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.

 

 

Rejection of Theresa May’s little Englander ‘Brexit’ is splendid news

By Ambrose Evans-Pritchard. This article first appeared in the Daily Telegraph.

For liberal, free-market Brexiteers, the election shock is a gift from Mount Olympus. We are dancing cartwheels and quaffing our sparkling Kentish wines.

Theresa May’s plummeting star is an entirely unexpected chance to refashion British withdrawal from the European Union along different lines. It re-opens the possibility of a ‘Norwegian’ solution or close variant, an option that she shut down prematurely without debate because it limits her ability to control inflows of EU workers.

Mrs May sees Brexit through the fatal prism of migration, borders, and criminal justice – the déformation professionnelle of the Home Office – strangely oblivious to the immense economic risks of pursuing a narrow strategy to the detriment of all else.

Her vision is irksome to those of us who backed Brexit chiefly in order to restore the law-making prerogatives of Parliament, and to keep a safe distance from an EU that must evolve into a unitary political state if the euro is to survive. Such a destiny is self-evidently incompatible with British democracy and self-rule.

Mrs May is a Remainer who tries too hard to compensate. She has misunderstood the subtleties of Brexit, hijacked the Referendum for the better part of a year, twisted its contours, and seems unaware how her strategy is playing into a corrosive and false narrative taking hold in the world: that the British people are turning nasty and nationalist. So let us begin again.

The shrunken Tories will have to rely on the Ulster Unionists (DUP), who will not brook a hard economic border with the Republic of Ireland.

They will also have to listen more attentively to the Scottish Conservative leader Ruth Davidson and with her triumphant vanguard of Westminster MPs. She is pressing for the “largest amount of access” to the EU single market.

The balance of political power has changed. To the extent that this safeguards the unity of these Isles – the foremost priority – it is a blessing.

The election was not a rejection of Brexit, as Europe’s press seems to suppose. Some 84% of votes went to Brexit parties. But it was certainly a rejection of Mrs May’s particular variant of Brexit. Call it ‘hard’ if you wish. I prefer to call it insular, pedantic, and illiberal.

The natural fit at this stage is the European Economic Area (EEA), the Norwegian option that was once held out as the Holy Grail by Brexiteers of gradualist philosophy, but was subsequently rubbished by the tub-thumpers and Burka banners. The party of this ideology secured 1.8pc of the vote on Thursday, nota bene. It has no legitimate veto over anything.

The EEA would in principle allow Britain to preserve open trade with the EU single market and retain passporting rights for the City of London, the goose that lays the golden egg for a very vulnerable British economy.

“We should use the EEA as a vehicle to lengthen the transition time,” said Lord (David) Owen, one-time Labour foreign secretary and doyen of the EEA camp.

“Theresa May’s massive mistake has been to allow talk of a hard Brexit to run and run, and to refuse to frame a deal in a way that makes sense for the Europeans. The logic of the EEA is irrefutable,” he said.

Lord Owen said the EU’s withdrawal clause, ‘Article 50’, is designed as a deterrent to stop any country leaving. It leads to a cliff-edge, facing Britain with a take-it or leave-it choice when the clock stops ticking. “This puts us in a dangerous position,” he said. The EEA is a way to overleap this Article 50 trap.

Meredith Crowley, a trade expert at Cambridge University, says the great worry is that tariff barriers into the EU will jump to 12pc or 15pc overnight on UK exports of cars, engines, auto parts, and a range of machinery, setting off an exodus of foreign investment. “Joining the EEA would shut that threat down,” she said.

Critics argue that the Norwegian route is tantamount to remaining in the EU, but on worse terms, with no vote over policy: “While they pay, they don’t have a say,” said David Cameron before the Referendum.

This is a canard. EEA states are exempt from the EU’s farming and fisheries policies, as well as from foreign affairs, defence, and justice. They are free from great swathes of EU dominion established by the Amsterdam, Nice, and Lisbon Treaties.

Above all, EEA states are not subject to the European Court’s (ECJ) limitless writ over almost all areas of law through elastic invocation of the EU Charter of Fundamental Rights. The ECJ would no longer be able to exploit the Charter – in breach of Britain’s opt-out under Protocol 30 – whenever it feels like it. We would no longer be under an EU supreme court asserting effective sovereignty. These are not small matters. They are elemental.

Yes, the Norwegian option is a compromise. We would continue paying into the EU budget. This would do much to defuse the escalating showdown over the €100bn bill for EU reparations, poisonous because of the way it is presented. The transfers would become an access fee instead. Norway’s net payments in 2014 were £106 a head. Let us not die in a ditch over such trivia.

Britain would have to tolerate relatively open flows of migrant workers. But contrary to widespread belief, the EEA does not entail full acceptance of the EU’s “four freedoms” – movement of goods, services, capital, and people. Nor does it give the European Court full sway on these issues.

The arrangement allows “a lesser degree” of free movement than within the EU. The language covers the issue of residence, an entirely different matter from the rights of EU citizenship created by the Maastricht Treaty. The EEA permits the sort of emergency brake on migrant flows that was denied to Mr Cameron in his last-ditch talks with the EU before the Referendum.

The point in any case is that the EEA would be a temporary way-station for ten years or so, giving us time to negotiate 80 trade deals with the US, China, Japan, India, Mercorsur, and others without a gun held to our head.

Britain is a contracting party to the EEA. The agreement is binding on all members, and entails rights under the Vienna Convention on the Law of Treaties. Yes, we would need the goodwill of the EEA-trio of Norway, Iceland, and Liechtenstein, and the EU itself.

It is possible that some in the EU are now so intent on punishing Britain – or carving up post-Brexit spoils – that they would stop us pursuing this course. But that would be a hostile act. It would certainly clarify the issue. We would then know exactly what the real agenda was in Brussels. It is better to know this sooner rather than later.

There is no such thing as a soft Brexit. Wise statecraft can nevertheless work through this thicket. The EEA option is the best political solution on offer given the new circumstances. It is a graceful way out of the impasse for all parties, not least for a divided EU with a looming budget crunch and a mountain of other problems to deal with.

Tory ultras might balk at a settlement so far short of total liberation. I balk myself whenever I have to listen to the insolence of Jean-Claude Juncker. Yet Tory ultras did not win a mandate in this election for their hair-raising adventure into uncharted waters.

The vote changed the dynamics of Brexit. Compromise is now ineluctable. Jeremy Corbyn and his army of the young may have done this nation a favour.

Michael Gove’s Appointment – 200 mile Clarity Crucial

Fishing for Leave welcomes Michael Gove’s appointment as Secretary of State for Defra.

Press officer Alan Hastings said “FFL are happy given his family connections to fishing and his Brexit credentials and hope he does both justice”.

“Although Defra is not Mr Gove’s previous specialty his intellectual capacity should surmount not having had the Defra brief before, and we look forward to working with and engaging with him to bring him up to speed on one of the acid tests of Brexit”.

“Fishing can be a £6.3bn beacon of success for Brexit and can exorcise the betrayal by Edward Heath”.

“We must realise the opportunity to automatically repatriate all our waters and resources and to rejuvenate coastal communities with bespoke British policy that husbands our unique ecology, works for all fishermen and ends the policy of discards”.

“This opportunity cannot be squandered for the status quo to appease a minority of vested interests and the EU”.

FFL sounded a warning that, the deliberately ambiguous wording of the Conservative manifesto to describe the waters we will take back control of says those we have “historically exercised sovereign control. This deliberate choice of words can only mean out to 12 miles”.

“When international limits were extended to 200 miles Britain was already bound to the Common Fisheries Policy and therefore the EU automatically took control of our extended fishing limits”.

“Although the previous Secretary of State said the manifesto meant all UK waters Mrs Leadsom is now gone.

“It is now necessary for clarity and closure that Mr Gove and the Prime Minister commit to the entire UK EEZ out to 200miles or the midline”.

“We hope and wish Mr Gove every success in realising the opportunity for a triumph of Brexit and look forward to meeting with him to help ensure this happens”.

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

Criminal Justice – further reasons to distance ourselves from the EU

On the day that voters in the UK go to the polls, the European Council has announced that 20 member states have agreed on the details for setting up the European Public Prosecutor’s Office.  (It is easier to list the non-signatories: Ireland, Malta, Poland, Hungary, Denmark, Sweden, the Netherlands plus, of course, the UK.)

Plans for a European Public Prosecutor’s Office (EPPO) go back to the 1990s as part of a proposal to address budgetary fraud in the European Union.  Indeed, today’s announcement from the European Council emphasised its determination to tackle fraud:- “The EPPO will have the authority, under certain conditions, to investigate and prosecute EU-fraud and other crimes affecting the Union’s financial interests. It will bring together European and national law-enforcement efforts to counter EU fraud.”

The EPPO would operate under a European legal framework based on the inquisitorial Napoleonic law principle and applicable in all member states. The setting up of a mechanism initially to prosecute individuals for one specific class of offences was seen, in a consultation document dating from 1997 as “the embryo of a future European criminal code.” In other words, it was to be the first step in the harmonisation of legal systems across the member states.

Although the UK is leaving the EU, these developments are of more than academic interest. The EPPO will be empowered to issue European Arrest Warrants against people in the UK, as confirmed by the QC’s Opinion commissioned by Christopher Gill and Stuart Wheeler. The EPPO chief will surely be a political nominee (beholden to the Commission, doubtless), and can thus be used, on ostensibly “financial-crime” pretexts, to arrest and incarcerate political opponents of the EU project.

If we are to keep our distances from the EPPO, it is therefore more important than ever for us to dissociate ourselves from the European Arrest Warrant.

EU security and counter-terrorism control after Brexit

Dominic Grieve, the Conservative Chairman of the Commons Intelligence and Security Committee, argues that the UK must retain membership of the EU’s law enforcement agency (Europol) after Brexit, even if this means “accepting EU rules and judicial oversight for the European Court of Justice (ECJ).” This is not real Brexit and nor will it make us safer, in fact quite the reverse.

Security is the new defining issue of both British and European politics. Even the United States is concerned that Europe’s problem is a danger for us all. It will also form the key issue in the Article 50 Brexit negotiations, or at least so the Government hopes. According to The Daily Telegraph, the Cabinet meeting of 7th March 2017, which approved the strategy for PM Theresa May’s opening gambit in her soon to be sent Article 50 letter mentioned security no less than 11 times.

This was seen as using ‘blackmail’ and ‘threats’ and taking advantage of the fear of Russia. The governments thinking is that security is the ‘defining issue for the EU.’ And that the government believes that this issue gives Britain a ‘very strong hand’ in its forthcoming negotiations with Brussels.[i] It is surprising that a Conservative Government would see benefits in the fact that the EU’s eastern frontier is unstable and, in the view of some, vulnerable to Russian aggression.

Theresa May has not been alone in taking a robust approach to the EU and playing the security card. The Home Secretary, Amber Rudd, has said that the UK could stop co-operation with Europol. Perhaps the British government may even come out of the European Arrest Warrant… but that may be too much to hope for.

The flip side of the Government’s perceived threats not to participate in security measurers if no trade deal is forthcoming, is that if the EU does acquiesce to Britain’s demands then the UK will support and participate in Brussels ambitions in this area.

The benefit of the European Arrest Warrant and EU led police, judicial and intelligence cooperation is itself highly questionable. There are other ways with which a post-Brexit UK can still cooperate with other nations, and attempt to keep its citizens safe. Click here to read a recent article which details how this can be achieved.

There is a presumption that intelligence and data sharing via the EU is a good thing. This is not necessarily so. Compelling the UK to share information breaches the cardinal rule of intelligence, control over that information. Indeed, the US intelligence agencies drew the ire of the British government after they leaked information on the Manchester terror attack. The BBC reported that police stopped passing America information on the Manchester attack.[ii] Yet, even bigger issues are at stake. The effectiveness of how best to protect people is at stake and the independence of our security services from Brussels.

Dominic Grieve, the Conservative Chairman of the Commons Intelligence and Security Committee, argues that the UK must retain Europol membership after Brexit, even if this means “accepting EU rules and judicial oversight for the European Court of Justice (ECJ)”.[iii] In these times, the European Union is being touted by some unformed remainers as an answer to Europe’s terror threat.

In the referendum, they warned that Brexit will mean that the UK will be outside of Europol. This would not be a bad scenario as its officers are ‘immune from legal proceedings in respect of acts performed by them in their official capacity’. Yet, the Director of Europol, Rob Wainwright, recently stated that a post-Brexit UK can indeed still cooperate with the EU’s law enforcement agency. So, the arguments used by Remain in the referendum were clearly false. Yet, is the EU and coordination of security the answer to our safety? Some would argue that it has exacerbated the terrorist problem we now face.

EU Freedom of Movement was described by Ron Noble, the Head of Interpol, as “like hanging a sign welcoming terrorists to Europe.”[iv] He is not alone in his criticism. Sir Richard Dearlove, the former head of MI6, stated that Brexit is a security gain as it will allow us to have “greater control over immigration from the European Union.”[v] Indeed EU Directive 2004/38 stipulates that an immigrants criminal record is not grounds to refuse entry to the UK.

Sir Richard’s assessment of EU security agencies is that “…though the UK participates in various European and Brussels-based security bodies, they are of little consequence.” Ultimately his assessment is that these bodies have no operational capacity and are mainly forums for the exchange of ideas.

Just because these bodies are ineffectual is not the only problem. The even more significant issue is that EU led intelligence will detract from Britain’s participation in global bodies such as the ‘Five Eyes’ Intelligence-sharing partnership.[vi]

Another layer of EU bureaucracy taking over intelligence is no substitute for effective national control. Yet this emerging bureaucracy, indeed it has several new tiers, is exactly what Brussels is putting into place. And perhaps even keeping a post-Brexit UK tied into their structure. The EU has created Eurojust, the European Union’s Judicial Cooperation Unit, and in 2010, as a part of Europol, they established in 2010 the European Cybercrime Task Force (EUCTF).

Charles Michel, the Prime Minister of Belgium has called for “A European CIA (Central Intelligence Agency).” This is just the beginning the European Commissioner for Migration and Home Affairs, Dimitris Avramopoulos, also called for a pan-European spy agency.[vii] The President of the European Commission is also in favour of the EU coordinating member states secret services.[viii]

What is not realised by many is that these plans are already underway. The EU Intelligence and Situation Centre (EU INTCEN) came into being in 2011 and is the intelligence body of the European Union. It operates under the European External Action Service (EEAS). Along with the European Union Military Staff (EUMS) which handles military intelligence, EU INTCEN is part of the EU’s Single Intelligence Analysis Capacity (SIAC). These bodies are not effective.

Richard Wilton, Head of Counter Terrorism Command at New Scotland Yard from 2011-15, is adamant that EU led intelligence sharing matters not and Britain’s counter-terrorism capability will not be harmed by Brexit.[ix]

Sir Richard Dearlove dismissed the relevance of Brussels security bodies such as Europol, stating they were “of little consequence”. In fact, they are worse, as the fear of leaks is ever present. According to Sir Richard Dearlove British information is not shared throughout the EU as its members are potentially a “colander” for intelligence.[x]

The EU does not have a great track record on security. The EU’s Focal Point Travellers initiative, which seeks to coordinate investigations into foreign terrorist fighters in Europe from places such as Syria and Iraq only has information on 2,000 suspects which is less than half the foreign fighters known to individual EU member-states security services. And of course, this is just a fraction of both the number of people who have recently arrived in Europe from the middle-east and those homegrown people that sympathise with the jihadis. There is an intelligence black hole at the heart of Europe Union.[xi] Europol’s European Counter Terrorism Centre is not making us any safer.

Currently the dead hand of the European Union has been of little benefit tackling the problems that emerge out of places such as Molenbeek, Malmö and the suburbs of Paris, and clearly in the UK as well. Our safety cannot be outsourced to the EU as the likes of Dominic Grieve suggest. Nor is there the need. The UK is an intelligence leader and does not need the control of the European Union. Other states will, and do, want to share intelligence with Britain.

Britain’s intelligence services, along with our armed forces, are areas where we have an important resource which the EU is seeking to co-opt. Brussels is not stopping at the EU developing an intelligence arm. It is also building its military capacity, to back up its foreign policy[xii] and no doubt to establish its power at home and abroad. The plans are already underway.[xiii]

In the Brexit negations, which start on 19th June, the British Government must stand firm against EU attempts to take a measure of control over our excellent military and intelligence resources, and certainly not offer them up as part as some deep and special arrangement with Brussels. We can cooperate with global bodies and individual nations, but more EU bureaucracy in this important area is an unwelcome distraction.

[i] http://www.telegraph.co.uk/news/2017/04/01/revealed-cabinet-plotted-exploit-eus-defence-fears/
[ii] http://www.bbc.co.uk/news/uk-politics-40040210
[iii] https://www.theguardian.com/politics/2017/may/27/eu-theresa-may-combat-terror-brexit-europol
[iv] https://www.nytimes.com/2015/11/19/opinion/europes-welcome-sign-to-terrorists.html?_r=0
[v] http://uk.reuters.com/article/uk-britain-eu-security-idUKKCN0WQ0NE
[vi] http://www.pbs.org/newshour/rundown/an-exclusive-club-the-five-countries-that-dont-spy-on-each-other/
[vii] http://www.euronews.com/2015/11/30/belgium-s-pm-michel-calls-for-a-european-cia
[viii] http://www.euractiv.com/section/global-europe/news/juncker-warms-to-the-idea-of-an-eu-intelligence-agency/
[ix] https://www.thesun.co.uk/news/3676254/former-counter-terror-chief-says-britains-security-wont-be-harmed-by-brexit-because-of-our-spooks-global-reach/
[x] http://www.telegraph.co.uk/news/2016/03/24/quitting-the-eu-would-help-our-security-former-mi6-chief-suggest/
[xi] http://www.politico.eu/article/europes-intelligence-black-hole-europol-fbi-cia-paris-counter-terrorism/
[xii] http://www.bbc.co.uk/news/world-europe-31796337
[xiii] http://www.consilium.europa.eu/en/infographics/eu-global-strategy/