Holiday homework – suggested reading

So much of the information around the Brexit debate is highly partial and skewed to one agenda or another, as politicians, media folk and journalists ride their hobby horses fiercely in all directions, often to tight deadlines which preclude calm thought and deep research. So it is refreshing to have a balanced view from a man of undoubted expertise, deep knowledge and unrivalled experience who is trying to bring some clarity and balance to the debate.

Sir Ivan Rogers was the UK’s Representative to Brussels until his resignation shortly before Mrs. May’s Lancaster House Speech in January 2017. His parting advice to his colleagues was that they must be sure to speak truth to power, especially when the truth was unwelcome. Judging from subsequent events, it seems that all of it may not have got through.

Here he reviews the history of the Eurosceptic debate and suggests a way forward towards the achievement of a rational, prosperous and mutually satisfactory relationship with our nearest neighbours and largest trading partners, as well as with the wider world.

His comments on free trade, the customs union and the unrealistic tone of much of the post-referendum debate are well worth reading. While one cannot know exactly where Sir Ivan stands, he comes across as one of those people who, while naturally not wanting us to be leaving the EU, has accepted the result and genuinely wants to see a successful Brexit. There are unquestionably some pseudo-Brexiteers around – i.e., people who deliberately wish to create a Brexit in name only in order to prepare the ground for our re-entry into the EU, but there are also a good number of ex-remain supporters who are far more concerned about the consequences of a botched Brexit and don’t have any hidden agenda. The insights of such people are well worthy of consideration, regardless of their stance prior to the 2016 referendum.

 

Confusion and chaos

The Conservative MP Sir Nicholas Soames said recently that he didn’t think that in all his 35 years as an MP he had “ever known such a truly unpleasant and deeply uncertain time in the house” following the publication of the Government’s Brexit white paper. Michael Fabricant, the author of the hyperlinked piece, claimed that Sir Nicholas’ memory is playing tricks on him and that the battles over  the Maastricht Treaty were worse.  My colleague Robert Oulds from the Bruges Group agrees – threats of both physical violence and blackmail were used by the whips of John Major’s government. We haven’t quite got to that point – yet.

Even so, the atmosphere in Parliament is one of confusion and chaos. “We really don’t know what is going on” said one MP.  He is not the only one. A spate of ministerial resignations has been followed by the submission of a letter by Philip Davies, the MP, to the Prime Minister stating that he has “lost trust” in her ability to deliver the EU referendum result.

Mrs May is likely to cling on until the recess next Tuesday, unless firm evidence can be found which will confirm that the current impasse is something she has created deliberately and that she doesn’t want us to achieve a successful break from the EU.  Her unsuccessful attempt to bring the recess forward was defeated by MPs – and unsuprisingly, as it gave the impression of a Prime Minister wanting to run away.  Even if she does make it to next Tuesday, however, it is going to be a torrid time and Tory MPs can expect no respite when they return to their constituencies. Locals activists are incensed over what they see as a sell-out.

So what might happen? It would be a brave man to predict the outcome. Essentially, there are four possibilities: firstly, Mrs May manages to achieve a nominal Brexit based on something like the Chequers plan, but no doubt with a few more concessions thrown in. Secondly, the government falls and a general election is called. Thirdly, a second referendum may be offered to the people. Fourthly, Mrs May is ousted and a new Brexit strategy is devised by a new team.

Of the four options, the first would destroy the Conservative Party at the polls and could cause a split within the party itself. Given that the European Research group of Tory MPs led by Jacob Rees-Mogg has stated that it will vote against it, such an outcome would only be possible by relying on the Labour, Lib Dem and Scottish Nationalist parties. Labour is in a serious mess itself. Besides the deepening divisions within the party over antisemitism allegations, the party is disunited over Brexit. A minority of MPs support Brexit. Some, such as Chuka Umunna, see stopping Brexit as their main priority whereas the Corbynites are much more interested in seeing a general election called.

It is the fear of Jeremy Corbyn ending up in No. 10 which Mrs May’s team is using as a weapon against dissidents on both sides of her party. The effectiveness of this argument is questionable. However disunited the Tories may be over Brexit, the last thing any of them want is another General Election, not to mention that the Brexit clock would continue to tick during the campaign period, as it did during last year’s election. This is in no one’s interests.

A second referendum was recently proposed by Justine Greening, suggesting three options be put to the electorate – accept the Chequers deal, leave without a deal or abandon Brexit and stay in the EU.  The proposal was dismissed by Mrs May, although it is by no means an impossibility. There are nonetheless several reasons why it is unlikely. Firstly, it reflects very badly on Parliament. In effect, MPs would be saying “You gave us a mandate. We can’t deliver it so we’re throwing it back in your court.” Such a move would undermine the very authority of Parliament, although the Conservatives, as the party of government, would be the biggest losers electorally. Secondly, it would be cruel. There is no groundswell among the general public for another referendum. The message MPs have been receiving from their constituents has been simple  – “just get on with it.” Unlike the 2016 referendum, it isn’t wanted and what is more, it would reopen wounds which have largely been healed. Given the febrile atmosphere in Parliament, a second referendum would be fought in a terribly heated, bitter atmosphere which would tear communities and families apart. No sane MP could possibly want to inflict such pain on their fellow countrymen. There is also once again the ticking clock. The necessary legislation would have to complete its passage through Parliament and then a decent amount of time would need to be set aside for a serious campaign. With Brexit Day only just over eight months away, there just isn’t long enough.  Furthermore, why just these three options? There are others, including EFTA, which have some support.

So the most likely option is a new Brexit strategy. Time is short and would be shortened further by the time taken up with the inevitable leadership contest. Joining EFTA next March to give us a breathing space wouldn’t satisfy everyone, including some regular readers of this blog, but other options are running out. Even if a WTO-type exit were feasible (which some of us doubt), it would need time to prepare for it and that time just isn’t available. It also wouldn’t command a majority in Parliament. Joining the EEC was a complex business too; the government gave clear, detailed advice to business for over a year beforehand to ensure a smooth transition. There is no reason to suppose that the task  of disentangling the accumulated complexities through  Brexit would be any less.

Two years have been wasted. We are not going to achieve the Brexit we hoped for. Given the present chaos, if we achieve a smooth but genuine Brexit via the EFTA route, leaving some unfinished business for the period after March 2019, (such as negotiating a looser long-term relationship), most supporters of leaving the EU could heave a guarded sigh of relief.

Photo by Free-Photos (Pixabay)

 

Can anyone engineer such a shambles by accident?

On this website, you can read two assessments of the Government’s Brexit White Paper. Nigel Moore, one of our regular contributors, calls it “unworkable, risky thinking“, saying that it is highly unlikely that the EU will agree to it as it violates so many principles of the Single Market.   Meanwhile, taking a different angle, academics from the Brexit Studies Department at Birmingham City University have examined the plan and have declared it to be “Brexit in Name only”, keeping us tied to the EU with the only real change being perhaps a limited ability to control freedom of movement.

It is now over two years since the Brexit vote. Mrs May reached the second anniversary of her taking office last Friday. Under her watch, a new Department, the Department for Exiting the European Union, was set up, with several hundred staff employed. What have they been doing all this time?

Unless drastic action is taken, we will end up in a shambolic situation whereby our fishing industry will be devastated, our freedom to trade will be limited and we will still be subject  to virtually all the EU Acquis with no representation. It is the worst of all possible worlds.

It is not as if Mrs May isn’t aware of the less damaging EFTA option, which as a transitional arrangement, would at least get us out of the EU, save our fishing industry and enable  us to negotiate a longer-term agreement from a position of strength. We know that EFTA-supporting MPs have met with her. They seem to have made no impression.  The EFTA route would have solved many of the Irish border issues. The present plan still leaves many questions unanswered. The unfortunate Dominic Raab, parachuted into David Davis’ former position, challenged Mrs May’s critics to come up with a credible alternative. The answer is that they have and she ignored it.

What is more, It does not take much foresight to predict that her party would suffer in the event of a botched Brexit. We have been warning for some time that it could create the worst crisis for the Conservatives since the repeal of the Corn Laws in 1846. It should come as no surprise to readers that since the Chequers meeting and the publication of the Government White Paper, support for the Tories has fallen by 6%, with UKIP being the beneficiaries. Only 17% of voters are happy with the Chequers proposals. Unsurprisingly, some Tory MPs are getting nervous.

The big question which needs addressing is whether this is cock-up or conspiracy. An interesting piece in The Telegraph mentions how Airbus has been double-crossed by the Government.  It spurred them to publish a dire forecast of the impact of Brexit before handing a prize £2bn RAF contract to US rival Boeing without a competition. What is more, the piece mentioned that Airbus officials met with Remainer Cabinet ministers. Just coincidence?

Then there is the question of what happens if, as widely expected, the EU rejects the proposals in the White Paper. Writing in CapX, Oliver Wiseman claims that although  Mrs May might claim that this is the “furthest the UK can go”, rejection may result in yet more concessions.

It is unsurprising that some MPs are beginning to smell a rat.  Jacob Rees-Mogg claimed that the PM was only ever “pretending” to deliver Brexit and that she was a “Remainer who has stuck with remain”.  This is a damning indictment. If proof can be found that Mrs May was never serious about achieving a successful Brexit, the implications are enormous.  Unfortunately, when her behaviour over the last two years is weighed in the balance,  it is becoming increasingly hard to hold to the position that the mess we are currently in – and which Mrs May seems so determined to continue – is entirely the result of incompetence.

Brexit White Paper July 2018 fails to deliver frictionless trade

Unworkable, risky wishful thinking on frictionless Single Market trade

The Government’s recent White Paper entitled The Future Relationship between the United Kingdom and the European Union is unworkable, risky wishful thinking as far as frictionless trade with the Single Market (and wider European Economic Area, EEA) is concerned. The White Paper also fails to take cognisance of how the European Union (EU) and Single Market functions, and its direction of travel, which makes it unlikely that the EU can accept it. If the EU did accept these insubstantial, ‘cherry picking’ proposals, businesses and regulatory authorities, etc. would struggle to make them work.

This short examination does not consider Facilitated Customs Arrangements etc. It is difficult to work out exactly what is being proposed and how it will operate. However, it appears to be unproven and to increase the complexity and costs of importing and exporting goods and services.

Vague unreality without any practical solutions

A major shortcoming of the White Paper is the lack of detail.  It is unclear what the various terms used and their proposals actually mean in practice, what they cover and what they omit. There is also no recognition of any problems or limiting issues that need to be addressed, and no consideration of timescales or resources needed to turn the theory into reality.  Important terms not explained include: goods, services, Common Rulebook, Free Trade Area for goods, approvals and authorisations, ‘sit alongside’, ‘open and fair’ and ‘participation in EU agencies’.  These are critical to understanding and avoiding impracticalities, ambiguities, arguments (with the EU) and confusion.

Whilst goods and services are to be treated differently, there is no analysis about how they can be separated, which could often be very impractical.  The only example of a product, vaguely and briefly considered, is mutual recognition of type approval of motor vehicles, which is itself unlikely to be acceptable to the EU.

The EU’s legal basis for Frictionless Trade in Goods is ignored

The White Paper’s aspiration is for frictionless access for goods – a free trade area part in and part outside the Single Market. There would then be one set of approvals and authorisations for goods to be sold in both markets (UK and Single Market). How this will work is unclear given that EU Directives (the EU Acquis) relating to the Single Market governs how it functions.

The EU’s direction of travel (for the Single Market), is towards harmonised standards, regulations, and enforcement or surveillance through a top-down centralised legalistic and bureaucratic framework. This gives the European Commission and agencies ultimate control inside the Single Market.  This is the basis for frictionless trade. The European Free Trade Association (EFTA) incorporates relevant EU Directives into their own body of EFTA/EEA law in order for them to participate in the wider EEA.

Generally there are no deviations from the EU Directives except those permitted within the existing legal regulatory framework.  Any change must be incorporated into EU law first.  Countries outside the Single Market (and wider EEA) are ‘third’ countries effectively outside EU control or surveillance necessitating appropriate measures regarding imports.  The White Paper effectively ignores this and assumes the EU will agree to the changes and the UK exceptionalism being proposed.

The EU’s Directives for Products are ignored

The White Paper does not mention any actual EU/EEA legislation and how it will be affected, nor does it discuss practicalities. There is also no acknowledgement of the EU’s position on trade in goods with ‘third’ countries.  The EU’s legally mandated arrangements to control diseases and parasites etc. in imported livestock, products, plants, packaging etc. from ‘third’ countries are largely glossed over.

Note:    EU’s approach (to products) is outlined in principle in COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT Enhancing the Implementation of the New Approach Directives , in more detail in the EU’s Guide to the implementation of directives based on the New Approach and the Global Approach and encapsulated in EU law in REGULATION (EC) No 765/2008 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 9 July 2008 setting out the requirements for accreditation and market surveillance relating to the marketing of products and repealing Regulation (EEC) No 339/93. The EU has also recently spelt out its position, which is consistent with their New and Global Approach Directives, in Notice to stakeholders withdrawal of the United Kingdom and EU rules in the field of industrial products.   The adverse effect of Mrs May’s Brexit on a frequently essential part of this product jigsaw (the work of Notified Bodies for mandatory conformity assessment of products) is explained here.

According to EU law, products of animal origin (meat and meat products) imported into the EU must be inspected (sanitary checks) at Border Inspection Posts (BIPs). For products of plant origin (for plants and plant-derived foods) phytosanitary checks are required at Community Entry Points (CEPs, Designated Points of Entry, DPE).

The White Paper adds a new level of complexity to the Single Market and EEA

The White Paper’s advocacy of regulatory alignment and mutual recognition adds further complexity.  It would inevitably require considerable amendment to existing EU Directives covering a wide range of products and associated production, regulatory and conformity assessment and market surveillance. This is far from straightforward or quick given that requirements are effectively intertwined; change one here and there can be a knock-on effect elsewhere. Then there is the creation of new precedents that produce anomalies elsewhere and situations that can be exploited by others to gain an unfair or unreasonable advantage.

Also, more errors and anomalies are likely to occur when time is short to develop revised legislation, standards, conformity assessments, accreditations and market surveillance processes etc. Obviously it is far from certain that the EU will agree to this in any instances.  If it did, this would impose new uncertainties and risks where before matters were fairly settled and predictable.

No Go Chaos for Nobos and their Conformity Assessments of Products

Notified Bodies need accreditation for carrying out mandatory independent conformity assessment on a wide range of products to be placed on the market in the EEA. They need separate accreditation (Designated Body, Debo) when carrying out assessments relating to national specific or special cases covered by EU/EEA legislation.  The White Paper proposes a Common Rulebook (harmonisation with EU rules) applying to goods to be exported to the Single Market but not to services.  Clearly the work of Nobos and Debos are services falling outside any compliance with the EU Rulebook whatever that vague term is supposed to mean in this context; for example, EU Directives with or with European specifications, mandatory conformity assessment, market surveillance etc.

Under the White Paper’s proposals, a new product could be assessed by a Debo and then exported to the EEA where the Debo’s accreditation and product conformity assessment is currently not recognised. Obtaining this recognition raises a host of practical problems, such as who gives the Debo accreditation, how is the Debo assessed, who keeps the register of accredited Debos and test houses, and what should the Debo now include in its product conformity assessment and certification?  Where an existing product undergoes a material change requiring further or updated assessment, more difficulties will inevitably result in determining whether this is Debo or Nobo work or a combination and who does what.  This complexity and vagueness needs to be resolved or a wide range of UK goods would become non-compliant and could not be exported to the EEA.

The Practical Alternative

Mrs May’s Government is proposing an unworkable Brexit in name only. However, instead it could have opted for a workable real Brexit by remaining temporarily in the Single Market (or wider European Economic Area, EEA) under much more favourable and flexible conditions by re-joining the European Free Trade Association (EFTA). (Further information see The EFTA/EEA Solution to the Current Brexit Impasse, Brexit Reset, Eureferendum.com, various posts on Campaign for an Independent Britain and affiliates )

The Devil is in the Missing Detail

So far there is little indication that the UK’s negotiators actually understand much, if anything, about the minutiae of the EU Directives and how the EU/EEA functions.  Even if the EU agreed to this White Paper (and this is a very  big ‘If’), the resulting outcome is most likely to be more, largely avoidable confusion all round carrying on for years among customers, suppliers, regulators, conformity assessors (e.g. Notified Bodies) and organisations involved in market surveillance.  The frequent questions would be “Where do we find the requirements?”, “Must we comply with this requirement?”, “What does this requirement actually mean?”, and “How much is this going to cost us?”

In short, the whole document is seriously deficient and likely to be rejected by the EU.

Brexit Academics Believe White Paper to be ‘Brexit in Name Only’

A university-based research facility has described yesterday’s White Paper to be ‘Brexit, but in name only.’

Academics at Birmingham City University’s Centre for Brexit Studies have been examining May’s long awaited Brexit blueprint, in order to understand the Prime Minister’s plan for Britain’s exit from the European Union.

The most notable points being the common rules for goods covering only those rules necessary to enable frictionless trade at the border and no tariffs on any goods.

Professor Alex de Ruyter, Director of the Centre for Brexit Studies states: “Like the rest of the country and indeed the EU, we have long awaited the publication of the Brexit White Paper.

“The controversy of the last few days following the Chequers Summit has only added to the worry over the long awaited document.

“Today we learn that the plan appears to be exiting the European Union, whilst maintaining many of the same rules and freedoms that we currently subscribe to.

“The plan envisions that we will still participate in EU agencies that provide authorisations for goods in highly regulated sectors – namely the European Chemicals Agency, the European Aviation Safety Agency and the European Medicines Agency – accepting the rules of these agencies and contributing to their costs.

“We also note continued cooperation in terms of transport and energy and the exploration of reciprocal arrangements for road hauliers.  This is an issue that we have regularly raised at the Centre and it is interesting and encouraging to see the Government seeking to address it.

“The one change we do see, is the end of freedom of movement, but with several exceptions, for example, in the case of companies wanting movement of staff.

“So we want to continue to enjoy ease of travelling, whilst imposing restrictions on movement into the UK.  Crucially, the White Paper envisages that these will be, ‘in line with the arrangements that the UK might want to offer to other close trading partners in the future’.

“Will the EU agree to keeping almost everything the same, whilst rescinding on freedom of movement and losing the UK as part of the EU27?  I doubt it and I suspect that many Conservative backbenchers will be unhappy to commit to ‘binding provisions’ around future trading arrangements. Similarly, Jeremy Corbyn’s opposition may well oppose the envisioned rules over state aid and competition.  As such there is a very real possibility that the government’s proposals may fail to secure parliamentary approval in addition to the EU’s potential qualms over ‘cherry picking.’

“We await the EU’s response with bated breath and I believe we’re in for an interesting few months following that.”

The Centre continues to analyse all government outputs and to research the public perceptions and impact of Brexit on both a regional and national scale.

The Fisheries white paper – Where the Government has got it wrong.

The Fisheries White Paper was better than I was expecting and certainly a lot of thought has gone into the wording, but – and there is always a but – the whole paper has been written on the assumption that there will be an implementation/transitional period, which is far from guaranteed.

I was also surprised to see in the Executive Summary the following two statements:

1) We do not yet know the outcome of the UK’s negotiations to withdraw from the EU or on a future economic partnership.

2) Access to markets for fisheries products will be agreed as part of our future economic partnership, just as with other goods and food products. This is separate to the question of fishing opportunities and access to waters, which consequently will be addressed separately, founded on the UK’s legal status as an independent coastal state.

Those two statements by DEFRA are an honest assessment firstly because the withdrawal agreement which includes the implementation period, is not complete, so whatever the White Paper proposes, there is no guarantee that will happen, especially given we are a long way from securing any sort of trade deal. Secondly, we know full well that the EU will demand present levels of access into UK waters as part of a trade deal. Having sacrificed fishing during the Implementation period –  and those 21 months could be crucial for the survival of the UK’s fishing industry – will the same happen for a trade deal whereby the EU refuses to separate access to market and access to UK waters?. No one knows until that crunch point arrives.

The White paper, in my opinion, places too much emphasis on flawed the quota system. In this, it copies Norway and New Zealand. Neither of their fisheries management systems would rejuvenate our coastal communities. However it is admitted other management systems are available and HMG would be prepared to trial such systems, which I passionately believe would dramatically increase our scientific data, as every fishing vessel should­ become a scientific data point.

Throughout Brexit the UK has made the serious mistake of not understanding the functioning of the EU, and has therefore put forward proposals that were inevitably going to be rejected. It will be interesting to see what today’s White paper states, and if it in turn is expecting policy that the EU can’t provide.