Richard North, 05/03/2017  
 


It says something of the media that it chose to "big up" the House of Lords European Union Committee report on Brexit and the EU budget.

Essentially, the headline issue - enthusiastically repeated by the media - is that we have no legal liability to pay further amounts to the EU after leaving, as long as we leave without a deal. This, though, is not really anything new, or indeed remarkable. An agreement on RAL and attendant matters was always going to be settled at a political level.

Nevertheless, the Committee also comes to the logical conclusion that, "if the Government wishes to include future market access on favourable terms as part of the discussions on the withdrawal agreement, it is likely to prove impossible to do so without also reaching agreement on the issue of the budget".

However, The Times went further than most, reporting that the Government had also taken legal advice and also concluded that there was "no law or treaty that can compel Britain to make payments to the EU after Brexit".

But, on that basis, the newspaper avers that the advice "sets the stage for an early confrontation" with the EU's negotiating team, arguing that a failure to agree all aspects of a deal before 2019 would be as detrimental to the EU - which will face a black hole in its budget - as it would be to Britain.

In other words, the Government will use the money as leverage. Britain, says The Times "would offer to make payments voluntarily only if it meant that it secured preferential access to markets and co-operation on areas such as justice and security".

An early response comes via the Guardian, which has EU leaders warning that the UK must "honour all financial obligations" to the EU.

Thus, we are back where we started – one the one hand, the EU will want to secure as much financially as it can from a departing UK, while the UK Government will seek to minimise payments while securing as favourable a deal as it can manage.

What a huge contrast there is, therefore, between the massive coverage (including the front page treatment in The Times) on this issue – especially when the media was late to the party - and the lack of coverage on the problems attendant on the "hard" Brexit, about which so many politicians seem so keen.

Also interesting has been the reluctance to cover RAL while it has been seen as a problem which has to be addressed. When for instance, Booker covered my work on this issue in August last year - way ahead of the pack - there was no follow-through in the rest of the legacy media.

Yet, when there is a way of suggesting that the UK can escape these payments, the media is all over it – notwithstanding that the price that the price would be a "legal and political void" that could end up costing us ten percent of GDP annually – many times more than the cost of paying off the EU.

While the media is thus obsessing over what amounts to a non-story, Booker continues to plough his lonely furrow in his column, this time pointing out that "MPs can't see the catastrophe on the Brexit horizon".

It is a rule of human psychology, he starts off by writing, that those who are most vocally opinionated on a subject often find it hardest to understand that they haven't a clue what they are talking about. We saw this from both sides in last year's lamentable referendum debate, and there has been little sign of any improvement since.

Nothing, he then writes, brought this home more clearly than the recent questioning by the Commons Brexit committee of Sir Ivan Rogers, the UK's former ambassador to the EU, who resigned last December with a warning to his colleagues that they should beware of "ill-informed and muddled thinking".

The contrast between Sir Ivan and the MPs shuffling papers in front of him was devastating. From his years in Brussels, he understands how the EU actually works, and he spoke with an authority so far almost entirely lacking in our public debate.

He diplomatically tried to convey that, thanks to Theresa May’s decision to leave the single market and go for a "one-off trade deal", she is facing a horrendous task. On leaving an immensely complex regulatory system, we become what the EU calls "a third country". We are thus automatically excluding ourselves from the arrangements which currently allow our £230 billion a year of exports to flow unimpeded into the rest of the EU.

Our export trade, as he put it, will thus fall into "a legal void", confronting us with all sorts of customs procedures and other "non-tariff barriers" which could bring that trade to a halt.

One very interesting part of Sir Ivan's evidence was his analysis of the WTO option. "You are not", he said, "starting from a WTO-only world, as you may be with other, more distant third countries. You are starting from a deep and integrated relationship inside the single market, and moving into a legal void". He continues:
We are saying "Come on guys. You know the day before you used to take our accreditation and inspection regimes. They were perfectly fine the day before; why the hell are they not the day after? Do not be ridiculous".

The EU is perfectly capable of saying, "It is not a matter of being ridiculous; it is a matter of the law. In the absence of any law, given that you have now left the Union and left the single market, there is nothing. You have not signed any other agreement with us, and unless there is a legal agreement between the two of us, we no longer recognise your accreditation, conformity assessment bodies, abattoirs or slaughterhouses. We do not recognise any of it".

You may think this is ludicrous. Of course, there is an element of me that thinks, "This is a ludicrous state of affairs. What has changed from 31 March to 1 April?" But they will say, "The law has changed. You have left the European Union. You have left the single market. You are now a third country officially, and that is your status. We do not have to give you anything".
Rogers also takes on board the myth that other major countries, such as the United States, deal with the EU solely on the basis of WTO terms.

"The point", says Rogers, "is that even though we have failed to get an EU-US FTA - not for want of trying from some of us who have had about four goes, so if we can get a UK-US FTA, there will be nobody more delighted as I am great transatlantic free trade supporter—that has not meant there are not agreements struck between the EU and the US all the time, which affect the trade flows and trade volumes. They are struck all the time".

He adds, "I think there are 20-plus EU-US agreements … These things do govern EU-US trade. Before we get to any deal with Australia, a significant proportion of EU-Australian trade is governed not just by WTO rules".

Another issue Rogers addresses it the exit figure, "described as anything from £20 billion to £60 billion". When he is asked whether we should take it seriously, he says:
You have to take it seriously in that it is going to be a political part of the negotiation. The science or law behind the numbers I would not take excessively seriously. I would not want to sound excessively cynical, but I am well aware of what Commission or Council Legal Service lawyers might be capable of producing by way of justifications for a large number.
Pre-empting the House of Lords report, he says that this: "is a power dynamic and a power game, and a negotiation with political realities". There may be "quite ferocious legal disputes", but "then there is a political reality and a negotiating question". The two are quite separate.

Returning to Booker, he observes that if the MPs had been clued-up enough to get the implications of what Rogers was saying, they might have realised how fiendishly difficult it will be to negotiate, in the time, "a deal which could allow us to replicate even part of that access our chemicals and pharmaceutical industries, our airlines, farmers exporting Welsh lambs and countless other sectors enjoy now".

One got the impression, though, that Sir Ivan, the diplomat and civil servant was pulling his punches. Instead of trying not to sound too alarmist, it might have been better, says Booker, if he had come fully into the open. He needed to spell out just where all this "ill-informed and muddled thinking" is threatening to lead us (almost all of which, of course, could have been avoided if Mrs May had listened to people who know what they are talking about and decided to keep us in the European Economic Area).

Less than two weeks away from her triggering Article 50, Booker concludes that our politicians may be in for a very rude awakening. It could be a catastrophe beyond imagining, he says.






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