May administration that could deliver.

Nor is there any confidence in a political system which is basically deaf to ordinary citizens and which consistently shows itself unable to respond to anything originating outside its own bubble. If it had had the ability to respond, then it might not be in the mess in which we find it.

The answer to the Booker conundrum, therefore – as to why Brexit talks are in such a shambles – may be simpler than we thought. It all boils down to a failure to communicate, the inability of the government and the political classes to listen and learn. But if the diagnosis is simple, the solutions are anything but.



Richard North 25/06/2017 link

Brexit: another phoney Brexit

21/06/2017  


Chancellor Philip Hammond made his much-delayed speech yesterday. This is the man who thought that the cladding used on Grenfell Tower had been banned in the UK, provoking a swift denial from a lead firm in the renovation project. 

And now he has been giving us the benefit of his wisdom on "what we want to achieve from those Brexit negotiations". The Prime Minister's Lancaster House speech in January, he said, "had set out clearly the arrangements that the UK would like to agree, built around a comprehensive trade agreement in the context of a deep and special partnership that goes much wider than trade".

But, said the Chancellor, "we recognise that this is a negotiation, and our negotiating counterparts, while broadly sharing our desire for a close ongoing relationship, will have their own priorities". As to our own priorities, we must be "clear" about them. When the British people voted last June, they did not vote to become poorer, or less secure, but they did vote to leave the EU. And we will leave the EU.

But, Hammond declared, "it must be done in a way that works for Britain. In a way that prioritises British jobs, and underpins Britain's prosperity". He added: "Anything less will be a failure to deliver on the instructions of the British people". This brought us to the moment we'd all been waiting for: how we were going to achieve what the Chancellor called "Brexit for Britain".

Firstly, he said, we would secure "a comprehensive agreement for trade in goods and services". Secondly, we would negotiate "mutually beneficial transitional arrangements". These would "avoid unnecessary disruption and dangerous cliff edges". 

Thirdly, said our miracle worker, we would agree "frictionless customs arrangements to facilitate trade across our borders – and crucially – to keep the land border on the island of Ireland open and free-flowing".

To achieve this last miracle, "in the context of our wider objectives" would, said Hammond, "be challenging". It will almost certainly involve, "the deployment of new technology". Therefore, he added, "we'd certainly need an implementation period, outside the Customs Union itself".

To allow this, current customs border arrangements would remain in place until new long-term arrangements were up and running. And then finally, Mr Hammond had one big trump card. He was going to take a "pragmatic approach" to one of our most important EU export sector – financial services.

This would need "a new process for establishing regulatory requirements for cross-border business between the UK and EU". This would have to be "evidence-based, symmetrical, and transparent" and "reflect international standards".

Cooperation arrangements had to be "reciprocal, reliable, and prioritise financial stability". Crucially these had to enable "timely and coordinated risk management on both sides". Third, these arrangements have to be permanent and reliable for the businesses regulated under these regimes.

As far as migration goes, Mr Hammond would have us seeking to manage it. We would not seek to shut it down. But, beyond that, no detail was offered. This, though, was the tenor of the entire speech. One could not say it was "wishy-washy" – just "wishy". The speech was long on aspiration but entirely lacking in execution.

Yet, despite this, the Chancellor was "confident" that we could do "a Brexit deal that puts jobs and prosperity first". This would be a deal that "reassures employers that they will still be able to access the talent they need", one that "keeps our markets for goods and services and capital open" and one that would achieve "early agreement on transitional arrangements".

And in this lovely, fluffy, cuddly Brexit that Mr Hammond has invented for us, "trade can carry on flowing smoothly, and businesses up and down the country can move on with investment decisions that they want to make, but that have been on hold since the Referendum".

I seem to recall writing earlier about my aspirations for gaining the exclusive franchise for Lunar Green Cheese, with a quota of 1000 tons a week, beamed down directly from the Sea of Tranquillity by a matter transporter. But, it appears, Mr Hammond has beaten me to it. In Brexit terms, he's cleaned out the pool.

There is no going back from this. Either we have a minister here with hidden depths, a man who all this time has been sitting on a brilliant plan, the like of which the world has never seen, or we're dealing with yet another Walter Mitty character, living in a parallel universe, and not even the same one as Mrs May.

Particularly interesting is that Hammond too has joined the ranks of the "transitionals". Having caught up with the rest of the world, in understanding that we cannot conclude Mrs May's "deep and special partnership" inside the period allocated, he has embraced the idea that everything can be solved by "mutually beneficial transitional arrangements".

What nobody is admitting, least of all Mr Hammond, is that a transitional agreement is not quick fix. He, like the others, should have appreciated that the complexity is such that the two-year Article 50 period is barely (if at all) sufficient to craft such an agreement.

Looking at the most recent member of the European Union, Croatia, we see that it applied for membership in 2003 and was in negotiations from 2005 until 2011. The 116-page accession treaty was signed on 9 December 2011.

The essence of accession treaty is that it is (to a very large part) a transitional agreement, easing the entry of a joining nation into the Union. That is takes six years is a good indication of how long these things can take and it is not at all untoward to imagine a transitional agreement with the UK taking those two years that Article 50 allows.

The very fact that so many are leaping on this transition bandwagon is in itself and indication that they are little idea of what is involved. Having already wasted so much time, it is questionable whether there is even time to complete a basic agreement.

Hammond, coming to the party late, is playing games. There is nothing anywhere to indicate that his "ideas" have any more substance than the words in his speech, which were pathetically thin. He has joined the ranks of politicians selling their phoney Brexits. That is all these people have to offer.



Richard North 21/06/2017 link

Brexit: anti-climax

20/06/2017  


In first-day talks that were described by EU officials as "window dressing", David Davis and his "Team Brexit" effectively caved in to Brussels, agreeing to phased negotiations on their three "divorce" points.

In what has been called a "major defeat", there was no commitment to run parallel talks on trade, that ambition having been abandoned within hours of the Brexit Secretary having arrived in the Council building.

Last month, Davis had boasted that he would provoke the "row of the summer" unless he got his way on immediate trade talks, predicting an early collapse if the EU refused concessions.

Instead, the Brussels agenda is going ahead, with three working groups set up, one on EU citizens' rights, one on the "financial settlement" and the other on border issues, in particular, the border with Northern Ireland.

At the press conference after the session, Davis had to admit that the trade issue would only be entertained when the EU had decided that "enough progress" had been made on the EU's negotiating priorities. Confronted with the "weakness" of his negotiating position, Davis could only put on a brave face, claiming: "It's not when it starts but how it finishes that matters".

That much we get from the media – a totally predictable outcome. Davis caved in because he had to cave in. It was that or walk away immediately. The "colleagues" were not in a mood for games.

Mr Davis's humiliation, though, is the least of our troubles. There is no evidence that Mrs May's weakened government has a coherent (or any) plan. Beyond phase one of the negotiations, there is a black hole, from which nothing escapes.

We are getting to the point where, as far as this blog goes, virtually everything that could be said has been said. We have reached the stage where we are simply repeating ourselves while the noise level continues to climb and nothing can be heard above the din.

It is not just a question of this blog being ignored. Even seasoned civil servants and former government advisors are being frozen out of the loop, while ever-vacuous academics fill space on nostrums which demonstrate how little they have thought about this complex subject.

Basically, we have one option – the one we've only ever had: a continuation of EEA membership, if the Efta states will agree to our joining them. Without that, there is an outside possibility of redefining the Efta institutions to permit UK participation without membership, but this will not be easy or quick to set up.

Even then, those who are belatedly, jumping on the EEA bandwagon display such a limited understanding of the EEA Agreement and the treaty structure – much less of the possibilities afforded – that we are scarcely in a position to take advantage of the option.

All that is theoretical anyway. The EEA is not currently on the table and Davis has retreated to cloud-cuckoo land. He insisting that there is much "common ground" with the EU and that the timetable for withdrawal, while "ambitious" is "eminently achievable". This is very much a case of fools rushing in where angels fear to tread, with nothing of substance to support it.

If ever there was a time for the slow-motion train crash analogies, this is it. There is actually little more we can do, other than watch and wait – and record the progress of that train on its final departure from the permanent way.



Richard North 20/06/2017 link
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