No surprise, no progress.

Theresa May travelled to the European Council meeting last week in the hope of persuading the leaders of the other 27 member states that sufficient progress had been made on the three sticking points of the Irish border, the “divorce bill” alias the EU’s exit payment and the rights of EU citizens living in the UK. Any gambler could comfortably have bet on her being disappointed. The language on both sides was very polite, but all that has been agreed is to talk about talks.

If Mrs May or other members of her government  had any hopes that a “divide and conquer” strategy would work, going over the head of Michel Barnier from the Commission, they must now be realising that it won’t work. For all the divisions within the EU, some of which we have mentioned here, when it comes to Brexit, there is unity. No trade talks until sufficient progress has been made on the three sticking points.

France’s President Macron said that there was still much work to be done on the financial commitment before trade talks can begin, adding: “We are not halfway there.” Such a statement can easily be married with the more positive tone from Council President Donald Tusk, whose denial that the talks were deadlocked contradicted a statement to this effect from Michel Barnier.

For anyone still muddled by contradictory reports in the media who is seeking final confirmation that the EU does not consider sufficient progress to have been made, this statement from the European Council says it all.

Mrs May is currently between a rock and a hard place. She may or may not decide to listen to the voices from within her own party telling her to walk away altogether, but one thing is for sure – she cannot stop the Brexit clock. Her loyalty to her own party cannot be questioned and she knows that any attempt to backpedal would result in the Tories tearing themselves to pieces.

On the other hand, she cannot ignore the concerns expressed by businesses. It’s not just government ministers and bloggers who are warning about aircraft not being able to take off after Brexit. Some UK airlines are preparing to warn their customers that flights booked after March 2019 may not take off and they will not pay compensation if planes are grounded. Meanwhile, the UK Chamber of Shipping has expressed similar concerns about the problems UK ports will face if there is no deal, calling such an outcome an “absolute catastrophe”.

EU sources continue to express their belief that eventually a deal will be struck, even though some people such as Owen Paterson, a former cabinet minister, have said that no deal is “inevitable.”

Who will be right? Unfortunately, Mrs May’s charm offensive has achieved little.  The EU is a very rules-based organisation and it is going to stick to the letter in the forthcoming negotiations. I may be wrong, and would be happy to be eating humble pie in 18 months, but I fear that unless our side really gets to grips with how the EU works, Mr Paterson may end up being correct by default.

May admits coastal communities will be lost in transition

A press release from Fishing for leave

At PMQs yesterday (Wed 11th Oct.) Theresa May finally let the mask slip when asked a question on whether Britain would still be locked into the disastrous Common Fisheries Policy (CFP) during a transition.

Before the House of Commons the PM stated that Britain’s fishing industry and coastal communities will once again be bargained as part of the agreement to gain a transition/implementation period.

“As part of the agreement we need to enter into for the implementation period, obviously that (CFP )and other issues will be part of that agreement”.

Fishing for Leaves Alan Hastings raged “It is appalling that the establishment won’t even make a stand on fishing when it is such an “acid test” of whether we’ve taken back control – after being sacrificed to join it looks like Britain’s fishing and coastal communities will be sacrificed on leaving too”.

“It’s sickening that it is not for any benefit but to cravenly gain a transition period that will only leave this country prostrate at the hands of the EU”

Fishing for Leave highlighted that under international law Article 50 confers a clean slate on March 2019 where all EU treaties and law ceases to apply – taking Britain cleanly out the CFP and leaving the country free to make our own laws and deals.

“A transition has been spun as part of a gentle unwinding during leaving – IT IS ABSOLUTELY NOT”

“Legally Britain leaves the EU at the end of the Article 50 process in March 2019. A transition period isn’t part of leaving but part of a future deal with the EU”

“Therefore, a transition is only within the EUs gift to give and on their terms – this puts Britain at the EUs mercy – we will have taken back control in March 2019 only to give it straight back to the EU in a transition deal – its madness”.

This was confirmed by Michael Barnier on the 21st September. That any transition past the Article 50 cut-off date can only happen if the UK effectively re-joins the EU to get it.

”I would like to be very clear: if we are to extend for a limited period the Acquis of the EU, with all its benefits, then logically this would require existing Union regulatory, budgetary, supervisory, judiciary and enforcement instruments and structures to apply

Alan Hastings fumed “Barnier has made it crystal clear – the only way the EU will give a transition is if it is entirely on their terms. Where Britain continues to obey all current and future EU law but has no say or input over them – it’s a worse position than being members – perhaps that’s the point!”

“Consequently, they can demand continuation of the CFP – most worryingly they can alter the rules to cripple and finish what is left of the British fleet so they clear the sea of the British industry”

“What Mrs May and her remain sycophants are doing just now in their desperation to Remain with the EU is prostrating Britain in regulatory purgatory as they hope to keep kicking the can down the road – lost in transition comes to mind”

“They are putting not only the fishing industry but the nation in a grave position at the EUs mercy”.

“Unless the political establishment wants to self-destruct when the public realises what they have done they must take back full control in March 2019”.

The campaign for an Independent Britain would like to point out that, while fully sharing Fishing for Leave’s concerns about Mrs May’s statement, it does not believe that this damaging transitional arrangement is anything more than a figment of her imagination, as we pointed out here.
We would also wish to thank Heather Wheeler MP for her comments on this press release. She said “This is a complete nonsense and wrong. We are giving notice on fishing and we are taking back our fishing limits and quotas.” CIB is seeking further information and clarification from ministers and any replies will be posted in due course.  Mrs Wheeler was a staunch supporter of Leave during the referendum.

 

 

No deal is looking increasingly likely

There was something of a storm in a teacup in the House of Commons on Monday. The Conservative backbencher Jacob Rees-Mogg asked the Prime Minister for an assurance that the European Court of Justice’s writ will not run in the UK after March 29th 2019. Mrs May didn’t oblige. She replied that “That may mean that we will start off with the ECJ governing the rules that we are part of.” This admission that we will “fall under ECJ rules” was all over the papers, but this media frenzy was based on the assumption that the transition period proposed by Mrs May, among others, is a realistic option. In reality, it isn’t.

What seems to be the core of the transition proposals is that we continue for a couple of years as a shadow member state. Having repatriated the acquis into domestic legislation, we would voluntarily apply the rules of the single market and customs union while in exchange, the EU would treat us like a member state for trade purposes and neither impose any tariffs nor apply the usual rules of inspection for a “third country” at the main ports of entry for UK exports, such as Calais due to our regulatory convergence with the EU.

The flaw in the proposal is that it makes the assumption that the EU will bend its own rules for the sake of an ex-member whose vote to leave dealt it a huge political blow. There is every indication that Mrs May’s transitional plan, which so upset Jacob Rees-Mogg, is a non-starter. EU bigwigs have been very courteous but the message has been quite unequivocal – No way to this transitional arrangement, no matter how many times the Prime Minister calls on the EU to show “leadership” and “flexibility.”

So what are we left with? In her speech yesterday, Mrs May raised the possibility of there not being a deal in place – transitional or otherwise – by March 2019. “While I believe it is profoundly in all our interests for the negotiations to succeed, it is also our responsibility as a Government to prepare for every eventuality, so that is exactly what we are doing. These white papers also support that work, including setting out steps to minimise disruption for businesses and travellers”, she said. (The white papers to which she refers cover trade and customs.)

Naturally, the Prime Minister stated that this was not what she wanted, going on to say “We are negotiating a deal. We will not have negotiated that deal until, I suspect, close to the end of that period that’s been set aside for it.” In other words, we will keep on talking and hope for some sort of deal eventually, even if the talks go to the wire.

This is not helpful for businesses, who will not have any guidelines to help them prepare for Brexit and will not even know whether a deal is going to happen until the last minute.  If they were to take the advice of some commentators, it would be to prepare for no deal being struck. For all Mrs May’s calls for flexibility, that word isn’t to be found in the EU’s vocabulary, as David Davis and his team are beginning to discover. We agreed to the EU’s negotiating timetable – in other words, that an agreement (or at least, reasonable progress towards an agreement) – on  the Irish border question, the divorce bill and the rights of EU citizens resident in the UK must come before any talk about trade. We needn’t have done this, but we have and so who can blame the EU for sticking to its guns when there has been very little progress in these three areas?

The repeated rejection of ongoing membership of the European Economic Area, for instance, by re-joining EFTA, has closed off another option and one which has two advantages over the bespoke transitional arrangement which Mrs May is suggesting. Firstly, it is rooted in reality. We would be signing up to an agreement which the EU has already signed. Secondly, there would be no need to accept the supervision of the ECJ or to be part of the EU’s customs union. We would thus be free to strike our own trade deals.

There is also one other intriguing possibility, first raised by George Yarrow of the Regulatory Policy Institute. In his paper,  Brexit and the Single Market, he claims that on Brexit, the UK would remain a member of the EEA by default  He points out that joining the EU does not automatically mean joining the EEA; a separate accession process is required. Likewise, when Austria, Sweden and Finland left EFTA to join the EU in 1995 (by which time the EEA agreement between the EU and EFTA was in place), they did not have to re-apply to join the EEA. They were already members through having been in EFTA. The default position for the UK on departure, therefore, is that it too would remain an EEA member.

Yarrow’s thesis has attracted little attention from either our negotiators or the EU’s team. It raises a number of questions but it might possibly offer some answers. While the EU has no interest in exploring it, it would make life a lot easier for David Davis. We would not be under the power of the ECJ but of the EFTA court (which is limited to “EEA-relevant” matters) and could follow Liechtenstein and apply the same restriction on free movement of people, using Articles 112 and 113 of the EEA agreement. At a stroke, we would be in a better transitional position than under Mrs May’s proposals – to which the EU is not going to agree anyway.

On the other hand, if Yarrow is wrong and leaving the EU means leaving the EEA, it does mean that time is very short – probably already too short – for any satisfactory arrangement  to be in place by March 2019. German manufacturers are being told to prepare for a “very hard Brexit” while the Irish equivalent of HMRC has already reached the conclusion that customs posts will need to be erected between the Republic and Northern Ireland, even though no one on either side wants to see the return of any sort of visible border.

Yarrow’s thesis or an immediate application to re-join EFTA  are thus the only two escape routes from the looming cliff edge which no one wants either. The first option is untried and may not stand up legally while the second has been repeatedly rejected in favour of a chimera – namely Mrs May’s illusory “transitional arrangement”. We are not yet in Private Fraser territory where “we’re all doomed”, but Mrs May and her party could well be unless they engage in some lateral thinking – and quickly.

 

Groundhog Day

If you think you have read a post like this before, you’re probably right. Another week of Brexit negotiations are about to begin which will almost certainly end with very little progress being made. A smiling David Davis will emerge in a few days’ time and give a very upbeat assessment of the talks at a press conference while Michel Barnier, in guarded but polite language, will say that actually very little has happened which will enable the UK and the EU to get down to discussing any sort of future trade relationship.

It’s rather like the film Groundhog Day where an American weatherman finds himself trapped in a time loop, repeating the same day over and over again, except there’s an important difference: in the film, time basically stands still whereas the Brexit clock is ticking away.

To be more precise, Brexit day, 29th March 2019, will take place 1,010 days after our vote to leave on 23rd June last year. In exactly one month’s time, November 9th 2017, four days after Bonfire Night, we will reach the halfway point and so far, there is no sign of any deal which will enable trade to flow seamlessly between the UK and the EU once we leave the EU.

Even the plans for a two-year transition will be going nowhere. Essentially, while Mrs May may be telling the EU that the ball is in their court, the EU is being asked to make an exception to its normal rules for the sake of a former member state which doesn’t want to be part of the club any more. It is under no obligation to say yes – indeed, it has given every indication that it is not going to. Mrs May’s speech in Florence did nothing to shift the predominant belief in Brussels and elsewhere that there was plenty of goodwill in it but little of substance which could unblock the negotiations in the three key areas where agreement must be reached before trade talks can begin – the Irish border question, the divorce bill and the rights of EU citizens resident in the UK.

It may be a case that Mrs May is being advised to take a tough line in the hope that the EU will blink first. If so, she (and her advisors) are likely to be disappointed. Even so, the fallout from Mrs May’s conference speech and the  failed attempts to remove her have left her with no option but to ensure we leave the EU in March 2019. Grant Shapps, the former Tory Chairman who surfaced as the leader of the failed coup, did not raise Brexit as an issue, but Nadine Dorries, a consistent pro-Brexit Tory MP, claimed that the plan was to take Boris Johnson down with Theresa May and install a new pro-remain leader who would stop Brexit.

We will never know the truth of what went on in the aftermath of Mrs May’s speech, but the strong support she has been given from pro-Brexit MPs conveys the implicit message that there can be no turning back,

So are we heading towards a no-deal situation when our delegation will walk away from the talks, blaming EU intransigence? Business leaders will not like this and will be lobbying hard to prevent such an outcome.

This leaves Mrs May caught between a rock and a hard place.  Maybe she (or her advisors) still haven’t grasped the political nature of the EU project. This is hardly her fault. From Edward Heath onwards, the wool has been pulled over the eyes of the UK so effectively that even serving MPs think that the EU is all about trade, which it isn’t. If we are to believe those who know her well, she is typical of many Tories who  have never been that bothered about the EU but was forced by Cameron and Osborne, along with a significant number of her colleagues, to come off the fence. One of our correspondents claims that at the dinner parties he hosted, Cameron and his henchmen described supporting leave as “xenophobic”.

Indeed, if the finger of blame should be pointed at anyone, it is the dynamic duo who headed up the administration before June 23rd last year. Cameron and Osborne held a referendum they didn’t expect to lose, trying to frighten the voters and intimidate their parliamentary colleagues  so that the result would never be in doubt. So confident were they of victory that the Civil Service was banned from drawing up any exit plan.  According to Craig Oliver, Cameron’s spin doctor, Cameron arrived at Downing Street after the result was announced on 24h June saying almost jokingly “Well, that didn’t go according to plan!”

Indeed it didn’t and nor has the first 15 months of Mrs May’s premiership. We can but hope that the next 15 months see some significant progress but as far as the current round of negotiations is concerned, few people will be holding their breath.  She has been bequeathed a very difficult task by her predecessor and it may well take some further crisis before we start to see any real developments which will prevent the “cliff edge” that draws closer by the day and rightly concerns so many.

Photo by vastateparksstaff

Cough, cough, but no new insights on Brexit

There were at least two statements about Brexit during the Tory conference which show that some at least within the party appreciate the seismic change that Brexit involves. Firstly, Philip Hammond, the Chancellor, said that Brexit was “one of the most challenging tasks ever faced by a peacetime government in Britain.”  He is quite right there. Secondly, Jacob Rees-Mogg  challenged Theresa May’s assertion that her government would not be “defined by Brexit.” It “is the defining political issue of our time and and to pretend otherwise…is absurd”, he continued, comparing the changes Brexit would bring to the Great Reform Bill or the Glorious Revolution of 1688.

Again, all well and good, but we were expecting something more from the Prime Minister in her keynote speech, particularly more detail on what the route to Brexit was going to look like. Sadly, we were to be disappointed.

Mrs May reiterated that we would leave the EU in March 2019. No back-pedalling here or she is toast – and she knows it. She then continued “I know some find the negotiations frustrating, but if we approach them in the right spirit – in a spirit of cooperation and friendship, with our sights set firmly on the future – I am confident we will find a deal that works for Britain and Europe too. And let’s be clear about the agreement we seek.”

Oh no! Next came that awful phrase again “deep and special” – twice, in fact.  Please bury this one, Mrs May. It’s just as bad as “strong and stable” which the voters found so unconvincing in June.  It doesn’t reflect reality and sounds rather soppy. Mind you, what came next as she fleshed out this overworked cliché sounded rather familiar too:- “A partnership that allows us to continue to trade and cooperate with each other, because we see shared challenges and opportunities ahead. But a partnership that ensures the United Kingdom is a sovereign nation once again. A country in which the British people are firmly in control.” Once again, her statement begs the obvious question, “yes, but how are we going to get there?”

What is more, Mrs May ignored the unfortunate reality that negotiations on this partnership are not even going to be started any time soon. Yesterday, the European Parliament passed a resolution which stated that the “absence of any clear proposals has seriously impeded the negotiations”. The Parliament is “of the opinion that in the fourth round of negotiations sufficient progress has not yet been made” in the three key areas. Of course, the resolution is significant but merely a non-binding expression of opinion, not having been introduced by the EU Commission.

Maybe a speech at a party conference is  not the best occasion for announcing a new initiative on Brexit to unblock the talks, but when exactly will the moment come? Her words on Brexit today could have been cut and pasted from the Florence speech, which was received politely by the EU’s leading lights who then pointed out that it gave little idea about the sort of deal Mrs May is seeking, both for the interim and longer term.

To be fair to the Prime Minister, she wasn’t at her best, having to deal with a persistent cough and – as if that was not enough – a moronic intruder who somehow gatecrashed the meeting, handed her a P45 saying “Boris made me do it.” However, the issue goes deeper – and affects not only the Prime Minister but, it seems, a considerable number of Members of Parliament – they still fail to understand what the EU project is all about.

During the German General Election, one politician, when asked about Brexit, said he regretted that the UK always viewed the EU as an economic rather than a political project, this failing to see its value – at least in his eyes. This man, whether by accident or not, has hit the nail on the head. It explains why we are  getting two different pictures from the UK and the EU side whenever they report on the current negotiations.

To put it simply, the UK negotiators (and, I would suspect, Mrs May), are viewing  these negotiations through this same historic mindset. The EU must want a trade deal with us because surely it would be foolish not to. Look at how their businesses would suffer without one. Therefore, if we complete the repatriation of the acquis by Brexit day, there should be no reason why should we not trade as before – well, more or less – as there will still be regulatory convergence.

The EU’s reply, reiterated ad nauseam by Michel Barnier, is that we will be a third country on 29th March 2019. We will be outside the EU’s political bloc, whose ongoing integrity matters far more than trade deals. If the EU was prepared to reduce Greece to poverty – and Greece wasn’t even talking about leaving the EU – why should it put trade before politics in the Brexit negotiations? To repeat, for us, it’s all about trade whereas for the EU, it’s all about politics. Even discussion of any interim arrangement needs to be viewed in that light.  The EU simply will not let us enjoy two years as an honorary member of the club while outside the jurisdiction of the ECJ  and refusing to continue to abide by the EU’s free movement rules. It is another terrible and overused cliché, but only when our politicians can learn to see how the EU project is understood by the likes not just of Barnier, Juncker and Verhofstadt, but also of national leaders such as Merkel, Macron and even Varadkar – and realise that they are all more or less of the same opinion – will we be able to escape the “having cake but eating it” mindset which has so bedevilled the negotiations from the very start.

There are grounds for hope that at least some MPs are belatedly beginning to understand the nature of the EU, so I have been told, but they need to spread the word among their colleagues pretty quickly if we are to have any hope at all of leaving the EU in March 2019 with any sort of deal worthy of the name.

 

Photo by EU2017EE

Paved with good intentions?

If Mrs May hoped that her speech in Florence would unblock the Brexit talks, she must be feeling somewhat disappointed. Yesterday, Donald Tusk, the President of the EU Council politely welcomed its “constructive and more realistic tone” but then went on to say, “As you know, we will discuss our future relations with the United Kingdom once there is so-called ‘sufficient progress’. The two sides are working hard at it. But if you asked me and if today Member States asked me, I would say there is no ‘sufficient progress’ yet.”

Mrs May’s speech, as we mentioned recently, was  optimistic in tone and stated very clearly that the EU had never really worked for us. It “never felt to us like an integral part of our national story” although she stressed her enthusiasm to work closely with it once we leave.

But what exactly would this new partnership look like? “The question is then how we get there: how we build a bridge from where we are now to where we want to be,” said the Prime Minister. Unfortunately, she failed to answer her own question, apart from stating that a transitional period would be needed and ruling out ongoing membership of the European Economic Area, even in the short term.

The speech encapsulated the problem with which the Government is struggling. Like Boris Johnson, Mrs May sounded very hopeful about the UK’s prospects post-Brexit. She is right to do so. We potentially have a great future as an independent nation. The problem is reaching this point with our economy intact. Daniel Hannan has recently joined in the trade debate. enthusing about the prospects for free trade once we’re out of the EU, but we keep coming back to the same question:- how are we going to leave?

It isn’t helping that our team, led by David Davis, accepted the EU’s preconditions that discussions on a wider future relationship, including trade, cannot begin until “sufficient progress” has been made on the Irish border issue,  the “divorce bill” and the rights of EU citizens currently living in the UK. Mrs May stressed that the EU needed to “be creative” in working out its future relationship with the EU, while David Davis insisted that there should be  “no excuses for standing in the way of progress”.

But even if the outstanding issues are resolved, and there is little sign of any meaningful agreement as yet, what sort of agreement exactly does the UK want? Michel Barnier, the EU’s chief negotiator, has called  for  “a moment of clarity” from the UK’s side. He is quite right to ask this question as there are plenty of us this side of the Channel who can’t wait to see the UK safely out of the EU but at the same time are in a quandary regarding how the Government proposes to  get us there. The hints in Mrs May’s speech about the sort of transitional arrangement she would like suggest somehow more or less staying in the EU but somehow not being subject to the European Court of Justice – in other words, still in “having cake and eating it ” territory and thus unacceptable to the EU.

Scan through our website and read the comments on earlier articles and you will find a few people doubting if Brexit will ever happen and fearful that Mrs May is going to betray us and call the whole thing off.  While fully appreciating the anxiety of such people, I do not believe this to be remotely possible. The slightest hint of back-pedalling on Brexit and Mrs May would immediately face a leadership challenge. What is more, the Tories garnered much of the leave vote in last June’s  General Election because they promised to deliver on Brexit. Following the better-than-expected showing by Labour under Jeremy Corbyn, a botched or half-baked Brexit means electoral meltdown for the Tories and they know it.

Mrs May and her team are therefore under great pressure. There is no turning back, whatever some sections of the press may say – or indeed, secretly wish for. One possible scenario is that Mrs May and David Davis may pull out of the talks, blaming EU intransigence and falling back on the “no deal is better than a bad deal” position – in other words, the so-called WTO option. Iain Duncan Smith, among others, has been urging the government to prepare for no deal.

It probably won’t come to this, but we can expect a rocky road ahead in the next few weeks, especially as much of the business world does not share the optimism of Mr Duncan Smith or Professor Patrick Minford that the WTO option, coupled with a more or less total elimination of tariffs, is going to be beneficial. In the long term it may be, but the shock it would deliver to UK businesses in the immediate post-Brexit period would be immense with, among other things,  the likelihood of a massive stack of lorries on the M20 building up the moment we leave, unable to clear French customs due to a lack of the necessary paperwork.

So the Brexit clock keeps ticking and M. Barnier keeps reminding us that we will become a “Third Country” in just over 18 months time. Given it’s now more than 15 months since the Brexit vote, we are only six weeks or so away from the halfway point between the referendum and the result we sought. We can but hope that some sort of clarification or change of tack will take place soon or the dream for which so many of us campaigned for so long may turn out, in the short term at least, to be more of a nightmare. The road to Hell, they say, is paved with good intentions. The road to Brexit may turn out to be very similar.