Brexit: a psychic epidemic

19/04/2018  


I wrote yesterday that the bulk of MPs we encounter seem to be the most ignorant people on the planet, unable even to master the basics and prey to just about every myth and falsehood on Brexit that it is possible to imagine.

To these, we must now add the Lords, many of whom seem unable to understand what a customs union is, 348 of whom have voted to call on the Government to "explore" the possibility of remaining in (or joining) one – with 225 against. And the reason why many voted for the proposition was the mistaken belief that a customs union will remove customs checks - even to the extent that this will resolve the Irish border question.

Supposedly this is one of largest votes in history of the Lords and is being styled as a "crushing defeat" for the government. It is, of course, no such thing. The anodyne wording of the amendment to the European Union (Withdrawal) Bill simply calls upon the Government to consider the prospect of staying in a union. It does not actually require any executive action. The government, therefore, can (and will) go through the motions and then, having done precisely nothing, will move on.

This makes the whole charade a crass distraction from the business of government – signalling an epidemic of cretinism in our legislature, the like of which we have rarely if ever seen. It's almost as if an evil alien power has descended on Westminster and sucked the IQs out of their Lordships, leaving them with the deductive powers of five-year-olds.

Leader in the nursery stakes in the Lord's debate was Lord Kerr of Kinlochard, imbued with the stupidity which has infected the place.

Amazingly, after all this time, the man is clueless, arguing that it is not possible to "maintain an open border with no checks and no infrastructure if the UK leaves the Customs Union". And thus, he asserts, he workable solution to the Irish border conundrum is a customs union. The man thus blathers:
Even if cross-border trade is tariff free, as I hope and believe it will be, rules of origin, phytosanitary and other checks will require a hard border. They will make that inevitable unless we have a customs union. A customs union is not in itself a sufficient condition for an open or soft border - there will still have to be a degree of regulatory alignment, particularly in the agricultural sector - but it is a necessary condition for an open border.
This is madness beyond peradventure. The simplest of reality checks calls out the errors. A customs union does not in any way eliminate border, as we see with the borders between Turkey and EU Member States.

On the other hand, the nearest thing we have to frictionless borders between member and non-member states is on the crossings between Sweden and Norway – both participants in the Single Market, but with Norway firmly outside the customs union.

Affecting the brains of these hapless people is the simplest of flaws – the naïve belief that because it is called a "customs union", such an agreement deals with border checks – and will eliminate most of them. They are unable to distinguish between this concept and the entirely separate idea of "customs cooperation", and then the further concept of the Single Market.

All a customs union does is remove tariffs and quantitative restrictions (quotas) between members, and superimpose a common external tariff so that all members levy the same tariffs on goods from outside imported into the customs area.

Just supposing you wanted to maintain tariffs between members (and quantitative restrictions), these could be managed administratively, without border checks. The processes for tariffs are quite simple.

The consigner of goods must fill in a customs declaration, which can be posted into the system electronically before the goods even start moving. On receipt of the goods (i.e., once they have arrived at their destination), the consignee must pay whatever tariff is due – either directly to the carrier or via an electronic account, which is settled periodically.

Fraud and evasion can be policed "beyond the border" and only in exceptional circumstances is there any need for checks on the border.

On the other hand, you do not need a customs union to secure tariff-free trade. As with the EEA Agreement and any number of free trade agreements, there exist arrangements were no tariffs are charged, in either direction. The only thing missing is the common external tariff, the absence of which means that rules of origin may apply (if there are significant external tariffs). But again, these can be sorted administratively, without the need for border checks.

In short, policing tariffs does not require border checks and you do not need a customs union to remove tariffs.

Crucially though, even the most comprehensive of customs unions – with absolutely no tariffs - does not remove border checks, as indeed the European Union experience adequately demonstrates.

Beyond tariffs, there is a galaxy of border controls, all devised to deal with "non-tariff barriers", which have nothing to do with a customs union. To eliminate checks, you need cooperation on customs procedures and a Single Market (the former being part of the latter).

Thus, if you want frictionless trade (i.e., the absence of border checks), forget about a customs union. It is, as we have written so often, a red herring - a complete irrelevance. If you want more detail, you can find it here.

When it comes to Brexit, only in the event of a catastrophic breakdown in relations is it anticipated that tariffs will be re-imposed on trade between the UK and the EU. And while Rules of Origin might cause minor administrative difficulties, the problems are vastly overstated – and can be eliminated completely if the UK voluntarily harmonises its external tariffs with those of the EU (which will happen anyway when we adopt the EU's tariff schedules).

Thus, the only mechanism that we need concern ourselves with, in order to ensure frictionless trade, is the Single Market. And, outside EU membership, there is only one way of securing participation – through the Efta/EEA route.

As to the workings if the EEA in respect of Efta states, the land border between Norway and Sweden is not entirely frictionless. But many of the border checks currently carried out are a matter of choice – arising from the policing of alcohol and tobacco duties, for instance.

I have pointed out many times that the EEA Agreement is infinitely flexible. The structure readily allows for country-specific sub-agreements to suit local circumstances. A modified EEA Agreement, entirely within the scope of the treaty, with enhanced cross-border cooperation, could deliver free movement of goods across the Irish border – or so close that the no one would notice the difference.

And such principles have been known for years. There is no case whatsoever for staying in the EU's Customs Union (not that we can), and none for negotiating a new agreement. This will not give us frictionless trade. Participation in a modified EEA agreement, through Efta, will give us what we need.

Yet, the ennobled cretins yesterday obsessed about a customs union, mentioning it in their facile debate 125 times – against a mere fifteen mentions of the single market. The obsession has the hallmarks of mental illness – a psychic epidemic. Their lordships are not well.

The trouble is that this psychic epidemic has spread to the Commons. Indeed, it may even have started there. And the fourth estate is thoroughly infected, trotting out the annals of stupidity without not the slightest engagement of brain cells.

Meanwhile, distant from the noise and fury of the imbeciles in Westminster, the negotiations in Brussels go on. Donald Tusk reiterated yesterday that there would be no withdrawal agreement without settlement of the Irish question, but of any developments in the talks, there has been no news.

Yet events in Brussels have far greater importance than anything the baying hounds of Westminster can deliver. Nothing they did yesterday brings us any closer to a resolution of a problem that has the potential to collapse the talks. How interesting it is, therefore, that the legacy media should concentrate on the noise and fury. And so the epidemic spreads.



Richard North 19/04/2018 link

Brexit: nobody is listening

18/04/2018  


There was a seminar organised by the Efta secretariat in Geneva yesterday on the European Economic Area (EEA). Opening the proceedings was Deputy Secretary-General Dag Wernø Holter (pictured) who informed his audience (repeated on Twitter) that: "The objective of the EEA agreement is to extend the internal market to the participating EFTA states".

It is good to see this sort of information getting a wider currency and it is the sort of thing that should be spread to all those involved in the Brexit debate. However, it is of some concern that this sort of thing should even need saying. Such information is readily accessible to anyone with the wits to find it – I included it in Monograph 9, published in August 2016 – and it should already be widely known.

At the same seminar, there was also Brit Helle, Director of the Goods Division of the Efta Secretariat. She tackled another basic fact – one often misrepresented: "Efta is not a fax democracy", she said. "The Efta/EEA states are not waiting for the latest legislation to be faxed from the Commission. Efta/EEA experts have the right to participate in EU expert groups. This is our most important channel for influence".

This, of course, is by no means the only channel of influence, and later in the seminar the "two pillar structure" was explained, which gives further opportunities for consultation and decision shaping.

The procedures involved are so well-known and well-established that Efta even published an explanatory document about it, way back in 2009. And that is enough to destroy the canard that Efta/EEA membership places the Efta states in a wholly subordinate position, where they are obliged to accept all (relevant) EU law automatically, and have no influence in its making.

Yet in the Guardian in December 2012, we had a piece by Roland Rudd, then chairman of the Europhile lobby group, Business for New Europe. The topic was Norway's relationship with the EU, the piece bearing the headline: "No power, no influence and we would still have to pay the bill".

The claim, and especially (but not exclusively) that part relating to "influence", was a lie - a direct, obvious and easily verifiable lie. And while Remainers to this day (rightly) complain about Vote Leave's £350 million lie on the side of the big red bus, less is said about this lie – one repeated uncritically by a newspaper which is now in the forefront of exposing the machinations of the Leave campaign.

This same newspaper was quite content to give David Cameron a platform when, in October 2015, a Downing Street spokesman said that Norway was "the 10th largest contributor to the EU budget and is bound by the rules of the single market without any say in the decision-making process".

Both these lies went unchallenged, while others – including the Independent, repeated the canard in early 2016 that Norway had "to effectively implement all EU rules, has no say in how they are made, and still contributes a significant amount of money to the EU budget".

But then, David Cameron was quite at ease with lying on his own account, which he did during his notorious Bloomberg speech in January 2013 when he stretched the lie beyond breaking point. "Norway is part of the single market - and pays for the principle - it has no say at all in setting its rules: it just has to implement its directives", he declared.

If Mr Cameron didn't know that was a lie, he could easily have found out. As prime minister, it was his responsibility to find out, and tell the truth. But these days, and especially in relation to the Brexit debate, lies have become part of the normal currency of politics, delivered routinely and repeated often, with rarely even a hint of an apology when the lie is found out.

Perversely, the lies on Efta/EEA have been repeated by both sides, but perhaps none more egregiously than by Peter Lilley who described the EAA as an organisation "devised for countries whose governments wanted to join the EU but whose people were reluctant", adding: "It is an ante-room, not a departure lounge".

Imagine then how the current situation might be different had the truth been told, primarily that the EEA was devised as a mechanism for European countries to participate in the Single Market without having to commit to the political integration involved in full membership of the EU.

How different would it have been if there have been an honest, open discussion about influence, and decision-shaping? Not only would there have been the two-pillar structure to explore, but the more informal political mechanisms and the role of global bodies and the ability to shape the rules before they even reached the EU.

Less frequently discussed has been the ability of nations such as Norway to initiate or sponsor global conventions such as the Convention on the Conservation of Antarctic Marine Living Resources (CCAMLR) where it has been able, through this means, to protect a vital economic interest in the form of the Antarctic krill resource.

We saw a similar dynamic with Norway's involvement in the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal, where it helped shape the regulations and the regulatory system which were subsequently adopted by the EU.

For too long, though, people have been content with the lies and, of a single group beyond the media, the most common transgressors seem to be Members of Parliament. These are people who, in terms of information resource, are fabulously wealthy.

Not only are they paid to employ their own research staff, they have access to a world-class library and research facility that any university would kill for. They have, though the medium of parliamentary questions, oral and written, access to ministers and though them the civil service, and they can write personally to any minister and expect answers.

Collectively, they have their select committees, their cross-party interest groups and, in the wider world, MPs (or their researchers) only have to pick up a phone to arrange a visit to virtually any commercial facility in the country – and many more – where endless numbers of people are only too pleased to explain how things work.

Yet, for all that, the bulk of the MPs who we encounter seem to be the most ignorant people on the planet, unable even to master the basics and prey to just about every myth and falsehood on Brexit that it is possible to imagine.

And so we have corrective seminars in a far-off city, delivered by anonymous bureaucrats from an organisation that is scarcely known outside its specialist field. There, the truth is spoken, to a gathering attended by not a single MP and probably none of their staff either.

Thus, in the wider world, the lies and misunderstandings remain unchecked and the distortions which poison the Brexit debate continue to exert their malignant influence. The truth will out, they say. But nobody is listening any more. The liars have inherited the earth.



Richard North 18/04/2018 link

Brexit: the exercise of power

08/04/2018  


Booker only does a short Brexit-related piece in his column this week, but one nicely calculated to tweak the tails of the "ultra" Brexiteers.

One of those many Brexit "elephants in the room" which remain invisible to politicians and the media, he writes, is the amount of laws which now originate from global bodies and are then just passed on by the EU. So we will still have to comply with them after Brexit.

This is a point I have been banging on about forever, and one he raised in his column on 26 January 2013 - over five years ago. Booker and I both have raised the issue many times, and we're far from being alone. But it is very clear that the point has not registered with the majority of pundits, and hardly at all at Westminster.

That is especially the case with the EU's Single Market, where over 90 percent of the areas covered come within the purview of international bodies (or regional bodies such as UNECE) and are, therefore, potentially subject to international standards determined at a higher level than the EU.

Given the state of ignorance in Westminster, it is inevitable that the report from the Brexit select committee which looked at the Efta/EEA option failed to record how this affects Efta state members of the EEA.

Unlike EU-EEA members, where the EU represent them on international bodies and has exclusive competence on trade policy, each of the Efta states represent themselves on these bodies and, depending on how they manage and prioritise their activities, can have significant influence in shaping global standards.

This is far more than the mere decision shaping that Efta claims, where even small states such as Norway can set the agenda and, by concentrating on areas of economic (or political) interest to them, can often bring to fruition standards that they have initiated.

I've discussed the process on the blog many times, and of the many posts I've published,this one where I interviewed Anne Tvinnereim in Norway in August 2013 still stands out. It was one of a series of interviews we did for a film funded by the late Peter Troy on the Norway option.

Three other blogposts (here, here and here - the latter with a six-minute You-tube interview) came from an interview with Bjorn Knudtsen, a Norwegian vet who chaired the Fish and Fisheries Product Committee of the Codex Alimentarius, demonstrating how the process of influencing international standards works in practice.

These interviews and much more went to inform the writing of Flexcit and, in particular, Chapter 9 (page 178 et seq). This makes Flexcit still a highly relevant document and one which still takes the subject far beyond the limited understanding of the likes of the Brexit select committee.

The relationships are illustrated in the diagram above (also taken from Flexcit – and one submitted to the IEA as part of its botched Brexit competition) – which shows an entertaining situation where a country such as Norway can frame a standard which is then adopted by a global body and then turned by the EU into law which then becomes EEA law which is then, finally, adopted by Norway which started the whole process off in the first place.

It says much for failure of the media and the politicians (to say nothing of the referendum campaigns) that this dynamic is still so little known or understood, and how profoundly ignorant so many of our Brexit pundits remain.

Given the limitations of space in his column, Booker can only allude to such issues and it is too much to expect that his comic of a newspaper would give him more space to develop an issue, of which none of its "stars" seem to be aware.

However, Booker does get to write about another example, one raised by the continuing furore over the decision that our new blue UK passports should not be made in Britain but by a Franco-Dutch firm.

By many, this is being blamed on our slavish obedience to the "EU's procurement rules", which ordain that government contracts must be offered internationally and go to the lowest bidder. But, says Booker, even after Brexit we will still have to do this under the rules of the WTO: those very rules which ultra-Brexiteers fondly imagine will somehow solve all our problems even if we leave with "no deal".

What is even less known is that the format and contents of passports are also all dictated at global level, for historical reasons by the International Civil Aviation Organisation – as we discussed in this blogpost and mentioned by Booker in his column at the end of the year.

Thus, he wrote, virtually the only detail we will be allowed to choose for ourselves will be their colour and, of course, the right to remove the words "European Union" from the front.

All this will do though is put us on a par with the other independent countries making up the European Free Trade Association. And the light-blue colour we seem likely to choose is the same as that already used by little Iceland. So much for this "expression of our independence and sovereignty" as a "proud great nation". Going further down the line, we find that that the decision in 1981 to adopt the burgundy colour was non-binding and the UK government could have decided to retain the original colour.

As for the general rules on the use and recognition of passports, these stem from the 1920 Paris Passport Conference which led to the 1925 memorandum produced under the aegis of the League of Nations. This laid the international foundations of the global passport system.

This existence of an upper-tier of international rules led me to develop the concept of the double coffin lid back in November 2013, redolent of the victim in a horror movie, trapped alive in an as-yet unburied coffin. Having broken through the lid in a bid to escape, he finds to his consternation that there is another lid over the first.

So often with EU laws, when we examine their provenance, we find that they have international origins. Thus, much of the process of Brexit is going to be one of discarding EU law only to find the "double coffin lid" of international law replacing it. Ultimately, there will be very little change in the laws that govern us.

This necessarily begs the question as to why leaving the EU is so desirable. The answer is that, in theory, Brexit gives us the ability to reject international rules before they apply. However, many international agreements that we sign are binding and create little choice when it comes to adopting their requirements. In or out of the EU, we would be bound by them.

The crucial difference, therefore, has to be found elsewhere. And that is in the ability to influence and shape the rules that will eventually become EU laws before they reach the EU. Outside the EU, we regain the ability to shape the international agenda that was relinquished when we became part of the EEC.

For sure, as an individual state, we have less influence than when working as part of a bloc. But there is little merit in successfully being able to force through rules by weight of numbers that we didn't want anyway – as is so often the case.

Nevertheless, playing the international field is not the easy option – and nor is it likely to be cheap. Where the EU represents us on international committees, it often saves us the considerable costs of sending our own people and providing the administrative support. With thousands of technical committees in existence throughout the world, the cost of full participation will cost hundreds of millions.

Then, very often, the heft that a representative can deliver will very often depend on the technical case that can be presented. The EU scores here by devoting billions of its multi-billion annual research programme to standards development. To match the EU (and the US), the UK will have to fund substantial programmes of its own.

All of that would give us much greater control and that, in the final analysis, is what Brexit is all about. But it is rash to assert that there are financial savings to be had. The exercise of power costs money. And that is a lesson we will need to re-learn.



Richard North 08/04/2018 link

Brexit: fainting with damn praise

05/04/2018  


Exercising steely self-discipline, I am leaving the government's handling of the Salisbury poisoning and returning to our normal beat.

There are, in fact, multiple issues demanding attention, but the one of greatest immediate interest is yesterday's report from the House of Commons Committee on Exiting the European Union. This is entitled, "The future UK-EU relationship", produced under the chairmanship of Hilary Benn. It should be noted also that Jacob Rees-Mogg is a member of this committee.

The subject matters is an exploration of six possible relationships (or combinations). Listed are Canada's Deep and Comprehensive Free Trade Agreement (CETA), the Ukraine Association Agreement, the Swiss agreements, the EEA Agreement with Norway, the Customs Union with Turkey and, finally, what amounts to a non-relationship, the WTO option.

In producing its report, the committee is doing something we did in Flexcit more than four years ago and has been done by sundry pundits before and since. It is quite remarkable that the committee thus felt it necessary to repeat the exercise, and even more remarkable that there is any need for it.

Nonetheless, such has been the noise level and the amount of misinformation around the subject that such a report is indeed a necessary corrective – albeit that the recent track record of select committees on exploring and reporting of Brexit-related issues has been less than stellar.

As to whether the committee is even capable of such an undertaking is debatable, to the extent that one is reminded of Samuel Johnson's comment after being told by Boswell that he had been at a meeting of the people called Quakers, where he had heard a woman preach. Johnson had replied: "Sir, a woman's preaching is like a dog's walking on his hind legs. It is not done well; but you are surprised to find it done at all".

With that, we see the committee setting fifteen "key tests" by which any deal agreed should be judged. These are quite lengthy, with just the summary running over the page, but including certain predictable issues.

First and foremost, the committee wants the Irish border to remain open, with no physical infrastructure or any related checks and controls. It wants to maintain existing levels of cross-border co-operation on crime and terrorism, retaining involvement with Europol and the European Arrest Warrant and continuing to participate in the EU’s information-sharing systems. It then wants institutional and decision-making frameworks which enable the UK fully to participate in foreign and security co-operation.

As one might expect, it wants there to be no tariffs on trade between the UK and the trade in goods must continue to be conducted with no additional border rules or rules of origin checks "that would delay the delivery of perishable or time-sensitive deliveries or impede the operation of cross-border supply chains". Furthermore, there must be no additional costs to businesses that trade in goods or services. However, the UK must seek to maintain convergence with EU regulations in all relevant areas in order to maximise access to European markets.

Next, UK providers of financial and broadcasting services must be able to continue to sell their products into EU markets as at present, UK providers of financial and other services should be able to retain automatically, or with minimal additional administration, their rights of establishment in the EU, and vice versa, where possible on the basis of mutual recognition of regulatory standards.

There must be no impediments to the free flow of data between the UK and the EU; any new immigration arrangements set up between the UK and the EU must not act as an impediment to the movement of workers providing services across borders or to the recognition of their qualifications and their right to practise.

The committees also wants the UK to continue participation in the European Medicines Agency, the European Aviation Safety Agency, the European Chemicals Agency and in other agencies where there is a benefit to continuing co-operation.

The UK must also continue to participate in the Horizon 2020 programme, the Erasmus+ scheme, the Galileo project and in other space and research programmes in order to support the work of our world-class academic institutions and the importance of cultural and educational exchange between the UK and the EU 27.

And then, we are told, the UK must continue to participate in all relevant air safety agreements and the Open Skies Agreement to ensure no disruption to the existing level of direct flights. Finally, the UK Government must ensure maximum access to European markets while agreeing reciprocal access to waters and a fairer allocation of fishing opportunities for the UK fishing industry.

Exploring all these issues, however, one has to conclude that they are entirely unrealistic. There is no chance at all that the EU would agree to all these things, short of us actually remaining in the EU. This is seriously in unicorn grooming territory.

The saving grace to the report, though is that the committee recommends that, if these "key tests" are not met, and the negotiations on a "deep and special partnership" are, therefore, not successful, Efta/EEA membership remains an alternative and would have the advantage of continuity of access for UK services.

What, effectively, the committee is saying is that the UK should pursue the Efta/EEA option – even though it does not come out any say so, outright.

Nevertheless, this was enough to divide the committee, with Rees-Mogg and other "ultras" on the committee voted against the report. They were defeated by ten votes to six, leading to Mogg complaining that: "The High Priests of Remain on the select committee voted through another report seeking to thwart Brexit by stealth".

This brought a sharp rebuke from fellow committee member, Stephen Kinnock, expressing himself "baffled" as to why Mogg should respond thus, when there was "absolutely nothing in this report advocating that the UK should remain in the EU". His comments, said Kinnock, "are divisive and puerile".

And welcome though this all is, the committee have fudged the issue on Article 112 of the EEA Agreement, wrongly arguing only that it "could provide a route for the UK to operate a temporary emergency brake on free movement". This undoubtedly reflects the poor standard of witness giving evidence to the committee and the inability of MPs to avail themselves of other sources.

Rather than use these provisions, they would prefer the more permanent way of dealing with freedom of movement issues by amending Article 28, notwithstanding that this does not provide for a unilateral resolution.

Doubtless unwittingly, through this the MPs underline an essential discontinuity in their own report, when they argue that "the EEA option is available off-the-shelf and could be negotiated relatively quickly". This short sentence really does show that, at heart, they don't understand what the EEA Agreement is all about, comprising as it does, what amount to three individually negotiated and tailored agreements with the three Efta states.

With the UK's own specific requirements – not least agency participation and the inclusion of provisions on agriculture and fishing – inclusion of the UK in the agreement as an Efta state would require extensive negotiation which would not be a quick process, and more so if freedom of movement was to be tackled by way of treaty change.

Another lacuna, and a major one, is that while recognising that it is dealing with the Efta/EEA option, the committee barely considers what problems might arise should the UK decide that it wants to rejoin Efta. There is a brief passage only from one witness about Norway's view of our joining. Dangerously, one might take from the report that the committee sees rejoining a done deal.

This and other weaknesses in the report (too numerous to deal with in one blogpost) will make it eminently easy for the government to ignore it. It was surprising to see the report done, but it would have been better it if it had been done well. We cannot, therefore, even damn it with faint praise. 

But then, noting MPs' tender sensitivities, it is perhaps better if we do not praise the report at all. After all, we do not want the poor dears fainting with damn praise.



Richard North 05/04/2018 link

Brexit: washing whiter than Mogg

01/04/2018  


Under the title of: "A 'clean Brexit' could be the worst catastrophe to hit Britain for years", Booker writes in his column this week of his Somerset neighbour Jacob Rees-Mogg. He recalls that last week, Mogg was reported as predicting that, if the Government "fails to deliver a clean Brexit", this will be "the greatest national humiliation since Suez". 

Certainly, concedes Booker, "the reckless Anglo-French invasion of Egypt in 1956 to reclaim the Suez Canal brought home to us like nothing else that Britain was no longer one of the world’s great powers". As Washington threatened to destroy the pound and Moscow to "shower London and Paris with nuclear rockets", this forced us to make a swift and humiliating retreat.

But, when it comes to leaving the EU, we could have extricated ourselves completely from the EU (freeing ourselves at a stroke from three quarters of all its laws), by simply continued to trade much as we do now by remaining, alongside Norway, in the EEA.

When it comes to Rees-Mogg's idea of a "clean Brexit", though, it seems that ever more people these days are coming to view shutting ourselves out of unrestricted access to by far our largest export market, as potentially an even greater disaster.

Already we hear of many banks and other major industries making "contingency plans" behind the scenes to relocate significant parts of their operations to Ireland or the continent.

For pharmaceuticals, chemicals, aviation, the motor industry and many more, our exclusion from the EU’s fiendishly complex regulatory system, by choosing to leave not just the single market, but also the wider European Economic Area (EEA), will create difficulties that in many cases could prove insuperable.

To the irritation of many of his readers – who are quick to express their views on the comment section attached to the online version of his column, Booker has many times pointed out that most of these problems could so easily have been avoided, if we had chosen to do what most of us voted for in 2016.

We could have extricated ourselves completely from the EU (freeing ourselves at a stroke from three quarters of all its laws), but simply continued to trade much as we do now by remaining, alongside Norway, in the EEA. Our failure to think this through is confronting us with the reality of what that fatal misjudgement made inevitable.

However, as is beginning to emerge, even in the legacy media, even the middle-way option of a free trade agreement (FTA) will have much the "same impact as a 'no deal' in terms of border operations".

This comes from the British Ports Association, which represents 100 ports nationwide, with chief executive Richard Ballantyne declaring that, as far as his members are concerned, there is little difference between the options.

Even with and FTA, "new border controls on UK-EU trade are likely to be unavoidable and that delays at certain ports and important trade gateways are a distinct possibility".

Then, even if border checks in Britain are minimal, Westminster cannot guarantee that European ports will wave products past customs to ease trade. "For EU ports with UK links, full frontier checks, including customs and environmental health standard checks, could have a severe impact upon the UK", Ballantyne says.

Neither is the BPA on its own. The UK Major Ports Group (UKMPG), which represents all the leading ports in the country, is raising similar concerns, calling for "the best possible access to the single market, with minimum disruption to the movement of goods and services at UK borders".

They emphasise that changes to the car industry could badly affect the ports. If supply chains become more domestic and the volume of exports and imports subsequently falls, ports at Bristol, the Humber, Liverpool, Tilbury and Southampton could suffer, as they are relatively dependent on the automotive trade.

As we reported earlier, research by the Chartered Institute of Procurement and Supply has found that one in seven EU companies with UK suppliers have moved part or all of their business out of Britain "to reduce their exposure to any complications resulting from Brexit". Now, the institute warns of "an imminent collapse in the UK's supply chain following Brexit".

Needless to say, there is still an element of fantasy in the response. For instance, the BPA is urging the government to deliver on its frictionless promise by striking "a pragmatic deal with the EU on both customs and regulatory recognition".

It will support anything "that allows both British and European businesses to get their goods across borders as quickly as possible". Ports should "negotiate for the best, plan for the worst, declaring that increased friction to trading routes was "inevitable in any event".

And just to underline the scale of the problem, we are remined that more than 10,000 trucks pass through the UK's roll-on, roll-off ports every day and 390,000 live lambs cross the Irish land border annually. To keep trade flowing, it says, the government must ensure that "any necessary checks be carried out away from the frontier". There, of course, we have the rub. Even if we can organise deferred checks in the UK – which will be possible to an extent – there is no guarantee that EU Member States will be – or can be – so accommodating.

Furthermore, as we keep pointing out, for many sectors the prospect of border controls is the least of their problems. Whether pharmaceutical, chemical, vehicles, aviation or food products, or many more, for the foreseeable future, export will not be permitted.

Even after all this time, these issues have yet to be fully (or at all) understood by either politicians or media. The implications of the UK becoming a third country have simply not registered.

Within industry, though, the message seems to be getting through. According to the Observer (making up for lost time after its extravaganza last week), more than a fifth of manufacturing firms are planning to lay off workers to cope with the costs of Brexit, according to a survey that suggests the sector is already losing business.

Worryingly, eleven percent say that they have already lost contracts, while more than half of manufacturing companies (58 percent) said they planned to increase prices to offset Brexit. Some 46 percent said they had already increased costs to customers in the wake of the Brexit vote. Some manufacturers, we are told, are said to be trying to find suppliers in Britain to replace lost contracts overseas, known as "inshoring".

These, however, are but dress rehearsals for the real thing and, as the implications of settling for an FTA become better known, it is inevitable that there will be a political backlash. The main questions relate to form it will take and how it will be triggered.

Looking at the Brexit timescale, there are several possibilities. The first major trigger point may occur at any time during the transition period, if enough MPs come to understand quite how dangerous an FTA will be.

Probably the only option available to the government will be to see an extension of the transition period, whence we would see the extreme, Rees-Mogg faction splitting off from the Conservative Party, in protest. The result could then see a realignment of centre MPs from both parties, leaving a "moderate party", possibly under new leadership. This would then push for the Efta/EEA option.

The next major trigger – as I see it – will be after the general election in 2022, held after the electorate have experienced the disaster of an FTA. Then I can see a hung parliament and the formation of a four-way coalition (including the SNP), with the government this time pushing to rejoin the EEA, via Efta.

The difference in the scenarios lies between whether there is action before or after disaster strikes, but in each event the outcome takes us closer to an EEA solution. Without that, there is only darkness.

The closer we get to Brexit, the greater the chances of political stresses building. But, if the disaster is not headed off at the pass, then there would seem to be a very high possibility of permanent ruptures in current political alignments, centred on or around the general election.

And out of that, what also seems sure is that the likes of Rees-Mogg will, politically, be dead meat. His "clean Brexit" will be seen for the madness that it really is and, if there is any justice, he will become another sad little political has been. The humiliation will be all his.



Richard North 01/04/2018 link

Brexit: Armageddon on hold

26/03/2018  


I wonder if there could be anything more dispiriting than watching Andrew Marr interview David Davis on his show – other than having to go back and read the transcript afterwards?

Between the soft questions and stupid answers, you end up no further forward and, at the end of the programme, just an hour longer. As far as the Irish border question goes, for instance, Davis is still prattling about Authorised Economic Operators and the use of technology to avoid a hard border, and even calls in aid the European Parliament report produced by Lars Karlsson, the former head of the World Customs Organisation.

By coincidence, this was picked up by Booker in his column yesterday (no paywall) when he noted that "our more reckless Brexiteers" have since last November waxed lyrical about the report.

To them, it seemed to offer a miraculous solution to an intractable problem, more so as its author was able to claim impeccable credentials. In one fell swoop, he presented the answer to the Irish riddle, arguing that it lay in a version of the system that allows goods to flow pretty freely between Norway and his native Sweden.

Helpfully, to a wider audience, Booker recorded how, last Wednesday, Dr Karlsson had been attentively received by the Commons Brexit committee, to lay out his plan for a "smart border" between the two parts of Ireland, which could resolve the impasse that for months has threatened to derail Brexit talks.

The only snag, he tells his readers, was that, as a customs man, Dr Karlsson focused entirely on "customs controls", completely failing to address those other "border controls" which are by far the more serious part of the problem.

Nothing he said would do anything to avoid the need for Border Inspection Posts, where, under EU rules, all live animals and "products of animal origin", from milk to fish, will require inspections by officials wholly unconnected with customs.

The same applies to the Designated Points of Entry required to inspect all plant and vegetable products (right down to the wooden pallets used in transporting them).

All these items, Booker says, "form a very significant part of the currently "frictionless" cross-border trade between the two parts of Ireland, worth billions of pounds a year. But leaving the EU will make a "hard border inevitable".

The terrifying thing, though, was that not a single MP seemed to realise that what Dr Karlsson was offering would solve nothing at all; any more than they grasped that the reason why goods can flow so freely between Norway and Sweden is that they are both in the European Economic Area, which Theresa May is determined we shall leave.

Thus, we ended up with another example of Brexit wishful thinking: the blind again leading the blind.

If it were not for Booker, though, this little episode would have got even less publicity than it did, reflecting the gradual withdrawal of the media from reporting the technical details of Brexit.

This is almost a re-run of the 1970-72 accession negotiations where Con O'Neil reported in his book that, "towards the end of the negotiations, journalists in Brussels had become so thoroughly bored with the multiplicity of highly technical subjects still under discussion and were ready to be content with fairly superficial information".

Some 46 or so years later, the media haven't even got to the halfway mark before giving up the ghost. Thus, while the newspapers this weekend should have been devoted to an analysis of Mrs May's "surrender", the main preoccupation was the Observer story on the machinations of Vote Leave.

Yet, in some instances, it's perhaps just as well that the media is taking no notice of proceedings, not least the day following Dr Karlsson's evidence when the Brexit Committee had David Bannerman in to talk about his "SuperCanada trade model".

This, presumably, is a re-worked version of his earlier EEA-lite plan from four years ago, calculated to capitalise on the latest fashionable nostrums.

Reading it, we suffer some of the same sense of depression that we get when confronting the outpourings of David Davis – yet another pompous, elderly white man who really doesn't know what he's talking about, and insists on taking every possible opportunity to demonstrate that fact.

From his evidence, what especially rings the alarm bells is his casual discussion about conformity with standards, where he expresses preference for "mutual recognition" as against equivalence, as if the former was actually on offer – or even attainable – from the European Union. But once again, we get the MPs sucking up the misinformation, in this case with the questioning eagerly led by Jacob Rees-Mogg.

Behind the scenes, EUReferendum.com readers, with a far better grasp of the issues, are talking to their own MPs, but it is an uphill struggle. Against the legions of false prophets and the indifference of the media, the task of informing our representatives is almost beyond the scope of mere mortals. As I've observed before, the tragedy is that these people will have to learn the hard way.

Nevertheless, although we will be watching with interest today, so see what Mrs May reports to the House of her Brussels adventure, it looks as if we must start getting used to the idea that the "vassal state" transition will go ahead – in all probability, virtually unchanged.

The implications of this will take a while to sink in, but the most important thing it does is turn Brexit day on 29 March 2019 (or the day after) into a non-event. For all practical purposes, we will still be in the EU. As the status quo option, it will ensure that the traffic runs freely through Dover to the continent. There will be no queues, no shortages in the shops and no great drama.

No doubt, there will be those who will see in this the opportunity to dismiss our fears as "scaremongering", but if all Mrs May has got in the locker to take over when the transition period ends is a Canada-style free trade area, then she has only kicked the cannery down the road. The cliff-edge will still be there, looming on the horizon.

In many respects, though, it will be a slow-motion disaster, with Brexit casting a long shadow. The prospect of quitting the EU, says Reuters, "has hurt sentiment in Britain's finance industry for longer than the global financial crisis that plunged economies into recession and destroyed some of the world’s biggest banks".

There seems to me, though, no point in expecting either media or politicians to recognise the danger (those that might want to prevent it) – not until it's too late. Their institutions have long since shown their inability to cope with the detail required, and I can't see things improving on their own.

Yet, with Armageddon on hold, the media is free to play its shallow games and, for the next week or so we may have to tolerate still more coverage on the Cambridge Analytica / Vote Leave drama that the Guardian group is working so hard on.

There may even be useful spin-offs from this, especially if it weakens Mrs May's loathsome foreign secretary, and damages some of the figures behind Vote Leave. Even then, it is a distraction we could do without, even if we have a year or more to think about what to do when the cliff edge approaches once again.

Oddly enough, despite those who were so keen to predict its demise, Flexcit is even more relevant, as it still points the way to a workable departure. And never more has The Harrogate Agenda been necessary, if for no other reason than to escape the political tribalism about which Sam Hooper writes so eloquently.

In the early autumn, we've been thinking in terms of holding a conference in London, under the EUReferendum.com and/or THA banner. It would be helpful to have readers' observations on the utility of this, and how we might proceed. This might be a better option than simply counting down the days to disaster.



Richard North 26/03/2018 link

Brexit: the poison seeps out

25/03/2018  


The Observer is going to town today, ripping into the Brexit "leave" campaign with rare gusto, publishing four pieces online in anticipation of the print copy hitting the streets.

These are a spin-off to the reports on Cambridge Analytica, with one of the stories providing a backdrop to the rest. It is headed: "Keep your enemies close: the splits and infighting behind the Leave campaigns". To this, the sub-heading adds: "The battle of the Brexiters has resurfaced in revelations over the use of campaign funds".

On top of that, we have a lengthy piece on the Channel 4 website which declares: "Brexit campaign was ‘totally illegal’, claims whistleblower".

As the details emerge, it is an ironic reflection that, as a registered campaigner, I was investigated by the Electoral Commission for failing to make a zero return on their approved form, and was considered for prosecution. I had actually made the return by e-mail because I could not log on to their dysfunctional website, but that was not good enough. I had committed an offence by not using the correct form, and had to be hunted down like the common criminal that I am.

Meanwhile, as it subsequently transpires, all sorts of dark deeds were being perpetrated by the official, state appointed Vote Leave campaign. Dirty money, apparently, was flowing freely – with what appeared to be the full knowledge and blessing of campaign organisers Matthew Elliott and Dominic Cummings.

Topping that, most likely, illegally acquired personal data were being misused for campaign purposes, with oceans of money being thrown at Cambridge Analytica and/or associated companies – now claimed to be in excess of spending limits.

None of this, of course, was of the slightest bit of interest to the Electoral Commission, until it was pushed into action. And even then, none of the details currently emerging have come to light as a result of the Commission's investigations. However, readers will be appalled to learn that, despite weeks of intensive investigation, the Commission let me off with only a warning for my heinous crime.

As to the Observer pieces, the particular relevance of the featured story it pulls together a narrative detailing some of the infighting and other unpleasantness that went on between leave factions, prior to and during the referendum campaign.

It opens by reminding us that "acrimony, distrust and recrimination have ravaged the battle over Brexit since the summer of 2016", yet "in the run-up to the EU referendum, the same toxic atmosphere characterised the relationship between some of the groups campaigning to secure Britain's EU exit".

"The constant warring", says the Observer "meant that they often appeared to be engaged in comic levels of factual infighting worthy of a Monty Python sketch". Leaving the EU was about the only thing they could agree on, but some now credit the fact that the groups were aiming at different groups of voters with helping to secure the shock result.

The two main groups were Vote Leave, which eventually went on to win the support of the Brexiters in David Cameron's cabinet, and Leave.EU, backed by prominent Ukip figures and bankrolled by Ukip donor Arron Banks. The former was headed by "lobbyist" Matthew Elliott and Michael Gove's former special adviser Dominic Cummings. 

We hardly need any reminding that there was no love lost between the groups but the Observer does recall that Banks said that Elliott and Cummings were "two of the nastiest individuals I have ever had the misfortune to meet" and that he "wouldn't put them in charge of the local sweet shop". Says the newspaper:
The increasingly bitter dispute was not just down to the big personalities involved. There was also a major prize at stake – the race to become the official "Leave" campaign group. The winner would gain greater spending powers and media time. Official organisations were granted up to £600,000, campaign broadcasts and free mailing. They were also allowed to spend up to £7m, instead of the £700,000 limit that applied to other registered campaign groups in the run-up to the referendum.
I remember this well, and seriously did not want Vote Leave to get the nomination. The trouble was that Leave.eu – fronted by Arron Banks, was no better. And our small group, the Leave Alliance, did not have the financial resources to make a credible bid. That left us the task of introducing Flexcit to these warring tribes. No wonder we had such little success.

The acrimony the dominated the groups also caused splits within political parties. While Nigel Farage was an early backer of Leave.eu, Ukip's only MP at the time, Douglas Carswell, backed Vote Leave. There were even reports of staff in Vote Leave headquarters shredding documents for fear that they were being spied upon by their pro-Brexit rivals. Banks has gone on record that he ordered a private detective to follow Elliott.

"The strategic differences were clear" claims the Observer, which argues that Vote Leave initially wanted to run an economy-focused campaign capable of winning over those considering voting for Brexit, but concerned about the consequences.

The group, it says, "soon identified that its most successful message was the pledge to use money currently sent to Brussels to fund the NHS". Meanwhile, Leave.EU would release starker, more right wing messages designed to appeal to Ukip voters and ensure that staunch Leavers cast their vote. Immigration, supposedly, "was their key battleground".  

In actuality, Vote Leave was a Tory-funded coup. Its primary purpose was never to win. First and foremost, its job was to run the campaign in such a way as to avoid causing damaging, long-term splits to the Conservative Party. 

As to strategy, polls and focus groups had been telling us that if David Cameron came back from Brussels without a credible "reform" deal, he would lose the referendum. When he not only failed to bring anything of substance home, but lied about it, we were poised for an easy win.

Vote Leave, however - anxious to avoid "blue on blue" - deliberately avoided using our most potent weapon. Instead, it featured its fatuous £350 million "lie on the bus". And basing its own campaign on a lie, it was in no position to call out Cameron's lies, either on the "EU reform" or his later dissimulation on what he insisted on calling the "Norway model". Through this, Vote Leave nearly lost us the referendum.

With the strong Tory bias within Vote Leave, it was unsurprising that there was soon internal strife. Labour and Green supporters, relegated to the sidelines, with no say in campaign strategy, left the group – showing its cross-party credentials to be a fraud. The Labour Leave group was at one time a supporter of Vote Leave, but leading members eventually broke away to campaign independently.

Says the Observer, with the infighting at its peak, some figures – including Farage and some Tory MPs – eventually threw their weight behind another organisation, Grassroots Out. The group's garish green ties became a feature in the Commons. One of its rallies saw the unlikely speaking lineup of Farage, Labour MP Kate Hoey and former Respect MP George Galloway.

As the referendum progressed, Leave.EU threw its weight behind the grassroots movement in a failed attempt to become the official pro-Brexit campaign. And if all that wasn't confusing enough, there was also BeLeave – the outfit now at the centre of inquiries.

Now, the Observer tells us with scarcely concealed glee, "the confusion that characterised the campaign groups has resurfaced, and questions are being asked about the precise nature of the relationship between them – and how they used the funds they received".

When it comes to the money, and the huge spend on "big data" though, no one is actually able to put forward any convincing arguments that this actually achieved anything. Much is made, for instance, of the fact that President Trump's campaign used big data techniques, but it must also be remembered that he lost the popular vote. Trump, as a referendum, would have failed.

Enormous claims are made of these techniques, and the use of social media but, when we caught a glimpse of how the system was supposed to work, it was singularly less than impressive. They had very little idea of what they should be saying.

Then, to put it bluntly, if social media was that powerful a tool of persuasion, by now my cupboards would be full of bootleg Viagra, I would have had several penis enlargements, be dating Russian "babes" and be planning to meet a Nigerian gentleman who wants to give me several million dollars.

With every Tom, Dick and Harry claiming credit for the referendum result, what the pundits forget is that the withdrawal campaign had been going for more than forty years. The referendum was but the very last stage of a long process, with the campaign the least important part of it.

Many of us remain convinced that we won in spite of the state-appointed Vote Leave. They did us no favours at all and their lies we disowned as not in our name. Who knows what a properly based campaign might have achieved – it could hardly have done worse than the train wreck produced by Elliott and Cummings.



Richard North 25/03/2018 link

Brexit: the worst of all possible worlds

24/03/2018  


It seems as if Russia has served its unintended purpose of distracting from the European Council and the guidelines on the future relationship with the UK. Mrs May has walked away with expressions of solidarity from the EU and Member States, claiming the deal brokered with the EU has laid the ground for a "new dynamic" in the talks.

With that, a complacent media is variously reporting that Mrs May has achieved "success in negotiating a standstill transition deal", while the Mail has the prime minister hailing the "spirit of opportunity". The Wall Street Journal even went so far as to declare: "Prime Minister Theresa May concluded on Friday what probably counts as her most successful EU summit".

This is an utterly bizarre "take" on what feels like the most ignominious surrender since Lord Cornwallis ceded Yorktown, Virginia to Washington on 19 October 1781 – on receipt of news of which, Prime Minister Lord North is said to have repeatedly exclaimed, "Oh, God! It's all over!".

In accepting the terms set out in the guidelines adopted by the European Council yesterday, Mrs May has effective opened the way to a further 21 months of subordination to the EU, without being able to take part in any of the decision-making processes that attend membership of the EU.

Not only that, the guidelines pave the way to a future partnership that "will inevitably lead to frictions in trade" and "unfortunately" will "have negative economic consequences, in particular in the United Kingdom".

In entirely uncompromising terms, the European Council has reiterated that "any agreement with the United Kingdom will have to be based on a balance of rights and obligations, and ensure a level playing field", noting that, "a non-member of the Union, that does not live up to the same obligations as a member, cannot have the same rights and enjoy the same benefits as a member".

The Council recalls that the four freedoms are indivisible and that there can be no "cherry picking" through participation in the Single Market based on a sector-by-sector approach, which would undermine the integrity and proper functioning of the Single Market.

Thus, it further reiterates that the Union will preserve its autonomy as regards its decision-making, which excludes participation of the United Kingdom as a third-country in the Union Institutions and participation in the decision-making of the Union bodies, offices and agencies.

Leaving no room for ambiguity, it states that the role of the ECJ "will also be fully respected" and, while it is ready to "initiate work towards a balanced, ambitious and wide-ranging free trade agreement", it cannot "offer the same benefits as Membership and cannot amount to participation in the Single Market or parts thereof".

At the Council, we heard that the EU "wants to have the closest possible partnership with the UK, which would cover trade and economic cooperation, security and defence, among other areas". However, we are told, the EU 27 leaders noted that UK's current positions "limit the depth of such a future partnership".

Donald Tusk told reporters, "We want to use the positive momentum in the negotiations to finally settle outstanding issues such as the solution to avoid a hard border between Ireland and Northern Ireland". He added: "In parallel, we will start our first talks about the future EU-UK relationship. Leaders will assess in June if the Irish question has been resolved, and how to go about a common declaration on our future". 

 Even to get this far, the UK has had to agree to substantial payments to the EU budget, make substantial concessions on the free movement of persons through the transition period, and to commit to a solution on the Irish border which Mrs May declared "complexly unacceptable" to any UK prime minister.

One other price we have had to pay is the effective "betrayal" of our fishermen as the UK agrees to a continuation of the hated Common Fisheries Policy.

Even then, the transition is not a done deal. The Times is reporting that this is not enough to calm the jitters of business leaders. Thousands of jobs in the City of London, it says, will begin migrating to continental Europe from next month. Mrs Mays "success" will not to stop companies in regulated areas such as finance, chemicals and pharmaceuticals from implementing their contingency plans for a so-called hard Brexit.

All aspects of the deal are linked under the principle of "nothing is agreed until everything is agreed". The companies have concluded that the chance of a failure to resolve remaining differences about the transition period, such as over the Irish border, is still too high to take the risk of not being able to trade in Europe after March next year.

According to the paper, one "senior city figure" has said that between 5,000 and 10,000 jobs of finance and support staff would move by the end of this year. Another figure advising companies on their Brexit plans said more than half of all the companies they had contact with in regulated industries were intending to go ahead with their contingency plans.

This, in fact, is only to be expected. The shape of any free trade deal that the EU is prepared to offer will not give market access to UK-manufactured pharmaceuticals, chemicals, automotive and aviation products, and a host of other products. Even cosmetics will be affected.

Interestingly, Politico.eu calls Mrs May's deal a process of "managed surrender" which, I suppose, is something more than Cornwallis managed. As a sub-heading, it declares: "London talks tough but gives Brussels what it wants".

Yet, the national humiliation is by no means over. The withdrawal talks, Polico.eu says, are likely to become even more lopsided as an unofficial October deadline for agreement on the framework of the future UK-EU relationship draws near.

Any resemblance with a negotiation among equals is purely cosmetic, it adds. And that will be a different sort of cosmetic to the ones we will no longer be able to sell in the EU and wider EEA.

Michael Leigh, a former head of the European Commission's enlargement department, sees the withdrawal process in terms of an accession negotiation in reverse. And, like our entry negotiations, the balance of power and time are, once again, not on London's side. The prospect of a no-deal Brexit is more harmful to the UK than to its continental partners and we have too much to lose.

Leigh reminds us of how, during our entry negotiations, the UK's chief negotiator Con O'Neill described how, for the accession process to succeed, we would have to: "Swallow the lot and swallow it now". It turns out, Leigh says, that "leaving the bloc is a strikingly symmetrical process".

Despite this, the "ultras" have been remarkably quiescent. One wonders if the essence of the May surrender has really registered with them. Their house journal the Telegraph, for instance, leads today with an "exclusive", headlining: "Cars to travel slower than bicycles on England's clogged-up roads within a decade". The European Council is scarcely reported, while most of the media seems to be obsessing over the sacking of a person called Owen Jones - I think.

Whether the "ultra" silence represents merely the calm before the storm or just another Tory surrender on the scale of Maastricht remains to be seen. "Ultra" leader Rees-Mogg and the other mouths alongside him will have their chance, no doubt, on Monday when Mrs May reports to the Commons on her adventure in Brussels. But something tells me we should not hold our collective breaths.

It is, after all, the combined efforts of the "ultras" that have brought us to this point, where the "least-worst" Norway option has been rejected, only for us to end up with something inestimably worse. One hopes, at least, that they are able to express a little shame for what they have done.

These people, though, are High Tories. They don't do shame, although they are past masters at betrayal. It's what they do superbly well – the only thing in which they actually excel. But, in this case, first and foremost, they have betrayed themselves – as well as those who were foolish enough to rely on them. North's first rule of politics comes to mind: never trust a Tory. The second rule is: always obey the first.

For those who might have looked to the bankrupt Ukip for salvation, all they have is an etiolated ex-leader throwing dead fish into the Thames. Farage might just as well throw himself in afterwards, for all the good he is – despite an apparent Damascene conversion, confiding recently that that the government's "biggest mistake" was not going straight way for the Norway option.

Any which way, Brexit is now going to be a matter of counting the job losses and the missed opportunities. It didn't have to be this way but, if we have a political class where incompetence seems to be its highest aspiration, I suppose we should have expected it. Now we have to clean up the mess.



Richard North 24/03/2018 link

Brexit: catch-up day

23/03/2018  


It is almost four years to the day that we received a perfunctory note from the IEA informing us that our submission for their "Brexit Prize" had not even made the final shortlist – in common with every other submission that had suggested adoption of the so-called "Norway option".

The disgusting Lord Lawson and his biased panel of judges had rigged the competition so that no such heresy made the final cut. But days later, I was able to publish the first version of Flexcit, the 98 pages which has since expanded to its current 406 pages, augmented by 17 Monographs and not far short of two million words written on this blog.

No one with any honesty can say that Flexcit didn't make a mark. After having read it, and met me several times, Dominic Cummings - of what was to become Vote Leave - know all about it,but deliberately rejected it.

His were the spurious grounds that a coherent plan for leaving the EU would be "divisive" to the Tories who were to hijack the campaign. In the event of a leave vote, the great Cummings idea was "to force a new Government to negotiate a new deal and give us a new vote". How did that work out Dominic?

As to Leave.eu, I met Arron Banks several times in his offices in Bristol and personally handed him a copy of Flexcit. We even did a special version for him, called the "The Market Solution". But, after showing initial enthusiasm, he took fright after Ukip extremists gave him a hard time. He then dumped the plan without even the good grace to tell me. That is the measure of the man.

Nevertheless, we ran our own Leave Alliance campaign, with Flexcit at its centre. And, with an online copy freely available, we registered more than 100,000 downloads. The media knew all about it, but it was quite deliberately ignored. It didn't fit the narrative.

But those four years down the line, I suppose we must be expected to hold our hands up in awe as the great Simon Jenkins finally acknowledges the value of the "Norway option, believing it "offers the only sensible way for Britain". He also tells us that: "The smart money in Brussels was always on the Norway option".

That is not to say that Jenkins fully understands its advantages – but he's closer than some. The so-called European Economic Area, he says, "was a simple 'off-the-shelf' basis for a bespoke deal with the UK".

Of course, it acquires its prestige not from us lowly creatures who have nurtured it for so long. Jenkins relies on "a favourable analysis" last month in The Economist. Even though superficial and error-strewn (it claims, for instance that Iceland has never invoked Art 112 of the EEA Agreement), it obviously impressed Jenkins enough for him to give it a punt, especially when the august journal declares that, given all that has passed: "It seems perverse now to reject the option out of hand".

Jenkins now sees the barrier to forging a new relationship with Efta, lying: "not in negotiating it but in overcoming Theresa May's belief that her fate depended on some 50 backbench leavers and the editors of the Sun and the Daily Mail. She was terrified of them".

This is typical bubble-talk, though, seeing things through the spectrum of Westminster politics, again at a wholly superficial level. In fact, the poison long predates Mrs May, stemming from when David Cameron and Vote Leave saw common cause in trashing what they insisted on calling the "Norway model".

With the media never bothering to get past the low-grade "pay-no say" propaganda of both sides, or the added canards that the option meant buying into unrestricted freedom of movement and staying subordinate to the ECJ, the "Norway option" has never stood much of a chance.

Now, however, we are perhaps beginning to see a crack in the dam. Underlying Jenkins's Damascene conversion is the same conclusion to which we are drawn: that the UK is simply running out of options. This makes Efta/EEA the obvious escape route. 

Unlike Jenkins, though, who thinks that Mrs May will "drive her hard Brexiters into sullen acceptance [of the Single Market] or resignation, my reading is that the prime minister will never back down on her Lancaster House stance.

Rather than the Jenkins's thesis that the unacceptability of the "vassal state" transition will give Mrs May the opening she needs to pursue the Norway option, it is more likely that she will try to force the transition settlement through the House, regardless of the opposition.

Like the Financial Times, I tend to the view that Mrs May will abandon her current "red lines" and accept any deal she can get. In this, she can always rely on her back benchers. Confronting electoral oblivion, they will cave in and back their leader – just as they did in the final Maastricht vote.

Thus, I don't see a sudden change of heart coming from No. 10 – any more than I see the media suddenly recognising our role in the debate, and the fact that we have done more than most to keep the Efta/EEA option alive.  

But that, as we have so often observed, is the way the media works. Nothing exists until they have discovered it or "invented" it for themselves. And such is the fear of independent political blogs, and especially serious and well-informed blogs such as this one, that they will go to any lengths to avoid drawing attention to them, or acknowledging their work – even if they draw heavily on our material when it suits them.

A classic example of this parasitic relationship comes with Ian Dunt of politics.co.uk who has made a career of lifting other people's ideas from blogs, twitter and other independent sources.

Nonetheless, for all his assiduous "borrowing", he has only just noticed that "Free market extremists" are hijacking the "Brexit trade chaos". Picking on the recent Policy Exchange report, he regales us with its dastardly plot, whereby it is "demanding Britain unilaterally reduce its tariffs as part of a potent new Britannia-rules-the-waves trading adventure".

The intent is, says the egregious Dunt, "to use Brexit as a hard reset on British society, eradicating the protections available to struggling industries and unleashing a kind of Viagra-capitalism. It's basically Thatcherism 2.0".

Never mind that unilateral tariff reduction is Minford's agenda and that we've been banging on about it for several years. Never mind the close relationship between the Policy Exchange and Legatum, and with the IEA. Dunt is obviously behind in his reading and is only just catching up. Soon enough, he will "discover" this and claim it for his own.

Meanwhile, the rest of the media is indulging itself in the ongoing drama of the blue passports and the news that the printing contract could go to a Franco-Dutch company.

Perhaps the most entertaining comment comes from the Evening Standard. "Surely", it observes, "this is exactly the kind of global free trade the Brexiteers told us they were all in favour of? Britain benefiting, as the free market delivers the most competitive product to our citizens".

Rubbing salt in the wound, it goes on to say, "That's certainly what they once claimed. Jacob Rees-Mogg said 'free trade puts consumers first and lowers prices for all'. Yet he, and a host of other Brexiteers, now tell us that the new passport contract should have been awarded to a British firm - not because it offers a better product at a better price, but for the simple reason it is based in Britain".

But, in their rush to point out the EU dimension, none of the media pointed out that, even after Brexit, we will still be signatories to the WTO Agreement on Government Procurement. Ironically, the likes of Rees-Mogg, so keen on WTO rules, would still – most likely - find his treasured passports printed abroad.

Thus, even when they do their trivia, the media so often miss the point. But in this case, we hadn't done it on the blog for them to scavenge. No doubt, in fullness of time, the media will catch up once more, and discover the WTO link all by themselves. That is what they do.



Richard North 23/03/2018 link

Brexit: a solution at hand

22/03/2018  


If the increasingly impotent politicians wanted any guidance as to how to deal with the nightmare of a post-Brexit Irish border, all they have to do is look at the EEA Agreement. Right from day one, this has been staring them in the face.

In particular, they should be looking at Chapter 3 (Article 21) and then Protocol 10 on the simplification of border controls and formalities, and Protocol 11 on mutual assistance in customs matters.

As one might imagine, though, these are the provisions which form the regulatory basis for trade between Norway and Sweden, a border which is relatively free-flowing but not entirely frictionless. Truckers can find that clearance during busy periods can take as long as an hour and a half to get their loads cleared.

As a result, numerous voices have argued that, for all its advantages, the so-called "Norway option" would not provide an entirely adequate solution for a border-free Ireland.

But what the pundits fail almost completely to understand are two things. Firstly, the nature of the EEA agreement is that it is infinitely flexible. Neither the Agreement nor the Protocols set out the finite details of the arrangements and such as are agreed can be changed through established mechanisms via the EEA Joint Committee.

These changes can be introduced either as specific amendments to the EEA Agreement of via EEA relevant legislation promulgated by the EU and adopted into the EEA acquis. There is no technical limit to the number of changes, nor the frequency, permitting a process of ongoing development.

Secondly, and having regard to the first point, the Norwegian land border with Sweden – which has been continually under scrutiny as the possible model – is considered to be unfinished business. With technological and procedural enhancements planned over the next ten years, the movement of goods is expected to be even smoother than it is at present.

Many of the limitations on freedom arise from policy differences between Norway and the EU, and especially in relation to VAT, duties on alcohol, tobacco and vehicles, and from minor differences in the rules relating to the import of medicines, waste , explosives, fireworks and hazardous substances.

However, with online registration of controlled imports, with prior issue of transit permits, it is anticipated that vehicle traffic through existing customs posts will be reduced by as much as 70 percent within five years. Many of the goods which currently require physical checks will be routed to sites away from the borders, where they will be cleared.

One exception would be animal and plant material but this problem is much reduced because of the adoption of the "official controls" on foods of animal origin – and the plant equivalent - removing the need for border inspections for produce from EEA states.

The take-home point from all this, therefore, is that while the Sweden-Norway border, as it stands, is an example of what can be achieved under the EEA regime, it is not the definitive model and would not have to be copied exactly if applied to Ireland.

Any Irish border arrangement would come out of a bespoke agreement which would take into account the special needs of the island and, even then, would be amenable to continuing development and improvement. But, like Norway, where the Union Customs Code was adopted and entered into force in October-November 2013, while its substantive provisions starting to applying in May 2016, the UK would also continue with the UCC.

One special feature that could be adopted, though, is the border agency cooperation system. In 1960 and 1969 respectively, Norway signed agreements with Swedish and Finnish authorities, This allows a division of labour where the national border authorities of each country are allowed to provide services and exercise legal powers not only on behalf of their home state, but that of their neighbouring states as well.

When goods are exported from Norway, either a Swedish, Finnish or Norwegian customs office may take care of all paperwork related to exportation from Norway and importation into the before mentioned countries. This is also the case when goods are imported into Norway.

As a result it is unnecessary to establish customs offices and deploy customs officers on both sides of the border. It is decided through bilateral negotiations which country or countries will manage a border post, as well as the allocation of costs.

Thus, if trucks do have to stop, it is only at one customs checkpoint. Then, each country's enforcement personnel have the right to operate up to 16km (10 miles) into each other's territory, with mobile inspection units operating within the zone.

Altogether, a "bespoke" EEA system, melded with the latest technology, would resolve all the underlying problems in Ireland, with the border as near invisible as makes no difference. Controls would be applied, but there would be no barriers to traffic at the borders.

The problems, therefore, are neither technical nor procedural, but political. They stem entirely from Mrs May's decision to take us out of the Single Market (EEA). And, despite the blathering of the masses, the customs union is completely irrelevant. Within the EEA, tariffs and quotas disappear. A separate deal on ROO can also be accommodated within the agreement, and we retain our AEO approvals.

Turning it round, there is no solution to the Irish problem without the UK's participation in the EEA Agreement. The barrier, then, is Mrs May. Either she has to change her mind or she has to go.

Given that she does not change her mind, possibly the time for her to go is after the 29 March 2019, when we actually leave the EU. Then, under a new premier, the UK could use the transition period to negotiate with Efta, with a view to rejoining, and with all the EEA contracting parties with a view to rejoining the EEA.

If both coincide with the end or the transition period – which is the status quo option – then we will have administrative continuity and disruption will be minimised.

On that basis, the Efta/EEA option is not dead – merely delayed. And if we follow the principles of Flexcit, the current proposed transition becomes a transition to a transition. However, we cannot rule out negotiations during the transition period on reform of the EEA, to incorporate co-decision on rule-making, as Delors originally proposed.

Any solution though, will require a vastly improved level of competence on the UK side, together with a far better appreciation of how the EEA Agreement is structured and how it works. Moreover, the mantras have to be ditched, and people need to understand that the EEA is, for the moment, the only game in town.



Richard North 22/03/2018 link

Brexit: getting absolutely nowhere

21/03/2018  


"You pays your money and you takes your choice". The saying, incidentally, was used by Mark Twain in 1884, at the end of chapter 28 of ''Huckleberry Finn".

Applying it to the modern day, you can read the BBC and it will tell you: "Swedish expert offers post-Brexit Irish border solution". The gist of the story is that, according to customs expert Dr Lars Karlsson, there is a technical solution to keeping an open border in Ireland after Brexit.

Go to the Belfast Telegraph and you will get much the same story: "No physical border possible, customs expert tells MPs". This is a reference to Karlsson's evidence to the European Union Committee yesterday. It is possible to have no physical infrastructure on the Irish border after Brexit, he says, but only if the political will exists in a best-case scenario.

But, if you end up with the Irish Times, you get a different spin. The headline declares: "Post-Brexit Border unlikely to be frictionless, Swedish expert says". And this time we have Karlsson conceding that "crossing registration and CCTV" – required for some versions of his border scheme – are "too much" for some.

For the sake of completeness, though, this is the option preferred by Snake Oil Singham, who endorses Karlsson's report written for the European Parliament in November 2017, with the somewhat wordy title: "Smart Border 2.0 Avoiding a hard border on the island of Ireland for Customs control and the free movement of persons".

Says Singham: "It will be hugely beneficial to have a bilateral border process in operation, as is the case in the Norway/Sweden border, and as described in the 'Smart Border 2.0' report for the European Parliament by customs specialist Lars Karlsson".

And, of course, Karlsson, president of KGH Border Services; Former Director of the World Customs Organization and Deputy Director General of Swedish Customs, is the expert. He has that perfect combination of a gold-plated cv, years of experience and all the prestige you could ever ask for.

But he is also the classic example of the narrow subject specialist, so constrained by his own discipline that he is totally blinkered, knowing nothing of the world outside his domain. As a result, although he delivers his evidence with enthusiasm, confidence and enormous authority, when it comes the Northern Irish border, his report is of next to no value.

What is extremely unhelpful about his work is that it looks at the customs issues, reflecting his blinkered approach to the subject. He is, after all, a customs specialist. But, despite the manifest inability of so many to appreciate the reality, there is a great deal more to border controls than just customs.

Not least, and by no means exclusively, there are the all-important "official controls" covering the movement of animals and foods of animal origin – the so-called sanitary controls, requiring veterinary inspection at Border Inspection Posts (BIPs). Fish and fish products also come under the official controls, requiring a separate breed of food inspector to monitor them.

Separately, there is the huge raft of phytosanitary controls, from plant health certification, to the monitoring and certification of timber products – including the ubiquitous pallets used to transport goods – and foods of plant origin: fruit and vegetables, but also nuts, spices, cereals and much else. Throw in animal feed and you have a huge range of goods, most of which must go through what are called designated points of entry.

Yet, in Karlsson's report, you will see is only one, incidental reference to phytosanitary requirements, no reference to sanitary controls, not a single reference to border inspection posts or designated points of entry, no reference to the EU's "official controls" and no mention of veterinary inspections.

As we well know, by far the greater proportion of vehicle inspections are required for sanitary and phytosanitary purposes, respectively in Border Inspection Posts and Designated Points of Entry, where presentation is mandatory before the goods can be submitted for customs clearance. The system is entirely separate from customs, and their officials take no part in the process.

In his report, Karlsson takes a special look at the Sweden-Norway border, offering the border control system as the starting point for a more comprehensive system. Using the best of available technology and systems, grafted on to the Sweden-Norway system - he believes we would provide a frictionless border between the two Irelands.

But, with the focus entirely on customs, he fails to take into account that both countries are in the single market, one in the EU and the other and Efta/EEA state. Both adopt internally the "official controls". Therefore, neither country treats the other as a "third country" and there is no application of official controls at the border, and no requirement for phytosanitary controls.

Nor are these minor or incidental omissions. Karlsson is clearly out of his depth. In his evidence to the select committee yesterday, he talked about "trusted trader" schemes to deal with agriculture. In slightly more detail, he tells the Irish Times that: "Checks under sanitary rules, a key regulatory area for agricultural trade, could be covered under the trusted trader arrangements".

Clearly, the man has no knowledge of non-customs systems. The AEO "trusted trader" certification is a customs system and has no bearing on sanitary or phytosanitary issues. The EU does not operate a preferential access system to BIPs and DPsE and, under WTO rules, they are required to give access on the same terms, in a non-discriminatory manner, to all third country users.

Then, crucially, this does not get past the central problem that the facilities do not exist at present and, should they be provided, they would constitute hard border infrastructure, confounding the pledge to avoid this. The very requirement means that there will be a hard border.

Mind, if Karlsson gets it wrong, he is not alone. Shanker Singham, the self-appointed expert in all things to do with trade, goes spectacularly off the rails, drivelling about mutual recognition (of both regulations and conformity assessment) for meat products and animals, ignoring completely the existence of official controls.

At the stroke of a pen, so to speak, Singham invents his own private, unique world where over fifty years of community legislation and the entire food control acquis disappears in a puff of smoke, miraculously paving the way to a frictionless border.

Failing this, he asserts that that the EU "has a formal Mutual Recognition Agreement with New Zealand that lists a number of sanitary measures in animal health and animal derived products where the parties have agreed recognition of equivalence, and associated reductions in border checks".

He also assets that "CETA also includes a protocol in similar terms". In Singham's miraculous little world, therefore, for the UK and EU "it would be reasonable to expect, at least while the respective regulations are still harmonised, to recognise not just the regulations but also the testing and enforcement regimes and thus avoid the need for controls at BIPs".

Here, for a start, Singham confuses the entirely separate concepts of "mutual recognition" and "equivalence". In terms of errors, this is akin to a car mechanic looking for the carburettor in a car fitted with fuel injection. It is a rookie mistake which rules out any claim to expertise. This is a man who simply has no idea what he's talking about.

For sure, the EU and New Zealand have an agreement which allows for "the progressive recognition of the equivalence of sanitary measures", but that in no way exempts imports of New Zealand produce from being presented at BIPs. They must go through the system just like produce from any other third country.

For sure, New Zealand enjoys a reduced inspection rate, as low as one percent for physical inspection of lamb carcases. But, as I explain here, that is a special situation.

Lamb is considered to be low risk, and a "high purity" inspection system applies to New Zealand produce, something that few UK abattoirs could replicate. And, with their more complex disease patterns and involvement in a wider range of zoonoses, such low inspection rates would never apply to cattle and pigs.

Thus, when Singham asserts that "CETA also includes a protocol in similar terms", he is just plain wrong. Canada "enjoys" inspection rates of 10-15 percent, against the normal requirement of 20 percent. And all produce has to go through BIPs.

But, God help us, this is what represents state of the art knowledge amongst the chatterati. Whether Karlsson or Singham, you have the blind leading the blind, spectacularly misleading spoon-fed MPs who haven't the wit to find out for themselves that they are being led astray.

And it doesn't even stop there. Even in Karlsson's specialist area, he gets it wrong. In assessing customs requirements, he takes no account of the fact that inspection frequency is based on risk assessment - a legal requirement under the UCC. He only makes one reference in his entire report to risk assessment. But what needs to be considered is that the Swedish/Norway border is a very stable, longstanding system, where the parameters are well understood.

With a new border between the north and south in Ireland, in the absence of experience and a lot of new systems in place - with plenty of people prepared to exploit any gaps - the border might be considered high risk - and for some years. Therefore, assessments of rates of customs inspections might be grossly under-represented, as is the resource requirement.

But if we can't get past these basics, there is no hope for us. In the hands of the ignorant, any idea of sensible planning goes out of the window. We are looking at fantasy worlds that simply don't exist, with the debate going round and round in circles – getting absolutely nowhere.



Richard North 21/03/2018 link

Brexit: what you see is green

20/03/2018  


If, for my first stage of Flexcit, I had written up the transitional agreement currently on offer to the UK government, it would no doubt have elicited exactly the same responses we're now getting from the "sell out" merchants.

They've been squeaking all over the internet, and for very much the same reasons for which they were originally complaining – the vassal state schtick they said was the problem with the "Norway option".

Now they are getting the "pay-no say" scenario that they thought they were getting but were not. And they haven't a leg to stand on. Having sabotaged any attempt to get a sensible resolution, they're lumbered with their own worst nightmare. If it was just them getting what they deserved, the current mess would be worth it.

As it is, when Jacob Rees-Mogg and others board a boat and pass by Parliament throwing fish into the Thames in protest at the alleged "sellout", as they are promising to do, we might pray for a nautical disaster which has him following them into the Thames.

Ironically, the price we will have to pay for the "transition" that Rees-Mogg has done so much to bring about is a settlement of the Irish question. That bill remains unpaid. The cannery has been kicked down the road again, with no proposals forthcoming from the UK government.

The best the "ultras" can offer is stunningly ill-informed drivel from Snake Oil Singham (now of the IEA), technically illiterate, strewn with errors and false assumptions. Needless to say, it is given pride of place on the "ultra" noticeboard CapX - but as long as this sort of stupidity is given house room by the chatterati, there is little hope for us.

Inevitably, nothing of Mr Singham's stupidity will have slightest impact on the Commission. And, in the absence of anything sensible there looms the infamous "backstop" whence, "the negotiators agree that a legally operative version of the 'backstop' solution for the border between Northern Ireland and Ireland, in line with paragraph 49 of the Joint Report, should be agreed as part of the legal text of the Withdrawal Agreement, to apply unless and until another solution is found".

This is the 'backstop" that a certain Mrs May dismissed as "completely unacceptable", saying that "no UK prime minister could ever agree to it". It could, she said, undermine the UK common market and threaten the "constitutional integrity" of the country by creating a new customs barrier in the Irish Sea.

But, not only has she caved in and is dumping Northern Ireland by apparently accepting something unacceptable, fishing also gets the "sell out" treatment. Had this travesty been proposed the day after the referendum, it would have been rejected out of hand. But now, it is been lauded as a "success" by our Brexit minister.

We have got there by a process of attrition. A totally unprepared UK government has fed its negotiators into the Brussels grinder, the outcome of which was as predictable as sending raw troops over the top to face German machine guns in the first battle of the Somme.

However, even the BBC in its TV news bulletins noted that M. Barnier had gone out of his way to point out that, "nothing is agreed until everything is agreed". The General Affairs Committee gets its bite today and then there is the European Council on Friday, which will probably rubber stamp the draft agreement. And then we're back on the treadmill.

Despite that, the idiot Davis is drooling that we've taken a "decisive step" towards a Brexit settlement. Yet, can it really have escaped his attention that the Irish question was there at the beginning, and is still there?

That reality is not going to conceal the drama of M. Barnier's presentation yesterday, where he stood in front of a backdrop and proudly declared: "What you see is green". From where he stood, you could hardly see the white – the areas where agreement has not been reached. And white, for this day, was Ireland.

If it's reality, you're after, though, cut to the Independent. It has Jonathan Powell asserting that Mrs May's handling of the border question could bring the entire Brexit negotiation "crashing down". He accuses her of committing "the worst possible sin" of having "boxed herself in". Her Mansion House speech had "not solved the substantive problems" and, in his view, "her problems on Brexit may only just have begun".

Right on cue, the Belfast Telegraph reports UUP's Nicholson saying that the backstop option for Brexit is "unacceptable", a position that will never change as long there is one Unionist MP left standing.

The Scots, on the other hand, are wound up about fishing rights. Reuters tells us that the SNP has called the current deal "a sell-out" and a Conservative MP has warned that it would be easier "to drink a pint of cold sick" than sell it as a success.

That is where it is going to get interesting. Mrs May will come back from her "triumph" in Brussels on Friday but, on the following Monday, will have to face the Commons with her report. It is unlikely to be a "frictionless" passage.

Yet, the delusions persist – and doubtless will continue. From the very start of her tenure, Mrs May has evaded reality, made worse by being surrounded by second-raters who are trapped by their own stupidity. It seems impossible for her to break out.

When it comes to the crunch, that has been the problem all along. This is not a society that can handle expertise, or one that has any respect for knowledge. And when a snake-oil salesman of the calibre of Shanker Singham can be taken seriously, his influence reaching to the the very heart of government, we are in very serious trouble.

Even now, though, there is still time to take a different route. It is unlikely that it could work under this prime minister, though, so it is time for her to go. She has already secured her position as the worst premier this nation has had to suffer in living memory, so has nothing to gain by staying on.

If by some miracle she was deposed before the current deal is separated, a new prime minister could perhaps go to Brussels and ask for an extension of time, sufficient for us to set a new course in the direction of Efta/EEA. But for that to happen, much of the dead intellectual wood surrounding the government needs to be put to the torch.

Therein lies the real problem. If the prime minister is the pinnacle of stupidity, she rests on a huge base which will be almost impossible to shift. The rent-seekers have lodged their positions and are not going to give them up easily.

Nevertheless, reality will eventually have its day. Whether on 29 March 2019 or some time later, the UK will become a fully fledged third country, whence all the stupidity will be exposed for what it is. A shock to the system is inevitable and it can hardly be less than profound.

Out of the wreckage, perhaps, we might be able to salvage something, and start again. But until the stables are cleansed, we'll not be seeing much more of the "green" of which M. Barnier was so proud.



Richard North 20/03/2018 link

Brexit: a respite from Putin

18/03/2018  

 
Of all the things that the UK might want to do as an independent nation, freed from the obligation to shadow EU foreign policy, picking a fight with Russia was probably not at the top of the list. But if we are going to take on Russia, it would be best if we understand what we're taking on.

Some interesting insight into this comes in Booker's column today when he recalls his visit to the Soviet Union in 1980 to cover the Olympic Games.

Sitting in Moscow, as the capital of the largest country on earth, at a time of high Cold War tension over the invasion of Afghanistan, it became obvious that Russia saw itself ringed on all sides by enemies, all along its thousands of miles of frontier from Nato Norway in the west to China in the east. It was a country gripped by an intense sense of paranoia.

The charge sheet against Russia in recent years may be long, from Putin's ruthless suppression of dissent to saving the Assad regime in Syria. But the one disaster the West has never understood was one entirely of its own making.

On this, there is a public figure who correctly read the crisis erupting over Ukraine in 2014. That was Tony Brenton, our ambassador to Moscow from 2004 to 2008. He recognised only too clearly that the trigger for that shambles was the hubristic desire of the West to see Ukraine, the historic cradle of Russian national identity, absorbed into the EU and Nato.

The crisis was set off by the coup whereby one corrupt but pro-Russian ruler of Ukraine was replaced by another willing to sign the agreement leading to Ukraine's EU membership.

Thus, the response of the Russian-speakers of eastern Ukraine and Crimea was wholly predictable. They wished to be ruled by their fellow Russians in Moscow rather than by some mysterious, alien bureaucracy in faraway Brussels, and were prepared both to vote and to fight for it.

They were, after all, confronting the question of why people with such a fierce sense of national identity should want to become part of an empire deliberately set up to eliminate national identity. Yet, to this day, the West remains powerless to do anything about it except make indignant noises of protest at the ineluctable consequences of its own actions.

Some understanding of this psychology might have helped inform our response to the poisoning incident in Salisbury, where finger-wagging condemnations were only going to elicit one, very predictable response.

That we are now in a confrontational situation, with the wall-to-wall coverage given to President Putin, is doubly unfortunate. Says Booker, it is diverting attention from the possibility that this week may see the near-breakdown of what have been billed as "the most important international negotiations Britain has been involved in since the Second World War".

It is now four months since David Davis, the Brexit Secretary, assured MPs that all our difficulties with the EU would be happily resolved at "the 59th minute of the 11th hour". That moment has now arrived.

The European Council meets this week to consider its "draft withdrawal agreement", still without any sign of resolution to the impasse that could prevent negotiations continuing.

The key as ever is the Irish border, which, for trading purposes, the EU insists will have to move to the Irish Sea, to protect the "integrity" of its single market, but which Theresa May insists no British prime minister could possibly accept.

To narrow it down still further, as Booker explained in February last year, just after Mrs May announced that we were to leave both the single market and the European Economic Area (EEA).

Following this blog, he reported on the disaster looming over the arrangements whereby the multi-billion-pound racing industries of Ireland, Britain and France can move racehorses between their countries to race or for sale without any hindrance.

The moment we leave, as the EU again warned on 27 February of this year, these arrangements, mandated by directive 2009/156, will lapse. As with so much else facing Britain's trade with our largest export market, up will go complex (and in the case of racehorses, prohibitive) border controls.

Last week's Cheltenham Festival, the highlight of our racing calendar, could be the last but one where those all-conquering Irish horses can appear (although "transition" might allow one more in 2020).

At least in that respect people will finally see the kind of thing we are letting ourselves in for by choosing to become a "third country", not just outside the EU but also the wider EEA (where, to avoid all these difficulties, we could have chosen to remain).

But this of course is only a small part of the story. This week seems likely to mark the moment when the "irresistible force" of Brexiteer wishful thinking collides with the "immovable object" of those implacable EU rules. And, by the way we have chosen to play it, this could be the moment when any further meaningful talks with the EU are at an end.

That, at least, was the situation when Booker left it, his column going to press on the Friday. But since then, we've had further talks in Brussels at official level and there are to be face-to-face discussions between M. Barnier and David Davis on the Monday. The leaves open the possibility that there will be a last-minute compromise that will keep the show on the road.

Perversely, one factor which could work in the UK's favour is precisely the situation which has been dominating the headlines for nearly two weeks – the Salisbury poisoning. More or less obliged to show solidarity with the UK, to avoid a public rift with a Nato ally, the Europeans may be disposed to apply temporary patches to the cracks in the Brexit agreement, and kick the cannery down the road to the June European Council.

According to The Times, what may be on the cards is the device of a political declaration on the transition. This will be provisional and still dependent on full implementation of the "Irish protocol" in the draft withdrawal agreement. Sources suggest that both sides are confident that a deal will be brokered.

As it stands, if there is no closure on the withdrawal agreement there will be no transition agreement. There cannot be a transition agreement on its own. But is some sort of accommodation isn't reached, then the Brexit negotiations come screeching to a halt on Friday.

However, the "colleagues" have far too much invested in their current stance to give much away on a permanent basis. Not least, there is Mr Tusk's credibility. If they give ground on the transition period without settling the Irish question, they will seriously weaken his authority. And in the EU, such things matter.

What could get everyone off the hook, for the time being is the one being mooted in London – the possibility of extending the negotiations past the two-year period, and then adding to the transition period. This is being suggested by the Brexit select committee, to the chagrin of committee member Rees Mogg, which itself is sufficient to commend it.

Without a fundamental shift in the UK's position, though, this can only be seen as an attempt to stall. It does not solve anything in its own right. Either Mrs May's government will have to solve the problem of how to ensure Ireland has a "soft" border, or it's game over. And if that is to be the case, many would prefer it to be sooner rather than later.

But in all this, there is something we've never really factored in. If it is going to take time for the UK to prepare for Brexit – which indeed it is – the same will apply to the remaining EU Member States and the institutions. There may be less political opposition to the idea of an extension than we first thought.

That notwithstanding, to my mind it was touch and go as to whether the talks collapsed this coming Friday. It will be hugely ironic if Putin's Russia is the immediate factor which takes the heat off. But if the respite is only temporary – then it must be, then all we've managed is to stay in the frying pan, while toasting our feet in the fire.

And maybe it will be too much to expect the headlines to recognise the real reason for any delay in execution, but I will be looking for that single line on the coming Saturday which declares: "from Russia with love".



Richard North 18/03/2018 link

Brexit: baby, it's cold outside

08/03/2018  


Now that the European Council has got its draft guidelines, I think we can safely assume that Mrs May's policy proposals, as expressed in her Mansion House speech, are now dead in the water.

Her brave new proposals, based as they were on completely unrealistic ideas of mutual recognition, were never going to fly. And yesterday, nemesis arrived in the form of European Council president Donald Tusk and his smiling henchman, Xavier Bettel, prime minister of Luxembourg.

Two hours before addressing the press corps, he told us, he had sent the EU27 Member States his draft guidelines for our relations with the UK after Brexit, and he was in Luxembourg to consult with Bettel on those guidelines that he hoped would be adopted at the European Council in March.

"My proposal shows that we don't want to build a wall between the EU and Britain", said Tusk. "On the contrary, the UK will be our closest neighbour and we want to remain friends and partners also after Brexit. Partners that are as close as possible, just like we have said from the very first day after the referendum".

With that, it was not long before he was putting the boot in, ignoring Mrs May's ideas for semi-detached membership of the Single Market. He proposed merely "a trade agreement covering all sectors and with zero tariffs on goods". Like other free trade agreements, he said, it should address services.

And in what most likely will cause a lot of grief, especially amongst the "ultras" he linked this to fisheries. Reciprocal access to fishing waters and resources, he said, should be maintained. The message there was very clear – all your fish are belong to us.

The generality is confirmed in the draft guidelines themselves. The European Council is ready to "initiate work towards a free trade agreement (FTA), to be finalised and concluded once the UK is no longer a Member State". But just so that there can be no misunderstanding, the guidelines go on to say: "Such an agreement cannot offer the same benefits as Membership and cannot amount to participation in the Single Market or parts thereof".

With the irony bursting from his script, Tusk in his statement called this a "positive approach". The simple fact was, he added, "that because of Brexit we will be drifting apart". This will be the first FTA in history that loosens economic ties, instead of strengthening them. 

In terms of slogans that go on the sides of red busses, his next sentences didn't quite make the cut. "Our agreement", he said, "will not make trade between the UK and the EU frictionless or smoother. It will make it more complicated and costly than today, for all of us. This is the essence of Brexit". Perhaps they would fit on the roof, to be relayed to us via helicopter onto our TV screens.

Nevertheless, these guidelines are very much a draft. They have not even been formally published. But, as M. Barnier and M. Juncker have both observed at various times, a speech does not constitute a negotiating position. As with Florence, for them to have any actionable status, they needed to be translated into a formal proposal.

Therefore, unless there have been communications of which we are unaware (which is quite possible), we have a situation where the Tusk is reacting to a non-proposal from the UK government, in the form of a speech from Mrs May. He has responded with draft guidelines which cannot even formally exist until they have been approved by the European Council – meeting as the 27. And this is not set until 23 March.

In strictly legal terms, therefore, yesterday's statement was a non-event. In theory, nothing has actually changed. Of course, though, everything has changed. Mrs May is holed below the waterline. The policy on which she so delicately crafted an agreement with her Cabinet has crashed and burned, shot down in flames by the EU before it could even take on the status of a formal proposal.

Yet, in the absence of the very formality which gives these things tangible effect, the May government can carry on as normal for a while, as if nothing had happened.

Some time ago, I drew the comparison with the worker who has taken a lethal dose of radiation. For a short time, before the symptoms kick in, he can pretend nothing has happened. But he's still dead – it's just a matter of time. The Mansion House speech is dying – even now its organs are shutting down. Soon it will be dead.

The lethal dose came towards the end of Mr Tusk's short statement, by way of his summary. We will enter the negotiations of the future relations with the UK with an open, positive and constructive mind, he said. But also with realism.

Instead of Mrs May's five tests, he offered us a mere two. The first was the test of balance of rights and obligations. For example, he stated, the EU cannot agree to grant the UK the rights of Norway with the obligations of Canada.

Next, there was the test of integrity of the Single Market. No Member State is free to pick only those sectors of the Single Market it likes, nor to accept the role of the ECJ only when it suits their interest. By the same token, a pick-and-mix approach for a non-member state is out of the question. We are not going to sacrifice these principles. It's simply not in our interest.

That's the epitaph that goes on the tombstone of the Mansion House speech: "It's simply not in our interest". That's why it died.

By coincidence, or not, at roughly the same time, Chancellor Philip Hammond was giving a speech. On Friday, he said, the prime minister set out the UK's vision for its future economic partnership with the European Union, in a speech which answered the call to set out "what we want". 

It was "clear" said Hammond, "that we understand this is a negotiation, where both sides will need to give and take". Our task, together with our European partners, he added, "is to deliver a Brexit that works for the UK and for the EU".

Well, what works for the UK clearly doesn't work for the EU. It's simply not in its interest. Thus, the EU is going to pursue its own version of give and take: we give, it takes. It will do so because it can, and because Mrs May has boxed us into a corner so firmly that the UK has run out of option. We take what we are given, or we go away with nothing.

By the end of his speech, though, Hammond hadn't got the message. For financial services, he still thinks we can go "far beyond what is available in ordinary third-country relationships", establishing "the most comprehensive supervisory cooperation arrangements anywhere in the world".

But, as the draft guidelines bluntly tell us, when it comes to trade in services, the UK will become a third country. Thus, the Union and the UK "will no longer share a common regulatory, supervisory, enforcement and judiciary framework".

This is not just a matter of common regulation. There are four elements to the framework, of which regulation is only one. We will, therefore, be lucky to get "regulatory equivalence", granted on a grudging, case-by-case basis, that will take years for each firm to put in place.

Hammond needs to hear the words: the agreement "cannot offer the same benefits as Membership and cannot amount to participation in the Single Market or parts thereof". Mrs May has made our bed – and we will have to lie on it.

The only false note of the day thus came from Tusk when he declared that "we don't want to build a wall between the EU and Britain". But that wall doesn't have to be built. It already exists around the Single Market, like the wall round a medieval city.

Mrs May has decided to place us on the outside and, like the song goes: baby, it's cold outside. We just got the first icy blast of that reality.



Richard North 08/03/2018 link

Brexit: only its mother could love it

13/02/2018  


Rose Monday, the day before Shrove Tuesday (13 February this year), is an important day in the Catholic German Rhineland district, where a series of carnivals are held, now famous for their political satire.

Traditionally, the usual rules of polite society are thrown out of the window and in Düsseldorf – as elsewhere – that tradition has been maintained in the form of a crude parody of Mrs May's attempts to manage the Brexit process.

The burghers have sponsored a gruesome float with a papier-mâché sculpture depicting the prime minister having just given birth to a three-eyed monster called Brexit (pictured above).

As political comment, this is not very far from the mark, the misbegotten attempts from Mrs May's government so far representing something so grotesque that only its mother could love it. And, if media reports are any guide (not that they often are, these days), we are in for something a whole lot worse.

This is to come, we are told, in a series of speeches – six in all – the first of which is to be delivered by the buffoon Johnson tomorrow in what is being trailed as an "upbeat message" about Brexit.

This will be followed by Theresa May speaking in Munich about Brexit and security on Saturday. She will not, we are reliably informed, be returning with a piece of paper in her hand, promising peace in our time.

Next week we will be suffering David Davis, who will be talking about what leaving the EU means for business. Then International Trade Secretary Liam Fox will speak about trade and cabinet minister David Lidington will explain what Brexit means for devolution.

Mrs May is then schedules for a finale when she delivers a second speech, titled Road to Brexit: A Future Partnership. Despite the title, she is not seeking to emulate Dorothy Lamour and there will be no Bob Hope or Bing Crosby in sight to give the comedy turn.

Comedy in good measure we will be getting nonetheless, with the buffoon set to lecture us on, amongst other things, regulation in the post-Brexit era. This is the man who betrayed his profound ignorance during the referendum campaign, making an utter fool of himself by claiming the existence of an EU regulation which prohibited shops from selling bananas in bunches of more than two or three bananas.

This fine grasp of the issues is – it would seem – to stand him in good stead on Wednesday when he will express that belief that any move to stay as close as a country such as Norway is to the EU (as in the Efta/EEA option) would tie Britain's hands because signing up to the same regulations would limit the ability to strike new trade deals elsewhere.

Clearly, if it is this profound level of ignorance which is driving the debate – and there is every indication that it is – then there is no hope for us at all. The cretins are in charge and will drag us down to their level of stupidity, simply because they are incapable even of mastering the basics of their trade.

Collectively, the May government is being advised, in the secret civil service analysis of the possible economic impact of Brexit, which the government was forced to release to MPs recently, that "Leaving the European Union could provide the UK with an opportunity to regulate differently across social, environment, energy, consumer and product standards".

And if that really is a serious contribution from the civil service, then the rot has spread even deeper than we feared, as the officials ignore decades of globalisation and the ongoing trend towards harmonisation of regulation at a global level. With or without leaving the EU, there is precious little opportunity to regulate differently if we are to remain part of the multilateral trading system.

Johnson's stupidity, however, is set to perpetuate the continued conflict between the "ultras" and chancellor Philip Hammond. He, with his allies, are taking a contrary view and want to retain close economic ties to the EU. Hammond, we learn, is not part of the "speech bomb" but he is jetting off to Oslo, Stockholm, The Hague, Madrid and then Lisbon next week, to discuss financial services and the effects of Brexit.

One area where there is some degree of agreement, however, lies in the area of the need for a transitional agreement, even if there is no consensus as to what it should look like. Since the EU has already put its cards on the table in this respect, the fact that "Team May" are agreed on the need for something that the prime minister asked for in her Florence speech – and to which the EU subsequently responded – doesn't seem to be a whole lot of progress.

What is emerging though is a sort of modus operandi, where the EU tells us what to do, Mrs May's cabinet goes away and talks about something completely different and then, in the fullness of time, Mrs May decides to do what the EU "suggested" in the first place.

Before we get there on the transitional period, it looks as if we're going to have go though tortuous arguments about whether the UK should be looking for something like a Norwegian or Swiss style "off-the-shelf" agreement during this "implementation period", and whether we should delay applying immigration controls.

Going way back to when I was working on the original draft of Flexcit, one mistake I made was to characterise what we were then calling the "Norway option" as an off-the-shelf" agreement.

However, more and better knowledge of the Efta/EEA option – as we now prefer to call it – has us recognising that the uniquely flexible EEA Agreement is in fact the next best thing to a bespoke agreement, allowing for a tailor-made relationship between the EU and the UK, covering our specific needs.

On the other hand, of course, the Swiss option is, self-evidently a bespoke agreement – crafted after the Swiss Federation walked away from the EEA agreement, taking some 16 years to conclude. This is entirely unique to Switzerland and could hardly serve as a model for a short-term transitional period.

We are thus, once more, seeing the same incoherence from government that we have been witnessing ever since the EU referendum in June 2016. The upper echelons of our political system are no further forward than when the votes were cast, having not even defined the basic issues which they should be considering.

For all that, we are beginning to hear talk of a temporary customs union, which would suggest that Mrs May is preparing the ground for her usual climbdown, allowing her ministers to prattle while she gets on with the job of doing what the EU tells her to do.

Today, though, we are led to believe that we will see a "position paper", setting out proposals for "the freest and most frictionless possible trade in goods between the UK and the EU", although early indications suggest that we are going to see nothing that we haven't already seen.

The first proposal suggests a new customs border with the EU could be introduced without disrupting trade – apparently to be managed by the UK, making it the first customs union in the world to be managed by just one country. The second suggests a new borderless customs partnership could somehow be agreed while the UK also signs external trade deals.

Readers may recall that such ideas have already been rejected by the EU as impractical. They are so disruptive to the principles of the Single Market that they would prejudice its integrity, something that the EU could never tolerate them.

That will leave the UK government with nowhere to go, and no options but to follow the line drafted by Brussels, making this yet another waste of time and effort. We end up with a "loveless child" of a Brexit, to which the UK electorate will have to be gradually introduced and thus given time to come to terms with the likelihood that the end of March next year will see Brexit in name only.

In the meantime, we will have to put up with the burbling Boris, and others, while the prime minister's spokesman tells us that it is "time to set out our approach to that partnership, to inform the upcoming negotiations, and to provide citizens and businesses at home and across Europe with a deeper understanding of our thinking".

I suppose such people believe what they are saying, but I would have thought that the last thing the government wants to do is give anybody a "deeper understanding" of its thinking. Not knowing is bad enough. To have our deepest suspicions confirmed could trigger a crisis the like of which we have never experienced.



Richard North 13/02/2018 link

Brexit: lost in wishful thinking?

11/02/2018  


It will come as a surprise to absolutely no one to find that the Observer thinks (if that isn't a contradiction in terms) that Theresa May's leadership over Brexit is "weak".

But it also notes that, as the leadership vacuum deepens, "the media debate continues to grow more acrimonious, couched in the toxic language of traitors, enemies of the people and secret plots to thwart democracy". Thus, the paper opines: "We have never felt further from the common ground that must be established to bridge the margin between those who voted for Remain and Leave".

Enter Booker who has devoted the lead item in his truncated column to Brexit, telling us that, with only eight months of Brexit talks left, Mrs May has locked us into an "impossible position".

To some it will come as a surprise that there are only eight months left but, since Michel Barnier has oft' expressed the wish for negotiations to finish at the end of October, that leaves us just over eight months, less the summer holidays when most of Brussels closes down.

But, as with Mrs May's lack of leaders, there will also be an almost total lack of surprise that the roots of the problem go right back to the referendum and the failure to address the "one enormous question has overshadowed all others" – as Booker puts it: How can we completely leave the EU while still retaining access to our largest single export market, worth £230 billion a year, eight percent of our GDP?

This is the infamous Single Market question, and it has always pained me that so many get bogged down in arguments about the merits and demerits of membership. To my mind, there is no question about whether we should leave it. The questions are how, when and under what terms, ensuring that any actions taken minimise the economic damage.

Immediately after Mrs May took office, and for six months thereafter, it looked as if we might have a prime minister who understood the issues, with her constant refrain that we would remain "within" the market.

But that ended at Lancaster House in January 2017 when she slammed the door on that by saying that she wanted us to leave the Single Market while somehow continuing to have "frictionless" access to it – the notorious "have your cake and eat it" strategy.

She made the situation inestimably worse with her reckless (and clearly, ill-thought-out) mantra that "no deal" was better than a bad deal, that coming from a politician who clearly had no idea what "no deal" actually entailed. Gradually, the European Commission is educating the lady on this with its notices to stakeholders on Brexit preparedness.

Much of this could have been worked out by a halfway competent researcher, and we tried our best. But the need for competent research, it would appear, rules out almost the entire political establishment and most of the legacy media.

Even yesterday, we were getting the self-important Jonathan Lis writing in the Guardian about "how that customs union works. There, he blithely informed us that:
If an open border exists between Ireland and Northern Ireland, there will be little to stop American agricultural goods – chlorinated chicken, say – from arriving in the UK tariff-free, then entering Ireland (and then the rest of the EU) untroubled by the requisite EU tax or regulation. This is why Norway, which is in the single market but not in the customs union, operates customs checks on its border with Sweden.
Like so many, he falls into the trap of believing that "customs union" equate with the absence of border checks, making the laughable assertion that, for want of a customs union, there are border checks between Norway and Sweden – notwithstanding that Turkey and the EU operate a customs union and we see lengthy delays on the Turkey-EU borders.

Collectively, the politico-media nexus seem unable to distinguish between a customs union and customs cooperation, and between the effects of the Single Market and the customs union.

Few could reliably state the difference between Efta and the EEA, and not any have demonstrated the slightest knowledge of how the EEA actually works. As, as to the so-called "Norway option", almost to a man (and woman), they trot out the mantras on freedom of movement and rule taking, untouched by knowledge and years of debate.

The lack of any attempt seriously to engage with the issues, or make any adult attempt to understand them, has been largely responsible for poisoning the public discourse, which hasn't progressed beyond primary level, despite torrent of "explainers" and "reality checks" which simply serve pile confusion upon confusion.

Thus, as Booker observes, following Lancaster House, all we have really heard since then is the sound of more doors slamming, on both sides. After 11 months of lacklustre negotiations with the EU, we still haven't resolved two of the three "phase one" issues the EU made a condition on negotiations moving on, including the Northern Irish border.

The EU had made clear that, by our choosing to become "a third country", border controls are inevitable. We have of necessity half-agreed a "transition period", of a further 21 months up to December 2020, giving us more time to put those border controls in place. But after October this year all negotiations will be at an end.

Despite that, we still haven't begun to unravel all the complexities of how our major economic sectors can continue trading with the EU once the transition is over, from chemicals, pharmaceuticals and aviation to the motor industry. These alone are worth nearly £100 billion a year.

And then, despite continued and continual prompting for the EU, Mrs May still gives us no clue of what she means by that "deep and special relationship" she hopes we might have. Yet all this and much more has now to be resolved by October.

In between ,the EU has slammed the door on our retaining those "passporting rights" that helped to make London the financial centre of the EU. We haven't begun to negotiate for those "Third Country Operator" certificates needed to allow our airliners to continue flying in EU airspace, and there is no indication that the UK government has even understood the implications of us dropping out of the European Aviation Safety Agency (EASA).

Only recently has it responded to the inevitability of UK driving licenses not being recognised in EU Member States after Brexit (or at the end of the transition period), which will now require drivers to apply for International Driving Permits. But that does not solve the problem of truck drivers' certificates of professional competence, or fleet operating licenses.

As for what will happens when we drop out of the Common Agricultural and Fisheries Policies next year, there is nothing specific coming from this government – a strange contrast with the way we were being saturated with information about preparing for the Single Market, years before it took effect.

It is hardly surprising that others are now beginning to realise that if only we had chosen to remain like Norway in the European Economic Area, most of these problems need never have arisen. But Mrs May has again slammed the door on that. So, asks Booker, where does she think this will leave us? Or is she so lost in wishful thinking that she hasn't actually got the faintest idea?

Right on cue, we then see a survey published in the Independent which tells us that the vast majority of people have little or no understanding of what the Government wants to achieve on Brexit.

In the land of no surprises, that certainly comes as no surprise. Doubtless, Mrs May herself has little idea of what she wants and, even if she did, she is torn between opposing factions of her own party and has neither the authority nor ability to implement it.

As a result, there is no dispute that, a year and a half on from the referendum, people still do not by and large comprehend what Brexit will look like. This is a failure for which we are all going to pay.



Richard North 11/02/2018 link

Brexit: select committee blues

09/02/2018  


On Tuesday, we got word from Stephen Kinnock that there was to be an evidence session in the Brexit select committee, looking at the EU's relationships with Norway and the European Economic Area.

The session was on Wednesday and we now await the transcript in order to fully evaluate the evidence.

We could have watched the video, and I did look in on the session until tedium overtook me. Predictably, given the list of witnesses, there was never going to be much of any value and dipping into the session was enough to confirm it.

Nevertheless, that did not stop the Telegraph gleefully reporting extracts which seemed to indicate that a "Norway-style EU trade agreement for the UK might not cover many areas of agricultural production".

This, the paper averred, might have "particularly severe implications for groups such as Northern Irish dairy farmers and food processing firms near the Irish border".

According to the narrative, MPs had "quizzed experts including the director of the Norwegian Institute of International Affairs, Ulf Sverdrup, who highlighted the problems with border and tariff arrangements for some agricultural or fishery foodstuffs".

As a signatory of a Efta and an EEA member, we were told, Norway is subject to tariffs on processed foods, such as a processed fish.

More to the point, Mr Sverdrup had told the committee that an initial failure to agree veterinary alignment with the EU led to truck-loads of fish "standing on the border rotting", as the border then caused substantial delays.

The UK has sought to avoid this situation in its Northern Irish position paper, the Telegraph asserts. However, it says, checks on the origin of goods would still apply.

Such examples, it goes on to say, illustrate the potential difficulties for trade in foodstuffs such as milk and processed derivatives across any future Irish-UK border once the UK leaves the Customs Union. Currently, the dairy and other food industries frequently send produce backwards and forwards between farms and processing units.

What is quite predicable about this, though, is the issue illiteracy – not least the reference to leaving the customs union – which has no impact of border checks on food.

As to "truck-loads of fish" problem, for historical reasons, Norwegian farmed salmon stands outside the EEA agreement but for the general import and export of foodstuffs, the Efta states (including Switzerland) are fully integrated into the Single Market.

Thus, wearily, I was able to post on Twitter that, typically - and largely as expected - the Brexit Committee had got half the picture and was being royally misinformed. Norway is fully covered for sanitary and phytosanitary border arrangements.

The thing is that no one needed to go through the palaver of calling in prestigious witness to waste time talking to the committee, only then to be misinformed by them. Literally, minutes on the internet would have told the committee all it needed to know.

As I remarked on Twitter, though, the committee had made a more fundamental mistake of just looking at Norway option. The Efta/EEA Agreement allows for individual, bespoke agreements for each of the Efta states. Each one is different. The UK, thus, would not be following in the path of Norway, but would have its own bespoke agreement under the EEA umbrella.

As to tariffs on agricultural products, the Efta/EEA (NIL) states have opted out of the CAP and pay their own farmers higher subsidies than the EU – which means there are tariff issues at the borders. However, there is no reason why this situation should prevail for the UK - there is provision within the EEA for elimination of tariffs between the EU and UK.

In other words, if we took the Efta/EEA route, we could (and most likely would) broker our own specific agreement on tariffs – and much else. This would not be the Norway option, but the UK option, tuned specifically to our needs. That is the advantage of the Efta/EEA option - it is infinitely flexible.

This has been pointed out numerous times on the EU Referendum blog, such as here, and I have even drawn Kinnock's attention to it. Sadly, as MPs only have a slender grasp of the basics, this is evidently too much for them to take in. Hence they are so easily misled.

So often do we see this that we find select committees becoming repositories for misinformation - sharing half-truths and misconceptions and never getting to the bottom of the issues and contributing anything of value. Small wonder they are treated (as I am advised privately) with disdain by ministers and civil servants.

If the system is to work at all, we need to see fundamental changes to it – and not just confined to the Brexit committee. In the past, we've had major reservations about the Defence Committee, which has proved just as inadequate in monitoring the MoD.

One thing I would like to see is the end of the practice where MPs on the committee each take turns questioning witnesses. Instead, it might be better if each committee appoints its own advocate (who might be a barrister) to conduct the oral sessions. The MPs would then act in a similar fashion to a judge (or jury).

On a broader level, the committees should rely less on oral testimony and much more on their own staff carrying out structured research. I've seen this done with US Senate Committee inquiries, which deliver far more comprehensive investigations. And, on something as important as Brexit, this is the sort of quality we need. Needless to say, Parliament would have to engage higher calibre researchers, and pay them more.

Then, as for witnesses, we need to see much more reliance on people with knowledge rather than opting for prestige. Time and time again, we see the parade of the "great and the good", their pontifications often being nothing more than an opportunity for them to parade their ignorance.

MPs themselves also need to be reminded that the title "professor" is a job description – not a qualification. Many are primarily administrators and are distant from cutting edge research.

Nevertheless, for all the desperate need for change, there is no immediate prospect of this happening. But that means that – as we have already observed – select committee reports are often of very little value. And all too often, not only do they represent missed opportunities, they are actively misleading.

We need better. MPs need to do better.



Richard North 09/02/2018 link

Brexit: all at sea on Efta

08/02/2018  


That leaked impact report has made another appearance. It hasn't been published in the ordinary sense, but it's been shown to MPs in a confidential reading room. Some of them, clearly, are able to read and enough of them were able to take notes, sufficient to give the Guardian a treat.

A no-deal Brexit, the paper is thus able to tell us, would blow an £80 billion hole in the public finances, based on the government having to borrow £120 billion more over the next 15 years, mitigated by £40 billion of gains from leaving the EU.

As always, such figures need to be taken with a pinch of salt. A full-blown kamikaze Brexit would doubtless cost the exchequer considerably more than an average of just over £5 billion year. The full £80 billion could be soaked up in the very first year.

For the rest, the Guardian "has learned" that the north-east would face a 16 percent hit to regional economic growth and the West Midlands would suffer a loss of 13 percent. And overall, a hard Brexit would mean an overall 21 percent rise in retail prices, with a 17 percent uplift in food and drink costs.

The report in fact looks at just three scenarios – the only three that really matter: the Single Market (Efta/EEA); the Free Trade Agreement; and the "no deal". MPs who have seen the documents said they showed every region of the UK would be affected negatively whatever the outcome.

Northern Ireland would be the third worst affected, with a fall of 12 percent in a no deal scenario, and that is without factoring in the impact of a hard border.

London comes out best with a loss of one percent if we stay in the Single Market, two percent in a free trade deal and 3.5 percent in the event of no deal. The South West is judged to do as well under the first two scenarios but drops to five percent if there is no deal.

But, given that the evidence is stacking up that the Single Market presents the most favourable Brexit outcome, it is unsurprising that a number of MPs are pushing for this option The only surprise is that it's taken so long for them to get organised.

Yesterday, they organised a Westminster Hall debate on the European Free Trade Association, while the Brexit select committee took evidence on what it called the "Norway option", a coincidence which did not stop committee member and Efta/EEA advocate, Stephen Kinnock, from taking part in the debate.

The option even got an airing in the "ultras'" holy temple, the Telegraph, in an article written by debate leader Stephen Hammond.

Accusing hard Brexit camp of having begun a project fear of their own against "Efta" (when did they ever stop?), he got enough of the points roughly correct to make a tolerable, if clumsy case for the Efta/EEA option. If only he and his supporters had been this far down the road in June 2016, we might by now be getting somewhere.

However, even now, MP supporters seemed on the whole to be unable to make up their minds whether it is just Efta membership they are after, or the full monty of the Efta/EEA option. Even Hammond fell into the trap, closing his speech with the peroration:
I recognise that EFTA is not a universal panacea, nor does it have all the benefits of membership of the single market and the customs union, but I believe, and I hope this whole House believes, that Britain’s negotiating position and its economic position post-Brexit will be improved by joining Efta.
We then got Paul Masterton, Conservative MP for East Renfrewshire, telling us that:
Efta guarantees to people who voted leave that we are implementing their democratic will to leave the European Union. If anything, it finds that sweet spot in reflecting that the EU referendum result, although decisive, was not overwhelming. We will be in the single market but not members of the EU. We will leave the EU sensibly - even conservatively -if we recognise that trade is only one part of our integrated and co-operative relationship that needs to be unpicked.
However, James Cartlidge, Conservative member for South Suffolk, managed to get it right. "In Efta-EEA", he said, "we stay in the single market. For everyone, there would have to be a control on unsustainable migration. In Efta-EEA, we have the control that should migration surge again, Article 112 and, importantly, Article 113, which guarantees our right to negotiate free movement, would apply and have applied in practice in the real world".

Even though the EEA was mentioned 55 times in the Westminster Hall debate, and the Single Market 30 times, the weakest links wrecked the debate. They allowed the "duty minister", Parliamentary Under-Secretary of State Robin Walker to refer almost exclusively to Efta and ignore the substantive points on the EEA.

The government, he said, did not plan to seek membership of this organisation for four key reasons, the first of which was that it did not of itself deliver any market access to the EU. Those calling for us to join Efta, he added, need to be more specific about whether they mean joining the EEA, or attempting to copy the Swiss agreement, or negotiating a different bespoke agreement.

This lack of specificity had given the minister the opportunity he needed to fudge the issue although, as to the EEA, he declared that Mrs May "has been clear" that participation in the EEA agreement would not work for the UK because it would not deliver on the British people's desire to have more direct control over the decisions that affect their daily lives.

It would also, he said, mean accepting the continued free movement of people, which both the Conservative and Labour manifestos pledged to end at the last election – thus totally ignoring the point made by Stephen Hammond that, "under protocol 15 and articles 112 and 113 of the EEA agreement, EFTA states can suspend free movement of people …".

Even then, Hammond could not get it right, referring to the suspension on a "reciprocal basis", not that it really mattered. The minister had ignored the point anyway.

As with the minister, most of the media today is ignoring the Efta/EEA option – and especially the freedom of movement issue. If the option has few friends in parliament, it seems to have even fewer in the media, most of which is focusing on the "secret report" and the economic effects of Brexit.

None seems to be aware – or have made the point - that the effects have (or will be) largely suspended if the transition period proposals go through – leaving us with something inestimably worse than the Efta/EEA option that they are so diligently ignoring.

Just supposing MPs could get their acts together, though, advocates of the option have not thought past it to define a Brexit end state. All thinking seems to stop with the three main scenarios, with nothing devoted to anything outside these very narrow parameters. For all that Flexcit is now getting on for five years old, it is still way ahead of the field.

Most MPs are not past the Janet and John stage of fully understanding the nature of Efta and its relationship with the EEA, so much so that ministers are able to skirt the issue. Parliament, when it "hunts as a pack" can be a powerful institution, but if MPs are all over the place, parading their ignorance, they get nowhere.

Yesterday, they had their chance – limited thought it was. And they blew it, as they almost always do.



Richard North 08/02/2018 link

Brexit: where is that cake now, Boris?

28/01/2018  


Even though I have spent three weeks in Scotland, at Hamilton Sheriff Court, focusing on the Errington Cheese case, and am off back for a few more days this week – this time to give evidence – the long-running saga of Brexit hasn't lost any of its unreality.

I managed to read the Davis speech with growing incredulity as he presented the EU fait accomplis as "the bridge that we plan to build, to smooth the path to our new relationship with the EU after Brexit".

What we were calling the "vassal state" scenario long before Rees Mogg appropriated the term becomes a "strictly time limited implementation period, which forms a sound basis for the UK’s future prosperity".

The fact that, even now, an extension is being talked of, and Mrs May is said to have abandoned her Lancaster House anniversary speech, is neither here nor there. According to Mr Davis, the EU's idea of transition "allows us to grasp the benefits of Brexit by setting in place the fundamental building blocks for the country as we leave".

Of course, Mr Davis doesn't actually say it's all the EU's idea, and he's still prattling on about "implementation" rather than transition. This bridge, he says, "will give more certainty and clarity" for ports like Teesport (where he was speaking) and businesses right across the UK and Europe.

Maybe Davis actually believes the sort of rubbish he's spouting, even if Pete was less than impressed. But, if it's even possible, Booker is even less impressed.

Almost the only clear thing emerging from the murk shrouding our tortuous progress towards Brexit, he writes in his column, "is how completely we can now forget last year's fatuous claim by Boris Johnson that, on leaving the EU, we could somehow 'have our cake and eat it'".

Unless you are Rees Mogg, gone are the days when we could fantasise that in March 2019 we shall "with one mighty bound be free": out of the EU and free to sign all those wonderful trade deals with the rest of the world. It has finally dawned on a goodly proportion of the population that extricating ourselves from the EU is far more complicated than our politicians ever realised it would be.

Of course, a lot of us knew all along that that it was going to be complicated, but then us mere mortals clearly don't have the capability for self-delusion that sustains our political masters and their media handmaidens.

As a result, Booker writes, neither side is remotely prepared for all the hugely costly border controls needing to be installed once we leave the single market. That makes it inevitable that "transition period" will almost certainly more than two years.

Having contributed to screwing up any rational approach to Brexit – about which they need to be reminded at every opportunity – Rees Mogg and his pals have contributed to the situation where, despite leaving the EU, we will remain essentially still in it.

Parliament has nicely rolled over to give us that absurd EU Withdrawal Bill, whereby we turn all EU laws into UK law. By this means, we can always pretend that we have somehow "taken back control", even though we end up having to go cap in hand to the EU for every decision of consequence.

An indication of how perilous that might be comes with a recent report about the UK's potential problems with the Aviation Safety Agency. The European Commission is saying that "UK membership of EASA is not possible", which means all sorts of complications when it comes to aircraft manufacturing and repair and related matters.

This is one of many such issues that aren't going to go away and, while we might get temporary relief during the (prolonged) transitional period, aviation is going to come back to haunt us. The UK will have to settle an aviation agreement with the EU along the lines of those agreed with the United States and Canada, and that isn't going to come easy.

But this is but a detail. Equally dawning are the damaging consequences likely to face much of the largest part of our export trade, worth £230 billion a year: by no means all of which could be remedied by that "bespoke trade deal" that Theresa May still dreams of, let alone by those fondly imagined future deals with other "third countries".

Never, concludes Booker, has it been more obvious that if only we had chosen to leave the EU but stay, like Norway, in the European Economic Area, we need not have got into this mess.

It could have been so different, except that for us to have taken a rational approach was more than any of our current breed of politicians could ever manage.

Having explored in detail for so long what it takes to achieve a successful Brexit, it is getting more than a little tiresome watching the politicians stumble through their fog of ignorance, unaware of even the basics and seemingly unable to learn.

The trouble is that, to maximise the opportunities presented by Brexit, we should have started as soon as the result of the referendum had been declared. The delay has already closed down options and the longer we leave the initiative with the EU, the less chance there is of a satisfactory conclusion.

Obviously, one can understand – and appreciate – the constraints which limit Mrs May's freedom of action, even if those problems are largely of her own making. But now the cold, harsh reality of the "vassal state" scenario is beginning to create stresses within the Conservative Party which could even prove terminal.

Newspapers such as the Telegraph are exploiting these stresses, also pointing to tensions between politicians and the "mandarins" who have supposedly "taken control" and are "forcing a weak Prime Minister" into a soft Brexit.

The paper's journalists (and their editors) are simply unable to cope with the realities of a Brexit that must deal with business and their needs for ongoing access with EU enterprises.

"Simplistic" would be too generous to describe their stance. These are people whose ignorance is matched by the politicians about whom they report. Between them – and especially the "ultra" tendency – they are making such a glorious mess that it can only get worse.

But no matter how much these people think they are making the running, soon enough reality has to intrude. It cannot be hidden or disguised forever and when it rears its head, it will leave them with nowhere to go. Then Mr Johnson's cake will turn into a poison chalice.



Richard North 28/01/2018 link

Brexit: watering horses

24/01/2018  


It really is quite remarkable how much space the media are prepared to devote to that odious creature, Alexander (aka Boris) Johnson – more than adequately illustrating how debased contemporary news values have become.

A Foreign Secretary – manifestly inadequate at handling his own portfolio – should not be pontificating about NHS funding. And then to suggest that there should be a £5 billion "dividend" from Brexit after March next year is little short of fatuous.

At this stage, it would appear that the UK government is planning to continue its EU contributions during the 21-month transition period, leaving no savings for redistribution. The Foreign Secretary is chasing after a pot of gold at the end of an imaginary rainbow.

Despite that, The Times is telling us that Johnson "is determined to press the case for a Brexit dividend" and allies are making it clear "that he would not back down".

Yet not even NHS managers support the proposition. Tying NHS funding to Brexit, they say, risks distracting from the need to find a long-term source of extra money for health. Chris Hopson, chief executive of NHS Providers, rejects the idea of short-term fixes and argues for a "clear vision" for future funding.

The only sensible response to Mr Johnson's stance, therefore, is to treat it with derision – yet more evidence of the inability of this man to understand what is happening in the Brexit process. His blathering should be treated with the contempt it entirely deserves, as indeed it was by the Prime Minister and his cabinet colleagues, when he was "pretty much" humiliated.

Much the same can be said of another senior Tory, Iain Duncan Smith, who is tilting at the CBI complaining that this body is "intent on demanding that the Government ignore the clearly expressed will of the British people".

In Duncan Smith's view, in the referendum campaign all the leaders of the "remain" campaign made it clear that voting to leave would mean we would exit the customs union and the Single Market. And then, he says, the public voted overwhelmingly in the election for parties whose policy was to leave both.

Setting aside the disingenuous nature of the election argument, the issue at large is (certainly as far as we are concerned) not whether we should remain in the Single Market for all time – and we are not at all concerned to stay in the customs union. The point is whether we should stay in the Single Market until such time as we have been able to broker a long-term settlement.

As such, it is perfectly reasonable of the CBI to protect the economic position and the interests of its members until such time as the politicians can get their own acts together and come up with a comprehensive, long-term plan for our relationship with the EU. It is hardly appropriate to complain about the CBI seeking to protect its position in the absence of any firm arrangements for Brexit coming out of Downing Street.

Pointing to even broader problems is another unreconstructed "ultra", Lord Lawson. He has been holding forth about "undemocratic officials" who, he avers, will do everything to stop Brexit because it goes "so fundamentally against the grain". "Bureaucrats", he says, "by their very nature loathe radical change of any kind".

But, he adds, "they equally realise their constitutional duty to accept the leadership of the politicians, of the Government, of the elected Government - that is our constitutional position. And if they get the real lead, then they will follow it".

This is an undisguised snipe at the Prime Minister who is taking fire from all sides about her lack of resolution on Brexit. Described by a colleague as a "belief-free zone", Lawson's comments are another pointer to the fact that she has consistently failed to deliver a credible vision for a post-Brexit UK.

The lack of vision is also noted by the EU negotiators, who have constantly referred to the inability of the UK government to set out precisely (or even in general terms) what it expects from its post-Brexit relationship with the EU.

It is perhaps far too ambitious to expect politicians to focus on the long term and most seem to have a limited grasp even of what the short-term has to offer. A poll of MPs by Ipsos Mori, for instance, found that nearly three-quarters (74 percent) of Conservative MPs thought that free movement was unacceptable during a transition period.

This is very much the opinion of Rees-Mogg and other "ultra" MPs, who seem to have a limited grasp of the realities. As far as it goes, the "vassal state" transitional offer from the EU (wrongly described as a Norway-style deal) is an indivisible package which links the "four freedoms" to market access. If freedom of movement (one of the four "freedoms") is rejected, then the EU will restrict market access, with dire consequences for the UK economy.

On the other hand, we are seeing 90 percent of Labour MPs rejecting Corbyn's claim that the UK must leave the Single Market after Brexit, although – as we saw from McDonnell - they seem to be thinking in somewhat vague terms of market access, rather than conformity with the Single Market acquis and all that that entails.

Nowhere, it seems, is there any room for reality – the ingress of the real world where there are set parameters and consequences for divergence. In their unreal world, our importunate politicians seem imbued with the idea that they can pick and choose bits from the Brexit bag and assemble their own preferred plans – whence the EU, presumably, will roll over and give them everything they want.

Therein lies the crux of the failure of the UK politico-media nexus to engage sensibly with the Brexit debate. Yet it is what the EU will and will not accept that will determine the shape of the exit settlement and any transitional process. Nothing will happen unless it is agreed by the EU through its own procedures.

As to those procedures, the EU itself is constrained by its own treaty provisions, but decisions taken are also influenced the political imperatives of its member states and, to an extent, by the ambitions of the European Commission and the other institutions.

In terms of how the EU sets negotiating objectives and then responds to the UK, these factors are far more important than the wishes of UK politicians. In fact, it would be fair to say that what our politicians might want are matters of supreme unimportance to EU negotiators.

By contrast, what so many commentators completely fail to understand is that the writ of the EU, its negotiators and institutions, extends only to the provisions of EU treaties and subordinate matters. The EU, as a sole entity, does not have control over the implementation of the EEA Agreement, which is a wholly separate treaty with its own sets of rules.

As a fully paid-up member of the EEA, the UK can invoke its provisions without having to rely on the permission or assent of EU institutions. And, where it comes to variations in the treaties, these are instigated by the EEA Council and Joint Committee - in which the EU is only one voice. Further, should the UK shift from the EU to Efta membership, it can invoke those provisions which are specific to Efta states and beyond the reach of the EU.

In other words, if the UK so desired – and had the wit to do so – it could pursue relationships with the EU via EEA mechanisms without being tied to the Article 50 process. This is something I have mentioned is previous blogposts (for instance this one) and, in my view, the reluctance to use these mechanisms represents one of the most egregious failures of the UK government in the Brexit process.

There, probably, we see in the UK government a reflection of the ignorance of its senior members and its negotiators. There is no evidence whatsoever that they have any appreciation of the role of the EEA institutions and their potential value to the UK. If they do have any awareness, they have kept it remarkably quiet.

From our perspective, however, there is the old saw – you can take a horse to water but you cannot make it drink. We can bring matters to the attention of government but we cannot make it take note of them or act upon them. A government which is determined on procedural or economic suicide is still master in its own house.



Richard North 24/01/2018 link
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