Mrs May’s trashing of the Successful Nobo Industry

Notified Bodies (Nobos), together with Designated Bodies (Debos) and Assessment Bodies (Asbos), are one of our country’s least known success stories. Yet they could easily largely disappear, together with thousands of well paid jobs and millions if not billions of pounds in export earnings, if Mrs May persists in her determination to take this country out of the Single Market and European Economic Area (EEA).

A wide range of products – from equipment used in explosive atmospheres to toys – are required by EU product law to undergo third party conformity assessment and/or testing by suitable independent accredited organisations (Nobos) in order to be placed on the market in the European Union (EU) and often by extension the EEA. This is to ensure that they meet EU legal requirements, which often includes compliance with specified requirements in European Standards (ENs).  This assessment, depending upon the relevant EU product legislation and ENs may require continuing surveillance (of manufacture) and testing of the product by the Nobo.  Certification can also be time limited as well, requiring reassessment after a number of years.  Over the years, the EU has increased the scope of its legislation, which may in part originate elsewhere in world bodies or agreements and it carries out periodic updates of existing product legislation.

In turn, the Nobos need to be resident in the EEA, Switzerland or Turkey, be accredited with relevant competence(s) and are listed on the EU’s NANDO database.  Each Member State also has an accreditation organisation which regularly checks the competence of Nobos to carry out assessment and testing work. The UK-based list of Nobos includes famous and respected names such as British Standards Institute (BSI), Lloyd’s Register, the National Physical Laboratory and The Vehicle Certification Agency. There are also many other less well known, smaller organisations in the private and public sectors.

Through mutual recognition, a product with a conformity certificate issued by an accredited Nobo in one Member State is accepted in all the others without further assessment or testing.  Sometimes, however, a product may undergo further assessment as part of an overall system, but this is not intended to repeat previous work.

Recently the European Commission has published guidance for manufacturers and Nobos for after 29th March 2019 Notice to stakeholders withdrawal of the United Kingdom and EU rules in the field of industrial products.  After this date Nobos registered in the United Kingdom (as a ‘third country’ outside the EU and EEA) will lose their EU Nobo status and be removed from the EU’s database.

A manufacturer (or supplier) of a product requiring third party conformity assessment after 29th March 2019 will have to use a Nobo based in the EEA, Switzerland or Turkey in order to place a new or modified product on the EU market.  When placing a new or modified product on the UK market, the manufacturer is likely to opt for an EEA- or Switzerland-based Nobo for all conformity assessment to prevent duplication of work and costs. After all, Mrs May intends that after Brexit (if it ever happens instead of EU Vassal State status) UK legislation (presumably including product legislation) will follow EU legislation.

UK-based former EU Nobos could then see much of their work disappear quickly, including any work related to putting products on the UK market.  The Annex to the EU’s Notice to stakeholders withdrawal of the United Kingdom and EU rules in the field of industrial products lists the EU product categories covered. This, however, may be just the ‘tip of the iceberg’ since, depending upon the EU product legislation, components making up a particular product may also need some form of independent conformity testing and inspection.  Manufacturers or suppliers may also like to use a ‘one stop shop’ approach developing a longer term relationship with one Nobo to cover a wide range of their independent conformity, testing and quality assessment requirements, not merely to comply with EU product legislation.

A further blow to UK based Nobos is that without the potentially larger market provided by the EU, some investment decisions, say for testing facilities, may not be justified or even feasible.  In the current climate of uncertainty, prudent UK-based Nobos could already start transferring work and jobs to other EEA members in order to retain existing EU based customers.  They may also consider working through an EU-based Nobo who will ‘rebadge’ their work and obviously charge for so doing. This would in turn undermine their unique selling proposition – competitiveness.

It is possible that this impending loss of EU accreditation by Nobos can be successfully resolved by the Department for (not) Exiting the European Union.  However, at the moment, this does not look promising given that some of the inaccurate and uncompromising statements in the EU’s Notice to stakeholders withdrawal of the United Kingdom and EU rules in the field of industrial products relating to Nobos may not be legal under EU law; Nobos are not solely within the EU.

Third party testing and certification appears to have a very promising future worldwide. It provides confidence that safety, environmental impact and energy consumption have been independently assessed.  It may be essential when assessing some of the products of the future, such as autonomous or driverless cars. Sadly the UK is potentially going to face a huge handicap if Nobos cannot viably operate here through political decisions of the government.

The potential loss of UK and EU markets for UK based Nobos would not arise if Mrs May had not made such a rash decision in ruling out any ongoing membership of the EEA after Brexit.  She could have decided instead after Brexit on 29th March 2019 to re-join the European Free Trade Association (EFTA). This provides a breathing space. enabling us to remain in the EEA (whilst outside the EU) under different conditions which, for example, allow unilateral control of immigration (see Chapter 4, Schedule 112 The Safeguard Measures in the EEA Agreement).  Will she have the courage after 29th March 2019 to face people from these UK-based former EU-accredited Nobos who have worked hard over the years to build expertise, facilities, reputations and long-term relationships with customers and yet face unemployment, because of her premature rejection of a useful “holding position” without any consideration of an alternative?

Crony capitalism – how it works:- a letter from our Chairman

This letter from our Chairman appeared in the Derby Telegraph.

Whilst Mr. Corbyn is rightly making a great fuss about the terms on which private providers like Carillion contract for the provision of public services, the fashion for this type of arrangement reached giddying heights under Labour government.

One of the most notorious contracts was the sale in 2001 by the Inland Revenue of two thirds of its office buildings for £370 million which they leased back for £144 million per annum, including maintenance costs. Over the period of the whole contract period , the actual cost is estimated to be £4.2 billion. The much increased value of the office premises will benefit the contractor, a firm based in a tax haven!

Why does any government make such a silly bargain? Our old friend, the EU comes into it. Under the Growth & Stability Pact, governments are required to restrict their borrowing. By making the contractor put up the necessary money, the government keeps the debt off the public accounts. Of course, the contractors pay a much higher rate of interest than the government would have done and then have to add a profit on top. The increased cost is spread over many years and few people notice but the taxpayer is far worse off.

There is another advantage for those in the know. Ministers and senior civil servants, who awarded large lucrative contracts during their careers, retire from public office and spend a year with their inflation-proof pensions. They then reappear as directors and consultants for the contractors, using their insider knowledge to sell their services to their former colleagues in government. This process is known as “the revolving door”. They come back in again to their old ministries, demonstrating that private finance contracts provide very well-paid second careers for those who have left the public service.

The privatisation of Royal Mail demonstrates another aspect of EU influence. The EU’s Postal Directives decreed that letter and parcel deliveries must be part of a European market in postal services and not a nationally provided public service. Many people of widely ranging views supported the retention of this national institution. The Labour and Trade Union Movement did so too but suppressed the fact that this privatisation was the result of EU laws and continued to support EU membership.

Back in 1983 Michael Foot was the Labour leader and his policies were very similar to those of Mr Corbyn. Ken Clarke remarked then “The great thing about Europe is that it makes most of Labour’s policies illegal” . At least Mr Foot drew the obvious conclusion – that we should leave the then EEC. So it is strange today to see all but a handful of Labour MPs trying to wreck the European Union (Withdrawal) Bill. It has now passed its third reading in the Commons which is one step along the way of removing those EU influences which drove the process of privatisation.

Yours faithfully,

Edward Spalton

Awaiting the storm (or explosion!)

It cannot be much longer before the penny finally drops regarding the terms being proposed by the EU for the UK’s 21-month “transitional arrangement.”

Businessmen like John Mills and John Longworth, both of whom met Michel Barnier in Brussels last week, are distinctly unimpressed with what we are likely to be offered, but it is surprising that there haven’t already been even louder cries of outrage from the Conservative back benches. Last November, at a meeting organised by Conservative MEP David Campbell Bannerman, Rt Hon David Jones MP was quite unequivocal that any further involvement of the European Court of Justice (ECJ) in the legal affairs of the UK after Brexit would be an “absolute red line” for himself and a number of his colleagues, who would rather leave with no deal.

As more details emerge, it is becoming clear that it’s not just a role for the ECJ in our affairs which the EU wishes to incorporate into the transitional deal. According to an article in The Times, the EU will insist on the free movement of people throughout the period and the inclusion of people moving to the UK before 31st December 2020 in any post-Brexit agreement on citizens’ rights.. This again is a slap in the face for leave voters. It’s not just that many of us voted leave because we want to see a drastic cut in immigration; more to the point, we voted leave because we wanted our institutions to be sovereign – and this means that the EU must have no say in determining who can or cannot come into the UK or how long they can stay.

This tougher stance is contained in a new document dated 15th January. It is not the final word on the EU’s position, which will not be published until the end of the month, but it certainly gives us an idea of the general direction of travel. The guidelines produced last year by the European Parliament, although essentially a consultative document, were bad enough. We would be, in effect, a colony of the EU, unable to sign any trade agreements with other countries and still subject to the Common Fisheries and Common Agricultural policies. This document was bad enough, but according to Bloomberg, the latest document also states that we would need to seek the EU’s permission even to start negotiations on trade deals with third parties. We would be unable to strike out on our own path. The net “divorce bill” may also be increased.

Perhaps ironically, the Council President Donald Tusk told the European Parliament that “our hearts are still open “that the UK might “have a change of heart” and stay within the EU. This suggests a warmth towards us which just is not reflected in the negotiating guidelines which seem designed to squeeze and humiliate us as much as possible. Chancellor Philip Hammond claimed recently that the EU is “paranoid” that other countries will follow us out of the door. It has also been claimed that the EU is pressurising Switzerland not to make a bilateral deal with the UK The EU’s tough stance may well all be technically justifiable from the treaties, but it clearly wishes to interpret them in the toughest way possible as far as Brexit is concerned. No one with any sense of self-respect should give in to this bullying.

The transitional deal must therefore be kicked into the long grass as soon as possible, especially as there is no guarantee that a new trade deal will be ready to replace it after 21 months. The EU’s ambassadors have signalled a willingness for the transitional period to be extended, but this would only prolong an unsatisfactory situation which is not Brexit in any real sense of the term.

A further complication is looming on the horizon. The Norwegians have indicated that they would seek to renegotiate their trading arrangements with the EU if we were given favourable access to the EU’s single market  while not being a member of it.  This, of course, refers to any long-term deal and therefore is not an issue for Mrs May at the moment as the EU has insisted that negotiations on a long-term trading arrangement cannot start yet.  Let’s face it, she has enough on her plate as her team prepares to negotiate the transitional arrangements. We must hope that there is already a storm brewing up on the Conservative back benches which will rapidly knock these unacceptable proposals on the head and force the government to take a different approach.

If not, the storm is likely to strike with far greater ferocity  in four years’ time. A botched Brexit where we leave in name only is not what we voted for and not what Mrs May promised us when she became leader.   Brexit must mean Brexit or our Prime Minister will not only find herself consigned to a “rogues gallery”, excoriated by posterity alongside the likes of Lord North, Neville Chamberlain, Heath, Blair and Brown, but she may well take her party down with her.

Taking Stock

Where are we with the Brexit negotiations and where would we like them to be going?

It’s hard to find any sort of consensus about the former, let alone the latter. Are we being led deliberately towards a Brexit in name only or are we about to see our side walk away from the negotiations and rely on so-called “WTO rules” to govern all our future international trade? Was Article 50 always a trap which was going to end up locking us into the EU?

Given the multiplicity of deeply-held views, this piece could end up being just one other person’s opinion. I hope not.  In summing up where we are now, I have read a fair number of different commentators and weighed their opinions before writing this summary.

Firstly, I think it is beyond dispute that the talks have not gone brilliantly from the UK’s point of view, but at least we can be thankful they did not grind to a halt last December as some had predicted.

David Davis and his team got off to a bad start by agreeing to the EU’s sequencing – in other words, “sufficient progress” had to be made on the Irish border issue, the rights of EU citizens resident in the UK and the “divorce settlement” before we could proceed to other issues. Under Article 50 of the Lisbon Treaty, there was no requirement for him to agree to this.

Next comes the transitional arrangement. This was our side’s idea and does not reflect well on our politicians and civil servants.  Not that long ago, we were hearing from some quarters that a trade deal between the EU and the UK would be “the easiest in human history” because of our regulatory conformity. It has since dawned on at least some politicians (although possibly not even all of them, even now)  that this isn’t the case.

The mistake is a very fundamental one because it reveals a profound ignorance of the purpose of the whole European project. We have always viewed the EU as a trading bloc – after all, that was what Edward Heath sought to emphasise in the early 1970s. He did occasionally talk about the sharing of sovereignty, but he didn’t exactly bend over backwards to  explain even to Parliament what we were joining. Of course, Heath knew the truth and now our team is having to learn the hard way. The EU is primarily a political project and trade issues are only a means to an end.

It is also a very rules-bound organisation. Belatedly, our team is discovering that “flexibility” is not a popular word in Brussels. Treaties with precise wording govern every aspect of the EU project. The EU’s chief negotiator, Michel Barnier, knows its workings inside out and unfortunately, comes across as far more on the ball than David Davis.

Is Barnier an ogre? Does he want to punish the UK? Is he merely a puppet whose strings are being pulled by Berlin? A delegation of pro-Brexit businessmen met him in Brussels recently. One of them, CIB Committee member John Mills, described him as “tough and charming“. Essentially, he wants these negotiations to succeed but not at the expense of the integrity of the EU’s single market.  The European project unquestionably took a knock when we voted to leave and he as much as any senior figure in the EU is committed to damage limitation and keeping the show on the road.  The EU has other crises on its hands and Brexit is an unwelcome distraction. After all, it was our decision to leave.  Given these factors, Barnier is merely sticking to the EU rulebook which he knows so well. There is no evidence of any personal animosity towards us our our politicians.  His biggest gripe is that we don’t seem to know what we want from Brexit.

This is essentially where our request for a transitional arrangement comes in. There have been pro-withdrawal groups, including the Campaign for an Independent Britain, even before we joined the European project in 1973. We have been good at arguing the case for independence and ultimately persuaded over 17 million voters of our point of view. We have been less good at explaining how we can leave seamlessly and this has been the root of the Government’s problems.

The Transitional deal, at least if it is negotiated according to the rules laid down by the European Parliament, will be very bad news for us.  It seems to be being pursued purely because the Government knows that a full trade deal will not be ready by March 2019; in other words, it buys us more time.  Theoretically, there is a “sunset clause” – it will only last 21 months, but what if the trade deal isn’t signed by the end of this period?

The significant and surprising support for this transitional deal seems to be based entirely on the assumption that this won’t be a worry. If there’s something good to look forward to, these 21 months of being essentially controlled by Brussels is a price worth paying. This is a fallacy, however, as this piece helpfully explains.

The dilemma we face is that while there is widespread agreement about where we actually want to be after Brexit, there is no agreement on how to get there.

Apart from diehard remoaners, most people would probably agree on all or most of the following:-

i) The ECJ must have no power whatsoever to interfere in the government or legal process in the UK – including those EU citizens currently resident here. We must remove ourselves from Europol and the European Arrest Warrant – in other words, we are back to being a normal sovereign independent country as far as criminal justice is concerned.

ii) Fisheries and agriculture must be 100% under domestic control (and fishing should not be managed on a quota system)

iii) We must be separate from the EU’s military machine, including in the areas of procurement.

iv) We should not make any contribution to the EU’s funds apart from covering our costs where we wish to participate in a specific scheme such as the Erasmus student exchange.

v) we must have complete control of our borders

vi) we must have complete freedom to set our own levels of taxation, benefits and tariffs.

Agreeing our long-term goal is the easy bit. The problem is that we may never get there unless the Government can define in terms which the EU can understand what we want in the immediate post-Brexit period. The transitional arrangements might at least keep industry happy inasmuch as no new guidelines need be given for life could continue for a further 21 months more or less as it does now, but this is only kicking the can down the road. If we find ourselves bogged down in a transition arrangement along the lines already discussed and this period is then extended to (and beyond) the next General Election, we may find ourselves stuck in a sort of limbo which would please no one and would leave many voters vulnerable to the remoaners’ propaganda and thus eventually crawling back into the EU. Alternatively, if we walk away from the negotiations altogether, the net result could be a sudden and severe recession. In this instance,  once again we could be faced with a clamour to re-join.

This would be a tragedy. The key to preventing this happening is to focus on the unacceptability of the current transitional proposals. While many leave voters are strongly opposed to any further membership of the European Economic Area, as a stopgap, it is much less awful, as Nigel Moore argues here. What is more, according to Profesor George Yarrow, unless we give notice that we are quitting the EEA before 29th March of this year, we will still be in it on Brexit day by default, as leaving he EEA is totally separate from leaving the EU.

Yarrow’s thesis has not been put to the test, but then, Brexit as a whole is breaking completely new ground. It is hardly surprising that the path has not been a smooth one. All the same, progress has not been satisfactory thus far and although on balance, I think that the Government’s poor performance has been borne out of an inability to master the issues as quickly as anticipated rather than out of a devious plan to stifle Brexit, Mr Davis and his team desperately need to up their game if we are to achieve a successful Brexit in just over a year’s time.

Impressions of meeting with Michel Barnier in Brussels – John Mills

ON WEDNESDAY, 10TH JANUARY 2018

    Michel Barnier is an impressive person, tough and charming, who is evidently well on top of his Brexit brief and thus a formidable person to have on the other side of the table as the Brexit negotiations take place. He wants to get a deal completed but not at any cost to the EU27.

    His primary aim is to secure the integrity and security of the Single Market and the Customs Union rather than to search for a deal which is necessarily in the overall best interest of both the UK and the EU27. The notion that the EU27 may make substantial concessions to avoid economic pain is therefore very probably misplaced.

    While the best outcome from both the UK’s and the EU27’s point of view has always seemed to be for the UK to be outside the Single Market and the Customs Union but with a free trade deal in place covering goods and as many services as possible, this now looks as though it may be difficult to achieve. This is despite the fact that this is substantially the relationship the EU27 has with other countries as varied as Israel, Peru, Mexico, South Korea, Canada and the Ukraine.

    There are at least four major reasons why this is the case, these being:

1. The UK is starting from a radically different position from these other countries – essentially looking for a divorce rather than marriage, with all the baggage that this brings with it.

2. The UK is a much larger player in EU trade terms than any of these other countries, and thus potentially more disruptive if derogations are needed from the existing carefully balanced EU acquis.

3. The UK’s negotiation position has been gravely weakened both by the sequencing insisted on by the EU27 – dealing with money, Ireland and citizenship before trade – and by the result of the recent general election which has left no majority in Parliament for the WTO option which – although not the optimal outcome – is the only realistic fall-back position for the UK to have, without which the EU27 is left with all the cards in its hands.

4. Time is running short, although some extension of time by suspending Article 50 to create the proposed transitional period may help.

    In these circumstances, the most likely offer to the UK from the EU27 seems be free movement of goods and some concessions on services with the UK formally outside the Single Market and probably the Customs Union too but with the UK having to continue to accept nearly all the legal and regulatory obligations currently in place. These will almost certainly include substantial annual net contributions to the EU budget, free movement of people, significant jurisdiction by the ECJ, constraints on the UK’s capacity to negotiate trade deals on its own, and continuing membership of both the Common Agricultural Policy and the Common Fisheries Policy.

    An offer to the UK along these lines would probably be supported by all the EU27, led by Germany and France, but may not be acceptable to Parliament, let alone the British electorate. In these circumstances, preparing for the UK to fall back on WTO terms appears to be essential both to safeguard the position if no acceptable deal is presented to the UK, and to stiffen the UK’s negotiating position in the meantime.

    There may well be calls in circumstances where no acceptable deal is offered to the UK, for a second referendum on the UK’s EU membership, although probably only by a small minority of diehard Remainers. Even in the unlikely event of another referendum being held, current polls indicate that it would be unlikely to produce a different outcome from the one held in June 2016, thus confirming that Brexit is some form is likely to be inevitable.

    If the EU27 wants a deal with the UK it is therefore essential that this takes account of the political realities exposed by the 2016 EU referendum and current polls, which is that – if push comes to shove – the UK electorate would very probably be willing to opt for a clean break with the EU rather than finishing up being in a worse position than we were before Brexit started – with all the obligations against which people voted still in place, but with the UK having no say in how the EU develops in future.

John Mills 11th January 2018

For those who DON’T want a break from Brexit……

Maybe you are longing for Christmas, especially given the Parliamentary recess will at least give s a week’s break for Christmas. If so, there’s no need to read any further…..

On the other hand, you may find this article of interest. Whatever the turmoil of our Brexit negotiations, our country has risen from fifth to first ranking in the Forbes list of the best countries in which to do business.  This is the first time we have ever taken the top spot and the competition is fierce – several Anglophone nations, Scandinavia, Hong Kong Singapore and Switzerland  would have given us a good run for our money.

On a very different note, Open Europe has published a report entitled Beyond the Westminster Bubble – what people really think of immigration. It’s quite long- 74 pages in total, but it well illustrates the strength of feeling that exists among the UK population for a cut in migration, even though there isn’t much confidence in the Government’s ability to meet its target to reduce numbers to “tens of thousands”.

Open Europe may not be the moist popular think tank among Brexit supporters, but it does produce some very useful research and this paper is well worth reading.