Why did we vote to leave? Two quick reminders

A number of UK companies are to be given a pre-Brexit leaving present by the EU – a substantial fine. According to this piece in Bloomberg, the European Commission intends to complete its investigation into a controversial tax break for U.K.-based multinationals will be ready later this year. None of the companies involved in the U.K. probe is accused of wrongdoing. It is the government’s tax system is the issue for regulators in Brussels.

With the second anniversary of the Brexit vote looming, here is a timely reminder of why we voted to leave – to take back control from these unelected bureaucrats.

Another reminder was provided by Michel Barnier, the EU’s chief negotiator. He warned that we would be ejected from Europol and from the European Arrest Warrant (EAW). Although meant as a threat, if his words are to be taken at face value. they ought to be a cause of rejoicing for Brexit campaigners. On this website, we have repeatedly highlighted the failings of the EAW and have stated that Brexit must mean our withdrawal from it.

Unfortunately, things are not that simple. Barnier’s words are most likely designed to pile additional pressure on Theresa May, who is desperate to keep us in the EAW. Still, who knows, more by accident than design, thanks to the government’s lack of progress,  we could end up with a better Brexit at least in the area of criminal justice than the Government actually intends?

Separating the wood from the trees

As the “ping-pong” continues between the two Houses of Parliament over the amendments to the EU (Withdrawal) Bill, it is easy to end up very confused, bogged down by a mass of detail.

Part of the problem is separating the wood from the trees. Some items of news, touted as major developments, could better be described as “going round in circles”. More of the same, in other words. Take, for example, the “Backstop” plan announced by HM Government two weeks ago – a temporary customs agreement  which, so it believed, would solve the Irish border problem.  Any gambler would have been justified in betting that the proposals would amount to nothing new and would promptly be rejected by the EU.  This, of course, is exactly what happened. In his usual polite, but measured way, Michel Barnier dismissed the UK plans. Here is his speech. For those readers not wanting to read it in full, this short extract, where he contrasts the EU’s “backstop” proposals (which have been deemed unacceptable by  a number of pro-Brexit supporters in the UK) with HM Government’s, is sufficient to show just how wide of the mark our side still is:-

But let me recall that our backstop provides answers to each of these questions.

It provides specific solutions to the unique situation of Northern Ireland.

The UK is taking a different angle, however. It is looking for a UK-wide solution.

Let me be clear: our backstop cannot be extended to the whole UK.

Why? Because it has been designed for the specific situation of Northern Ireland.

What does it do? On customs, Northern Ireland would form part of our customs territory. What is feasible with a territory the size of Northern Ireland is not necessarily feasible with the whole UK….

So it’s back to the drawing board with the clock continuing to tick.

If further evidence was needed of how good life can be outside the EU, even for signatories of the EEA agreement, this documentary on Liechtenstein is worth listening to.  It includes an interview with the country’s Prince.  If anyone should know how well this small country is functioning outside the EU but yet within the EEA, its leader must surely be the man.

Such is the muddle at the heart of government that some serious commentators are now claiming that we will never achieve Brexit. The forthcoming European Council looks to be a bad time for Mrs May. On the one hand, she is nowhere near to coming up with any sort of agreement to which the EU will agree. On the other hand, some of her backbenchers are threatening to bring down the government over fears that Brexit will be botched and disaster ensue.

The standard of reporting by the press when it comes to Brexit has left much to be desired, Looking at things more objectively, the two problems the government is facing are closely related. There are unquestionably a few determined “wreckers” who have not come to terms with the Brexit vote and never will. There are also mainy remain-voting MPs who have accepted the verdict of the referendum but will only go along with the government’s plans if they are confident that the country will not suffer economic turmoil and dislocation. They, unlike their more gung-ho Brexit colleagues, are aware of the problems which we, among others have highlighted if we have to crash out of the EU without a deal and bringing down the government is the only weapon left in their arsenal.

We have long been saying that only a crisis will bring a change of direction.  Thankfully, the government’s complete lack of ability to address the outstanding issues, let alone throw its weight behind a solution which will be acceptable to Parliament, makes such a crisis increasingly likely.  If it leads to a reconsideration of something like the EFTA route, this could actually prove beneficial, detaching from the hard core head-banging remainiacs those pragmatic MPs who are prepared, in spite of their own personal preference, to support the people’s democratic decision with a sensible Brexit and thus ensure that we do finally leave the EU next March.

Stagnation

Italy has a new government, but only after a great deal of wrangling. The principal reason for the impasse is that, like the Brexit vote in 2016,  frustration with the European Union was an important motivation for the Italians’ decision to vote in large numbers for two eurosceptic parties.

The situations in the two countries at the moment are nonetheless very different. We are on the way out. True, many Brexit supporters are finding themselves increasingly frustrated by the lack of progress in the Brexit negotiations but there are good grounds for believing that we will leave – eventually., somehow.

Italy, by contrast, is still in the EU and there is no immediate likelihood of “Italexit”. Many inhabitants of this founder member of the European Union are distinctly unenthusiastic at the way EU membership has affected their country, but this doesn’t mean they want to leave altogether..

What both countries have in common is that they have come up against the dead hand of inertia. Essentially, big, bloated states and bureaucracies do not make decisions quickly. Stagnation is the inevitable result. Those of us who can remember the latter years of the Soviet Union will recall that by the time of Mikhail Gorbachev, it had lapsed into stagnation – unable to respond to events. The EU is in a similar position. No senior figure since Jacques Delors seems to have any vision for the EU’s future direction. The enlargement process, after the celebrations of 2004, seems to have ground to a halt.

However, just like the Soviet Union, the EU does not like anyone trying to take it in a direction in which it does not want to go. This piece by Norman Lamont  claims that the EU is very uncomfortable with democracy when it produces a result it doesn’t like. Unfortunately for the Italians, the stagnation into which the EU has descended is going to make it difficult to sort out their country’s moribund economy. A well-informed website claimed that it was actually Berlin which forced the Italian President to reject the nomination of a Eurosceptic finance minister by the putative new government, forcing a climbdown and nearly precipitating new elections, the result of which would most likely have been a parliament containing even more Euro-critical MPs.

For us in the UK, this tendency towards stagnation has made it very hard for us to achieve a successful Brexit.  Last week, Michel Barnier delivered a speech expressing his frustration at the slow progress of Brexit talks. In one sense, he has some justification – our side has been going round in circles ever since Article 50 was invoked. To leave the EU seamlessly requires a lot of research and an appreciation of the nature of the beast. It could be argued that our side has failed almost totally on both counts.

And the struggles the EU is going through, including the Italian crisis, are more than sufficient vindication of our decision.  In a fast-moving world, the EU’s inbuilt bias to inertia makes it ill-equipped to respond to change. We could do much better as a sovereign state – the big problem is making our escape. A rocket needs a huge amount of power to escape the gravitational pull of the Earth and fly off into space. Our negotiators will need to try a lot harder if we are to escape from the gravitational power of the EU.

 

Is the Customs Union (or Partnership) option about to be shunted into the siding?

The government has been going round in circles with its Brexit proposals and getting nowhere. We have been saying so on this website for well over a year, but a growing chorus of voices is saying the same thing. Lord Kerslake, the former head of the Civil Service, has called the Government’s plans “undeliverable” while Michel Barnier has poured scorn on Mrs May’s hopes of breaking the Deadlock in her cabinet, which has been divided into two in order to consider two equally unworkable options – the  customs partnership or the alternative “maximum facilitation” model, which relies on as yet untried computer technology. He pointed out that neither would be acceptable to Brussels.

Is it too much to hope that the idea of a customs union or customs partnership is slowly being abandoned? In this article for Cap X,  William Davison could not be clearer:- “A new customs union will not resolve the Irish border issue.” He quotes Richard North, who has provided ample evidence ot show that it does not create frictionless trade. The customs union, he correctly states, is a key building block of European integration. There really is no point in pursuing any sort of customs union or partnership if we want to leave the EU. A recent ICM poll, discussed in the Guardian, shows that the general public is more on the ball than Mrs May’s government. Leaving the customs union is the most popular Brexit option. It is encouraging that, in the current climate where most people are utterly fed up with Brexit, that there remains at least some appreciation of what Brexit must mean among the general public.

So this leaves us with two options – leaving with no deal or the EEA/EFTA route. The Davison article mentioned above does say that the Single Market is also a “building block of European Integration”, but this doesn’t mean that re-joining EFTA would be a covert back door returning us into the EU.  It is a shame that the Davison article, after debunking the Customs Union option so thoroughly, fails to to justice to the freedom which we would enjoy as an EFTA member – accessing the single market but free from the EU’s programme of ever-closer union. Dr Richard North explains very clearly in this piece that accessing the single market via the EEA Agreement is a much better option than is widely believed. He debunks an article in Brexit Central by Hjörtur J. Guðmundsson which claims that “this arrangement was originally designed by Brussels to prepare countries for becoming part of the EU”.

Not so, says Dr North. “What became the EEA originated from an initiative taken by the EFTA member states.” He then gives the reader a thorough history lesson, which is well worth reading through, as is his previous post on “EEA Myths”, where he explains that if we used the EFTA route, we wold not end up replicating Norway, Iceland or Liechtenstein but would use the flexibility within the EEA agreement to carve out our own relationship with the EU.

Whether or not this sounds appealing, few could disagree that it is vastly better than the current transitional arrangements. What is more, it looks like being the only Brexit solution which will be acceptable to Parliament. On the one side, the Lords continue to behave mischievously while on the other, a number of MPs including cabinet colleagues have lined up against any sort of customs partnership.

The only other alternative is to walk away and rely on so-called “WTO rules”. Although advocated by a number of leave-supporting MPs it would be fraught with problems. This piece offers a lengthy but readable analysis of what life would be like without any agreement:- disruption for goods crossing borders, major issues with air traffic, no nuclear safeguarding framework, mutual recognition issues and so on. Especially given the ticking clock – less than ten months remain before Brexit Day, there is no time to address these issues and make bilateral deals to avoid utter chaos.

We have been saying for some time that it will need a crisis to provoke a change of direction from Mrs May. It has yet to break, as latest reports still talk of Mrs May not only pursuing a customs union or partnership for the transitional period, but even extending if for several years. Even so, this unworkable customs union/partnership option is now being openly assailed on all fronts, so there is some hope that, amidst all the muddle, the tectonic plates are slowly shifting.

  

 

Trust you, Mrs May?

 

In an article in the Sunday Times, Prime Minister Theresa May implored voters to trust her to deliver Brexit. “I will ensure that we take back control of our borders…our money…[and] our laws.” she said.

But why should we trust her? After being office for over 18 months, there is no sign that she has come up with a trustworthy exit route that would see us make a clean break with the EU while at the same time allowing trade to continue reasonably seamlessly. Coming back to work after a week’s holiday, I signed on to my computer to find that nothing has changed; nothing has progressed. Mrs May and the Brexit negotiations are still going round in circles. An unworkable “customs partnership” is still being pursued even though no less than HMRC has described the current proposals as “unviable.” Michael Gove likewise claimed that there were “significant question marks” about them.  Mrs May has split her cabinet into two asking them both to pursue what, to any intelligent analysis, are two different but equally impractical solutions to keeping our trade flowing with the EU, including across the Irish border.

Why should we trust her when the obvious solution  – at least in the short term – to this problem is under her nose but she has so far steadfastly refused to change tack and replace her unworkable proposals with something which will get us out of the EU while giving her a longer breathing space to negotiate a longer-term arrangement? I am referring, of course, to the EEA/EFTA arrangement. Nigel Moore has written an article which sums up its strengths. Yes, it has weaknesses too – I hardly need point that out to regular readers of this blog. The weaknesses are, however, far fewer than those of the arrangements Mrs May is proposing. In particular, we can regain total control over our fishing, we can keep goods flowing across the Irish border and we will be beyond the reach of the European Court of Justice.  For more on this, please see also the “EFTA 4 UK” Facebook page.

Why should we trust her when she seems so keen to keep us shackled to the European Arrest Warrant? Her argument that other extradition routes are more costly and time consuming is a red herring. The EAW is fatally flawed and has exposed UK citizens to flawed criminal justice systems abroad on the basis of the flimsiest of evidence.

Why should we trust her when, under her watch, several agreements have been signed without Parliamentary debate (and possibly without some MPs even being aware of what is going on) which tie us to the EU’s military programme?

The Daily Express published an article today about a secret document, known as FCO30/1048, which, it claimed, was locked away under Official Secrets Act rules for almost three decades. The author’s identity is unknown, but was most likely a senior civil servant in the Foreign Office. The document, which was written before we joined the EU, suggested the Government should keep the British public in the dark about what EEC membership means predicting that it would take 30 years for voters to realise what was happening, by which time it would be too late to leave. Thankfully, the author was wrong about the last point but correctly predicted that “the increased role of Brussels in the lives of the British people would lead to a “popular feeling of alienation from Government”.

There is nothing new here. Christopher Booker mentioned this paper in a piece for the Sunday Telegraph six years ago, having discovered it as far back as 2002. However, the Express is bringing it to our attention at a very opportune moment. Mrs May has been given the chance to rebuild trust in the government and in politicians in general. She is asking for our trust and if she delivers a successful Brexit, the beginning of  that rebuilding of trust will be part of her legacy. Getting rid of her current Brexit advisor, the untrustworthy Europhile Civil Servant Ollie Robbins, whose poor advice may well be hampering her, would be a good start, but she needs to go a lot further.

As things stand, Mrs May is leading us towards a chaotic Brexit in Name Only which will only further alienate voters from the political system while possibly precipitating the worst crisis in her party since 1846. It is not too late for her to change course – after all, she did promise not to call an early General Election  and then changed her mind. That decision proved disastrous, but as far as Brexit goes, a change of direction would actually prevent, rather than precipitate a disaster, both for the Conservative party and for the country as a whole.

Photo by Tiocfaidh ár lá 1916

EFTA might save the day if MPs will read the small print

We have pointed out regularly on this website that, for all its faults as a long-term relationship with the EU, the EEA/EFTA route – whereby the UK remains in the European Economic Area (EEA) by re-joining EFTA, the European Free Trade Association – is a much better short-term arrangement to see us out of the Brexit door than the current proposed “Vassal State” transitional arrangements, particularly as it appears that these will be based on “good faith” rather than a treaty. Since when has the EU ever respected “good faith”?

More on good faith here, but it appears that the initial talking down and misrepresentation of the EEA/EFTA route by David Cameron selectively and inaccurately  highlighting the negatives, which were duly repeated parrot-fashion by everyone from Nick Clegg to Nigel Farage for their different reasons has distorted MPs’ perception of  what in reality could be a life saver for Mrs May and her government, whilst taking the wind out of the sails of all but the most fanatical remoaners.

This option has been brought into focus once again by Iceland’s Foreign Minister Guðlaugur Thór Thórðarson. A year ago, speaking on Radio 4’s Today programme, he urged the UK to rejoin EFTA and this last week, he has intervened in the Bexit debate again, saying that Iceland’s relationship with the EU had been misrepresented in the Brexit debate and allowed more independence than many people realised. “We have the best of both worlds, we can make deals wherever we like, we usually do it through EFTA,” said Thórðarson, adding “We also have bilateral agreements, for example we were the first Western nation to sign a bilateral agreement with China,” adding, “It’s not true we take 80 to 90 percent of [EU’s] acquis, we have taken 13.4% since 1994.” Of course, Iceland is not tied to the Common Fisheries Policy, the Common Agricultural Policy nor to any of the political structures of the EU.  As an EFTA country, it is out of the direct reach of the European Court of Justice. If the terms of the EEA agreement are found to be unsatisfactory, the agreement can be ended by simply giving a year’s notice.

Given the overlap between free trade agreements signed by the EU and those signed by EFTA, following Iceland and Norway’s example would enable trade to continue to flow seamlessly between the UK and EU as well as  countries like the USA, Japan, South Korea and Mexico. It would also much reduce the Irish border problem. Some hard brexirteers applauded the suggestion by Yanis Varoufakis, the former Greek finance minister, that Britain should avoid the Article 50 procedure altogether and simply leave. But they overlooked the fact that he suggested that the UK should move instantly to the EEA/EFTA model, pending completion of final negotiations which, he foresaw, could take some years.

At the moment, Mrs May is squeezed between a rock and a hard place. Six out of the 11 members of her “Brexit war cabinet” have stated their opposition to any “customs partnership” while 60 Tory MPs have insisted that they will not support the government if it pursues a “customs partnership” as it would make meaningful trade deals “impossible” and render the Department of International Trade “obsolete”. Given that Jacob Rees-Mogg, the leader of these sixty, has stated his willingness to endure 21 months of the proposed “Vassal State” transitional arrangement, it is hard to imagine that using EFTA instead as a transition would lead to widespread revolt. On the other hand, the security offered by EFTA would deprive the hard-core remainiacs of their support on both the Tory and Labour benches. The reasons given, for instance by Dr Sarah Wollaston, for supporting the House of Lords amendment – namely that she was not prepared to “endorse economic ruin” – would no longer apply.  There would be no credible reason for MPs not supporting the EEA/EFTA route unless they were genuinely determined to wreck Brexit. Some of the Lords, according to Lord Lamont, are seeking to do just this.  The EFTA route would pull the rug from under their feet, as few MPs would like to be exposed as mere wreckers when there would be no reasonable grounds to justify their behaviour.

This option could well become more attractive given that ever more MPs are starting to speak out against any close customs partnership with the EU. But, if the EEA/EFTA route is necessary at some stage on the way to a final settlement, it looks more tolerable than anything else which is within the bounds of possibility as a transitional arrangement during the few available remaining months of opportunity before the Article 50 notice expires.