Brexit: to be or not a disaster

Monday 13 July 2020  

In what they evidently regard as something of a coup, the Telegraph has an authored article from Justin King, former CEO of Sainsbury's and Remain campaigner, telling readers that "a no-deal Brexit won't be a disaster".

This is precisely the sort of message the Telegraph needs to get out if it is to support its favourite son, who seems intent on taking us down that route. Speaking very personally, though, I'm as much inclined to take political advice from a (former) grocer as I am the cat next door.

Notwithstanding the obvious point that we've already left the EU, so Brexit has come and gone, we also have to bear in mind that King is one of the golden elites – that band of over-generously salaried British CEOs.

That, on the face of it, makes his opinion even less reliable. These people are too divorced from real life, and far too well insulated from the consequences of any advice they give. They have no skin in the game.

Even setting that prejudice aside, King's information wouldn't be up to much. He encourages businesses to "prepare properly" for "Brexit". But what he covers is extraordinarily limited, amounting to dealing with the "groundwork" for "things like tariffs and the paperwork necessary to support them".

As we have seen for the last four years, the knowledge of many of the pundits extends only to tariffs and such matters. The concept of non-tariff barriers, if even mentioned, is rarely understood. Then, in the sort of business that Mr King knows, coping with the price increases that certain tariffs might bring is about all he needs to do.

Alarmingly, though, King has other ways of illustrating his profound ignorance, which he does with the comment that "a willingness to embrace no deal as a possibility is also an excellent negotiating tactic, and an option I therefore expect to stay on the table right up to the moment a deal is concluded".

A shopkeeper might indeed think that, especially one with significant buying power. When trying to squeeze the last possible price advantage out of reluctant suppliers of toilet paper – where there are plenty of competitors bidding for the business – the "no-deal" tactic is a useful one.

But, when it comes to a complex issue such as a trade agreement with our biggest and best trading partners, one might be rather stunned to find that the man is of such limited intellectual capacity that he sees any parallel. But then, the "might" is conditional – the stock of British CEOs is hardly impressive.

This actually seems to be the way of the world though. The establishment has lived for many years – centuries even – on the myth that they are somehow superior in knowledge and, therefore, wisdom.

But the reality – especially in this internet age – is otherwise. Knowledge and understanding seems to take on the profile of a pyramid: the higher up you go, the less you have. But as long as people, blinded by the effects of prestige, think differently, then the myth survives.

From the look of it though, the government is about to display its own lack of knowledge of the consequences of a no-deal "TransEnd" as it gears up for a £93 million "information" campaign to prepare business and the public for 1 January 2021.

As one might expect, we are to be treated to multiple statements of the bleedin' obvious, such as "travelling to the Continent will be a different experience next year". Or, as we increasingly find ourselves saying: "No shit, sherlock!".

We will get warnings about passports (not to travel if the document is within six months of expiry), travel insurance (expect increases), mobile phone charges (free roaming may end) and travelling with pets (don't, unless you want to pay rip-off vet fees).

The government's "initiative" – if that's what it is – goes under the rather tacky slogan, "The UK's new start: let's get going". You'd think with the amount of money it spends on advertising agencies, it could come up with something better than that, especially as for many, the future means they won't be going anywhere in a hurry.

Business owners "who import and export goods", will find themselves being urged to apply in good time for an EU Economic Operators Registration and Identification (EORI) number. However, since this is an EU system, I can't see it applying to importers of goods.

A taste of things to come was laid before us when toilet cleaner Gove appeared yesterday on the Marr Show to tell us that "whether or not we secure a Canada-style trade deal with the EU during the course of the negotiations that we're carrying out, we will be, we know, outside both the Single Market and the Customs Union come what may".

I'm not sure if that suggests that this implies that Gove thinks a Canada-style trade deal is still on the cards but, if he does, that rather proves my point about the information pyramid. As to leaving the Single Market and the Customs Union, anyone who needed to know that surely must know by now.

Gove has it that, "This will bring changes and significant opportunities for which we all need to prepare". Companies and citizens should be "ready to hit the ground running". Metaphorically, they can certainly comply with the first bit. The "running" may prove a little bit more difficult for some traders.

Questioned on the purchase of the "Mojo" site, Mr Gove also tells us that the government wants to make sure that freight travelling through Kent can get to Dover and "then onto the ferries and then into France and into the rest of Europe as quickly as possible".

Again, one is not entirely clear from what he is saying that the man really knows what is going on. His opportunities for ensuring that freight gets "into France and into the rest of Europe as quickly as possible" is strictly limited, being largely in the hands of the French authorities.

As to the nature of the general publicity campaign, we're not much the wiser. Some of those who have been able to preview the campaign suggest that there might not be that much more to have than we have already learned. Pundits have been surprised to find how little information is provided, at least in the early stages of the campaign.

To an extent, the government does have to be a little cautious. It might stand accused of denting already fragile consumer confidence, or triggering another round of panic buying, which would further stress a retail system already under pressure.

Left hanging is the situation in Northern Ireland, resting on the fiction that the rules have yet to be fully defined, pending further negotiations that may run to the end of the year. There does seem to be an expectation at the heart of government that the EU can be prevailed upon to reopen the Withdrawal Agreement.

It was left to Gove somehow to explain to Marr how the prime minister's promise that there would not be any checks on goods going to Northern Ireland would be honoured. To say he was unconvincing is to stretch the meaning of the word "understatement" to its breaking point.

As we lap all this up, though, we can see the debate running to the wire. While Justin King is at pains to assure us that a no-deal scenario won't be a disaster, the Guardian line, via William Keegan is that "it becomes more obvious by the day that a no-deal Brexit would be an unmitigated disaster".

Regrettably, writes Keegan, "this strange country has left the EU and is merely enjoying a period of grace, while the behaviour of our so-called leaders calls to mind a classical quotation that may be familiar to Johnson: Quem deus vult perdere, prius dementat. "Those whom the gods wish to destroy they first make mad".

When the Guardian starts quoting Latin, I suppose, we really need to worry.

Also published on Turbulent Times.

Richard North 13/07/2020 link

Brexit: borders have two sides

Sunday 12 July 2020  

Michael Gove is the man who, famously, tried to use an ordinary household vacuum cleaner to unblock a toilet. And, from the look of it, his grasp of reality doesn't seem to have improved, as he takes the equivalent of a vacuum cleaner to unblock our borders.

The point this rather strange man doesn't seem to realise is that, in this real world of which he is quite obviously so unfamiliar, borders have two sides. When people or goods cross a border, and thereby leave a territory, that usually means that they are poised to enter another, different territory.

It is a matter of fairly straightforward logic, therefore, that a border crossing tends to be a two-part process. Furthermore, no single country will have total control of the process. The transition experience as a whole will depend on how the systems on both sides of the border inter-relate and how or whether the border authorities cooperate.

Thus, when we have Mr Gove writing little homilies in The Sunday Telegraph, telling us that he intends to spend £705 million of our money "to make sure our borders are ready for full independence", it's a fairly reasonable assumption that the man doesn't really have a hang of this border crossing thingy.

Specifically, the man is telling us that the government is "investing in new infrastructure, more jobs and better technology to help goods move smoothly, make our country more secure and our citizens safer".

The money, he says, "will ensure that Great Britain’s new borders will be ready when the UK takes back control on 1 January 2021, and will also lay the foundations for us to build the world's most effective border by 2025".

Standing back a wee bit from this, for a start, we need a double-take on his assertion that he is investing in "more jobs". These are going to be customs officials and the like, "useless mouths" whose functions were largely abolished for trade with Europe once the Single Market was up and running.

I may have missed something here, but why does hiring extra officials, thereby imposing an ongoing cost on the taxpayer, actually constitute an investment? Why, indeed, is hiring more "useless mouths" a good thing?

The next question which springs to mind is just as perplexing. How does imposing extra infrastructure, officials and processes actually "help goods move smoothly"? How can the movement be smooth if the goods are subject to all manner of procedures from which, previously, they were exempt?

Then, of course, when we have a two-part process, with the other part dependent on the authorities on the other side of the border, how can any amount of investment this side of the border ensure the smooth flow of goods? What is the advantage, for instance, in expediting flows across our border in an outwards direction, if goods are then substantially delayed once they get to the other side?

Such are the ponderables that I don't begin to see how it is appropriate to boast of "full independence", when that very thing is neither possible nor desirable. Nor is the UK going to "take back control", because (at best) we only have control over half the process.

Our state, therefore, is not one of independence, but interdependence, and I see no harm in having the authorities on each side of a border being mutually dependent. That simply reflects the actual situation.

As to whether a state of "full independence" makes our country more secure and our citizens safer, I rather doubt it. In modern border management practice, most controls are risk-based, intrinsically reliant on intelligence to enable the assessments to be made. And much of that intelligence has to come from the other side of the line.

On that basis, "full independence" is a guaranteed way of ensuring that you cannot exert effective control over borders. In short, the only way you get to have a smooth, efficient system, which maximises protection is where you have the maximum of cooperation (i.e., interdependence) from all parties.

But then, Gove is not confining his babbling to just this area. He's telling us that the deal the prime minister struck last year, and which the country backed in the general election, "ensured we left the EU in January and means we can look forward with confidence to the end of the transition period on 31 December".

The deal that Johnson struck, though, was the Withdrawal Agreement. That has created its own problems which have not been resolved, but the important point here is that we have no deal, as yet, to take us past the end of the transition period and define our future relationship.

Given that there has been very little progress in the negotiations, and the indications are that we're looking at a no-deal TransEnd, I would dearly love to know the grounds on which we can "look forward with confidence". The scenario, as I see it, is one that invites gloom and despondency.

As for his guff on immigration and a points-based system, this has to be the biggest con trick on the planet. The points system is not a control measure, per se. It simply defines the skills bases of the people who do come here.

As we saw with the Australian system – on which ours is supposedly based – unless you have an overarching entry quota, the country still stands to be swamped with unwanted immigrants. The government must set an annual figure for net immigration, and stick to it – otherwise we don't have a policy in any meaningful sense of the word.

Sadly, though, neither Mr Gove nor any of his colleagues are prepared to put their name to a number, and if we see immigration numbers continue to rise, my guess will be that a lot of people will be asking why we had Brexit – especially as asylum seekers will be unaffected by the government's policy proposals.

Then there is the small issue of trade deals. Here it is rather remarkable that Gove should be talking up the new opportunities with Japan, Australia, New Zealand and other growing Pacific economies, as well as deeper ties with North America and the developing world – yet he doesn't mention one of the world's largest consumer markets sitting right on our doorstep.

In this context, and rather strangely, Gove initially talks about adjusting to life "outside the EU Customs Union". But that is the least of our problems. It is being outside the Single Market which is going to be the biggest challenge. Yet when he refers to being outside the Single Market, this is not presented as being problematical.

And if that isn't bad enough, elsewhere we are getting some gibbering about clawing back parts of the Withdrawal Agreement, and especially the "burdensome EU customs mechanisms" at "a border in the Irish Sea".

This is, of course, the deal prime minister Johnson signed up to – without the cover of the backstop. It now has the status of an international treaty and is no longer open to negotiation.

Yet the Muppets in the ERG and their supporters are urging Johnson to replace the Withdrawal Agreement with a "sovereignty compliant" agreement, as if it is in the gift of the prime minister to do so. It takes two to tango, and if the EU does not consent to changes, then we're stuck with what we've got.

The Muppets still don't seem to understand, though, that the EU is not going to allow a back door into the Single Market via the Irish border. Thus, there were only ever two choices – checkpoints on the land border, or between Great Britain and Northern Ireland.

Still, we can always play with Sunak's freeports, another dubious idea from the Tory creche. One of these days, they might let grown-ups near their policies, but I guess they need to bankrupt the economy first.

Richard North 12/07/2020 link

Brexit: it's Mojo, but not as we know it

Saturday 11 July 2020  

There is far more to the news that a vast Brexit customs clearance centre is to be built in Kent. The very fact that it has been done so fast and with such secrecy must tell a story.

Of course, the exact nature of that story is far from clear. In twenty years' time, perhaps, diligent researchers will be trawling through recently released official records to find out the backstory on what will then be a tiny bit of history.

From this side of the divide, however, the move looks distinctly like panic - the Downing Street Muppets having just realised the implications of what they've been doing, and the consequences of the no-deal direction in which they've been heading.

All the same, the government's action really is quite extraordinary. It has secretly purchased a 27 acre site bearing the unlikely name of 'Mojo'. The location is close to Ashford, 20 miles from Dover. The plan, apparently, is to use 1.2 million square feet as a customs clearance centre for the 10,000 or so lorries that come through the Kent port every day.

So rapid has been this move that the local authority was given only hours' notice of what, it seems, was an emergency purchase. After being told yesterday afternoon, the council leader was forced to rush out hand-delivered letters to local residents to warn them of the disruption.

In the grander scheme of things, it will be the first time a customs post has been needed by the British government to deal with goods from the EU since the Single Market was established in 1992. Fencing work will start on Monday, together with grass and weed vegetation cutting, extensive survey work, the constructing of a temporary site office, and the constructing of temporary access from the A2070 link road.

Bowing to the inevitable, the choice of the site makes absolute sense. There is no room within the confines of Dover Port to carry out customs checks, and there is already a precedent for off-site processing.

We already have, since 2012, a purpose-built facility at the 'Stop24' Folkestone Services at Junction 11 on the M20. Equipped to process third country imports, it is a mere five minutes' drive from the Channel Tunnel and 15 minutes from the port at Dover.

In fact, inland ports are a normal part of the Customs system, taking the pressure off the maritime ports and airports. Thus, if 'Mojo' is to be used, then it will acquire the status of an inland port, for which there are well-rehearsed procedures.

Nevertheless, the government's plans, or so it says, have not yet been finalised for the use of this site. Apart from providing facilities for border-related controls, there will also be holding space for HGVs to prevent Dover being overwhelmed in the event of disruption.

Thus, the story is not the fact of the provision, but the suddenness of the decision to go ahead. Had the government been on the ball, one would imagine that it would have been making these arrangements many months ago, and would not be having to work at such speed or in such secrecy.

One wonders, therefore, whether the government had even realised until now what their current stance on the negotiations entailed. But it also suggests that the government has reconciled itself to the reality of leaving the Single Market, and has finally understood that border controls are the new normal.

Now this is out in the open, it seems that we are to get more detail this weekend, with Michael Gove preparing to tour TV studios to publicise a multi-million-pound Get Ready for Brexit campaign – somewhat inappropriate, since we have already left.

For the first time, it looks as if businesses are to be given the full details of what they should expect once the transition period ends. They will have access to a 90-page document, currently in draft, which sets out the new arrangements.

Entitled, 'The Border with the European Union, Importing and Exporting Goods', it apparently 'lays bare' the complicated new paperwork facing all businesses from 1 January, whether there is a deal or not.

But it also emerges that the 'Mojo' site is to be only the first of a series of new inland customs clearance centres and border control posts. Others are to be built to alleviate congestion at sites including Portsmouth and Holyhead. In time, we might expect most traffic to be processed through such inland centres.

As it stands, though, the arrangements being publicised cover those which will apply whether we have a deal or not. If, as expected, the UK does leave without a deal, then additional measures will have to be specified. These have yet to be revealed. Largely, they won't even be known until the last days of the transition period, towards the end of December.

But, in that case, there will have to be a further information campaign by the government. Then, the true effects of the government's actions will hit home. The impact on public sentiment will be interesting to observe. Business leaders, however, are undoubtedly watching the current EU moves to establish a €5 billion 'crisis fund' to compensate some of those who lose out from Brexit.

The Commission has acknowledged that the effects of the Covid pandemic have weakened national economies to such a state that they will be less able to withstand Brexit shocks, and will thus need help.

With the precedent set by Covid-19 compensation, the UK government is going to find it very hard to resist similar calls for payments to those businesses which suffer losses. If the principle is conceded, that £350 million a week sum, which so famously adorned the side of a big red bus, is going to be stretched to breaking point.

The big problem for the government – and everybody else – is that the ongoing costs of Brexit are almost impossible to estimate. But gone are the heady days when we were hearing optimistic chirping about how much better off the UK would be.

By now, only a few diehards refuse to accept that this government's version of Brexit will cost us dear. Only the amount is in dispute, ranging from very large to huge.

The worst of it all, though, is that no one can see an end to this. Spending on Covid issues is still multiplying and, unless the Chancellor has discovered a magic money tree, or reinvented the rules of economics, excess government borrowing will eventually be translated into additional taxes and spending cuts. Add Brexit to that, and things begin to look pretty dismal.

But that is yet to come. For the moment, as a nation we are just starting to confront the practical realities of Brexit. Since 2016, the "conversation" has been largely theoretical, with many of the pundits away with the fayries.

More recently we have seen even the likes of Liz Truss writing to Gove expressing her concern over the lack of preparedness which could (and probably will) leave the UK "vulnerable" to smuggling and to a legal challenge by the World Trade Organisation.

Such issues themselves have direct cost implications, but there are also reputational effects which will have indirect impacts. In the eyes of many, Britain will no longer be a good place to do business.

Just for once, it would actually be nice to have something optimistic about which we could write, but short of the outright fantasy which seems to dominate the prime minister's thinking, we don't seem to have much going for us – especially as we have just discovered another meaning for 'Mojo'.

Also published on Turbulent Times.

Richard North 11/07/2020 link

Brexit: a tinge of glee

Friday 10 July 2020  

Way down the list of news stories last night have been the reports that, once again, "Brexit" (meaning TransEnd) talks have broken early, after just a day and a half. Putting groundhog day to shame, we also learn that there are still "significant divergences".

This time held in London, to make a change from Brussels, Mr Barnier and his officials arrived by train in time for dinner with our chief negotiator David Frost on Tuesday. The UK and EU teams were expected to devote two full days to talks, but they pulled the plug just after lunchtime yesterday.

There was some excited talk earlier about a possible deal on fishing, but nothing more has been heard in a period when there were supposed to be "intensified" discussions. No one had said what "relaxed" talks look like.

The lack of media interest rather reflects the fact that you can only say "nothing to report" so many times before your readers walk away. There will be plenty of time between now and the end of December to report on the impending doom so it's a question of not making hay while the rain falls – and we've seen a lot of rain lately.

Meanwhile, to coincide with the end of the current round of talks, the Commission has published an entertaining document headed: "Getting ready for changes - Communication on readiness at the end of the transition period between the European Union and the United Kingdom".

There's actually nothing particularly new here, but the Commission is reminding its readers that there has been "little progress" in the talks. It also repeats that which our own government seems reluctant to say, that once the transition period is over, the UK will no longer participate in Union policies and this will create barriers to trade in goods and services and to cross-border mobility and exchanges that do not exist today.

This will happen in both directions, the Commission also says, as if we needed reminding, although a lot of people obviously do – even if many of them won't actually be reading this latest document.

But the Commission is also putting two and two together for us, saying that the choices made by the UK government mean that there will be "inevitable disruptions" as of 1 January 2021 "and risk compounding the pressure that businesses are already under due to the Covid-19 outbreak".

The Communication, the Commission adds, in no way seeks to prejudge the outcome of negotiations, nor to examine the possible implications of a failure to reach an agreement on a future partnership, but it advises businesses to consider revisiting their existing preparedness plans.

In the rest of the 35 pages, it then rehearses a certain amount of detail, starting with the effects of TransEnd on trade in goods. As of 1 January 2021, it says, the United Kingdom will no longer be part of the EU Customs Union. Therefore, customs formalities required under Union law will apply to all goods entering the customs territory of the Union from the United Kingdom, or leaving that customs territory to the United Kingdom.

This, we are advised, will happen even if an ambitious free trade area is established with the United Kingdom, providing for zero tariffs and zero quotas on goods, with customs and regulatory cooperation.

Offering more detail than usual, the Commission then tells us that, on the EU side, customs authorities will carry out controls on the basis of the Union Customs Code, according to the common risk-based system applied to any other external border of the Union with regard to the movement of goods in relations to third countries.

That reference to the "risk-based system" is interesting because if the UK is unable to administer its own customs checks (which looks likely) then it drops into a high-risk category and we can expect a relative high level of controls.

Even at a low level, we are helpfully informed that these controls are likely to lead to increased administrative burdens for businesses and longer delivery times in logistical supply chains.

Additionally, EU businesses wishing to import from or export to the United Kingdom will need to ensure they have an Economic Operators Registration and Identification (EORI) number in order to go through customs formalities.

In addition, EORI numbers issued by the United Kingdom will no longer be valid in the Union. Businesses based in the United Kingdom wishing to import into the Union will need to receive an EU EORI number, or appoint a Union customs representative where applicable.

That is going to be seriously entertaining for some businesses as they get mixed up in half-understood bureaucracy and try to work out how these unfamiliar systems work.

But that's not the end of it. Authorised Economic Operators authorisations or other authorisations issued by the United Kingdom will cease to be valid in the Union. Where the economic operators wish to obtain EU authorisations, they will need to apply for them in an EU Member State. And good luck with that.

Piling on the agony, the Commission almost lovingly tells us that the originating status of goods traded will have to be demonstrated in order for them to be entitled to preferential treatment under a possible future EU-UK agreement. Goods not meeting origin requirements, it says, will be liable to customs duties even if a zero-tariff, zero-quota EU-UK trade agreement is in place.

Trade between the EU and its preferential partners will also be affected, as UK content (in terms of both material and processing operations) will become "non-originating" under Union preferential trade arrangements for the determination of the preferential origin of the goods that incorporate such UK content.

In practice, this entails a need for EU exporters to reassess their supply chains. They may have to relocate production or change suppliers for certain inputs in order to continue to benefit from Union preferential trade arrangements with current Union preferential partners. Now that is going to be fun.

And there is real fun to be had with VAT. Furthermore, any goods imported into the VAT territory of the European Union from the United Kingdom will become due for VAT at the rate that applies to supplies of the same goods within the Union. To avoid double charging, some firms will have to organise VAT refunds from HMRC, as their goods leave the UK.

But, in the exporting game, it seems that there is endless joy to be had. All products exported from the Union to the United Kingdom will have to comply with UK rules and standards and will be subject to any applicable regulatory compliance checks and controls on imports.

Similarly, all products imported from the United Kingdom to the Union will need to comply with Union rules and standards and will be subject to all applicable regulatory compliance checks and controls on imports for safety, health and other public policy purposes.

Certificates or authorisations issued by UK authorities or by bodies based in the United Kingdom will no longer be valid for placing products on the Union market. This means, for instance, that a motor vehicle with a type approval issued by the United Kingdom can no longer be placed on the Union market.

Where Union legislation requires certification by an EU Notified Body – e.g. for some medical devices, machinery, personal protective equipment or construction products – products certified by UK-based bodies will no longer be allowed to be placed on the Union market.

We have written extensively about such matters on this blog, but I wonder just how many firms fully realise what's going to hit them on 1 January 2021. No doubt the media will keep us entertained with a stream of "exclusives" outlining the travails of companies trying to export to the EU, experiencing things we've been warning about for ages.

And if there is going to be fun and games on exporting goods, don't even think about services. The "colleagues" have endless ways of making it almost impossible for you to trade.

Reading through this Communication, though, one almost gets the impression that the authors really enjoyed writing it. There is almost a tinge of glee to it. But, I have to say, it didn't have to be like this. This is not Brexit we're suffering from – it's Johnson. What we actually need is Borex.

Also published on Turbulent Times.

Richard North 10/07/2020 link

Fisheries: a historical grievance – Part 2

Thursday 9 July 2020  

As we left it yesterday, Heath's government had decided that UK fisheries were "expendable" and had sought to conceal that from the public and, especially, the fishermen themselves.

Through the spring of 1971, while the accession negotiations were still being stalled by France, the FCO was dealing with other issues. But by June, as the deadline for the end of negotiations approached, O’Neill and his team suddenly realised the seriousness of the fisheries problem.

Ministers took the view, O’Neill was to record, that the ideal solution would be for the Community to suspend its fisheries policy, pending agreement on a suitable regime after British accession.

This was ruled out, so Britain sought a compromise, suggesting that the Community could control waters between six and 12 miles off the coast, as long as British fishermen could enjoy exclusive fishing rights out to six miles.

Again, the Community insisted on control right up to the beaches, offering only a temporary derogation, whereby all Member States could keep an exclusive six-mile zone for five years, possibly to be extended to ten, with "a review" thereafter.

It was on this basis that, with all other issues agreed, the government put out its White Paper in July claiming that "the Community has recognised the need to change its fisheries policy…". Not for the last time on fisheries, the British public was being seriously misled.

The fisheries issue remained unresolved well into 1971. The Commission bulletin (produced for a US readership) happily announced in its July-August edition: "Common Market Accepts United Kingdom", but acknowledged that: "The only unsettled issue is fishing rights and the common fisheries policy on which discussion will continue after the August recess".

Before Heath could fly to Brussels to sign the Treaty of Accession, he had to deal with this most pressing of issues. By then, having accepted Community control over the fishing waters between six and 12 miles from her coast, he still hoped to retain exclusive rights to the six-miles zone.

On 18 June, Ireland declared their refusal to accept the Community's proposals. The Norwegians followed suit three days later. Having given away so much, Britain's negotiators feared that the Community might now offer the other countries concessions it was too late for her to ask for.

The situation became increasingly fraught as Norway passed a law limiting the size of vessels allowed within her 6-12-mile limit, excluding British deep-water trawlers from one of their most lucrative fishing grounds. Iceland had unilaterally extended its limits to 50 miles, excluding British vessels from another lucrative ground.

Pressure began to build for Britain to seek concessions similar to those demanded by the Norwegians. But the political situation was becoming so explosive that O’Neill’s team decided to defer further demands until after the Parliamentary debate, lest awkward questions were put by Labour front-benchers.

Because the fisheries problem had only come up since Labour’s application in 1967, it was an issue over which Labour spokesmen felt no inhibitions in attacking the government.

By the time negotiations were resumed, they became "so intense, intricate and continuous", according to O’Neill, that he gave up trying to record a step-by-step account.

Fisheries had been raised briefly in the debate, prompting Rippon to make the misleading claim that there was now "a clear understanding" that there would either have to be a wholly new fisheries regulation or the Community would have to accept the status quo.

On 9 November, the Community came up with another minor variation on its earlier proposal, offering member states a "derogation" adding control up to their 12-mile limits in certain geographical areas.

These arrangements would still be subject to review after ten years, but the decision as to whether they could continue would have to be unanimous. Although O’Neill described this as "in many respects entirely unsatisfactory", it was to be the basis on which agreement was eventually reached.

The Norwegians were even less happy. Meeting with Rippon, they rejected any solution that was only temporary, insisting that national limits must be permanent.

They were unimpressed by his remark that "it was better when dealing with the Community to go round a problem rather than deal with it head on". O'Neill regarded the Norwegians as "stubborn". Their stance was to bring their relations with the Community to crisis point.

By now Rippon was under almost continuous fire in the Commons, to which he could only respond with evasive or ambiguous answers. As he and his colleagues tried to extract further minor concessions from the Six, centred on those areas where they wanted to retain a 12-mile limit, the Norwegians remained adamant that they must have a permanent 12-mile limit for the whole of their coastline.

Heath was now worried that, unless the issue could be resolved, his timetable for entering the Community on 1 January 1973 would have to be abandoned.

On 29 November, as ministers were due to arrive in Brussels for a final marathon session, he sent an urgent message to the Norwegian prime minister, Trygve Bratteli. "You will know", he wrote, "that it is very important that we present this question in a manner that will appear satisfactory to our fishing interests".

But Heath went on to say that he was now "seriously concerned" by the way negotiations were dragging on. If Norway kept up its "stiff" and "intransigent" attitude, the Community might lose patience.

It was only because he believed it was of "the utmost importance" that Norway should join the European Community, wrote Heath, that, "I dare send you this message today". It was a great mistake, when dealing with the EEC, he suggested, to make demands "of a permanent nature", because this "touches a principle which the EEC considers as fundamental".

If Mr Bratteli could only accept a time-limit, "subject to revision", Heath suggested, then in practice he would surely find that the EEC would be understanding, and "will give you the essential concession which you expect".

In other words, so long as the Commission got what it wanted on paper, Heath was sure it would privately allow Norway the de facto permanence she wanted. After pleading with Bratteli to instruct his negotiators to give way, Heath ended by threatening, "with very much regret", that, unless Norway conceded, the other candidate countries would have to join without her.

When this message was received in Oslo, its contents were swiftly leaked, with the full text of Heath’s letter appearing in the Oslo newspaper Aftenposten on 7 December 1971, leaving its citizens more informed than the British people.

Word of Heath’s intervention reached Brussels just as the crucial meeting was beginning. From the high-handed attitude of the French foreign minister, Maurice Schumann, it was more obvious than ever that the real driving force behind the policy was France.

The Six had all at different times privately indicated unhappiness at the ruthless way it was being forced on the applicants. The evening after the Brussels talks ended, the German ambassador to London confessed to Rippon's secretary Crispin Tickell that Schumann's behaviour in Brussels and France's subsequent blocking tactics had been "deplorable". ‘As seen from here,’ he said, "the Community had behaved at its worst".

After the fiasco of the Brussels talks, a further meeting was scheduled for Saturday, 11 December. Cynically, the British government's only real concern was to get a formula covering the 12-mile limit which would somehow enable it to defend the policy in Parliament. By Sunday morning, wrote O'Neill, "we got almost everything we wanted".

The following day, 13 December, Rippon made a statement to the House of Commons on the outcome of the final meeting. He claimed that, "the United Kingdom together with the Republic of Ireland and Denmark have now reached agreement on the outstanding problems".

"The Community", he claimed, "had been persuaded of the need to protect Britain’s vital interests", both by conserving fish stocks and by protecting "the livelihoods of our fishermen". He then said, "it is clear that we retain full jurisdiction of the whole of our coastal waters up to 12 miles".

This was untrue. Under the Fishing Regulation as set out by the EEC in 1970, British vessels would only have exclusive rights out to three miles, limited to five years.

What the British delegation had done was negotiate a further derogation – which had Community-wide effect – allowing Member States to restrict fishing within the six nautical mile limit until 31 December 1982, and special arrangements for some areas up to 12 miles. This additional "concession" became part of the 198-page Accession Treaty (Article 100). In Article 103, provision was made for further derogations.

Crucially, Britain had conceded to the Community the right to control her fishing waters, eventually right up to the beaches. Even inshore fishermen would have to comply with Community rules. And when the 200-mile limit took effect, the world’s richest fishing waters would have been given away in toto.

Desperate to hide how much had been given away, Rippon then said: "I must emphasise that these are not just transitional arrangements which automatically lapse at the end of a fixed period".

This claim drew fierce challenge from Denis Healey and Peter Shore, both of whom suspected he was lying. But neither had sight of the accession treaty, which would not be shown to MPs until after it had been signed a month later. Only then did it become clear that Rippon had told a blatant lie.

The Norwegians were unmoved by the concessions offered. Still further concessions brought a reluctant agreement on 15 January 1971, but they provoked the resignation of their fisheries minister. When the accession deal was put to the Norwegian people in a referendum on 25 September 1972, they rejected it, by 52.7 percent to 47.3.

The British people, however, were not allowed a referendum. And, with a temporary derogation in place until 1982, when we joined the EEC, the full extent of Heath's actions were not immediately apparent. By then, of course, it was too late to do anything, but the issue was never to be forgotten.

In an interesting codicil, it emerged that in 1962, the "father" of the Common Agricultural Policy, Dr Sicco Mansholt, had declared that a common fisheries policy "would be in the interest of all the countries on the North Sea".

He said that the EEC Commission, in cooperation with the governments of the six Common Market members, intended to hold a preliminary conference on fisheries in the autumn.

Dr Mansholt added that entry into the Common Market of Great Britain, Denmark and Norway would be of greater importance to the fisheries industry than drafting of a common fisheries policy within the Six - a matter which the European Community had not yet undertaken.

He pointed out that Great Britain, Norway and Denmark produced some 3.2 million tons of fish per year, compared to 1.9 by the European Community countries (Belgium, France, the Federal Republic of Germany, Italy, Luxembourg and the Netherlands).

However, Mansholt then concluded that "it would be impossible for the Community countries to formulate a meaningful fisheries policy without prior consultation with Great Britain, Norway and Denmark, which fish the same North Sea waters".

Mansholt, of course, was right. The Community, by sleight of hand, had launched common fisheries policy without prior consultation with Great Britain, Norway or Denmark. But it was very far from "meaningful" in the sense that it was neither rational nor effective.

In the years to come, though, there would be plenty of apologists ready and willing to excuse the Community's predatory behaviour. But, for many British citizens, the experience was summed up in the words of Margaret Thatcher, who famously said, "They stole our fish!"

Also published on Turbulent Times.

Richard North 09/07/2020 link

Fisheries: a historical grievance – Part 1

Wednesday 8 July 2020  

There cannot be anyone in England, who has a serious interest in Britain's relationship with the EU and is unaware that the Common Fisheries Policy (CFP) has substantial political baggage.

Thus, anyone who comes to this issue surprised that fishing is such an issue in the Brexit/TransEnd talks is either not a serious student of the subject, or is being disingenuous. It is of enormous significance to the Eurosceptic "community" and outweighs any considerations of its economic value.

In particular, the establishment of the CFP represents an egregious example of bad faith by the European Community (EEC) and combines with a prolonged episode of dishonesty on the part of UK ministers in the treatment of the British public during our accession negotiations.

To set the record straight, this blog is publishing the outline of events which went into making the CFP such a sensitive subject, to the extent that it constitutes an historical grievance that has tainted British perception of the EU and its predecessors. Because of the length, it will be published in two parts, the first today and next part tomorrow.

The story starts - or, to be more accurate, doesn't start - on 30 June 1970 when the accession negotiations that were to take us into the EEC were formally opened. With disarming candour, the then chief negotiator, Sir Con O’Neill was to record that "the problem of fisheries did not exist" at the precise point when the negotiations opened. It came later the same day. From then on, O'Neill wrote in the official history of the negotiations, "fisheries was a major problem".

What lay behind his words was the most bizarre episode of the negotiations, politically so embarrassing that much of it was kept secret for three decades.

At the centre of this indisputably scandalous story lies the certainty that, in the months that preceded the applications for entry by Britain, Ireland, Denmark and Norway, a representative of the Six – the evidence suggests he must have been French – realised that the four new applicants would bring with them the richest, best-conserved fishing waters in Europe.

Furthermore, there was already international pressure for a major revision of the international law of the sea, to extend national control of fisheries to 200 miles (or the ‘median line’ between two nations). When this took place, the waters of the four applicants would contain well over 90 percent of western Europe’s fish, some 80 percent in seas controlled by Britain.

It was also the case that, in 1964, some South American countries had extended their fishing limits to 200-miles and Iceland had extended hers to 50 miles. Thus, there was a reasonable expectation that other countries would follow suit, which indeed they did.

The 200-mile extension was agreed by the United Nations Conference on the Law of the Sea (UNCLOS) between 1972 and 1975. Britain formalised her right to a 200-mile limit in the Fisheries Limits Act 1976 – although by then she had ceded control of fisheries to the EEC.

It was actually Nye Bevan who had described Britain as an "island made of coal, surrounded by a sea of fish". But potentially, once the UK had joined the EEC, these waters could bring a valuable resource to augment over-fished seas off France, Holland, Belgium and Germany.

As it happened, the Commission in June 1966 had already considered "the basic principles" for a common fisheries policy (COM (66) 250 final) and had entertained the possibility of using Article 38 of the Treaty of Rome as a legal base for the policy.

Nothing immediately came of this lengthy (512-page) report, but it is known that persons unknown within the Community instructed the Service Juridique of the Council of Ministers to ascertain whether the Treaty of Rome could be used to create such a policy.

The idea at the time was to turn the fishing grounds of the applicants into a "common resource", giving "equal access" to every member state in the Community (National Archives FCO 30/656). The point which its lawyers were asked to address, described as "extremely delicate", was whether a "judicial base" could be established on which could rest a "regulation to give equal access".

Every Community law must be authorised by Treaty powers, the specifics of which for each law are noted in the recitals. The opinion given by the Council lawyers shows that they first considered Article 38 of the treaty, because this mentioned "fisheries products", the only reference to fish anywhere in the treaty.

But "strict exegesis", they concluded, showed that the article could not "cover anything outside the products of fishery and not fisheries themselves". They then turned to Articles 39–43, on agricultural policy, but were forced to conclude that, since these referred only to agriculture, they did not "constitute perhaps the most appropriate juridical basis".

The other articles they consulted seemed even more irrelevant. Articles 52–58 on the ‘right of establishment’ had to be ruled out. To use Articles 59–66 on "services" would not be "absolutely satisfactory", because this would require un gros effort d’interpretation.

Returning to Article 7, which outlawed discrimination between nationals of different countries, they concluded this did not seem, on its own, to "furnish a sufficient base".

Finally, they referred to "catch-all" Article 235 which permitted passing laws which complied with the "objectives" of the Treaty but were not specifically authorised elsewhere. "If one considers that 38–43 of the Treaty do not provide a sufficient legal basis for the Common Fisheries Policy (and the others are unsuitable)", they concluded, "what about 235?"

On the basis of this opinion, it was evident that the treaty offered extremely slender justification for what was being planned. Despite this, a regulation was drafted to define the "equal access" principle, with the intention that it should become part of the acquis before the four candidates lodged their applications.

They would therefore have to accept it, without argument. By any measure this was a trap, aimed at appropriating the applicants’ property, to share it between the Community members.

At a hastily arranged meeting of agriculture ministers on 30 June, the principle of equal access to "Community" fishing waters, "up to the beaches", was thus agreed, with the intention that a regulation to that effect would follow later. That same day the four entrants lodged their applications.

Initially, the only country fully alive to the implications of the move was Norway. For months the Foreign Office did not seem to focus on the issue, or make any efforts to ascertain what its consequences might be for Britain’s fishermen.

Internal notes in July recorded there was "real doubt about the right of the Community … to regulate access to fishing grounds". There was "nowhere any indication that it was the intention… [to] vest in the Community the right to exercise extra-territorial competence" (National Archives FCO 30/656–659 and FCO 954/978).

The Ministry of Agriculture and Fisheries told Con O’Neill they could "not believe the equal access proposals are serious" and suggested they "must be a basis for bargaining".

The first warnings were sounded by a trickle of letters from MPs for coastal constituencies, alerted by their local fishermen. Kent and Essex fishermen were warning that, "if Britain joins the Common Market and French fishermen are given access to inshore waters, they will clean them out".

Throughout the summer such letters continued to arrive, to be side-stepped by Geoffrey Rippon with replies such as "there is as yet no Common Fisheries Policy in the European Community", or "we made our interest clear at the start of negotiations on 30 June".

This latter claim was despite a note from O’Neill dated five days earlier that had said "we see no requirement for a special marker to be put down as regards fisheries policy".

In October an FCO briefing for the Permanent Under-Secretary, who was due to meet prime minister Edward Heath at a top-level Sunningdale conference, claimed that the legal basis for the CFP was "Article 38 of the Treaty".

This was despite the EEC’s Council Regulation, enacting the equal access, having by then been published - Regulation (EEC) No 2141/70 of the Council of 20 October 1970 laying down a common structural policy for the fishing industry. OJ No L.236/1.

Its recital showed the "judicial base" was Articles 7, 42, 43 and 235 of the Treaty. There was no mention of Article 38. Nevertheless, the canard that this Article was the legal basis for the Common Fisheries Policy became lodged firmly in the official mind and was repeatedly cited over the years by authorities ranging from Con O’Neill to Heath himself.

By now, the MPs’ letters were becoming increasingly aggressive in tone. Patrick Wolridge-Gordon, an Aberdeenshire MP, wrote to Rippon on 30 October that there was "not a fisherman who does not think that if territorial limits are to be abandoned, it means the end of an extremely successful and worthwhile industry for the whole coastline of Scotland. It is indeed unacceptable".

Robert MacLennan, MP for Caithness and Sutherland, wrote that the only major herring stocks left in European waters would be "swept away within a few weeks by their so intensive methods of fishing that have cleaned out the stocks from their own waters".

Jo Grimond, leader of the Liberal Party, MP for Orkney and Shetland, and a keen "Europeanist" wrote:
I am perturbed to say the least of it about what is happening over the fishing policy of the Common Market and the curious light it sheds on British diplomacy. I went to Brussels a year ago was told that there was no final policy on fishing but that the Commission would be receptive to the needs of Britain, Norway, Denmark etc. Since then I have been questioning both the Labour and Conservative governments … all I got was flannel.
The government’s response was to work out a formula whereby the protests might be defused. In a memo drafted by D K Rowand of the Scottish fisheries department on 9 November, he admitted that the damage to Britain’s fishermen would be considerable.

However, this official argued that Britain could not afford to spend its "limited negotiating capital" on resisting. He therefore suggested that replies to further letters or Parliamentary questions should indicate that the government was "aware of the anxieties of the fishing industry" and would "bear them in mind in the negotiations".

To that, he added that it was vital not to go into any detail:
The more one is drawn into such explanations, the more difficult it is to avoid exposing the weaknesses of the inshore fisheries position, the only answer to which may be that in the wider context they must be regarded as expendable.
From then on, replies to letters by Rippon and others repeated the same formula: "I can assure you that the Government will take proper account of the importance of the inshore fishing industry to the British economy as a whole". By this means it was concealed from the public that Britain’s fisheries were indeed "expendable".

Continues tomorrow in Part 2.

Also published on Turbulent Times.

Richard North 08/07/2020 link

Brexit: another dirty deal?

Tuesday 7 July 2020  

Things might start getting a little interesting on the fisheries front sometime soon, as the Fisheries Bill, having completed all its stages in the House of Lords on 1 July, was sent to the Commons for its first reading on 2 July and is now due for its second reading.

With parliament not due to go into recess until 22 July, it is likely that the Bill will get its debate before MPs break for the summer, at which point we might see the colour of the government's money – as to what precisely its intentions are.

This, of course, is the second attempt at a Bill, the first one having had its second reading in the Commons on 21 November 2018 then having fallen with the early general election.

And, although at the time, Michael Gove was highly complimentary about the Bill (claiming that DEFRA has some of the finest civil servants in the Government, but the fisheries team stand out), the Bill was a total dog's dinner and is currently only marginally improved, with the addition of a duty to create fisheries management plans (curiously absent from the first version).

At 117 pages, it is a fairly lengthy Bill, but it should not be mistaken for a fisheries policy. Basically, it is a mixed bag (a jumble, even) of miscellaneous powers and obligations, with no sign of a unifying theme that would suggest that its authors had got anywhere near creating an effective management system (or systems).

We actually saw a White Paper published in July 2018, under the title "Sustainable fisheries for future generations", which rather explains why the Bill is such a mess, as the document confuses itself into believing that a bag of tools and a bunch of woolly aspirations actually constitutes a policy.

Not least of the problems though, is that any policy which eventually evolves must be closely tied into the negotiations with the EU over access for EU Member State flagged fleets and since there has been very little progress on that front, it is hard to see what can be achieved.

However, it is clear to see that the basic mistakes that have dogged the EU's Common Fisheries Policy, with its application of Total Allowable Catches (TACs) and quotas, have been repeated by the British government, even though experience from fisheries in Iceland, the Faeroes and – to an extent, Norway – has shown that these are not appropriate tools for managing a mixed fishery.

Details, inevitably, are complex, but any effective system (and certainly in respect of the inshore fisheries) should be based on a mixture of fleet and vessel controls (limiting numbers of vessels, their sizes, capacities and power), with effort control (days at sea), combined with the use of selective fishing gear and techniques, with real time catch monitoring and a flexible programme of fisheries closures based on monitoring results.

But the other thing that comes over loud and clear is that there must be a strong element of local management, with full participation of the many stakeholders together with strong community commitment, otherwise it is difficult to fine-tune policies to the precise needs of individual fisheries, all of which have their individual characteristics.

It is precisely because the EU is unable to devolve management of fisheries to a local level that it has opted for the blunt tools of TACs and quotas, yet the UK seems to be determined to repeat the errors, with a top-down, centrally managed system.

There are, of course, the added complications that, before any fish or fisheries products from UK waters can be landed in the ports of EU Member States, there must be fisheries management plans in force, which must have been approved by the EU Commission. This is very much the elephant in the room, and seriously limits the UK government's room for manoeuvre.

Before we even get to discussing these issues, though, it seems there are developments, on the EU front, although not necessarily to anyone's advantage – particularly the fishermen.

It seems that "team Barnier" is signalling that the EU is prepared to adopt a different method of apportioning the spoils, based on a system known as "zonal attachment", where fishing quotas are allocated according to the distribution of fish stocks rather than geographical zones.

Currently, under the CFP, what are euphemistically called "fishing opportunities" in respect of national quotas, are calculated on the basis of the principle of "relative stability".

Once a Total Allowable Catch (TAC) is determined for a given stock, the relative stability key is used to allocate shares to individual Member States based on their fishing activity over the reference period of 1973-1978. Although the TAC may change annually, the percentage shares for each stock are fixed.

It is argued by the UK that the UK's overall share of fishing opportunities under relative stability does not accurately reflect the quantity of fish found and caught within the UK's Exclusive Economic Zone (EEZ), and therefore results in a poor deal for the UK.

The reality, though, is that the CFP, no matter how calculated, will always give the UK a poor deal. The essence of the policy is one of appropriation, where the UK's fishing waters were unilaterally (and illegally) declared a "common resource" by the EEC, the stocks then to be apportioned between Member States, based on a notional "track record" over the historic reference period.

It was precisely this policy which induced Norway to reject EEC membership and, as long as it exists, the system will prevent modern and effective fisheries management techniques being adopted. Changing the baseline for apportionment is merely lipstick on the pig.

However, since – in theory – the use of "zonal attachment" could deliver a higher share of fish to the British fleet (notwithstanding that most of it is under foreign ownership), there are marginal advantages to pursuing this line, and Barnier seems willing to consider it.

He has, for instance, conceded in evidence to the House of Lords Select Committee on the post-Brexit trade negotiations, that the EU's position on fishing was "clearly not" balanced – not that it was ever intended to be. But, with that, Brussels is willing to be "creative" to break the deadlock over the trade negotiations.

Nevertheless, Barnier is making it very clear that the EU intends to link fisheries and trade agreements. He says he is waiting "with much patience" for a response from "team Johnson" to his latest ideas. But, he says, "if there is no response, there will be no agreement on fisheries and no agreement on trade".

In essence, though, a pig with lipstick is still a pig, and all Barnier is talking about is redefining the method of apportionment, without conceding the principle of relative stability. This government may think that this represents a good (or better) deal, but there will be many fishermen who are not convinced.

The overarching problem though is that the complexities of fishing policy are such that it is easy to pull the wool over the eyes of MPs and the media, and present a messy and basically unsatisfactory deal as if it was a negotiating victory.

Those with longer memories will recall that that was precisely the tack adopted by the Heath administration in the 70s, tempered by direct lies about the nature of the policy. If history is about to repeat itself, the Johnson administration will be no more forgiven than Heath ever was. In the fishing communities as they stand (what's left of them), trust is not high.

Also published on Turbulent Times.

Richard North 07/07/2020 link

Politics: a broken machine

Monday 6 July 2020  

When the "silly season" comes early and high up in the headlines is the prime minister with the clap, the temptation is to book a prolonged holiday and come back when normal service has been resumed – if indeed that is ever likely to happen.

Pete, on the other hand, has been reading the runes about Scotland, giving early warning of troubles to come, although one has to say that as long as Sturgeon is around, there will always be trouble - that's the woman's middle name.

Nevertheless, there is certainly a thesis to consider, where a newly-independent Scotland could sign up to an association agreement with the EU, committing to full regulatory alignment and thereby detaching itself from the orbit of its English neighbour.

However, I suspect that, when confronted with the hard reality, Sturgeon might find having to buy back into the Common Fisheries Policy is too big a leap, as her fishermen still have some political clout north of the border.

Whatever the protestations of the EU as to their good intentions, Scotland might find that the riches of Scottish waters are too much of a temptation for the "colleagues" to resist. Deep in the bowels of the Berlaymont, there might already be a plan on how to reintegrate Scottish fishing into the existing CFP.

Interestingly, one tends to find the "colleagues" better-prepared than one might imagine. It is a testament of faith that, in 1970 when the UK started its accession negotiations to join the EEC, the French rapidly worked up a fisheries policy as a way of securing access to UK waters.

Delving into the archives, though, yields interesting results. As early as June 1966 the Commission had published – as COM (66) 250 final, a "Report on the situation of the fishing sector in the Member States of the EEC and the basic principles for a common policy".

English wasn't a Community language at that time, so the only published copy (that I can find) is in French, but the 512-page length tells you they weren't messing. No one puts that amount of effort into policy formulation unless they are very, very serious.

An independent Scotland, though, might have a little difficulty standing up to the EU and, without a deal, there are the costs of policing their waters to consider. Meeting them might be difficult without help from a Royal Navy that is run from the Admiralty in London.

Talk of independence from Scotland may also be premature given the economic damage occasioned by Covid-19. For a while at least, Sturgeon may need more help from British taxpayers than she is willing to admit.

Despite that, one has to accept that when it comes to Brexit, Scotland is a huge policy vacuum. We might consider sending a Legion up there to find out what the odds are, but historical precedents are not good. We might never get it back. However, if Johnson is still keen on infrastructure projects, then there are probably some votes in rebuilding Hadrian's Wall.

Entertaining though that might be, the real issue is not so much Scotland as the Brexit policy as a whole. That in itself is a massive policy vacuum, with question marks in virtually every sphere of activity.

Here, it is not just trade and border administration where detail is lacking. Key policies such as agriculture, regional policy and state aid – plus many more which currently reside within the domain of the EU – have not seen any significant policy activity from the British government, in the context where White Papers should be pouring off the presses.

The lack of activity may in part be the result of the Covid-19 epidemic, which has happened at just the wrong time. The lockdown measures have had a dampening effect on the general Brexit debate, and have suppressed the process of policy-making, not least because so much administrative effort has been devoted to managing the epidemic.

One other significant factor is that the UK has simply lost much of its policy-making skill and capacity. For decades now, the brightest and best have high-tailed it over to Brussels, where the money is so much better and there are real possibilities of seeing policy ideas come to fruition.

Similarly, academia has been bought and paid-for by the European Commission, which is a generous provider of research funds, enabling it successfully to recruit much of the academic capacity for engaging in policy-making activities. There is no evidence yet that the UK government is preparing to fill the void.

But then, there is the issue to which the Irish Times refers – the continuing "purge" in the civil service, which must be having both a destabilising and demoralising effect. No senior civil servant is going to risk his (or her) career in producing contentious (or uncomfortable) policy options when confronted with the hostility evident in this administration.

But, says the Irish Times, the purge of senior civil servants – or making their lives too uncomfortable to stay – will continue. Furthermore, under the Gove doctrine, Whitehall departments are to be dispersed around the country, supposedly to allow more room for innovation, a wider talent pool, and an end to the rule of senior mandarins.

The net effect of that will be to reduce the already limited attraction of the civil service as a career option, where those who want to work in the capital – where power resides – will seek to avoid employment which exiles them out into the provinces.

One also sees the leaden effect of the Johnson/Cummings regime, where competence is clearly less important than getting advice from officials that chimes with their prejudices. Thus, the very people who are best-suited to devising policy will be dissuaded from entering the field.

On the other hand, as the Irish Times rightly observes, ministers who are incapable of hearing independent advice will inevitably pay a heavy price in their ability to deliver on their project.

As we've seen again and again, the competence of senior ministers (and, indeed, prime ministers) has long been suspect, but if they are no longer even prepared to take policy advice from civil servants, then we are entering into dangerous and possibly unknown territory.

It might also be the case where the talent pool generally is drying up. After years of dumbing down in universities, we are seeing the emergence of a generation of graduates in the political field who lack research skills and even (or especially) the capacity to think clearly.

This is most evident in the output from the numerous and ever-multiplying think-tanks, much of which is of such poor quality as to be worthless. But then the media compounds the problem, producing low-grade and derivative analysis that makes little contribution to the ongoing debate.

For what it is worth, the technical and policy output from EU institutions – and especially the Commission – far exceeds the output from the UK government and much of it is of high quality – even if the conclusions are highly debatable. In the policy 'arms race' the EU is streets ahead.

Inevitably, that means that when the likes of Nicola Sturgeon are assessing their own options, they are more likely to be attracted to the Brussels orbit, which is generating the greater volume of ideas, than the policy vacuum of Whitehall, and ideologically motivated ministers of limited competence. If they want a fishing policy, they are wasting their time going to Whitehall.

Oddly, it was said of the UK experience in the EU, that British civil servants were highly valued for their skills and depth of experience, in the context where much policy-making in European countries is far from neutral, as civil servants are as political as their masters.

But if we're going down the path of ideologically-based policy, vested in politically-driven "special advisers" of limited ability, then it should come as no surprise that Brexit has become a policy vacuum. And, if that is allowed to become the norm, politicians will find that, once the policy machine is broken, is not easily restored.

As a result, the shambles over Brexit, may only be the start.

Also published on Turbulent Times.

Richard North 06/07/2020 link

Brexit: a diet of lies

Sunday 5 July 2020  

Work progresses apace with the revision of The Great Deception and, although I tend to work on several Chapters simultaneously, my current focus is on the 1991-2 period and the Maastricht Treaty.

As I did with my piece a week ago, I thought it would be entertaining and educative to look at what the media were saying at the time, and to contrast it with what was actually happening behind the scenes, with particular reference to the secret Cabinet documents.

Of the many interesting things about this Treaty, one that stands out was that it was a huge step forward in the process of European political integration, the point at which the long-standing ambition of the "colleagues" was realised, and they were able to set in motion the process of delivering the single currency.

But if that was the main headline accomplishment of the Treaty, there were others, including the notorious "social chapter and the introduction of the "pillar" structure which brought in to the Community ambit foreign policy and internal affairs.

Less obvious but equally significant, though, the treaty also greatly extended the areas of Commission "competences", along with an extension of qualified majority voting to 30 more areas of policy – despite UK opposition.

Added to those already ceded under the Single European Act were "broad economic guidelines", social policy, public health, consumer protection, telecommunications, energy, education, culture, vocational training and transport, including measures relating to the "trans-European network".

There were also major extensions of Community control over environmental law, including for the first time "town and country planning" and "measures which significantly affect a member state's choice between different energy sources".

Here we have an interesting contrast because, when the Treaty was agreed in the provincial Dutch town of Maastricht on 11 December 1991, it was widely hailed as a victory for Major.

Yet, before the treaty was agreed, the then Foreign Minister Douglas Hurd, had told Cabinet colleagues on 5 December that, at a conclave of foreign ministers on 2-3 December, he and the Danish foreign minister 'had opposed majority voting in any form'. (National Archives. CAB 128/100).

When Major reported back to the Cabinet on 12 December, he thus had to concede that "he had had to make concessions on some points which ideally he would have preferred to avoid". In particular, he was forced to admit:
The Commission's ability to continue to bring forward under the existing provisions of the Treaty, proposals for legislation which the United Kingdom found unpalatable, and which in some cases arguably amounted to misuse of the provisions in question, would remain. There could well be pressure to press ahead with such legislation during 1992, before the new Treaty entered into force at the beginning of 1993.
And yet, when Major came back home from Maastricht on 11 December, tired after an all-night session, he was treated almost in the manner of a conquering hero. The Times front-page carried the headline: "Major wins all he asked for at Maastricht", and ’ the newspapers were almost unanimous in praise of what the Daily Telegraph called "Major's success at Maastricht".

The Daily Express was almost ecstatic. It splashed the headline across the front page: "Major wins Euro deal", with the sub-heading: "Triumph as social charter is dropped from political treaty". A page-6 story, headed: "MPs hail Major victory", had British officials "throwing their hats in the air with delight" in Maastricht, "after Mr Major's summit triumph".

In London on Wednesday afternoon, Major made a statement to the Commons. It was received with acclaim and much waving of order papers. He told MPs:
This is a treaty which safeguards and advances our national interests. It advances the interests of Europe as a whole. It opens up new ways of co-operating in Europe. It clarifies and contains the powers of the Commission. It will allow the Community to develop in depth. It reaches out to other Europeans – the new democracies who want to share the benefits we already enjoy. It is a good agreement for Europe, and a good agreement for the United Kingdom.
The essence of the "good news" story though was pure spin. The media was being asked to focus on the things that Major had been able to protect – Britain's right to stay out of the single currency, and out of the social chapter. It was completely in the dark about what had been given away.

Yet Major cannot have been wholly unaware what an immense range of powers he had ceded, perhaps indicated by his response to one of his own back-benchers, who asked him to summarise them. His reply was evasive. Detailed information, he said, "could be found in the Commons library".' In fact, it was to be months before MPs or anyone else would find out just how much had been surrendered.

The treaty itself had not been published and it was some months before a full, printed version became available. Even then it would be largely meaningless, because so much would be shown only as "amendments" to the existing treaties, comprehensible only when cross-referred to earlier texts. It was only when a private organisation produced a consolidated version were MPs able to see what had been agreed.

But what was terrifying about Mr Major, concealed from us by the secrecy afforded to Cabinet documents was what, might at best be called an alarming naiveté about the way the Community worked. In his very first Cabinet meeting as Prime Minister, on 29 November 1990, he told his Ministers:
It was questionable whether the Commission should retain the sole right of legislative initiative. If a group of member states had a united view on an issue, they should be able to put it on the Community's agenda for discussion. On the other hand, there were some areas, notably agriculture, where giving a right of initiative to individual member states would lead to worse decisions, as compared with the present situation in which the Commission could exercise a degree of control. (National Archives. CAB 128/97)
This was thus a man who, as Prime Minister of the United Kingdom didn't know how the Community worked. He could have done no better than read the book published in 1972 by Walter Hallstein – the first Commission President. The Commission, he wrote:
… has a responsibility to draft proposals and plans. This responsibility is not discretionary: it is obligatory, and it is obligatory in two ways. In the first place, the Commission is in duty bound to initiate action in all the many fields laid down in the Treaty of Rome … the Commission is entrusted with what virtually amounts to a monopoly in taking the initiative in all matters affecting the Community.
Written just before the UK joined the (then) EEC, nearly twenty years later we had a prime minister who didn't understand that basic, driving force which defined the way the Community functioned.

Another of Major's bizarre misunderstandings was his belief that the principle of subsidiarity, introduced with Maastricht, constituted "proof" that he had agreed a "decentralising treaty".

For sure, it was Delors' "big idea", drawing from the encyclical Quadragesimo Anno, issued by the Vatican in 1931. This held that every task in society should be fulfilled by the smallest social unit capable of carrying it out, beginning with individuals and families, up through larger social units. Only when a task could not be fulfilled on a lower level, it was held, should a higher unit step in and take over.

But, crucially, the "sub-units" had no veto. It was up to what Delors called the "higher agencies" to decide when subsidiarity should apply. That agency was, of course, the Commission, which would decide whether it needed to hand its powers down to a lower level. And, of course, it never did.

Small wonder, Maastricht proved to be another turning point: 1992 proved to be the year when Euroscepticism was reborn, paving the road to Brexit. This was the measure of Mr Major's "triumph", the one the media was so keen to tell us all about – as always, feeding us a diet of lies.

Richard North 05/07/2020 link

Politics: ignorance is bliss

Saturday 4 July 2020  

A propos the government giving us permission to go to the pub for a drink, as from 6am today, I must admit that the sight of Downing Street bottom-feeders, and other such cretins, on our TV screens calling for "responsible behaviour" tends to invite a sharp rejoinder.

This usually involves a two-word instruction which, if not physiologically impossible, would be biologically highly undesirable. If I were to meet any of these creatures, I would tell them to their faces. These are the very last people on the planet to talk about "responsibility", or similar concepts.

This lack of self-awareness in government, however, is easily matched by media representatives, the classic example of the moment being Andrew Roberts complaining about Johnson's intention to introduce White House-style press briefings.

This, Roberts is warning – apparently with a straight face – will only "further trivialise British politics", as if that were even possible with the current state of the media. But then Roberts, by his own admission, believes Laura Kuenssberg to be "very sharp-witted", and Nick Robinson "equally clever".

Down in the weeds, though, where these clever people don't look, we see an intriguing report from the Irish press, telling us that a draft agreement has been reached between the Republic's government and EU officials to reduce the impact of Brexit on Irish agri-food exports and live animal exports.

This comes via the broadcaster RTÉ, which says that Irish food exports will gain access to the EU's "green lanes" network of transport routes after travelling on ferries from the UK to other EU member states.

This is especially relevant to vehicles from Ireland using the so-called "land bridge", travelling to the UK and then crossing over to the Continent via Dover. Unlike the UK traffic, which will be subject to a variety of checks, Irish trucks will be able to bypass the customs channels and pass directly across borders with minimal formalities.

The concept, from the look of it, is quite recent, introduced in March of this year, as a result of border delays arising from Covid-19 control measures.

Applicable to internal borders, the idea is to avoid disrupting the European supply chain and, in the context of roads accounting for 75 percent of freight transport, the EU Commission is anxious to avoid delays, especially as waiting times at some internal borders went beyond 24 hours, even for medical supplies.

For the system to apply at external borders would be an extension of the principle, but there is little objection in principle to arranging fast-track clearance for Irish vehicles coming through the Channel ports. If nothing else, this will serve as a reminder for British operators of what they are missing.

But what this also tells us is that the Commission (and the Irish government) is quite definitely expecting delays at the Channel ports – something which will come as no surprise to those who have been watching the situation, even if it shocks British politicians and many businesses.

It seems, though, that while the EU is steadily making preparations to cope with a no-deal TransEnd, the UK media is unable to focus on such boring things and is indulging itself by covering the end-of-lockdown news and related matters. You will struggle mightily to find any Brexit-related news for today.

We are, however, seeing a small amount of interest in the Irish Times as it confronts the "appalling vista" of a second Covid-19 outbreak and no-deal Brexit.

This is hardly a new theme, but the story here is that the Irish Central Bank is shunning forecasts in the face of what they see as the "extreme uncertainty" of these two events combining. Instead, the bank sets out two scenarios for the economy.

Its "baseline" scenario involves gradual reopening of the State this year and a rebound in economic activity, in which case it suggests that the economy could contract by 9 percent in this year, expanding by 5.7 per cent in 2021.

A more "severe" model would mean the economy contracting by nearly 14 percent in 2020 with unemployment staying elevated for several years after that. This assumes the lockdown period has a more damaging impact on economic activity and that there is a virus resurgence at some point over the next year.

Should this scenario take effect, it would take until 2023-24 before the economy rebounds fully from Covid-19.

But the point made by the Irish Times is that the Bank is not prepared to speculate on the probability of either outcome. And rather than a cop-out, it protests that this is a public health matter and therefore outside its bailiwick.

If it was to start speculating, it would have to acknowledge that the "severe" scenario is not the worst case. That would be if no vaccine arrives and the new normal involves perpetual social distancing and disease vigilance. But the Bank stopped short of evaluating the effect, presumably because the ramifications are too difficult to estimate.

But if these are the disease scenarios, layered on top of them are three possible TransEnd variations: a trade deal between the EU and the UK; no deal with an orderly transition to tariffs; and a disorderly, no-deal outcome. At the moment, the two Covid-19 scenarios presented assume a EU-UK trade deal.

Inevitably a complete breakdown in the trade talks would significantly amplify the Covid-19 shock, which gives rise to what is being called "the Dracula scenario". This is where a second wave of coronavirus and a chaotic no-deal TransEnd hit at the same time.

There is already recognition that some of the failures that a no-deal scenario might have brought have already been occasioned by Covid-19. Thus, some of Brexit effects that would have been expected next year have been front-loaded into the economy as a result of the lockdown.

Thus, while a worst case scenario for Brexit/TransEnd might not be as bad as it could have been in pre-Covid times, we have to take account of the possibility that the combination could be worse than either.

It you really want to stoke up the nightmares, though, you can add in a third element – the "net zero" preparations so beloved of the climate changers, which hasn't gone away. The drag on the economy, on top of the other two events could be… "interesting".

Yet, all of this is practically a closed book for the British media and our politicians. Keen to lecture us on how we should behave when we visit the pub, either and both have long since ceased addressing grown-up topics.

Whether we will have to focus on them, of course, is beyond speculation – which is why the Irish Central Bank is exercising caution. But the "double whammy" or "Dracula scenario" can never be ruled out.

Here, we have the example of Israeli experience, which has seen an increase in incidence in Covid-19 since relaxation of its lockdown just over a month ago.

What is interesting here is the timescale. There is usually a lag phase when dealing with the early stages of an epidemic, and if it takes a month for the mortality rate to respond to changes in lockdown regimes, then we need to expect an upturn to be evident in August.

But then, if we start looking at cyclical effects, with the incidence curve starting to look like a sine wave, that could spell bad news for the end of the year. But then, as long as we don't speculate, then we can pretend nothing bad is going to happen. I think this is known as "ignorance is bliss".

And, if that's the policy, we certainly have the right prime minister for it. Just lie back and drink for England.

Also published on Turbulent Times.

Richard North 04/07/2020 link

Log in

Sign THA

The Many, Not the Few