Booker: the great unmentionables

Sunday 23 April 2017  

As usual when another election comes along, Booker tries to point out some of those hugely important issues which won't be getting discussed, because all the parties agree not to notice them.

The irony, in my view, is that although this is supposed to be the "Brexit election", the one thing that won't be discussed in any detail is the way we should be leaving the EU. At best (or worst), I fear that all we're going to get is a half-hearted re-run of the referendum campaign to the counterpoint of ritual cries about the Single Market.

Anyhow, high on Booker's list in this week's column is the energy future we face under the Climate Change Act, where our politicians have all happily nodded through a "decarbonisation" policy whereby we shall before long be phasing out all those remaining fossil-fuel power stations which still provide more than half our electricity, to rely instead on grotesquely subsidised "renewables" and imaginary nuclear power stations which show little sign of getting built.

Scarcely any MP has yet shown any sign of recognising what a disaster this is heading us for. The only mentions it is likely to get in coming weeks will be virtue-signalling manifesto references to the need for yet more unreliable renewables.

That is fair enough but, because of the EU links, this is probably a downstream issue – for the next election rather than this one – and then only after we have has a serious public debate on energy. For the moment, we have to concentrate on Brexit.

Even less mentioned, says Booker, will be the scandalous state of our "child protection" system and the family courts, as almost every month the number of children being removed from their families continues to break records, far too many of them for wholly inadequate reasons.

The only MP who ever properly recognised the nature of this tragedy was the Lib Dem John Hemming, who lost his seat in 2015, and it is now lost to view in the one place, Parliament, with the power to try to bring this corrupted system back to its original laudable intentions.

This, though, demonstrates the inadequacy of the electoral system. It is never going to be the case that the nation chooses a government on such narrow issues – no matter how worthy they are.

We need separate mechanisms, outside the framework of a general election, to be able to address such failures. Here, there is an excellent opportunity for The Harrogate Agenda, which would permit a referendum on the Childrens' Act, with a view to seeking its abolition.

Next in Booker's line of fire is public spending. How often, he asks, are we told that public spending rose last year from £761 billion to £784 billion, and is due this year to hit £797 billion?

This makes for his third unmentionable: our still soaring national debt, due to rise again this year, from a mere £316 billion at the turn of the century, to £1,829 billion – the interest payable on which, £52 billion, is alone way ahead of our spending on national defence.

We may hear much about those damaging "cuts", on everything from the NHS and care of the elderly to our schools and police. But how often are we told that public spending rose last year from £761 billion to £784 billion, and is due this year to hit £797 billion.

These are the figures supplied to Parliament for every MP to study, but since not one of them has any idea what to do about it, it's all best pushed under the carpet. And, if you are standing for Labour or the Lib Dems, you can just stick to complaining about those dreadful "cuts".

Finally, of course, there is Brexit, where all the indications are, from an increasingly stern Brussels and from the implications of Theresa May's decision that we should shut ourselves out of the single market, that we may end up in a situation much worse than most people yet realise or than what we have now.

It is always a danger sign, Booker says, when all our politicians agree on taking some great leap in the dark, without giving any proper thought to where it may lead; as it was when 463 MPs voted in 2008 for the Climate Change Act, without any of them asking how in practice we could cut down our "carbon emissions" by four fifths within 40 years without shutting down virtually our entire economy.

We similarly saw 494 MPs voting to send Mrs May on her way to Brussels, without having any idea what this may lead to. They have no idea that, in just two years, she will be able not only to agree a unique deal which somehow allows us to carry on trading with our largest export market and the source of 30 per cent of our food much as we do now.

Still less do our MPs have any sensible suggestions on how to sort out the thousand and one other issues needing to be resolved, from foreign and security policies to agriculture and fisheries: even how airliners from Britain can continue to enjoy free access to the "single European sky".

But, Booker concludes, at least she will be able to enjoy her huge election victory before some very uncomfortable realities begin to break in, and she will avoid having to face the country again in 2020, when the results of her negotiations are evident for all to see.

And it is then, when she has sorted those details that the truth of Brexit will emerge. Far from being a solution to our problems, it is just an enabler. After Brexit, Mrs May will not be able to hide behind "Brussels".

It is then that she will have to work out what is to be done about our suicidal national energy policy and how to pay the interest on a national debt which by then could have topped £2 trillion.

Richard North 23/04/2017 link

Brexit: a historical curiosity

Saturday 22 April 2017  

One of the side-effects of this referendum, it would seem, will be the next step in the decline and fall of Ukip. The party is broke, short of willing candidates and bereft of leadership.

Even their most prominent member, Nigel Farage, has done a runner, claiming he is more useful in Strasbourg and Brussels where, unlike in "easy win" Clacton, his tax-funded expenses will keep flowing.

In a move that no real political party would contemplate, Ukip is also considering having its people stand down in some seats currently represented by strongly pro-Brexit Conservative MPs.

There is also "keenness" among some Ukip figures for the party to stand aside in seats where a pro-leave Conservative MP is facing a close challenge from the pro-remain Liberal Democrats, in order not to split the vote.

Ukip is said to be preparing to present such a move as a principled decision to best secure departure from the EU. However, it would also save the party cash, allowing it to focus its limited resources on as-yet undeclared target areas.

But unlike previous general elections, there is no sugar daddy waiting in the wings with his pockets full of cash, ready to bail out impoverished candidates. The most recent of the party's big donors, Arron Banks, has gone AWOL and may even stand as a rival candidate in Carswell's former seat, while fending off the Electoral Commssion which is investigating his spending during the referendum.

With Ukip entering the election campaign deprived of its one and only MPs, and facing the prospect losing its entire corps of revenue-generating MEPs, the party's influence is on the wane. And not even its best friends believe it will make up its losses by gaining even a single MPs.

Farage's aim while he plays on the "stage" offered by the European Parliament, is to promote a "hard Brexit", the pursuit of which has become the holy grail of the "kippers". This they cling onto as their "vision" of ideological purity, for want of any more creative or intelligent ideas on how to manage the UK's exit.

More than anything, it is this refusal to engage in the practical realities of Brexit that is dragging the party down into the well-deserved oblivion that awaits it. The real job of managing the process of extracting ourselves from the European Union is being left to the grown-ups, while Ukip members whinge ineffectually from the sidelines.

In the longer term, the nation is going to have to get used to a new style of national politics, where Ukip is no longer a credible electoral threat, where Labour is in what seems to be terminal decline, where the Lib-Dems are picking up the protest vote and the Tories, for the time being, are all-powerful and sweep everything before them.

Although we've been there before, in the Thatcher years, many of the new generation of political wonks cut their teeth in the Blair years, and have seen only weak Conservatives governments since, lacking any clear ideology or commitment to Conservative principles.

Yet here we are, on the brink of what looks as if it could become a one-party state, even if the future of the Tories is entirely bound up in how well it manages Brexit.

Perhaps it could have been different, had Ukip worked up a realistic exit plan and sought to set the agenda for the next decade but, despite Farage's protestations to the contrary, the party has nothing useful or interesting to say.

After this election, though, we're unlikely ever to see the likes of the scenes photographed during the 2015 election (pictured), leaving generations to come to ponder over their political history books and to learn about the historical curiosity that was once UKIP.

There again, out of the ashes, another party could rise – but the days of yellow and purple are numbered.

Richard North 22/04/2017 link

Brexit: hard nuts in Brussels

Friday 21 April 2017  

Even though the draft negotiating guidelines from the European Council were pretty unequivocal, the "colleagues", it seems, have been working on a new draft which makes them even tougher.

This is according to the Financial Times which has seen a "non-paper" commenting on the new guidelines. As such, "non-papers" are usually published to "facilitate and structure discussion" and do not amount to formal proposals.

The FT itself tells of "small but significant revisions" to the original draft guidelines. But, to be more accurate, these are discussion points and clarifications offered by the Commission. There is no new draft as such.

Nevertheless, the newspaper believes the "non-paper" shows that EU Member States are happy to take a harder line on some issues than its negotiators originally suggested. In actuality, this reflects a hard line being taken by the Commission, but more in the form of tentative kite-flying.

Most notably, the Commission is challenging a UK requirement that EU migrants complete an 85-page form to prove that they are permanently resident in the UK. Guarantees of migrant rights "must be comprehensive, effective, enforceable and non-discriminatory" the document states. "Citizens should be able to exercise their rights through smooth and simple administrative procedures".

From "several diplomats", we learn that this call for "simple administrative procedures" was a direct reference to what are unnecessary bureaucratic hurdles that will make it harder for EU citizens to exercise their rights in Britain. "We've all seen that 85-page form", one senior EU diplomat tells the FT.

Another significant suggestion for amendment confronts one of the UK's supposedly most important "red lines" by including a more explicit reference to the ECJ and its role during a transition.

Any transition phase extending EU law would require not just the continuance of regulatory, budgetary, supervisory and enforcement instruments and structures, but also the EU's judicial oversight. The new draft also seeks to preserve the "autonomy" of EU decision-making at all stages, as well as "the role" of European courts.

One wonders whether Mrs May knew about this before her surprise announcement on the election and whether it influenced her decision. This is, after all, a dagger at the heart of her Brexit policy, ostensibly keeping the UK locked into the ECJ's jurisdiction until any free trade agreement comes into force – which could be years down the line.

Unsurprisingly, there is little enthusiasm in the Commission for establishing special judicial arrangements for the UK, just to cover the transition period. The UK will have to fit into the EU mould, not the other way around.

And having stabbed deep, the "colleagues" are intent on twisting the knife, demanding that the UK not only addresses the reste à liquider issue but also agrees to a "single financial settlement" which includes issues related to the European Investment Bank, development spending and contributions to the capital of the European Central Bank.

Not content with that, the non paper notes that the withdrawal agreement will need to address "potential issues arising from the withdrawal in other areas of cooperation, including security".

But the real bombshell comes in what the FT terms a "subtle edit". This downplays the EU's view of how soon it is willing to engage in discussions on an "ambitious" post-Brexit trade deal with the UK.

The original draft noted the EU was willing to start work on this before 2019, but the suggested text merely notes a willingness to discuss "an agreement on trade". This, apparently, is a deliberate attempt to lower expectations, leading one to suppose that, if adopted, team Brexit is going to find it hard going extracting a substantial agreement from the "colleagues".

Even then, the bad news isn't done. On trade deals in general, the Commission is suggesting that any new arrangements should not "endanger financial stability in the union, which is interpreted as a demand that the UK financial sector stays in line with European standards and potentially accepts some EU oversight.

That regulatory oversight, however, does not stop with financial services. The reference to social and environmental "dumping" in the original is also suggested for modification, with a reference to the need to tackle "unfair competitive advantages" including "tax, social, environmental and regulatory measures and practices".

As a final touch, the non-paper demands that the relocation of the European Medicines Agency and the European Banking Authority, currently based in London, be settled "rapidly". Britain will have no say in where they go, but there is some suggestion that the UK should cover the relocation costs.

Small wonder than that Finnish Finance Minister Petteri Orpo ventures the opinion that Brexit is inevitably going to be so painful that no one will want to feel it for themselves. He adds: "I believe it's going to be a precedent no one will want to follow".

And for all that, we have yet to see the final version of the actual guidelines, which are set to be approved on 29 April at a European Council meeting. But anybody who thought that the general election might buy us a temporary truce could be prey to over-optimism. The Commission seems determined to close down as many of Mrs May's options as they can.

This could make the Council an event of electoral significance if the hardest of the suggestions are adopted and they feed back into the campaign over here. Any sign of a stiffening resolve in Brussels is going to need careful handling, otherwise we end up with a bunfight that nobody can win.

Just for once, Brussels needs to realise that concessions cannot just go one way. To get something, they are going to have to give something. Playing the hard nut doesn't always work. However tough the nut is, one can always find a bigger sledgehammer.

Richard North 21/04/2017 link

Brexit: delaying the inevitable

Thursday 20 April 2017  

Given that some of them were voting for their own redundancies, you would have thought that more than 13 would have voted against a general election. But such is the obsession of the political classes with elections that, offered the prospect of a contest, 522 MPs piled in to give Mrs May what she wanted.

The immediate effect of this, however, is malign. As election fever takes hold, the political noise level increases exponentially while the information quotient drops almost to zero. Equally, the "colleagues" won't make much of a showing, knowing full well that anything they say now will fall on deaf ears.

And then we have in Jeremy Corbyn a leader of the opposition who seems unable to discuss anything of substance, except in terms of mind-blowing clichés, delivering "ten pledges to rebuild and transform Britain" which makes no mention of the EU.

Thus we have the bizarre situation where the so-called "Brexit election" will be about everything other than Brexit. And since we were getting little enough before Mrs May's Tuesday announcement, those anxious to explore the deeper ramifications of Brexit are going to be disappointed. They might just as well pack up and go home for the duration.

The irony here is that, after the election, Mrs May will claim that the vote (assuming she wins it) will give her the mandate she needs to continue the Article 50 negotiations, when it will do no such thing. The exit options will have been no better aired by 8 June than they have been to date.

This, though, is the time for ironies – witness the Guardian which has Stewart Wood tell us that: "May wants a hard Brexit without scrutiny. It’s Labour's job to stop her getting it".

Even if it was actually true that Mrs May was hankering after this suicidal course of action, it would be hard to find anyone in the real world who could deal with the idea of Labour performing as an effective opposition without breaking up into uncontrolled giggles.

But them, as the Guardian points out elsewhere, even with the best will in the world, it would be difficult for any opposition to perform effectively.

The election, the paper says, is an invitation to voters to buy Mrs May's Brexit terms sight unseen. She has declared that she wants support "for the decisions I must take", but we do not know what those decisions will be. It goes on to say:
They depend on negotiations that have barely begun with some EU partners who face elections of their own, as well as on events. All this will involve give and take. Mrs May is seeking a mandate to do something of which not even she knows the main planks, the details and the trade-offs. She wants to get parliament off her back in making the Brexit terms. This election must ensure that this does not happen.
There goes someone, an anonymous scribe, who really isn't of this world. This election – if it is to perform any function – is to get the electorate off Mrs May's "back".

What very few of the pundits seem to be doing is asking what the consequences for the Prime Minister would be if she didn't call a referendum just now.

Picking up on the very words used by our earnest scribe, we have a politician confronting the unknown where, at some time shortly before what would have been the next election, was going to be forced into making unpopular concessions to the EU. She would then have to turn to the voters and ask them to elect her party, so that she could spend the next five years in office, putting into action a programme with which her natural constituency would most probably heartily disagree.

This was a situation where, as a result of a bodged Brexit, we hypothesised, could arise the only possible circumstances where Jeremy Corbyn could actually win an election.

Any sanguine analysis, therefore, must conclude that the primary purpose of this election is to buy the Prime Minister more time to conclude negotiations before having to face the nation in a make-or-break election.

Even with the extra time, though, it is going to be difficult for Mrs May to square the circle – maintaining full participation in the Single Market while also giving the impression that she has broken free of the EU and is able to decide on immigration policy and other matters for which we supposedly sought to leave the EU.

Thus we have a politician faced with an intractable problem and it should come as no surprise that her response is to kick the can down the road. That is what politicians tend do when confronted with intractable problems.

At best, the extra time strengthens Mrs May's hand in the negotiations, reducing the pressure that comes with an imminent election. But despite that, she has only gained two years and that seems hardly enough. She could still find herself facing an incomplete settlement, having to fudge a messy transitional period that leaves us half-in and half out of the EU.

That is no more likely to be popular in 2022 as it would have been in 2020, in which case the only gain could be delaying the inevitable, when the electorate wreaks vengeance for a bodged Brexit and votes the Conservatives out of office for a generation.

That is the other side of the coin. There are few commentators who believe that this election will be anything other than a disaster for Labour, the immediate consequence of which will be the removal of Jeremy Corbyn as leader.

In 2022, therefore, Mrs May could find herself up against a reformed and strengthened Labour Party under a new leader, better capable of pointing out the weaknesses of her Article 50 settlement, ready to provide a lightning rod for public dissatisfaction.

That being the case, winning this election could be just delaying the inevitable. To survive, she need to use the extra time wisely, crafting a solution that will ensure we are fully out of the EU by the time she again goes to the electorate, with a sustainable relationship which will ensure the continuation of trade and other cooperative ventures.

And there lies the final irony for, if this is to be a central part of Mrs May's plans, the very last thing she can do is reveal it at this stage. Her "Ultras" and former Ukip supporters, contemplating moving over to the Tories, must believe this is a hard lady heading for a hard Brexit. Not one of them could handle the truth which, in Churchillian terms, must be protected by a bodyguard of lies.

Modern politics, though, is more sophisticated. With the media adept at hunting down obvious lies, our leaders lie by omission rather than by commission. And that turns modern political speeches, as Sam Hooper points out, into "nothing but soulless, prefabricated word clouds designed to deliver vacuous soundbites to a cynical public".

We're going to get a lot of those in this campaign, and very little else.

Richard North 20/04/2017 link

Brexit: buying time

Wednesday 19 April 2017  

Within minutes of Mrs May's announcement of her intention to seek a general election on 8 June, people I'd never heard of were calling on voters to use the election to reverse the result of the referendum.

Yet Mrs May herself had already declared that she wanted contestants to put forward their plans for Brexit, making this about how we leave rather than whether – the debate we should have had before the referendum.

To be fair to Lib-Dem leader, Tim Farron, he sees the election in that light, arguing: "If you want to avoid a disastrous Hard Brexit. If you want to keep Britain in the Single Market. If you want a Britain that is open, tolerant and united, this is your chance".

With Corbyn, though, one is never quite sure what he's thinking. Even then, in his official response to Mrs May's announcement, he spoke of securing a "Brexit for everyone", which hardly suggests that he's going to be pitching for the remain vote.

On the face of it, therefore, it doesn't look as if the re-run idea is going to fly – purely on the basis that none of the main opposition parties are offering this as their position. Possibly the SNP might go with it, but who cares what the whining Sturgeon wants anyway?

As to conducting an open debate on how we leave, it is unlikely that the media could follow the arguments if they were properly made, and we have yet to see a politician who has a grasp of the issues sufficient to offer a coherent plan. Certainly, we're not going to be offered one by Mrs May this side of an election.

In her terms, the Government "has the right plan for negotiating our new relationship with Europe", which amounts to "a deep and special partnership between a strong and successful European Union and a United Kingdom that is free to chart its own way in the world".

In what can only become the battle of the mantras, she has it that, "we will regain control of our own money, our own laws and our own borders and we will be free to strike trade deals with old friends and new partners all around the world".

The thing is that this is not so much a plan as a series of loosely-drafted aspirations - not only lacking in ambition but also short on realism. Amongst other things, the obsession with making our own laws is as wearying as it is irrelevant.

That brings us to the real reason for this election. Mrs May is telling us that she cannot pursue her plan because of the opposition of other political parties. "At this moment of enormous national significance", she says, "there should be unity here in Westminster, but instead there is division. The country is coming together, but Westminster is not".

Maybe that's a credible argument, but somehow it doesn't pass the smell test. There has to be something more. The Guardian's Patrick Wintour would have us believe that a Brexit mandate, delivering a large Conservative Commons majority, would sweep away the last hope that that the UK's "aberrant" referendum decision last June could be reversed.

Among parts of the EU leadership and the European public, Wintour writes, there remains a lingering belief that the British people can be helped to change their mind. Even though article 50 has been triggered, many EU lawyers believe a legal route is available for Britain to revoke Brexit, probably through a Commons vote in the winter of 2018.

In Wintour's mind, therefore, Mrs May is going to all this trouble and effort just to convince the "colleagues" that Brexit means Brexit, thereby forcing them to concentrate on the task at hand – crafting a workable exit package for the UK.

Yet, there is actually nothing in the official response from the European Council that would encourage such a belief. If anything, the "colleagues" are remarkably focused and have set out their stall with some clarity.

What is perhaps more convincing is the scenario buried in Mrs May's own address yesterday, when she reminded us that, "If we do not hold a general election now their political game-playing will continue, and the negotiations with the European Union will reach their most difficult stage in the run-up to the next scheduled election".

To give this more focus, we need to edit it slightly, so that it reads that, if we don't have a general election now, the negotiations with the European Union will reach their most difficult stage in the run-up to the next scheduled election.

And it is at that point that Mrs May will have to make some real concessions, not least on the financial issues. Then to paraphrase Mr Juncker' s 2007 comment: "We all know what to do, we just don' t know how to get re-elected after we've done it", Mrs May – with her feet held to the fire by the "colleagues" – will know exactly what she will need to do. But she will also know that it will substantially reduce her chances of winning the 2020 election.

Mrs May thus needs a general election now, to get it out of the way and clear the way for her to make unpalatable decisions immediately prior to an election. On the need for that election, she says, "I have only recently and reluctantly come to this conclusion", in which context we have to ask what it is that has changed so very recently.

And there is the clue. Mood music emanating from Brussels and London indicates that it has finally dawned on all parties that the negotiations are not going to be concluded in two years – or at all if the Government follows the line ordained by the "Ultras".

By having an election now, Mrs May buys herself two more years before she has to face a post-Brexit electorate. And this is time in which she can craft a more stable deal without the prospect of sudden electoral death.

On the back of a successful election, one can then expect to see the newly victorious Prime Minister go to Brussels and immediately ask for more time – rather than wait for the deadline. Although she has said she will not do this, we are dealing here with someone who said we would stay in the Single Market and we would not have a snap election. The lady is most definitely for turning. 

Then, having already realised she is between the rock of a "no deal" and the hard place of an unattainable free trade deal, she can devote her attention to crafting a "not the EEA" agreement that covers all the same bases but qualifies as something new and different.

Cleverly, in my view, Mrs May has exploited what she calls a "one-off chance" – a window when France and Germany are preoccupied with their elections and the European Union has yet to agree its negotiating position.

And if my analysis is anywhere near correct, we could be looking at a new realism pervading No 10, where they have miraculously bought time for an attainable solution. But we can kiss goodbye to Brexit on 29 March 2019.

Richard North 19/04/2017 link

Brexit: chemical complications

Tuesday 18 April 2017  

Such is the poverty of reporting on Brexit issues that yesterday we were able to see a report from Bloomberg on the potential effects of separation on the chemical industry with absolutely no mention of REACH.

Yet, unless REACH issues can be resolved before Brexit, it is almost certain that exports to EU Member States will be badly disrupted if not halted altogether.

Trade bodies have already been questioning whether Brexit will affect the 6,000 or so registrations attributed to UK companies, and have said that the UK will need to consider the status of existing REACH registrations during the negotiations and before exiting "to ensure that they do not become invalid".

That was in February, after we'd written our own evaluation on the issue but the subject has been barely raised since, and not at all in the legacy media – other than in some quarters where it is suggested that chemical safety regulation could be scrapped – a sure recipe for disaster.

However, at least the Environmental Audit Committee has set in train an inquiry on "The Future of Chemicals Regulation after the EU Referendum", which it announced on 21 December last year – and event which was completely ignored by the legacy media, then and since.

Even then, progress is slow, with the latest oral evidence session on 7 March. Then we heard from Andreas Herdina, Director of Co-operation, European Chemicals Agency (ECHA); Harvey Bradshaw, Executive Director for Environment and Business, Environment Agency, and Dave Bench, Director of Chemicals Regulation Division, Health and Safety Executive.

Not dissimilar from the experience with Jim Harra giving evidence to the Treasury Committee on customs issues, we see from the officials an extraordinary complacency, with no attempt made to stress to MPs the consequences of a failure to strike a deal with the EU over recognition of existing registrations.

The point that we sought to make back in January is that chemicals can only be registered under the REACH Regulation by a body established within the EU (or EEA). Post-Brexit, UK manufacturers will no longer comply and will be required to appoint "only representatives" to take over the registration process.

Without special concessions from the EU – making unique relaxations for UK companies – our manufacturers face the prospect of having to appoint representatives to re-register their products, at a potential cost of £250 million.

As important will be the time delay: the ECHA will not be able to process nearly 6,000 applications, and trading cannot recommence until new registrations have been granted.

Furthermore, as we learn from the latest oral evidence, the ECHA does not operate on a total cost-recovery basis and requires a subsidy from EU funds to make ends meet. It seems hardly likely that the EU will be rushing to subsidise the re-registration process, in which case the UK will be finding it necessary to offer financial inducements in order to expedite the process.

The political implications of this hardly need stating, but one can certainly see the "Ultras" putting pressure on Mrs May to block any payments for what many see as burdensome "red tape".

Yet to come, though, is trade body evidence to the select committee, although we are getting a taste of how complex regulatory conformity might be from the written evidence provided by Defra.

It makes the point that REACH is not by any means the sole regulatory requirement. In addition there is the EU's Classification, Labelling and Packaging (CLP) Regulation, implementing UN's Globally Harmonised System (GHS). Furthermore, the CLP Regulation has consequences for downstream legislation such as the Control of Major Accident Hazard Regulations and the hazardous waste regime, along with additional environmental legislation.

In addition, there are other regulatory regimes for chemicals – Biocidal Products Regulation (BPR) and Plant Protection Products (PPP) and Prior Informed Consent (PIC), which operate alongside REACH, some of these are dependent on the European Chemicals Agency to operate.

Without our own regulatory infrastructure with the resources and experience to implement these measures, the UK will probably have to strike a deal on retaining cooperative arrangement with the ECHA – and again there will be financial implications. The EU, at the very least, will be looking for full cost recovery, with a substantial contribution to its £100 million-plus annual budget.

Currently, responsibility is for regulating the chemical industry is split between the ECHA and Member States. The ECHA carries out completeness checks on submitted dossiers while in-depth checks are carried out by Member States depending upon national concerns.

On the ground, enforcement is carried out by the competent authorities of the individual Member States. Currently this is the Health and Safety Executive in the UK. Defra, however, reminds us that there is an appeal structure with the final authority lying with the European Commission. Therefore, after Brexit, the UK would need to set up a domestic appeal structure. Replication of this model in domestic bodies will require significant additional resource and potentially up-skilling of UK personnel.

As to the prospects for deregulation, even if we were not concerned to maintain the £25 billion in export value to the EU annually, the UK is also party in its own right to three United Nations multilateral environmental agreements (MEAs). These are the Stockholm, Rotterdam and Basel Conventions, which commit us to action on matters such as the regulation of Persistent Organic Pollutants. In addition, we are working towards ratifying the Minamata Convention on mercury.

As it stands, international agreements are implemented by EU law, which means that the EU law would either have to be re-enacted (via the Great Repeal Bill) or the UK would have to enact its own legislation.

Thus, by any measure, setting up a functional regulatory structure for the chemical industry is going to be a complex and expensive affair – to say nothing of time-consuming. To maintain current export levels, we are going to need the goodwill and active cooperation of the EU and, in the nature of things, those too will come at a price.

But the worst case scenario is that we lose up to £25 billion annually of high-value exports, with the added problem that exports sent to the continent are used as precursors for products which are then bought by UK enterprises. These inputs amount to about 15 percent of the value of the industry's total finished product exports, serving EU and global markets. Interruption of EU exports, therefore, would have a knock-on effect on our sales to the rest of the world.

On that basis, addressing the problems of the chemical industry merely in terms of difficulties with REACH vastly understate the problems. With the legacy media unable even to get that far – we have yet another situation where the public is being grossly misinformed about the complexities of Brexit.

Needless to say, if the UK elected to remain in the EEA, very few of these problems would arise, giving time for the UK to work with other nations on a global regulatory system to replace the EU measures.

Since so much environmental legislation is already agreed at global level, this should not be so very difficult to achieve, with the added advantage of providing a firm base on which to launch a genuine European Single Market, fully meshing with the global system.

When the Environmental Audit Committee gets round to completing its report, it will be interesting to see how much of this – if any – percolates the brains of one of the more dismal committees in the House of Commons. Likely, the MPs will compete with the fourth estate in the ignorance stakes, although we are always open to being pleasantly surprised.

Richard North 18/04/2017 link

Brexit: march of the "little Europeans"

Monday 17 April 2017  

The Financial Times is on the case the rainy bank holiday telling us that Brexit is a problem not only for Britain but for the EU as well.

Dredging up an interesting factoid, the paper tells us that the British economy is as big as that of the 20 smallest member states put together. So it is as if 20 of 28 countries were leaving the bloc at the same time.

That is the FT "take", treating this as an economic issue. But this is a political issue and the UK does not carry the same weight politically within the Community as twenty countries.

Nevertheless, pursuing its flawed thesis, the paper argues that Brexit "destroys the European equilibrium, rendering otiose minority rights in the European Council".

Here, it is calling in aid the Lisbon treaty specifies that a blocking minority needs 35 percent of the EU population. Together with the UK, the so-called "Deutschmark bloc" (Germany, the Netherlands, Austria and Finland) has a population of exactly 35 percent. These are all countries, the FT says, that are in favour of free trade.

But the paper isn't taking account of two things. Firstly, "free trade", as such, is not something that is known to the Germans. They pursue their own economic advantage under whatever title other people choose to give it. Free trade it is not.

Secondly, the FT is doing some rather suspect arithmetic. Compared with the supposed "free trade" bloc, the countries surrounding the Mediterranean, which have traditionally been more reliant on protectionism and state intervention, have a population of 36 percent. This, it says. is also a blocking minority.

By that reckoning, the Lisbon "balance" has been destroyed. The first block shrinks after Brexit to a population share of 25 percent. The "Club-Med" countries extend theirs to 42 percent.

Using this argument, the thesis is that this sub-bloc may now seek to turn Europe into a trade fortress – as if it wasn't one already.

But the crucial mistake here is in assuming that the group dynamics, post Brexit, will remain the same. In the first instance, there is bound to be a realignment of voting weights, in what must be a secession treaty. The balance that emerges from this is not necessarily going to be the same as it is now.

Secondly, in the absence of the UK, there is every reason to believe that the EU will strengthen the Franco-German nexus. In a spirit of solidarity, we can expect to see the so-called "motor of integration" reassert itself, to ensure the continued functioning of the Union. The FT idea of a trade-related polarisation is pure speculation.

If, however, you accept the FT thesis, then it becomes logical to accept their argument that there will have to be new negotiations of the existing EU treaty, alongside the Article 50 negotiations, rather than waiting until afterwards. The EU, it says, should re-organise both the internal relationships within the EU and the relationship with the UK.

But all this does is affirm what we've being saying for many, many months: as well as the Article 50 settlement (and any free-trade or interim deal that has to be formalised), there will have to be a secession treaty. This is necessary for precisely the reason the FT is setting out – to regularise the voting weights and all the other consequential changes attendant on the departure of the UK.

Where this get really interesting though, is if the "colleagues" do treat these issues as something more than simply administrative changes, and start seeking to renegotiate the Lisbon settlement – changing the whole basis of the voting structure.

The consequences of this could be extreme, because it could distract the "colleagues" from what we believe to be the main event – the Article 50 negotiations – and turn them inwards, where they expend the bulk of their energies on their own internal affairs.

Without fully realising it, therefore. the FT is identifying yet another element of uncertainty into a mix which is already fraught. The paper thinks that playing around with such ideas as the pursuit of a "two-speed" Europe could antagonise Poland, as well as Denmark, Sweden, the Czech Republic and Hungary.

Then, responding to Brexit by giving the eurozone more state-like structures is to separate the north and east and draw a dividing line through the ancient divisions of Mitteleuropa, while making the northern eurozone states paymasters of a new Latin currency union.

But this is taking it too far for the moment. Doubtless, once the dust has settled on the mechanical processes of Brexit, the EU will return to its central obsession with structural change, and will be looking to float a major and long-overdue treaty.

That then raises yet another issue. While we are currently negotiating with the EU (or just about to), the EU with which we finalise an agreement will not be the same as the EU which emerges from its next treaty. In that sense, we should be trying to second-guess their intentions, because it is this altered EU that we will have to live with.

For the UK, therefore, this makes an interim solution an even better option. We can hardly conclude an agreement on a long-term relationship with a body, the nature of which could be very different in a decade or so.

But then there is also the process of globalisation to deal with. There, the FT is locked in the "little European" paradigm, where trade and related issues are played out in Brussels, with European nations calling the shots.

Yet, while "little Europe" is more or less self-sufficient in food, it is a net energy importer and, if it wasn't for the fact that it was importing so many finished goods, it would have serious shortages of basic raw materials such as metal ores, coking coal and other basics.

Europe as a whole, therefore, is not in a position to go it alone. The idea of protectionist walls being erected – more so than exist already – is a myth. Global trade is a reality and the European Union is at the forefront of trying to control and manage the globalisation process.

All of this, though, is way beyond the pay grade of the "little Europeans", who have more in common with the "little Englanders" and their close cousins, the "Ultras" than they would like to think.

No longer are we dealing with "free trade" versus protectionism. The balance of power in Europe has already moved from Brussels to Geneva – as the gateway to the world. The issue is how we manage globalisation, and the degree to which we are able to retain control of the process in the face of the demands from the emerging economies.

Interestingly, in a picture that is becoming a cliché, the FT chose as its illustration, the line of lorries outside Dover (top). That, for many, is how trade is seen from these shores – although the container port is another pictorial cliché.

Yet, given the current trade deficit in goods, and the fact that we are seeking to sell high value goods to our partners, in return for basic commodities, as many as two-thirds of those trucks may be empty. In the container ports, a significant number of those boxes may contain nothing more valuable than waste, intended for sorting and recycling.

And if the pictures need to change to reflect the reality, so too must the thinking. That, however, will prove a lot harder.

Richard North 17/04/2017 link

Brexit: renewable confusion

Sunday 16 April 2017  

There can hardly be anyone with two braincells to rub together who is not aware that the Open Europe study on the costs of EU regulation has been thoroughly discredited.

Even the organisation itself downgraded its own initial estimates of savings, which it originally put at £33.3 billion for the top 100 regulations. It ended up with £12.8 billion a year, based on what it considered "politically feasible" deregulation.

How feasible that would be is a matter of speculation. It would require tackling "controversial areas", involving changing social employment and workers' rights regulations and a huge shift away from our climate change obligations.

In the latter event, Open Europe (as elsewhere) had failed to take account of the international dimensions of climate change, and the fact that requirements are mandated not only by the EU but also by Climate Change Act. This would not necessarily change just because we leave the EU.

What price then Harry Phibbs of Conservative Home? He piles in with exactly the self-same figure of £33.3 billion that Open Europe has already disowned.

This seems classic groupthink. It doesn't matter how slender the facts are. If they suit they argument, they will be used.

Phibbs's hook though is something even more absurd – a report in the The Daily Telegraph. This has it that "Government sources" (anonymous, of course) are telling the paper that the EU's target, under the EU Renewable Energy Directive, is likely to be scrapped after Brexit.

Missing the point entirely, is the international dimension, set out in the recital to the Directive, which tells us that:
The control of European energy consumption and the increased use of energy from renewable sources, together with energy savings and increased energy efficiency, constitute important parts of the package of measures needed to reduce greenhouse gas emissions and comply with the Kyoto Protocol to the United Nations Framework Convention on Climate Change, and with further Community and international greenhouse gas emission reduction commitments beyond 2012.
There we have exactly the point – the Directive is a red herring. And in any case, if - as this select committee report points out - "the UK misses, or reneges on its commitment to, the 2020 renewables targets", this "will undermine confidence in its commitment to future targets, including the 2050 decarbonisation objectives of the Climate Change Act 2008".

In other words, in order to meet the statutory target set by UK law, the Government must meet the targets set by the Renewable Energy Directive, even if it no longer applies. As it is, the Government is already under pressure to deliver an effective Emissions Reduction Plan. It may end up in court if it doesn't come up with something credible.

As to the application of the Directive, it has been transposed into UK law and is given effect by the Promotion of the Use of Energy from Renewable Sources Regulations 2011 and the Renewable Transport Fuel Obligations (Amendment) Order 2011. For the target to be abandoned, both these laws would have to be repealed.

That is not to say that these laws should not be repealed – they should. The 2050 decarbonisation plan is uniquely damaging and should be abandoned altogether. But it is facile to pretend that getting rid of the law is primarily – if at all – an EU issue.

Clearing out the Climate Change Act, and thereby relieving the Government of its statutory obligations, requires the approval of the Parliament. And, given that only five MPs voted against Act (including the two tellers), there is a huge majority to overturn.

However, there is a bigger game afoot. At a point where we are about to embark on Article 50 negotiations, the very last thing the UK needs to be doing is making grandiose statements about deregulation, exposing us to criticisms of "environmental dumping".

This has even greater implications on the international scene. The UK is a signatory to the UNFCCC, has signed up to Kyoto and has been in the lead on climate change issues. There is more at stake than just our relationship with the EU. Rolling up these international deals is going to take some care. 

It is going to take a little while longer to get rid of those wind farms.

Richard North 16/04/2017 link

Brexit: the vision thing

Saturday 15 April 2017  

A good friend to this blog is Andrew Stuttaford of National Review. And in typical form he picks up and runs with the article on the "Norway Option", and identifies some of the flaws in it.

If, however, the Efta/EEA option has any running power then we must applaud those behind it for coming to the same conclusions that we drew those years ago when we put some serious thought into the issue.

The point we need to keep reminding people about is that we didn't wake up one day and decide that the "Norway option" was such a spiffing idea that we should buy into it. It came to us though the process of elimination, after exploring all the other options – and became adopted as the "least worst" answer to a complex issue that cannot be resolved in a mere three years.

That other people are trailing in our wake and coming to the same conclusion is thus hardly surprising. We would not be at all surprised if some of the chatterati discover it and claim it for their own. That's what they do – and nothing at all exists until they have invented it for themselves. That is why National Review is so refreshing.

But the point that then arises that, if the "Norway Option" - aka the Efta/EEA option – becomes the favoured interim (or transitional) option, then it still begs the question of what the final destination should be.

And this is where Flexcit really comes into its own. While some dismal critics have been keen to write it off, the core of the plan, in respect of our future relations with our European trading partners lies not in Phase 1, which deals merely with the mechanics of exit, but in Phase 3.

The point of Phase 3 is that, unlike the pedestrian thinkers who are obsessed with the only thing they know – the free trade agreement – this offers a real alternatives which give us at least the equivalent if not better access to European markets than existing arrangements.

As it stands, Brexit offers nothing but pain. From full participation in the Single Market, even the EEA gives us a less advantageous relationship. To treat that as a transition, buying time to negotiate a free trade agreement, puts us in an even worse position when the deal is finally struck.

This is not what Brexit was supposed to be about, where we end up worse off than when we started. The whole point was to improve our situation, not to make us second-class citizens in a "Europe" that's calling the odds.

And it's here that we leave the chatterati behind. Free trade deals are sooo last century. The progress to be made is in regulatory harmonisation on a global scale, which makes IRC (International Regulatory Cooperation) the thing of the future.

One of the leading proponents of IRC is, of course, UNECE with the development of its WP.6, refined to produce common regulatory objectives (CRO) which are actioned initially by ISO and then promulgated as international quasi-legislation.

Given that the EU is a subscriber to this process, WP.6 effectively creates a standard-setting process which trumps the European Commission's regional monopoly of proposal where only it has the right to initiate legislative proposals. Under IRC, the Commission becomes the subordinate entity, with WP.6 members calling the shots.

This is so far above the paygrade of the chatterati though, that they scarcely realise that the concept exists. In fact, it is almost totally beyond their comprehension, which is why they stay so firmly in their comfort zones, never daring to venture out into the real world.

That real world is the modern world, where tariffs are of decreasing importance and where non-tariff barriers are the impediments that the grown-ups are having to deal with. This is a world where common regulation replaces the free-for-all and hidden barriers, facilitating trade rather than slowing it down.

For all the verbiage expended on free trade agreements, we should not be wasting our time on chimera that will bring us little in the way of increased wealth, and instead concentrate our efforts on where they really matter.

And this is why the Efta/EEA option is such a good idea – not only because it is the least-worst option but also because it is tolerable for the decade or more that it will take us to craft alternatives and bring them into fruition, paving the way for a genuine European single market, rather than the narrowly focused regional version that the EU administers.

Crucially, we should not be allowing our negotiators to go into the Article 50 process with their hands empty, knowing that whatever they bring home will be worse in some senses that we have already.

The driver of any successful talks, and the progenitor of a sustainable deal is the vision our negotiators take with them. For them to put real effort into their endeavours, they need to know that they are working for something better, not merely marking time or undertaking damage limitation.

And that is what is lacking from our current stance. Tired clichés about a "Global Britain" are largely meaningless if we are unable to resolve the issues on our doorstep and then break out of the cul-de-sac of selfish bilateralism and kick-start the process of multilateralism, addressing real world issues rather than the lazy mantras of the Tory right.

All of this, though, could be too much to ask of a government that is showing little imagination and even less competence. And in that case, Efta/EEA is still a good option as a place to park while we allow the politicians to catch up. 

At least staying in the EEA for a while will do no harm, which is more than can be said for any other option on the table.

Richard North 15/04/2017 link

Brexit: a second chance for the Norway option?

Friday 14 April 2017  

Having virtually written off the Efta/EEA solution – after the joint efforts of Mrs May and the "Ultras" – we now see it re-emerging from an unexpected quarter, the European Commission, which seems to be suggesting this option as a way of squaring the circle on the transitional phase.

The source of information on this surprise development is but, noting the outpouring of ignorance of its two authors, Guardianista Simon Marks and Hans Von Der Burchard, it seems we have a long, long way to go.

As to the substance of their report, the sub-heading gives the game away, as it declares: "Mimicking deal EU has with Norway would keep UK in single market during Brexit transition". But, in a way that is hardly gauged to promote wild enthusiasm from the Brexiteers, we are told that this would not only keep UK trade going with the EU after Brexit, it would "also keep Britain under the EU umbrella".

Thus, the idea, which we have been floating for more than three years in Flexcit - for precisely the opposite reason - has now become Brussels' "plan B", with the commission suggesting that the UK temporarily becomes a member of Efta.

But in a narrative which demonstrates the Mr Marks and his partner have learned precious little over the years, we are further told that Efta membership "would allow the U.K. to apply for membership in the European Economic Area", which "grants free access to the EU's single market".

Yet those of us who are better informed (which is an awful lot of people) know that we are already in the EEA. Furthermore, there is a distinct possibility that, as long as we can arrange Efta membership to cover us when we leave the EU, we need not re-apply. Our EEA membership should carry over with our new (or resumed) status.

Nevertheless, one European diplomat has it right, telling "It's an interim solution that causes the smallest possible disturbance for business on both sides of the Channel". And like Norway, the UK would not be part of the customs union, which means it could strike its own trade deals with countries around the world".

The problem, however, is that both "hard-line Brexiteers" and the likes of Mr Marks share a strand of profound ignorance that is difficult to breach. Say Marks and his colleague: "Such a plan … is a toxic idea for many hard-line Brexiteers because it would require the UK to accept the four founding EU freedoms of goods, services, people and capital".

In the rarefied and detached little world inhabited by this pair, Article 112 does not exist. The "Liechtenstein model" never happened. And, to add to the litany of ignorance, we are told that, "Britain would also have to continue paying Brussels in exchange for access to the EU market".

After all this time, and all the debate we've having on this matter, you'd think that these people would at least get the basics right. "Norway will have paid €1.3 billion to the EU between 2014 and 2021", they say – making an assertion that simply is not true. For sure, Norway pays for services rendered through the decentralised agencies, but it retains control of its expenditure on EEA/Norway grants.

Sadly, not only do we get this low drone of ignorance, it embellished by the the same tedious mantra, that the UK "also would have to fully implement EU laws and regulations - while losing any say in drafting or vetoing them" – again an egregious untruth.

Called in aid to make the option appear even less attractive, we then have Guntram Wolff, director of the think-tank Bruegel. He obligingly tells us: "It still means accepting supranational jurisdiction", adding that, although Efta's members are not directly bound by the ECJ, the Efta court, which largely follows the jurisdiction of the ECJ, does have oversight.

Then, just to rub it in, Andrés Delgado, a trade lawyer from the Max Planck Institute Luxembourg, says: "The Efta court judges on the basis of EU law, so it's not as if you were really leaving the realms of EU jurisdiction".

The way this is couched, therefore, it is almost as if our narrators don't want it to fly. Remarkably, though, officials in Brussels still hope that once the reality of a "hard Brexit" comes closer, the UK might become open to the Norway option, "at least as a temporary solution".

What is apparently attracting Brussels to the idea is that it would ease fears of legal problems at the WTO, where other countries might challenge the interim agreement if negotiations on a succeeding trade deal drag on. "An EEA-type transition would help avoid complaints during the transition phase", says the senior Commission official who is so willingly keeping informed.

For all that, I've been taking the view that the existing Efta members would not necessarily be terribly keen to see the UK on board, if this is presented as the second choice by a less than enthusiastic Mrs May.

But, it seems, there could be an opening. Oda Helen Sletnes, Norway's ambassador to the EU, says: "Overall, it is in Norway's interest to maintain as close trade policy cooperation with the UK as possible, with as good a level of access to the British market as possible".

However, there is nothing at all here that makes the idea attractive to the "Ultras" who have made it their business to be opposed to the Single Market. The idea of the "Norway option" was so roundly trashed by both "leavers" and "remainers" during the referendum campaign, and then by Mrs May, that it is going to require considerable rehabilitation before it will be entertained – if at all.

Neither does this story help. With the Single Market having been enthusiastically embraced by "remainers", thereby poisoning the well, endorsement of the "Norway Option" by the "heart of evil" – none other than the European Commission – could be just a tad counterproductive. Those who mistakenly believe that continued membership of the EEA means that we stay in the EU will now be convinced that that their beliefs are correct.

For the Government, things may not be that much better. If this plan gets wider circulation, then any chance Mrs May might have had of convincing her "Ultras" that the Single Market is a good idea has probably evaporated.

For all the self-importance of Mr Marks and his friend, however, the story so far is confined to The rest of the legacy media hasn't touched it yet, and it doesn't look as if it will.

Nevertheless, there is a huge irony here if the Commission really is supporting the idea of the UK taking up the Efta/EEA option. It will be promoting perhaps the best chance we have of making a clean break from the EU – and then most likely meeting resistance from those who profess to be keenest on leaving.

Not even Lewis Carroll could have dreamed this one up.

Richard North 14/04/2017 link

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