Reflections one year on from the referendum

The morning of 24th June is a day I will never ever forget. By 4AM, I had given up any idea of sleep and was watching the results of the referendum on my computer as they were posted up on the BBC website. I had always believed that we could persuade our countrymen that we would be better off out of the EU, but David Cameron had gone for a quick cut-and-run campaign to minimise our chances of success. However, as soon as I saw the relative totals for leave and remain, my heart leapt. We’re going to pull this off after all! Less than two hours later, the number of leave votes passed the crucial 50% mark. “We’ve done it! We’ve done it, We’ve done it!” I shouted at the top of my voice. It was not yet 6AM and normally I would be much more considerate towards my neighbours, but after sixteen years of campaigning for our country to leave the EU, my overwhelming feelings of joy momentarily got the better of me.

Thankfully, my neighbours have never complained. Perhaps they are sound sleepers. Perhaps the soundproofing of our late Victorian semi is better than I thought. Whatever, I don’t think I will be giving a repeat performance!

I spent much of the rest of the day in a daze. We’re really going to leave! It was hard to take it in. This was the greatest day in our country’s history since the end of the Second World War and I felt a great sense of pride in having played a part, albeit only a very small one, in achieving this memorable result.

One year on from that incredible day, the memories are still fresh in my mind, as I’m sure they are in the minds of many other leave campaigners, but in the meantime, what a roller-coaster we have endured!  There was the court case brought by Gina Miller, the uncertainly about whether Mrs May’s European Union (notification of withdrawal) bill would make it unscathed through both houses of Parliament, the sense of relief when Article 50 was finally triggered in March as the Prime Minister had promised, the reluctance of the economy to tank in spite of the predictions of George Osborne’s “Project Fear” and most recently, the shambolic General Election which was meant to increase the Government’s majority but instead left the Tories turning to the DUP in order to maintain any sort of hold on power.

In spite of the chaos, the Brexit negotiations have started and we are still on course to heave the EU in just over 21 months’ time. Media reporting seems to have plumbed new depths since the election results were announced and it has been hard to distinguish the wood from the trees. Terms like “hard” and “soft” Brexit are bandied around often without any explanation, leading some concerned leave supporters to equate “soft “Brexit” with  not actually leaving the EU at all.

From what I can gather after reading complete articles, including actual quotes, rather than just the headlines, there are very few politicians who actually want to stop Brexit. Many more are concerned about the implications for UK businesses if we don’t end up with a decent trading arrangement. Such concerns are actually quite reasonable and do not in any way imply that they want us to stay in the EU.  Soundings from Parliament after last June’s vote indicated that the overwhelming majority of MPs accepted the result and would not wish to frustrate the will of the people. The General Election has not significantly altered this.

Of course, with David Cameron not having made any preparation for our voting to leave, the government and civil service are on a sharp learning curve and we still await evidence that they have got on top of the brief which the electorate gave them a year ago. Our biggest concern must surely be a chaotic – or more likely sub-standard – Brexit rather than no Brexit at all.

The main reason why I remain confident that Brexit will happen in some form or other  lies in the nature of the Conservative Party. The Tories were given a nasty shock two weeks ago. They went into the campaign expecting to flatten Labour. Instead, they only just limped over the finishing line. Most Tory MPs voted to remain last year, but the vast majority of the party’s activists and supporters are strong leavers. The Tories  hoovered up quite a few UKIP votes on a platform of leading us out of the EU. Given these issues, any backtrack on Brexit would precipitate the worst crisis the party has faced since 1846 when it split down the middle over the repeal of the Corn Laws. They dare not go there.

What is more, the party will be keen to renew itself well before the next General Election in 2022. While removing Mrs May now would only add to the sense of  chaos which has prevailed since the General Election, it is hard to imagine she will still be in power in March 2019, perhaps not even in March 2018. If the party is seeking a dynamic new leader to revive its fortunes, given the ultimate say will lie with its predominantly Thatcherite Eurosceptic activists,  Mrs May’ successor is likely to be an MP with proven Brexiteer credentials.  The party faithful will not make the mistake of choosing another Cameron.

This will not make his (or her) task any easier, but still gives me hope that in March 2019, that historic vote which brought us so much joy a year ago will be translated into reality and we will finally achieve that goal for which so many of us have been striving for so long.

On the EU side, there has been some posturing too

Mrs May and some members of her team have gone on record to say “No deal is better than a bad deal”, but realistically, “no deal” was never an option. The worst scenario would have been an incomplete, partial deal and with neither side wanting a cliff-edge scenario in March 2019, even this would not be anyone’s preferred option. For all the dire warnings of Yanis Varoufakis, Greece’s former Finance Minister, the UK is not Greece.  We would suffer more than EU-27 from a non-deal, but it would not be in the EU’s interests to be obstructive and prevent an agreement being signed.

To prove the point, it is now emerging that some of the tough rhetoric from the EU side which we heard in the immediate post-referendum period has turned out to be little more than posturing. Barely three months ago, it was widely reported that Spain would be given  a right of veto over the final deal with the UK and would have the full support of the other EU member states if it chose to take a tough line over Gibraltar. Recently, however, Alfonso Dastis, Spain’s Foreign Minister,  has stated that his country will not block any Brexit deal and that talks over Gibraltar’s future will be handled on a bilateral basis. “The issue of Gibraltar doesn’t have to be the first, nor the most important point during talks,” he said.

Another example of hot air is the EU’s apparent desire to remove the lucrative €uro clearing business from the City of London to somewhere within the Eurozone.  This would have been a political gesture rather than an economic necessity. After all, most clearing in the Saudi Riyal takes place in London without any heart-searching in Riyadh. Writing in City AM, however, Mark Field, the City of London’s MP claims that “All of the EU politicians and financiers I have spoken to understand that this is a risk not worth taking. They express no desire to prevent euro-denominated trades from being cleared in London and indeed privately rail against the notion that such business might be forcibly moved to Paris.” He also points out that “Most sensible players implicitly understand that if London is undermined, key participants in the financial services industry will move not to Frankfurt, Dublin or Paris but to New York, Singapore or Shanghai.” Absolutely. In or out of the EU, London  will remain Europe’s principal centre for financial services for the foreseeable future.

On the surface, however, it does appear that the EU has turned the corner after its recent problems. Its economy is performing better than at any time since the Great Recession of 2008 and eurosceptic parties in the Netherlands and France failed to make any breakthrough in recent elections. France’s new President, Emmanuel Macron, is a strong supporter of the EU and his triumph is encouraging the Eurozone to consider pressing on with further integration. Even Germany’s ever-cautious Angela Merkel recently indicated that she would “consider a common finance minister, if the circumstances are right,” adding “we could also consider a Eurozone budget if it is clear that we are really strengthening the structure of the economy and doing sensible things”. 

Donald Tusk, the President of the European Council, has also adopted a very upbeat note in his invitation to the EU’s leaders for the next meeting. “It is fair to say that we will meet in a different political context from that of a few months ago, when the anti-EU forces were on the rise. The current developments on the continent seem to indicate that we are slowly turning the corner. In many of our countries, the political parties that have built their strength on anti-EU sentiments are beginning to diminish. We are witnessing the return of the EU rather as a solution, not a problem.”

There is a big “but”, however. A recent survey by Chatham House, a foreign policy think tank, pointed to a wide gap between the opinions of the EU’s “élite” (defined as leading figures from politics, media, business and civil society) and the general public and even the élite is not as optimistic as Mr Tusk’s words would have us believe.  Only 34% of the public feel they have benefitted from the EU, compared with 71% of the élite while a majority of the public (54%) think their country was a better place to live 20 years ago, which in some cases means before their country joined the EU.

The study also finds 48% of the public wants the EU to hand back powers to member states, while only 31% of the élite are keen on this idea. Less than 1 in 4 of the general public support extra powers for the EU and even among the élite, the figure is a mere 37%. What is more, among the élite, almost one in two (46%) thinks that another country will leave the EU within the next decade. The figure for the general public is 58%.

While the groundwork for the survey was undertaken between December 2016 and February 2017 – in other words, before the Dutch and French elections – it still painted a rather fragile picture of the EU, suggesting that Donald Tusk’s comments may be somewhat over-optimistic. To prove the point, less than a week after Macron’s triumph, several members of his cabinet have already quit. If plans for further Eurozone integration do fall foul of public opinion, any revival of enthusiasm for the EU project among the general public may prove short-lived.

None of this reduces the challenges facing the UK government in the Brexit negotiations. Indeed some have argued that a strong EU may be more willing to grant a favourable deal to the UK than one which believes itself to be on the back foot. What we can say is that it is far from certain that the UK’s negotiators will necessarily spend all the next 21 months facing representatives of an organisation which is self-confident or even united.

Photo by D-Stanley

And they’re off!

Today, our formal negotiations to leave the EU begin in Brussels. David Davis is meeting with Michel Barnier, the EU’s chief negotiator. Mr Davis said he is beginning his task “in a positive frame of mind“.

So there is finally something concrete to report after a ten days of confusion and speculation since the inconclusive General Election result. This. however, is where the certainty ends. It is almost a year since the Brexit vote and we do not know the shape of the planned Brexit deal. Of course, it is quite possible that this is a deliberate strategy to “keep our power dry”. Daniel Hannan, writing in the Daily Mail, claims that the Civil Servants have “had a year to prepare for these talks, and have put it to good effect.

We must hope so, but detail is thin on the ground. Although Philip Hammond, the Chancellor. has been widely reported as supporting ongoing membership of the Customs Union, he recently insisted that this was not the case. Speaking on the Andrew Marr Show, he said, “And by the way, we’ll be leaving the customs union. The question is not whether we’re leaving the customs union, the question is what do we put in its place.” The subject of the customs union was barely mentioned in the referendum campaign last year. It has always been a red herring. For all the otherwise mixed messages of last year’s assorted leave campaigns, virtually everyone was agreed that freedom to determine our trading arrangements would be one of the principal benefits of Brexit and that remaining in the Customs Union would place unacceptable restrictions on any such future arrangements.

The Single Market is another matter, however. Mr Hammond also insisted that we would be leaving this too. Fair enough, but it would be good to know what sort of relationship exactly he and the Civil Servants have agreed to seek if they are to avoid what he called “those cliff edges.”

He also hinted that some transitional arrangement would be sought. “We will need some kind of transitional structures and the European Union needs to understand that as well. This is not a British ask or a British demand, it’s a statement of common sense, that if we’re going to radically change the way we work together we need to get there via a slope, not via a cliff edge. That’s good for business on both sides of the English Channel.” He appeared to rule out remaining in the customs union, even as part of a transitional arrangement, but was vaguer about the Single Market – deliberately so? We will no doubt know more in due course.

This does pose the question about how much influence say he, or even Mrs May, will have. The loss of the Tories’ overall majority leaves the government more beholden to Parliament  – including Tory backbenchers – than before. Some have gone on record – anonymously – that any backpedalling on, or dilution of Brexit by the Prime Minister will result in a leadership challenge.

Mrs May will therefore have her work cut out to appease some more hard line Brexiteers, but on the other hand, she will need to keep on board those MPs are less enthusiastic about leaving the EU, who will doubtless seek to exploit any features of the end deal which would negatively affect the economy in general and jobs in particular.

Labour, however, says it will not seek to derail Brexit. During the election campaign, Jeremy Corbyn was campaigning for a different sort of Brexit but never offered any hint that he would try to undermine it.  There are two issues at play here. First, personally, Mr Corbyn has never been a supporter of the EU project. As we have pointed out, his contribution to the remain campaign was at best lukewarm and in reality, a negative one.  More to the point, outside the big cities, support for Brexit was strong in Labour-voting constituencies and Corbyn and his team rightly realised that unless he emphasised his commitment to Brexit, votes – and potentially seats – could be lost in the constituencies which historically have been Labour’s heartland. This tactic succeeded and consequentially, those Labour MPs who dislike both Corbyn and Brexit must realise that their room for manoevre is rather limited given that their party did much better than was widely predicted two months ago.

Emmanuel Macron, the seemingly all conquering French President, insisted that “the door remains open” to the UK abandoning Brexit and remaining in the EU. Dan Hannan strongly rebutted this offer. “The idea that Britain might crawl back to Brussels, apologising for its mistake, shows an extraordinary misreading of our character, our history – and public opinion,” he wrote.

It’s not just our history and character. One does not often find oneself in agreement with John Major, but during a recent interview on BBC’s Radio 4, he made the point  that the EU has never really been a big priority for most UK voters. Ask any veteran UKIP candidate or even the Lib Dems, whose pitch to the supposed “48%” in the recent General Election campaign fell rather flat, and they would concur 100%. A vocal minority notwithstanding, most people, whichever way they voted in June last year, just want the government to get on with it.

And this is what it is finally doing. We can but hope that everyone will be satisfied with the result.

 

Photo by rogerblake2

Fishing the first Brexit bright spot as confusion reigns

Fishing photo

Are we going to leave the Single Market or not? And what about the EU’s customs union? – a subject that never cropped up in the referendum debate last year. Do some politicians even know the difference between the two?

At the moment, we are seeing a great deal of confusion about the future direction of Brexit and for those of us outside Mrs May’s new cabinet, what we are reading in the media is leaving us none the wiser. the quality of press reporting has reached an all-time low, with uninformed speculation given free rein and undue weight placed on off-the-cuff comments.

Take, for instance, headline statements that Emmanuel Macron, France’s new President claimed that “Brexit could be reversed.” What he actually said was “Of course the door remains open, always open until talks come to the end. But it was a sovereign decision taken by the people to come out of the EU.” In other words, there remains a theoretical possibility that the UK government might change its mind, but no more than that.  Given the shock of last week’s General Election result, it is hard to see the any rowing back on Brexit given that the consequences for the Conservatives would be the worst crisis since 1846.

The terms “hard” and “soft” Brexit have been bandied about with very few people knowing what they actually mean.  By and large, the terms relate to a future trading arrangement with “hard” meaning leaving the Single Market (or perhaps the Customs Union, or maybe both??) and “soft” means remaining in one or both. But what about criminal justice or foreign policy? There are “hard and “soft” issues here, which few in the media are picking up.

In all this muddle, one thing is clear. From what we could discern of Mrs May’s Brexit agenda, it contained some worrying and unsatisfactory features, including too close a link with the EU’s military plans and an ongoing commitment to remain party to the European Arrest Warrant. The loss of her majority means that she cannot force through her plans for Brexit if they are widely seen as flawed. Indeed, it is possible that we could end up with a better Brexit deal, given that pressure groups and their supporters on the Tory back benches will have a lot more leverage than if we had ended up with a thumping Conservative majority.

In one particular policy area, fishing, we are already seeing evidence of this. Scotland was the one piece of good news for the Conservatives in an otherwise dismal result and several of the seats they won from the SNP include fishing communities. Ruth Davidson, the Scottish Conservative leader, campaigned strongly on the fisheries issue and has apparently spoken to Theresa May, insisting that the UK must leave the Common Fisheries Policy and manage its own waters right up to the 200 Nautical Mile/Median Point limit.

Given that Michael Gove, who has recently been appointed Secretary of State for Environment, Food and Rural Affairs , is the son of a man who worked in the fishing industry, there is every reason for being hopeful that the sensible post-Brexit fishing policy proposed by Fishing for Leave has a greater chance of being implemented.

So, amidst the current confusion, we are perhaps seeing the first bright light. As the dust settles, hopefully others will follow

 

Our EU exit fee – realism and extortion

How much – if anything – should we pay on leaving the EU?

This will be one of the first issues to be addressed by the new government once Brexit discussions begin. A number of sources within the EU have said that until a figure is agreed, there  can be no discussion on a trade deal.  A figure as high as €100 billion has been quoted in some sources. Meanwhile, a number of more ardent Brexiteers have urged that, on the contrary, we should not pay a penny and just leave.

In between these extreme positions, The Institute of Chartered Accountants of England and Wales (ICAEW) has produced a report suggesting that the likely cost should end up somewhere between £5 billion and £30 billion. The most likely figure, £15 billion, would equate to be £225 for every person living in the UK in 2019.  This is roughly on a par with our net annual contribution to the EU budget – in other words, how much we pay after the rebate and agricultural subsidies are deducted.

The full report can be downloaded here. Some of the costs have been widely discussed. such as the outstanding contributions to the current EU budget, which covers a seven-year period ending in 2020. Having signed up to the budget in 2014, some argue that we should pay what we agreed, even though for the final 21 months of the term, we will no longer be a member of the EU if the Brexit schedule does not slip.

Any spending which has been authorised but not yet incurred will be hard to avoid. ICAEW’s study puts this figure at £28 billion.

On the other hand, there are assets which we can cash in. We have a 16% stake in the European Investment Bank, estimated to amount to some £10 billion by 2019. With ownership restricted to EU members, our shareholding will need to be sold.

The authors also indicate that some additional expenditure will be needed to complete the Brexit process. After all,  for one thing, extra staff will need to be employed for what will be complex but one-off negotiations.

Would we also be expected to foot the bill for the relocation of those EU agencies currently based in London, such as the European Medicines Agency and the European Banking Authority? Time alone will tell as far as this is concerned.

The most contentious part of the deal, claim the report’s authors, is likely to be the level of our commitment to the former Soviet bloc countries which currently are in receipt of massive amounts of development funding.

There are numerous examples of development funding being squandered in the poorer nations of Western Europe. Spain, for instance, has been blessed with an unfinished motorway network and a surfeit of airports, some of which have since closed – and all at the EU taxpayers’ expense.

Of course, the EU was quite open in admitting that infrastructure projects in Spain and Portugal were to be a dry run for the much bigger challenge of putting Central and Eastern European countries on a par with the west. Given the absurd waste of these projects, however, it is hard to have any confidence that money spent in Poland or Romania will be used any more wisely.

This, of course, is one of the many issues which will need to be hammered out when the talks get under way. The ICAEW report has avoided being prescriptive, but on one point it is quite unambiguous – the €100 billion figure is totally unjustified.

 

 

Some crumbs of comfort

One person who must feel vindicated by yesterday’s election result is former Prime Minister Gordon Brown. He resisted calls for snap election soon after becoming leader in 2007 and although he was defeated at the General Election in 2010, this morning he may well be considering that he could have met with the same fate as Theresa May if he had likewise gone to the public prematurely.

On the face of it, the General Election result solves very little. Mrs May asked the electorate for a fresh mandate, hoping to see the Tories returned with a substantial majority, but it didn’t work out like that. Her position has been weakened and at time of writing, it is by no means certain that her announcement early this morning that she intends to carry on as leader will survive challenges from within her own party.

On the other hand, the General Election does not create as many problems for Brexit as some commentators are suggesting .Let us be clear. Brexit will still go ahead. Both Labour and the Conservatives were quite explicit about this.  Article 50 will not be reversed. The comment in the Washington Post that last night’s result was somehow the “revenge of the remainers” is thus very wide of the mark. Also, the claim that somehow this election will “soften” Brexit, as propounded by Andrew Grice in the Independent does not stack up. Assuming the Tories form the next government, perhaps in some sort of agreement with the Democratic Unionist Party, either Mrs May carries on or else her successor is likely to be a fervent Brexiteer who is unlikely to decide that we should after all remain within the EU’s Customs Union. This election was not about how “hard” or “soft” Brexit is going to be. Ironically, considering it was dubbed the “Brexit election”, neither Labour nor the Tories went into much detail about their plans for the forthcoming negotiations with the EU.

Bizarrely, the Lib Dems were the party who were keenest to talk about Brexit. Given their drubbing in 2015, it was no surprise that they improved on that dismal performance, but campaigning on essentially an anti-Brexit ticket reaped little reward. They failed to come anywhere near winning Cambridge, a remainiac stronghold, and didn’t recapture Lewes, which they lost in 2015 to the strongly pro-leave Tory Maria Caulfield. What is more, their former party leader Nick Clegg lost his seat in Sheffield, claiming that it was because he was too anti-Brexit.

The predominant mood for some time among voters in this country has been that they just want the government to get on with Brexit. Most people have accepted the result. Therefore, the Tories, in spite of only boasting a minority of committed Brexiteers among its MPs, are unlikely to row back on Brexit knowing it would be suicidal for their future electoral prospects which do not look wonderful at the moment. Any deal with the DUP, whose MPs are unequivocal Brexiteers, will give even less wriggle room to any would-be backsliders.

So are there any crumbs of comfort from the result? – apart from the defeat of Mr Clegg?  Yes indeed. The SNP lost ground in Scotland and especially in the North East, where Alex Salmond and Angus Robertson both lost their seats.  This is the heart of the Scottish fishing industry and thus gives the fishermen, especially in places like Lossiemouth and Peterhead, a greater voice in ensuring we get a good deal on fisheries in Brexit.

Furthermore, not only the DUP but staunch Tory Brexiteers will have more leverage as the Government begins its negotiations. A large Tory majority would have given the Government carte blanche to do whatever it wanted. We have already highlighted our concerns about the European Arrest Warrant and European defence policy. It now becomes much harder for any sub-standard deal in these areas to avoid close scrutiny and challenge.

Besides the Lib Dems’ hopes of revival failing to materialise, Jeremy Corbyn’s strong performance has confounded hopes of a Blairite revival, as we mentioned a few days ago. Whatever one’s opinions about Mr Corbyn’s policies in general, he is at best lukewarm about the EU and is more sympathetic to Brexit than the Blairites, who are among the most ardent remainiacs of all. Having strengthened his hold on the Labour Party, its MPs are unlikely to try to derail Brexit, even if the deal they would ideally like is different from that which Mrs May is contemplating.

But finally, this unsatisfactory election has at least bought time for the Brexit process. Whatever happens to Mrs May, there is no appetite for any more elections. Many of us will have heard of the BBC’s new star, Brenda from Bristol. This lady, when informed that Mrs May had called an election, forcefully replied “You’re joking! Not another one!”  For all the unsatisfactory nature of yesterday’s result,  after two elections in just over two years, the EU referendum  last year and Scotland’s independence vote in 2014, everyone, especially the many exhausted candidates, will want a good break before they go knocking on doors and leafletting again. By the time we next go to the polls, hopefully Brexit will be done and dusted and the EU will no longer by an election issue.

Photo by sonstroem