Richard North, 01/07/2017  
 

 
In yesterday's post, I made a passing reference to a piece by Jenni Russell in The Times headed "Davis is a dangerous driver of the Brexit bus". Writes Russell, "The buccaneering optimism shown by our chief negotiator with the EU is deluded and alarming".

I noted that this rather confirms what we already know about David Davis, but there was far too much detail here simply to tack on the end of an already long piece about Grenfell Tower, especially as was behind the paywall.

I did promise that I would return to the article today, with a more detailed analysis. However, since then the article has miraculously appeared on Behind the Paywall, so it can be read freely from the link.

One also gets an overwhelming sense that there is nothing quite so dead as yesterday's news, especially when there is this piece which says that Davis is a jolly good chap really, and all the problems are down to the intransigence and lack of flexibility of Mrs May.

Just briefly dwelling on the Jenni Russell piece, she is reporting an upbeat presentation by David Davis at a CEO summit hosted by The Times earlier this week.

According to the Brexit Secretary, sunny uplands lay ahead, it would be simple to complete an EU deal by March 2019, giving us almost all the trading benefits we currently enjoy and, immediately afterwards, during a very short transition period, we would be free to sign glorious trade agreements with the rest of the world.

There is much to be said for confidence and hope, observes Russell. But there is nothing to be said for Panglossian fantasy, particularly when one man holds the future of our country in his hands. Further, she says: "It did not go down well with many of those in the room: one grim-faced CEO, until then agnostic on Brexit, turned to me to say that listening to Davis had been the most disturbing half an hour he had spent in months".

This much, as I said yesterday, it nothing particularly new to us on this blog. And the knowledge that things are amiss in the upper reaches of the government is responsible for much of the gloom that pervades my writing. If, for one moment, I had the slightest confidence and Davis and his prime minister were on top of things, my tone would be completely different.

Coincidentally, we saw on Thursday, six new position papers from the European Commission, setting out more details of the EU's negotiating stance.

Subjects covered were important, ranging from "Goods placed on the Market under Union law before the withdrawal date" to "Governance", "Issues relating to the Functioning of the Union Institutions, Agencies and Bodies" and "Judicial Cooperation in Civil and Commercial Matters".

Nevertheless, my heart sank. The excruciating detail, covering minutia to a degree unimagined by the wand-wavers in the Brexit camp, suggests that the Commission machine is going to grind exceeding slow and thorough. Such unremitting detail can but take time, and if this is the way the Commission is going to handle things, then just the first phase of the talks is going to last forever.

For all the detail, there are contentious issues here, so there is no sense that there is going to be any easy resolution. This is not so much Blitzkrieg as trench warfare, 1916-style.

Not entirely unrelated is this piece that has KPMG has warning that big businesses will need up to a year to prepare for new customs arrangements to prevent trade with the EU grinding to a halt after Brexit.

David Davis, the man for whom everything is a sunlit upland, has said that he did not envisage Britain's transition arrangements including a customs union with the EU or continuing with present arrangements. KPMG is this suggesting that the current Brexit timescale now looks "frankly unrealistic".

I really wish I had a tenner for every time I've written that, going back four years and more. But now, everybody is beginning to get the message – even KPMG – especially as EU officials believe that the second phase of Brexit negotiations, including the future trade relationship, will not begin until next year.

Bob Jones, head of customs at KPMG, is saying that even when there is clarity over customs arrangements - and that could be an awful long time coming - businesses would still need an additional year to design, build and test their systems.

This is because custom codes - which classify the product according to a standardised system - and tax information and certification will have to be fed into IT systems.

Jones adds: "The customs agreement the UK arrives at with the EU defines the requirements, but the systems themselves can take a year to design, build, test and approve. With potentially no transitional period around customs, the timescales are looking tight".

Put that way, however long it takes government to get its act together, it will take businesses at least a year then to update their systems. "If businesses and governments fail to implement the right systems by the time the UK leaves the customs union, we could see thousands of lorries being held up - already a frequent occurrence at the Turkey/Bulgarian border", says Jones.

KPMG once called me in for a "friendly chat" with a view to offering me a job. But once they'd talked to me, they changed their minds. Perhaps they shouldn't have. Then they might have someone better to inform their clients – someone who might actually know that leaving the customs union isn't the problem.

As it is, this idiot says: "While a decision on whether the UK remains [in] the customs union is important, equally essential is the timing of that decision [so we] have an orderly Brexit for the movement of goods". I wonder what his hourly rate is. Whatever it is, it's too much.

On the other hand, Jill Rutter at the Institute for Government – who probably gets considerably less - is worried by the absence of any informed proposals from Dexeu on how new arrangements for customs, immigration or the Irish border would actually work.

Businesses that have come to see Davis have been left aghast at the lack of detailed understanding. Pharmaceutical companies, for instance, are afraid of losing free access to the European medicines market.

Aerospace representatives talk about plans to leave the customs union, but at least they have the sense to add in single market. It is that which would destroy their ability to import and export parts freely, and that without that Britain’s aerospace industry would collapse.

However, back at the CEO conference, Davis fobbed them all off with vague assurances that none of this was a problem; it would all be fine. They were not reassured – and nor should they be, any more than we should find KPMG's warnings a cause for celebration.

Russell says that Davis cannot afford to ignore facts, whether political or economic. Britain's dealmaker needs a shrewd grasp of our strategic needs and our relative weakness. As the country's chief negotiator, his role is not to grandstand or cheerlead, but to be a tactful, wily, charming realist.

But, she says, "So far he is not up to the task". An ambassador from a senior member state, who has been briefed on how Davis is viewed by the EU now, has a crushing verdict: "He is part of the problem. He doesn't know the dossiers well. His style is arrogant, he is full of bluster".

From a "European insider", we get the view that Davis appears to have an inflated, jingoistic faith in Britain's influence which is not going to play out well. "He's going to be humiliated again and again by the EU, as he was in the first week. How will someone as vain as Davis explain that? ", the man says.

Sense might even be percolating the "Ultras", as a senior Tory peer and Brexiteer is worried also by Davis's performance. "I am, frankly, scared. I'd be surprised if it all went right now", he says – joining a very large club that's been saying exactly that, for a very long time.

Yet, there is nothing there which gives us cause for any optimism. There are not even straws afloat. All we can do is look over the parapet and gaze at the wasteland before. It is not a pretty sight.






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