Brexit: reality takes a seat

02/12/2016  


Reuters have picked up and embellished the story that most of the media were running with all day yesterday, reporting that Chancellor Philip Hammond says that Britain needs to keep open the possibility of continuing to pay fees to the EU even after it leaves. 

This was after Brexit minister David Davis, in answer to an oral question in Parliament, had said that Britain would consider making payments to the EU after it leaves, if that was necessary to achieve the best possible access to the Single Market.

Hammond is cited as saying: "We have to look at any deal in the round ... and I think David Davis is absolutely right not to rule out the possibility that we might want to contribute in some way to some form of mechanism".

Despite a sharp reaction from the likes of Peter Bone and the squealing of anguish from the Brexit morons, this was always going to be a possibility – verging on certainty.

Needless to say, the loudest squeals have come from Ukip, with their new Brexit spokesman, Gerald Batten, saying: "David is already going weak at the knees. It is ridiculous to offer to pay to trade with the EU. Every country in the world has access to the single market".

But there is a lot more to this than Batten's simplistic nostrums – the man who wants to ignore Article 50 and go straight to the repeal of the European Communities Act.

As it stands, none of the Efta/EEA countries pay for market access. They pay grants in aid to help the emerging economies of Eastern and Central Europe and they pay for participation in decentralised agencies and programmes.

But there is also the question of what might be termed "legacy payments". These we deal with in Monograph 3, pointing out that, at the very least, we will have to honour the MFF commitments, which means that we will be paying a sum equivalent to our net annual payments until the end of 2020.

For that, we can barter participation in the decentralised agencies and programmes, so the net effect on expenditure will probably be neutral.

It is the next MFF programme that is going to be really interesting, when the RAL kick in and the "colleagues" demand the UK "share" of repayments, on top of agency and programme contributions. As Booker observed, with our own payments to farmers and others we could end up paying more overall than we are now.

The media far and wide, however, are casting this as a "concession", as if there was any choice in the matter. Short of a cold, hard Brexit, though, we are going to have to pay something to the EU. The only question will be how much we will have to pay.

What we are seeing in the responses is the media and politicians playing catch-up, as they are right across the board.

Only now are pundits getting to grips with the idea of a transitional deal, and the need for an end game, while many remainers, having rejected the idea of the "Norway option" before the referendum are now embracing it with zeal.

The payments issue, though, is likely to be particularly sensitive, given the rash claims made by Vote Leave and their fellow travellers. Arron Banks has called Davis's words "incredibly foolish".

Yet, the foolishness comes in failing to recognise and acknowledge that the UK cannot expect a cost free exit from the EU, and walk away from long-standing treaty commitments without offering something in the way of compensation. To refuse to accept this simply isn't practical politics.

Over the next few months, even running to years, we are going to see a lot of this – silly, shallow people like Banks, who have no grasp of the realities of international relations, making their facile statements. Meanwhile, the business of grown-up politics will have to continue, simply because it must.

That, in the end, is going to drive the outcome of the Brexit talks. The government is going to have to "concede" certain issues because, unless it does, there simply won't be a workable settlement. The pundits will just have to catch up as best they can.

But the same reality will have to drive the "colleagues". With the latest immigration figures just in, they will have to recognise that the UK government will not be able to agree a settlement that does not involve some real concessions on freedom of movement.

But then, there are no constants in this ever-changing political kaleidoscope. We heard yesterday, for instance, that Hollande was not going to stand for a second term as French president. This comes as no particular surprise but it confirms that there will be at least one new face at the table when the negotiations start.

When those talks do finally start, there will be something else at the table – something which is currently missing – a sense of reality. The parties will agree because they must agree. Meanwhile, the noisemakers will do what they do best – make noise.



Richard North 02/12/2016 link

Brexit: a Damascene conversion

29/11/2016  



So opposed to the "Norway option" was Peter Wilding, director of British Influence, that in February of this year – well before the referendum - he invited the Norwegian Europe minister, Vidar Helgesen, over to the UK to tell us how awful it was.

We got the usual low-grade BS from Helgesen, with him telling us that British Eurosceptics often say the Norwegian experience is evidence of how a country outside the EU, but enjoying the benefits of the single market through membership of the EEA, can prosper without having to commit itself to full membership.

Helgesen, on the other hand, said that this arrangement often created frustrations and difficulties, which meant Norwegian ministers and officials spent a lot of time – sometimes without success – trying to find out what was going on in EU meetings that would affect their country directly.

"We [Norway] are fully integrated into the EU single market as members of the EEA, but what we don't have is the right to vote on those regulations that are incorporated into our law when they are made by the council of ministers", he added.

On occasion, Brussels has sprung surprises that the Norwegians could not predict. The same kind of frustrations could well face the UK. "You would not have all those Brits staffing the commission where the decisions are made", said Helgesen. "Britain being on the outside would obviously not have that amount of people on the inside. You would find it more difficult, as a result, to affect the regulations".

On the back of this, Wilding roundly declared: "Eurosceptics who peddle the myth that Norway is the best [model] for a non-EU Britain are deceiving the British public. They say leaving leads to more democracy and security. This is nonsense".

In full spate, Wilding then said: "We now have the Norwegian Europe minister himself telling us to get a grip, get real and get involved in shaping Europe. Little England cannot be an option".

But now, a mere eight months later, this same Mr Wilding is so convinced of the merits of belonging to the EEA that he is preparing a legal challenge to the government to decide whether it can withdraw from it.

Wilding's rabidly "remainer" campaigning platform has now morphed into a "pro-single market think-tank" and has hired lawyers to argue that leaving the EU does not automatically take Britain out of the European Economic Area (EAA), in which the single market operates.

They will claim that the decision to take the additional step must be decided by parliament separately from any vote to trigger Article 50, the mechanism for exiting the EU.

British Influence has written to David Davis informing him it is seeking a judicial review of that position. It warns that the government may be in breach of the law if it seeks to take Britain out of the EEA along with the EU without clear legal justification.

"We believe the government has not understood how we leave the EEA, and has not understood that we do not need to leave the EEA in order to respect the red lines the 23 June referendum established", Wilding says. "This is not about stopping, thwarting or delaying Brexit, but getting a smarter Brexit that delivers for the UK and doesn’t destabilise the continent of Europe".

Interestingly, British Influence invokes Liechtenstein, saying that it has used some provisions of its EEA membership to limit free movement of people. Its lawyers will argue that Britain could also use these provisions to satisfy the demands of those who voted for Brexit to limit immigration.

The argument hinges on whether Britain joined the EEA as a member of the EU or in its own right. Lawyers are focusing on the case of Croatia, which acceded to the EEA nine months after joining the EU, to prove that the two entities are separate.

They will argue that to leave the EEA, Britain must separately trigger Article 127 of the EEA agreement, in addition to Article 50. Article 127, which Wilding calls "a game changer", requires members to give 12 months' notification to leave without reference to Article 50, while Article 128 says that countries acceding to the EU "may" apply to join the EEA but are not compelled to.

Actually, this argument is very thin indeed, making this a false move by Wilding. We dealt with it at length in October, arguing that the EEA Agreement was quite evidently a treaty between EU Member States and Efta States. To be a party to the Agreement, the UK must either be a member of the EU or Efta.

Failing this, the other members can invoke Article 60 of the Vienna Convention on the Law of Treaties, and eject the UK. Article 60(2) entitles, in the event of a material breach of a multilateral treaty by one of the parties, entitles the other parties by unanimous agreement to terminate the treaty in the relations between themselves and the defaulting State.

In practice, it would be very hard for any state to participate in the EEA unless it was either a member of the EU or Efta, as the management of the Agreement is conducted via the institutional frameworks of both organisations. That would allow the parties to terminate the Agreement on the grounds of "the impossibility of performing a treaty" (Article 61), or the parties may prefer Article 62, citing "a fundamental change of circumstances".

For once, though, we're not on our own on this. The media's all-purpose "leading authority on European law has also poured cold water on Wilding's thesis. This is Jean-Claude Piris, a former head of the European council's legal service.

"The UK's withdrawal from EU will mean an automatic cessation of its membership of EEA as an EEA-EU member", he says. "In order to become an EEA member you have either to be an EU member or an Efta member". Thus, the UK would not be able to remain in the EEA unless, on withdrawal from the EU, it rejoined Efta.

The crucial point then, which would be much more interesting for Wilding to explore, is whether the UK participation in the EEA Agreement would then automatically lapse, requiring the government to re-apply, or whether we could claim continuity.

In the latter event, this could be very helpful as the UK could then unilaterally invoke Article 112 (safeguard measures) to impose restrictions on the free movement of persons – without requiring the assent of any other party.

Needless to say, a Government spokesman dismissed the challenge, saying: "As the UK is party to the EEA Agreement only in its capacity as an EU Member State, once we leave the European Union we will automatically cease to be a member of the EEA".

Nevertheless, continued EEA participation is possibly the best option for a trouble-free extraction from the EU, which makes it all the more perverse that the lunatic fringe is objecting to it, and absolutely bizarre that those who most strenuously opposed it are now supporting the idea.

Welcome to the topsy-turvy world of Brexit were, as Booker ventured over the weekend, the most serious barriers to a smooth exit from the EU comes from the Tory eurosceptics – as well as their fellow travellers in Ukip.



Richard North 29/11/2016 link

Brexit: is Blair leaving it too late?

25/11/2016  


The reincarnation of Tony Blair is much heralded, but with mixed feelings. If he thinks his second coming is going to save the nation for Europhilia, others are taking the view that his presence will strengthen our determination to leave the EU.

Blair himself tells us he is "dismayed by the state of Western politics". But, he adds, he is also incredibly motivated by it. "I think in Britain today, you've got millions of effectively politically homeless people", he says.

He believes Brexit "can be stopped" if British voters decide the "cost-benefit analysis doesn't stack up". Such a turnaround could arise in one of two ways, both of them hinging on negotiations over access to the EU's Single Market, he thinks.

"Either you get maximum access to the single market, in which case you'll end up accepting a significant number of the rules on immigration, on payment into the budget, on the European court's jurisdiction". In this case, people may then say: "Well, hang on, why are we leaving then?"

"alternatively, you’ll be out of the single market and the economic pain may be very great because, beyond doubt, if you do that you'll have years, maybe a decade, of economic restructuring".

Brexit, he says, was 'like agreeing to a house swap without having seen the other house'. And while the referendum campaign was won by the leave side, even those voters would eventually look at this in a practical way, not an "ideological way".

However, while he is launching a defence of the "muscular centre", he says that the "right-wing media" would not allow him to return to front-line politics. "There are elements of the media who would literally move to destroy mode if I tried to do that," he claims.

Instead, he says he is interested in providing "a service" to political leaders, in the form of a technologically-inspired platform. Quite what that means is not yet clear but we do know that he has held private talks with non-leader Nick Clegg, after having had discussions with former Chancellor George Osborne.

Yet, when he approached the current Tim Farron, he was rebuffed, the current Lib-Dem leader, rejecting the offer of a face-to-face meeting with Mr Blair. Mr Farron gave him "short-shrift" and is not interested in a closer political relationship.

Perhaps Mr Farron believes that Blair is planning a break-away party on the lines of the Social Democratic Party of 1981, when four senior Labour Party "moderates", dubbed the "Gang of Four" broke away to form a new party – only to merge with the Liberals to become the Liberal Democrats.

Should this happen, Farron's lacklustre leadership would doubtless be challenged, as one can envisage Blair looking to splinter off Corbyn refugees from the Labour Party, to form a new grouping using the Liberal Democrats as it hub. Tory Europhiles might also be expected to join this new "centre party", ready to challenge the Conservatives in the 2020 election.

All this is an ironic inversion of expectations. Amongst others, Farage always anticipated the Tories splitting and, with a rampant Ukip taking dozens of seats in the Commons, he expected the "Right" to combine with his Ukip MPs to form a new centre right party to take us out of the EU.

Instead, the Ukip electoral ambitions were never realised, the Conservative Party has stayed intact (for the moment) and it is the disillusioned Europhiles who are potentially looking to form a centre-left or "progressive" party to keep us in the EU – or take us back in.

Nothing of this, though, has been declared openly by Mr Blair, whose new organisation launches in the spring. He says it merely intends to analyse why British voters chose Brexit and the populist forces that led to the election of Donald Trump in the United States.

On the other hand, Blair is pushing the thesis that there is a global political vacuum, and his moves to get senior Lib-Dems on side are definitely seen by some as an attempt to galvanise centre ground politics and restore New Labour thinking in the UK.

One wonders whether the recent Branson initiative might also be connected. Although there is no declared connection, the timing is deeply suspicious.

For all that, though, it may be that Blair has left it too late. If he is not intending to launch until the spring, Mrs May will by then be ready to start the Article 50 negotiations and the opportunity to block the notification will have passed (assuming Mrs May wins her Supreme Court appeal).

That leaves the alternative possibility that Blair is playing a longer game, ready to target the 2020 election, when he could present a party which stood on a pro-EU platform, arguing for rejoining the EU. If that is the case, and he really believes the referendum result can be overturned, then Mrs May could be facing a more serious challenge than anything Corbyn has to offer.

The upside is that a robust challenge could have the effect of uniting the Conservative Party, and aligning pro-anti EU politics with left and right. A win for Mrs May under those circumstances could become an affirmation of Brexit, leaving the pro-EU forces completely defeated.

If he is not too late to the party, therefore, Blair could be doing us a favour. Aligning his unpopularity with the EU, he could ensure that there is no chance whatsoever of us returning to the embrace of the EU.



Richard North 25/11/2016 link

Brexit: time is running out

20/11/2016  


There has been no neater comment on where we have got to on Brexit, writes Christopher Booker, than the two pictures on the cover of the current issue of Private Eye

The first, labelled "Then", showed that grandiose bus hired by Vote Leave, carrying the claim that, by pulling out of the EU, we could give an extra £350 million a week to the NHS. The second, captioned "Now", showed a clapped-out, windowless bus stuck in a field, going nowhere.

In Booker's view, our progress towards invoking Article 50 does indeed look ever more of a shambles. The real problem, as it has always been, he says, "is that so few people really understand the incredible complexity of what a successfully negotiated Brexit would involve".

That is certainly evident if we turn elsewhere to the Sunday Telegraph where we see an "exclusive account" of how: "Heavyweight Brexiteers among 60 Tory MPs to demand clean break from the EU".

These MPs, including seven ex-Cabinet ministers, are concerned that pro-EU figures in the Cabinet are fighting to soften the Government's Brexit position and are demanding that the Prime Minister pulls Britain out of the single market and customs union.

They say that only the "cleanest Brexit" can fulfil the country's referendum call to "untie ourselves from EU shackles and freely embrace the rest of the world".

This initiative coincides with the relaunch of the European Research Group (ERG), a pro-Brexit Tory body that claims it will produce "new thinking and policy ideas" for Britain's future after Brexit, as well as being "a constant reminder to ministers of the strength of Euroscepticism on the Tory backbenches".

As for these "new ideas", we are going to be waiting a long time, if a parallel piece in the ST is any guide. This is from Suella Fernandes, one of the 60 Tory MPs and vice chair of the ERG.

For her, we get the usual collection of issue-illiterate mantras, starting with the red herring of the customs union which was not even an issue until a few weeks ago, and was hardly – if at all – discussed during the referendum campaign.

The substantive issue is, of course, continued participation in the Single Market and here Fernandes claims that she and most of her Parliamentary colleagues took the referendum as an instruction to untie ourselves from EU shackles and freely embrace the rest of the world.

Fernandes also claims that it was "made clear in the referendum campaign" that remaining in the EU’s internal market, like Norway, or in a customs union like Turkey, "is not compatible with either of these commitments and doing so would frustrate the will of the electorate".

This is simply not true and these 60 have no more right than the lacklustre Vote Leave, Leave EU or Ukip to dictate the shape of the Brexit settlement. All of them consciously refused to adopt an exit plan prior to the referendum and, since that time, none of them have come up with any coherent ideas of how we manage the exit negotiations.

And that is the point that Booker makes in his column. None of the major "leaver" groups nor indeed the "remainers" were remotely prepared for the outcome.

The Remainers simply relied on their absurd Project Fear to ensure that the problem would never arise, but the Leavers were just as bad by deliberately refusing to work out any practical exit plan. Rather than come up with anything sensible, the "official" campaign believed they could wing it on vapid little make believe slogans such as the one blazoned on the side of their silly bus.

Five months later, with only four months to go before Mrs May invokes Article 50 and formally tells the European Council that we intend to leave, and here we are with the general debate no further forward or better informed.

All we can see is a dawning realisation by ministers that it really is turning out to be far more complicated than any of them ever realised, and that we have nothing like enough civil servants to cope with it all.

Booker reminds us that the Prime Minister, Theresa May, continues to keep her cards almost invisibly close to her chest, except for insisting that we must continue trading fully "within" the single market (because anything else would be a disaster), while staying hung up on how this could be made compatible with her wish to "control immigration".

This tension is why she added last week that we cannot be hoping for an "off-the-shelf" solution. Whatever she intended that to mean, there is only one way we can hope to achieve a deal that meets her primary requirement.

Only if, on leaving the EU, we nevertheless remain within the wider European Economic Area (EEA) can we hope to continue trading "within" the single market much as we do now.

But this would also allow us, outside the EU, to escape from the three quarters of its 20,000 laws that cover issues other than trade. It would even, under the "safeguarding" clauses of the EEA Agreement, give us limited control over internal EU immigration.

Whether or not Mrs May would regard this as the kind of "off-the-shelf" solution she now seems to be rejecting, its other immense advantage is that it would enable us, in the short time available for these negotiations, to focus on all those countless other issues that will need to be settled as part of our disentanglement from the rest of the EU system of government.

Look at the 35 different policy areas set out in the template for a treaty of accession to the EU and we can see just what will have to be unravelled in reverse, in the "Secession Treaty" that will be needed at the end of our negotiations. Only six of these 35 categories cover trade.

But our talks will also have to resolve the 29 other areas, such as what is to be done about our involvements in the EU’s common foreign and defence policies, its policies on justice and home affairs, our relations with the EU's 27 different agencies, and a whole host more – including, heaven help us, the unbelievably tricky questions of how we manage to extricate ourselves from the common agricultural and fisheries policies.

All this has so far been scarcely mentioned in the public debate, although it does help to explain why some are now suggesting that we may need to recruit 30,000 more civil servants just to cope with the myriad further issues needing to be resolved, including those ongoing financial commitments to the EU which, over a decade or more ahead, could amount to a staggering £60 billion.

The truth, Booker concludes, is that, in all directions, we are still hopelessly unprepared for what we let ourselves in for on 23 June. And the time left to get our act together is now fast running out.

And with that, the nonsense offered by the "Tory 60" is something we can certainly do without. As Pete observes, these people are dishonestly risking our global standing and flirting with recession on the basis of a delusion – a delusion that there is any credible alternative to continued participation in the Single Market, for the short- to medium-term.

Interestingly one person who in November 2014 saw this very clearly was Owen Paterson. "It is critical to remember, he said, that the economic Single Market and the political EU are not one and the same thing. We are perfectly at liberty to pursue participation in the Single Market without being saddled with the EU as a political project".

"Membership of the EEA", Paterson averred, "allows full participation in the Single Market without being in the EU, as enjoyed by Norway, Iceland and Lichtenstein. Those such as the CBI, who confuse the memberships of the Single Market and the EU are making a basic error and misleading the British people".

"We can leave the political project and enter into a truly economic project with Europe via the European Free Trade Association (EFTA) and the EEA", Paterson said. "We would still enjoy the trading benefits of the EU, without the huge cost of the political baggage".

And what was true then is true now. We cannot afford to be messing in the way we are doing. We need to move on. Most of all, if an "interim solution" is to be at all credible, we must define the end game. And that is something most people have scarcely considered.



Richard North 20/11/2016 link

Brexit: countering the scaremongering

18/11/2016  


In response to recent Brexit stories in The Times, some of which we have covered, a number of pundits have chosen to take the view that the newspaper is scaremongering. It is regarded, as with others, as merely continuing "project fear".

This raises the question as to what constitutes scaremongering and what is simply drawing attention to real but under-appreciated problems. There are then the instances were valid comment is being made, although the extent of problems identified is being exaggerated.

Certainly, The Times of yesterday - on payments to the EU – was probably exaggerating when it came to the payment period, but probably no far wrong when it comes to the £60 billion or so that we will have to pay the EU over term. But on this payment issue, The Times is not on its own. In early October, the Financial Times was talking about RAL and, if anything, understating the amount we might have to pay.

And now, the Financial Times has returned to the fray, enlisting Wolfgang Schäuble to spread a dose of pessimism, including an assertion that the UK would face EU budget bills for more than a decade, running up to 2030.

We have met Schäuble's pessimism before, and his role is very often to fly a kite for Angela Merkel. But neither he nor Merkel can guarantee they will survive the coming elections into the Brexit negotiations. Even if they do, Germany is only one country of 27 which will be sitting opposite us.

Thus, the Financial Times front page headline, declaring: "Berlin dashes Downing St hopes of easy path to Brexit" probably transcends mere exaggeration and belongs firmly in the realms of scaremongering. And, to no one's surprise at all, this is picked up by the Guardian which elides Schäuble's view with that of "Germany", as if they were the same thing.

Nevertheless, one cannot disagree with Schäuble's specific claim that we will probably be funding to EU to 2030 and beyond, and it is about time that the British public got used to this reality. Only if we deal with this obvious requirement will it not prove an insurmountable obstacle to the Brexit talks.

The Financial Times thus has elements of scaremongering and the truth, all rolled up into one article. But I wouldn't put in the same the latest story (at the time of writing) in The Times in the same league.

This has it that: "Brexit is too much for the civil service", with the paper relying on comments by John Manzoni, chief executive of the civil service, reported by Civil Service World. He says Whitehall is trying to do 30 percent too much, reflecting the growing anxiety among senior civil servants at the amount of extra work across departments being generated by Brexit.

This coincides with new figures released by government which reveal that only 38 percent of civil servants at the Department for Exiting the European Union agree that they have clear work objectives — the lowest score of any department. The Department for International Trade also recorded poor scores in the civil service people survey, which is conducted annually.

But this actually should not surprise us. For nations joining the EU, there is invariably concern about the "absorptive capacity" of their civil services, and the matter has been periodically discussed both in terms of individual states and of the EU as a whole.

It stands to reason, therefore, that there should be a similar challenge for departing states and it is so predictable that the UK would have to confront the issue that we wrote a section on it in Flexcit (see page 174).

Another problem we also predicted was having to deal with the functions carried by the EU's decentralised agencies – to which effect we devoted the best part of Chapter 5 to these and related matters. More recently (in August), we also wrote a blogpost to take the discussion further.

Compare and contrast this with an article by Labour MEP Richard Corbett, headed: "The Brexit nightmare we will soon be unable to ignore". This broaches the subject of agencies anew, written in such a way as to suggest that no-one else has ever thought of them in the context of Brexit – and suggesting there is no answer but to remain in the EU.

This, if anything, really is "project fear", but that does not mean to say that raising such problems is a bad idea. Unless we identify the potential pitfalls, we will be ill-equipped to deal with them when the time comes. What makes the difference, therefore, is that we look to raise problems in order to explore a way of dealing with them.

To that extent, the "head-in-sand" approach of the Brexit zealots - who dismiss concerns about potential difficulties and airily suggest that Brexit can be agreed on a rainy afternoon in Brussels – is just as unhelpful as the stance taken by those who would exaggerate the difficulties of leaving, or invent problems that don't exist in the real world.

Into that category storms the Daily Mirror which headlines the claim that a £100billion black hole will emerge in the Chancellor's budget over the next five years due to "mediocre" growth and low tax revenues.

Even then, in the same story, we have former Cabinet Secretary Gus O’Donnell backing up John Manzoni, warning that the civil service is not ready for the challenge of Brexit. He has told the House Magazine that Brexit was "a tougher task" than any he faced head of the civil service from 2005 to 2011.

Asked if Whitehall was prepared for the task, he said: "There's a very simple, short answer to that, which is No. Brexit imposes a lot of extra requirements on the civil service. They're not perfectly ready".

To conclude, though, I can't resist commenting on the news that Ukip has been accused of misspending £385,000 of EU funding on its own general election campaign and to bolster its Brexit drive ahead of the UK referendum.

Although they deny any wrongdoing, Ukip has always sailed close to the wind on its spending of EU funds, and it was back in 2003 that I proposed to Farage a challenge-proof scheme involving the creation of a think-tank in Brussels to provide a critique of the EU. But, as the current claim shows, Farage chose to fritter away the money on endless and ultimately fruitless attempts to get him into the Westminster parliament.

Yet now is the time, more than anything, when we need information to guide us on Brexit, and to counter the scaremongering. How ironic it is, though, while that Ukip is to appeal to the ECJ in an attempt to block demands from the European Parliament that some of the money is repaid, we are having to produce our Monograph series unaided – exactly the function the Brussels think-tank would have been performing.

Yet the obvious counter to scaremongering is information. It's a pity that Farage and I could not have agreed on this.



Richard North 18/11/2016 link

Brexit: the great betrayal?

02/11/2016  


To judge from the most recent media coverage, the great Brexit soap opera seems to have taken something of a hit from Greg Clark. Speculation on the "hard Brexit" has almost evaporated after he spelt out the Government's intentions so clearly that even the average hack could understand what he was saying.

It is now so obvious that the Government has no intention of taking us out of the Single Market that the Telegraph has actually noticed,and has Jeremy Warner noting that Mrs May's conference speech was throwing a bone to the Brexit zealots, but never promised us a hard time - something everybody but the media noticed at the time.

But that leaves the semi-employed Farage speaking on his LBC show, warning of the risk of a "great betrayal" of Britain's vote to leave the EU.

Farage's complaint is that the Single Market represents: "Every single thing that we voted to get out of in this referendum". With Lord Mandelson, Tony Blair, and Tory MPs like the Nadhim Zahawi telling us we must stay part of it, he's " just beginning to wonder and to worry, are we on the edge, perhaps, of a great betrayal".

"Whichever side you voted in that referendum", he said, "17.4 million people voted for us to leave … it was the biggest exercise in democracy ever in the history of this country". He then tells us that: "If Brexit doesn't happen, there is going to be political anger that has never been seen in this country".

Not for the first time, though, the former Ukip leader has got it spectacularly wrong. The "political anger" of which he speaks might well emerge, but the trigger is more likely to be a failed Brexit which crashes the UK economy.

There is no question, of course, that the majority voted to leave the European Union but, as Lord Mandelson rightly observed, the electorate has not given the Government any specific mandate as to how we leave. But there are no prizes for guessing that, other than the zealots, there is no desire to see the economy wrecked in the process of leaving.

On the other hand, if Farage and his friend Arron Banks had produced an exit plan before the referendum, and linked it with their own campaign, they might have some cause for complaint when the Government goes its own way.

The same could be said of Vote Leave, but hat organisation rejected the very idea of an exit plan, arguing that this should be left to government. Its supporters have even less cause for complaint than Farage.

The reality of the pre-referendum scenario, though, was one of anarchy. There was no exit plan endorsed by the official leave campaign or Ukip because the various factions could not agree amongst themselves as to what the strategy should be.

So it is today, with varying shades of "hard" being promoted, ranging from unilateral repeal of the ECA and no negotiations with the EU – rejecting entirely the use of Article 50 - to a Canadian style deal that removes us from participation in the Single Market, but allows us to negotiate a "better deal".

Then, as we have tried to point out many times, the term "free trade agreement" covers a multitude of sins, so even amongst those looking for this option, there is no unanimity. Check with any group and you will find differing and sometimes contradictory expectations, all sheltering under the same portmanteau description.

Moving on from the referendum, however, there is another factor to take into account. The question on the ballot paper was whether we should leave the EU. But that vote has now been cast. Those who voted to leave have no proprietary rights. They have not acquired exclusive rights to determine how we should leave. That is a matter for government, representing the entire nation – leavers and remainers alike.

Thus, it is more than a little presumptuous of the likes of Farage to complain about "betrayal". He had plenty of time and opportunity to work up an exit plan – and was strongly advised to do so, more than a decade ago – but didn't.

Then, in this post-referendum period, everyone has a right to offer opinions as to how the exit negotiations should be handled. No one group has any rights to dictate what the approach should be. That includes Parliament, which lost its right to dictate events when it handed over the decision on the EU to the people.

A further point that has to be considered is what actually constitutes leaving, with the secondary question of how the leaving process should be phased.

As to the first point, we've had freedom of movement (i.e., visa-free travel) with most of Europe since 1946 - over a quarter of a century before we joined the EEC. And, if Farage did his homework, he would know that participation in the Single Market is not incompatible with immigration control.

When even Guardian writers are beginning to recognise that we can participate in the Single Market without being in the EU, Farage is not only wrong to talk about "betrayal" – he is being absurd.

And that goes without factoring in the timescale. Given that we have undergone a process of political and economic integration over the last 43 years, it is not credible to expect that we should extract ourselves completely within the space of a couple of years.

Thus we also find the media gradually coming to the realisation that Brexit is a process, not an event. If we have restored the nation to a position of equilibrium within twenty years, it will be a minor miracle. In fact, we will always have a dynamic relationship with our European neighbours, so we will have to learn to live with a fluid and ever-changing situation.

With that, it would be useful – some might say essential – to have an organisation such as Ukip, outside the longer-established parties, monitoring the government's performance and offering sensible advice where needed.

Long ago though, Ukip vacated the field, so Farage himself has no mandate nor any obvious qualifications to offer the government advice, over and above any other grouping. That his party is so weak in this respect, is in itself an act of betrayal. Never more has an active, relevant watchdog been needed, and never since its creation has Ukip been so irrelevant.

The next time Farage talks about betrayal, therefore, he needs to be looking in a mirror.



Richard North 02/11/2016 link

Brexit: shambles at the top

15/08/2016  


It was our view, right from the very start, that Theresa May appointed the "three Brexiteers" with the idea that she was setting them up to fail. It's also been no secret that the three didn't get on with each other.

The story in the Telegraph yesterday doesn't really break any new ground when it tells us that Liam Fox and Alexander (aka Boris) Johnson are "locked in feud" over who controls Britain's foreign policy. In truth, it would be a surprise if sweet harmony reigned.

What is new is that the Telegraph says it has evidence of this disharmony, which comes in the form of a "terse letter", effectively demanding that the Foreign Office be broken up. It confirms the existence of a "bitter Whitehall feud" over who controls key parts of Britain's foreign policy.

Johnson is understood to have firmly rejected Dr Fox's demands and "Whitehall sources" claim that the Prime Minister is "unimpressed with this sort of carrying on".

One wonders whether this "tension" is responsible for the unexplained deletion of the recent news story put up by Dr Fox's department. But if Foreign Office and Dr Fox's department of international trade are already at loggerheads, that might also explain the Sunday Times story which is telling us that Brexit "will be delayed until end of 2019", relaying the warning from "ministers" that Whitehall is "not ready for talks".

The sources are unnamed "City sources" which could just as well mean that the Sunday Times is fabricating (or exaggerating) the story. Nevertheless, what we're getting is that Britain could remain in the EU until late 2019, the reason being that, despite great political pressure to stick to an earlier timetable, the new Brexit and international trade departments are not ready to deal with the negotiations.

Also being cited are the French and German elections, with the suggestion that Britain might not invoke article 50 until France has voted next May or even until after the German poll in September.

This makes complete sense, of course, and is brought into focus by the comment of an unnamed "City insider" who has told the Sunday Times: "You can't negotiate when you don't know who you're negotiating with". A Cabinet Minister (unnamed) has also confirmed to The Sunday Times that there were "some challenges" in the French and German electoral timetables.

On the domestic front, however, any perceived delay presents the Prime Minister with considerable problems, as we see from a tweet from former Ukip leader Nigel Farage. He has his staff write: "Brexit must mean end to free movement, out of single market & taking back our territorial waters. Anything less would be betrayal".

Back to The Sunday Times and we now switch to "another source", also unnamed. This is not even a "senior source", so it could be the tea lady or chauffeur who has had "discussions with two senior ministers". That exchange again tells us something we already knew, that: "They don't have the infrastructure for the people they need to hire. They say they don't even know the right questions to ask when they finally begin bargaining with Europe".

But as an indication of the sort of problems that are afflicting the heart of government, we get "another senior government insider" - unnamed. This one says that there is also uncertainty about preparatory talks with EU leaders. "I'm not sure they are going to be ready", the anonymous source says. "There is an issue about these preliminary talks - no one even seems to know what the substance will be".

Davis and Fox are spending the summer recess setting up their new fiefdoms, but The Sunday Times says Davis has so far recruited less than half the 250 staff he expects to need. They are working in Downing Street and the Cabinet Office in Whitehall.

Fox, we are told, is looking to recruit up to 1,000 trade policy experts but currently has fewer than 100. His team is temporarily housed in the business department. Its permanent home "could be anywhere", says yet another insider.

Yet, for all that, the story has all the gravitas of Whitehall gossip. There is no evidence, no documentary corroboration and no one, apparently, is prepared to put their names to the story. Nevertheless, from the direct experience of how long it takes to write up an exit strategy, it stands to reason that ministers and civil servants alike are having difficulty getting their acts together. And if the deleted news story is an indication of their grasp of the issues, we're in dire trouble. 

The only surprising thing is that anyone should be surprised, although The Sunday Times appears to be. In an editorial, it starts off by saying: "How simple and straightforward Brexit seemed just after the referendum. We would trigger article 50 of the Lisbon treaty and Britain would wave goodbye to the European Union two years later".

The thing is that only the profoundly ignorant or the wildly optimistic could ever have been under the impression that leaving the EU was ever going to be "simple and straightforward". To have a major British newspaper suggest that it might have been is worrisome.

And even without the Whitehall "gossip", we've always felt that we have good cause for concern about the lack of preparedness. Furthermore, it seems, the "reckless Brexiteers" are about to get in on the act, throwing a strop because reality is taking its toll. These are the Tory "eurosceptic" backbenchers who, as Booker observed two weeks ago are causing more trouble than they're worth.

Now, The Mail tells us, these troublemakers are planning to launch "at least two cross-party groups to pressure the Prime Minister into announcing a strict timetable for leaving the European Union", apparently having the nerve to complain that Mrs May has "failed to set out a clear 'road map' to the UK's eventual break".

It is interesting that the politicians and the whole London think-tank industry – which devotes its entire time to telling government what it should be doing - has gone AWOL on this, completely devoid of original or realistic ideas.

Nothing at all coming out of the intellectual desert in the capital gives us any confidence that anyone has got a grip on the issues, while the "leaver" community – as fragmented as the "three Brexiteers" - remains all at sea. They are making such a mess of things that, by contrast, even the EU is beginning to look efficient.



Richard North 15/08/2016 link

Brexit: the darkest of games

25/07/2016  


Those with memories that go back to the IEA Brexit competition in 2013-14 will recall that not one of the six finalists advocated the Efta/EEA option. All of these finalists "coincidentally" went for a then little-discussed Efta-bilateral option, the only six to have done so. And they all got a prize.

All those who advocated the Efta/EAA option were excluded from the final list – my submission included - even though a number of us had been originally shortlisted. Then the rules were changed, and a new shortlist of the shortlist was prepared. We found ourselves ousted from the competition.

That the head of the judging panel was Lord Lawson is no coincidence. This is a man who has consistently opposed the EEA option. And it is quite obvious that the IEA Brexit competition was rigged, unfairly to discriminate against those who offered the EEA option as a solution.

However, unlike most of the other discarded competitors, I did not take the rejection as final. I continued work on my draft, which is now in its eighth edition as Flexcit. But merely to have been so persistent has provoked the enmity of the eurosceptic "aristocracy" who, almost to a man (and woman), oppose the Efta/EEA option.

Amongst those are the group of "eurosceptic" Tory back-benchers, including Bill Cash, John Redwood and now the rising star, Steve Baker - all considered to be on the "right" of the party. They detest the idea of the Single Market, with an ideological fervour which defies any rationality. And because they have no rational base for their beliefs, they treat disagreement as tantamount to heresy.

These people don't fight fair. They attack the messenger, in my case briefing against me personally in a most disgusting fashion, all with the view of discrediting my arguments without ever having to deal with them.

Sadly, they've been aided and abetted by people whom I should have been able to rely upon as allies. But, since early days, just to exist and try and do one's work conscientiously, is to attract enemies.

In Ukip, in an attempt to neutralise the growing claims that our Party was racist, I recruited two Kashmiri Muslims to stand for Ukip in the 2001 General Election, only to attract the rabid hostility of a fundamentalist Christian group who effectively ran the Yorkshire region.

Writing The Great Deception, one might have thought, would have gained an amount of support, but it attracted a huge number of enemies in Ukip, as we failed to support the Rodney Atkinson theory that the EU was born of a Nazi plot.

My hostility to Nigel Farage, of course, has built up an extra cadre of enemies – his loyal fans who will hear no ill against their leader. I am supposed to give my unconditional backing to a man who had seriously damaged me financially and politically and who, to this day, briefs against me with a collection of well-worn lies.

Then, as we began to focus on leaving the EU, we looked seriously at Article 50, only to meet the sub-group who we have come to call the "trappists", who insist that the Article is a "trap" and that we should immediately repeal the ECA.

My subsequent support for a phased withdrawal from the EU has then built its own band of detractors, to add to the others, to which we must add the Cummings-Elliott nexus who, for their own thoroughly dishonest reasons, excluded me from the official leave campaign.

It may occur to the dispassionate observer, however, that my enemies have in common things which would lead them to be hostile to me, entirely unrelated to my own personality. After all, with the idea spread about that I am "difficult to work with", can anybody say that with a straight face after seeing Dominic Cummings in action? 

As to my critics, one only has to observe the discourtesy with which Steve Baker treated me (along with the rest of the Treasury Committee). He doesn't say so, but he completely disagrees with my position. But instead of having an open debate, he abused his position on the Committee to shut me out. The other witnesses were given twice the time I was allowed, drowning out my input.

But if that is the way these people work, there are others who have been taken in by the hostile propaganda. Some have argued that the Flexcit message would do better if it was detached from its primary author, and promoted separately as a concept by different people.

I've not entirely agreed with that view – not least because it is based on the false premise that I am the problem rather than the message. But I tolerated some independent initiatives before the referendum, simply to avoid any public display of disharmony.

This has been particularly the case with Roland Smith. But he has stretched tolerance to breaking point and beyond. With Sam Bowman of the Adam Smith Institute, he has produced a progression of posts, through which he has gradually sought to take ownership of the Flexcit agenda.

In work which quite evidently relies on Flexcit and the EUReferendum blog, Smith has only ever once admitted that his writing "borrows from the North plan". But in his latest evolution, published on Friday last, he offers a "collaborative effort" which once again "borrows from the North plan". Yet it is attributed to a group of authors led by himself, with no attribution to myself, the blog or Flexcit, or any recognition of the origins.

Sadly, in an (unsuccessful) attempt to make this "interim option" just sufficiently different from Flexcit to avoid a charge of outright plagiarism, Smith has introduced a number of errors, while also failing to keep up to speed with the EEA/Liechtenstein solution on freedom of movement.

He thus makes space for the predators to move in and damn his work with faint praise. That is the problem generally with cheap rip-offs. Superficially, they may look the same as the originals, but they are not as well-built and easily fall apart with only gentle use. This is why, of course, counterfeits should be avoided.

Significantly, one of Smith's co-authors is Dr Kristian Niemietz, who recently wrote an article for the IEA, headed, "Saving Brexit from the Brexiteers: why free-market liberals should support the EFTA/EEA option".

Dr Kristian Niemietz is the IEA's Head of Health and Welfare. He is seemingly obviously oblivious to the irony of his own Institute's rejection of the very same option when it was handed to them on a plate during its Brexit competition. But at least Niemitz in his own writing links to Flexcit – even though he doesn't mention it by name – an indirect and grudging acknowledgement of the source of the idea.

No such acknowledgement comes from Smith's other co-authors, Prof Steven Peers, George Peretz QC and Prof Simon Hix. Interestingly, the only time we seem to have heard about the EEA from Peers at such length is in a blogpost published on 24 June, the day after the referendum. So similar is this to the first stage of Flexcit – first published over two years ago – that it would be for him to show that he managed to dream up an almost exact replica all on his own, divorced from any external influence. 

At least the other two, Peretz and Hix, come to the subject anew, with nothing more to contribute to Smith's effort than their names. Hix in a YouTube presentation published on 30 June, effectively dismissed the option. His favourite response to it was: "please could I have a unicorn". Tellingly, he then went on to have a quick sneer at Flexcit, lumped in with fictional options.

All that aside, though, Smith's plagiarism presents me with a problem. Whatever justification he might have had before the referendum no longer applies. But when I have ignored it, he treats my silence as assent, and becomes more and more brazen in his theft.

At the other extreme, I do not want to waste money on formal action – that would serve little but to make a small band of lawyers even richer than they are already. And since I have offered the Flexcit free of charge to those who were prepared responsibly to promote it, I have suffered no financial loss.

In this case, though, Macmillan's "events, dear boy, events", are providing an answer. While Smith and his friends are so anxious to establish their ownership of a sub-standard version of Flexcit, the events of the past few days are rapidly making their efforts redundant.

When you look at the posturing of the Tory backbencher dinosaurs, and the actions of the Government in seeking to secure a Brexit settlement, even their rip-off version of Flexcit is so massively sophisticated in relation to what our protagonists are able to deal with, that it is totally beyond their comprehension.

On the one side, we have government agencies dealing with the mechanics of Brexit at an almost childishly superficial level, and on the other we have dinosaur Tories unable to see beyond their simplistic mantra of repeal the ECA", played to the repetitive counterpoint of "free-trade, free-trade, free-trade".

To such simple souls, the idea of an interim solution – presupposing a future end game which encompasses dimensions not already on the table – is so far beyond their comprehension that we all might just as well be speaking in tongues.

In context, Flexcit was intended as a referendum tool, designed to provide reassurance to wavering voters that there was a post-exit plan, and that leaving could be safe and largely cost-free. It was not intended for these people and doesn't speak to them. 

Now the referendum is over, Flexcit as originally drafted has largely done its job. I am already having to rewrite it to deal with the new political realities as they emerge. That a group of plagiarists now want to copy the old version is, in its way, very flattering. But it is largely a waste of time. The situation is changing faster then they can copy my work.

The important point, however, is that the work produced by Smith and his friends should not be confused with Flexcit. Although based on our work, they have introduced too many errors and are too far behind the curve for it to be taken seriously. If they want to market their sub-standard rip-off, they may as well get on with it, as long as they don't pretend it is Flexcit.

And while they play their games, we have to deal with the far greater threat, where the Tory dinosaurs, led by the likes of Steve Baker, are locking horns in a battle that has the potential to do far greater harm that Smith's petty theft.



Richard North 25/07/2016 link

Brexit: the shambles of Leadsom

05/07/2016  


The good thing about Andrea Leadsom's launch speech to support her bid for the leadership of the Conservative Party yesterday was that it was less than a third the length of Michael Gove's speech. Oddly enough though, the amount she dedicated to discussing withdrawal from the European was about the same – and of similar opacity.

She started off well enough though, stating that the result of the referendum was final. It must be respected, she added, declaring roundly: "The United Kingdom will leave the European Union".

Very quickly, though, it got down to detail, and her pitch began to unravel. Freedom of movement "will end", she said. The British parliament will decide how many people enter our country each year to live, work and contribute to our national life.

Billions of pounds more will be invested in the NHS from the savings we make from cancelling our EU membership fee, the laws and regulations that govern the British people will be made in Britain – and not Brussels. And at elections the British people will be able to appoint or sack politicians, secure in the knowledge that EU bureaucracy cannot undermine their wishes.

As to the negotiations, Leadsom informed us that she intended to keep them "as short as possible". Neither we nor our European friends need prolonged uncertainty, she said, "and not everything needs to be negotiated before Article 50 is triggered and the exit process is concluded".

Her "dedicated" team would consult opposition politicians, business people, farmers, trades unions and trade negotiators. And, having done so, she would set out trade, border and security agreements, with the "renegotiation" in the hands of a dedicated Cabinet colleague.

And so we go on. Mrs Leadsom wants to sell a pig in a poke. There is nothing specifically in her speech which identifies when she might invoke Article 50 – or even whether she intends to do so. She talks of a "trade agreement" with the EU without being specific as to its nature, but then commits to ending free movement, which presumably means dropping out of the Single Market – although she doesn't state this specifically.

Worryingly, though, she talks about "savings we make from cancelling our EU membership fee", which means she must think there will be any, and then – without even doffing a cap to globalisation (much less the possibility of EEA membership) declares that laws and regulations "will be made in Britain – and not Brussels".

That she intends to keep the negotiations "as short as possible" is a meaningless phrase. Bringing them to an end in twenty years, if that is the only "possible" course of action, would conform to that pledge. And why she talks about "renegotiation" is anyone's guess. What is she renegotiating?

The upshot of this effort, however, is a studied vagueness. It is possible to infer much from what she says, but the fact that inference is needed tells its own story. You would have thought by now that politicians might have learned that this is exactly the sort of behaviour that has alienated people from politics.

This unimpressive woman clearly does not have a grip on the issues and is unable to offer a convincing roadmap for successful negotiations. We need far more clarity than she has so far offered.

But if there was any doubt about the suitability of Mrs Leadsom, one needs only look at her latest backer. As well as John Redwood, she now has Alexander (aka Boris) Johnson, who says she has the "zap" to be prime minister.

Yet this is the woman who as junior Treasury minister attracted the ire of her officials, who declared her, "the worst minister we’ve ever had". Said one official, "She found it difficult to understand issues or take decisions", while another said: "She was monomaniacal, seeing the EU as the source of every problem".

To add to a growing concern, the Mail report which announces the recruitment of Johnson also has Leadsom declaring that she would invoke Article 50 as soon as she was elected, although I cannot find any direct quote to confirm that she was that specific.

However, the very lack of detail from Leadsom allows any number of constructions, none of them good. Unless the woman has a handle one of the most basic of the three challenges I outlined yesterday, she is no use to man nor beast. Even the prospect of Article 50 being triggered before we are ready is not one we could even countenance.

Increasingly, we see a delusional woman who seems to lack any clear idea – or any idea at all – of what we're dealing with. But that much is now becoming evident even to the MPs. At a hustings meeting of the 1922 Committee, last night, Leadsom is said to have "stumbled".

Backbenchers left the packed meeting muttering under their breath after the energy minister fielded questions on Brexit and how much support she was receiving from Ukip. One cabinet minister said she was asked three times about her backing from Ukip and Leave.EU. "When you're asked to say you're not UKIP at a hustings to be leader of the Conservative party, you're in trouble", he said. "It was a car crash".

Another MP said her pitch was a "fucking shambles", adding: "She babbled on about the importance of the frontal cortex for emotional development, said she'd trigger Article 50 immediately – and then that she wouldn't".

Appropriately, the archaic meaning of shambles is a slaughterhouse – a place where dumb animals are put down. This may have been the right place for Leadsom. No 10 certainly isn't. She's the Tory equivalent of Corbyn.



Richard North 05/07/2016 link

Brexit: Farage resigns … again

04/07/2016  


Top of the week's news for a few nanoseconds is the resignation of Ukip leader Nigel Farage – once again. I suppose we must wait for the statutory ten-day return period before it can be taken as confirmed.

Already, the political eulogies are flooding in, with the media rewriting history – casting Farage as the man who got us the referendum and then proceeded to win it: "the man who got us out of Europe".

Actually, as regards the referendum, he always opposed the idea – preferring to put his resources into taking Parliament by storm through the election process. When he found he could not block it, he reluctantly supported it, climbing on the bandwagon at the last minute.

However, he made no preparations for the campaign, rejected outright the idea of an exit plan and, when it came to the lead campaigner designation, the submission made on his behalf was so woefully inadequate that Farage ended up consigned to the periphery of the campaign, and us lumbered with Vote Leave.

Having thus done his best to lose us the campaign before it had even started, he then intensified his efforts with an obsessive focus on immigration – failing to distinguish between free movement of persons and the EU asylum policy, culminating in "that" advert, which probably cost us thousands of votes.

The majority of British voters nevertheless opted to leave the EU – for reasons we still do not fully understand. Now, with the political parties in turmoil, never before has clear direction been needed. But clearly, Farage is not the one to provide that,. With nothing useful to contribute to the debate, at least he has the decency to do the appropriate thing and resign.

However, with unconfirmed rumours that his Brussels offices have been raided, believed to be at the behest of Olaf investigating falsified documents in relation to Ukip's finances, Farage could be jumping before he is pushed. More than a few are suggesting that this "shock" move was not voluntary.

If one was to look for a political legacy, Farage was always a good spokesman and a moderately competent debater – let down by his indifferent grasp of detail, although so often paired with people who knew less, this was not always a handicap.

But he was also rigorous in excluding competition and suppressing fresh talent, so we will never know whether someone better might have emerged to lead Ukip more effectively, making victory more assured.

From a personal perspective, having shared a desk with him in Strasbourg over the four years that I worked for Ukip in the early days of our representation in the European Parliament, I have to say that he is a man best savoured from a distance – the greater the better.

His "boyish charm" is wafer thin and behind the façade he is a liar, a bully and a braggart, who does not know the meaning of the word loyalty. Personally he has done me great harm and, in my view, has held back the development of the party to the extent that he is largely responsible for its current parlous state.

Whether there is anyone of calibre ready to step up and take his place remains to be see but, from past performance, with the dictator gone we can expect a period of bitter in-fighting before a clear victor emerges. But this is a bad time for it to be happening, when we need focus on the EU withdrawal process.

As always, therefore, Farage has put himself before party and himself before country, telling us, "I want my life back". Well, having blighted many others, he can go and get his life. There will be no regrets over his passing from this quarter.



Richard North 04/07/2016 link

Brexit: the rats rejoin the ship

02/07/2016  


In yesterday's speech (Friday), running to around 5,000 words and taking an hour to deliver, Michael Gove's "plan for the United Kingdom" certainly demonstrated that he is fond of the sound of his own voice – excessively so.

When it actually came to talking about his plans for Brexit, though, that took less than 250 words. Mr Gove promised to deliver "specific changes". We would, "leave the European Union, end the supremacy of EU law and take back control of our democracy". With my leadership, it will be delivered, he said.

On the promise to take back control of our borders, Mr Gove informed us that he would "end free movement, introduce an Australian-style points-based system for immigration, and bring numbers down".

As to the money we currently send to Brussels, with his "leadership", it would be invested "on the priorities of the British people - principally in the NHS - and to cut VAT on domestic fuel".

The referendum, he said, "was about democratic accountability the principle that politicians must answer, as directly as possible, to the people who elected them". Because of that, Mr Gove believed that the next Prime Minister had to be "on the winning side of the argument".

Put simply, he said: "the best person to lead Britain out of the European Union is someone who argued to get Britain out of the European Union. That is best for the country - to retain the trust of millions of voters - and it is best for the Conservative party too".

What this "best person" singularly failed to deliver, though, was any detail at all about how he would achieve such wondrous things. And, in terms of trade, all we got from him, in one of two mentions, was that he was "a passionate supporter of free markets, free trade and free enterprise".

"We need bold leadership", said this best person, "both to negotiate our new relationship with the European union, and to pursue new trade deals with the rest of the world… with the US, the Commonwealth and the growing markets in South and East Asia".

With 5,000 words at his disposal, and the undivided attention of the world's press, you might have thought that he could then devote even a tiny ration to telling us what sort of relationship he had in mind, when he was going to trigger Article 50 to set negotiations in motion and how he was going to reconcile the need for a trade agreement with free movement of persons.

That we got such thin gruel, at this stage, is completely unacceptable. Business, for all its support of staying in, nevertheless needs more to go on than what Mr Gove had to offer, just as we all need a better idea of what he has in mind, in order to make an informed choice (not that we actually get a choice).

One suspects, though, that Mr Gove, having wafted through the referendum campaign with no clear exit plan, has very little more idea than when he was clambering out of a bright red bus proclaiming that we would give £350 million a week to the NHS – a detail noticeably absent from yesterday's speech.

But then, with only Dominic Cummings to rely on, the "best person" was hardly equipped to do detail. Perhaps the only real detail to come from Mt Gove – and then only in the questions session – was that he would not give Cummings a job in No 10 or his government.

As to a coherent exit plan, no more detail is forthcoming from the other contenders but, while the politicians retreat behind their smokescreens of waffle, the world and his wife is leaping into print, to offer ideas – mostly centring around the Norway/EEA option.

With far more clarity than "best person" Gove was able to muster, we thus have David Frost, head of the Scotch Whisky Association, talking up the Norway option, "but explicitly as a transitional arrangement", while relying on the protection of "the EEA safeguard clause for free movement".

Despite the uncanny similarity in approach, there was no mention of Flexcit, but his adoption of the principles at least puts Frost streets ahead of Wolfgang Münchau hiding behind the Financial Times paywall to tell us the Norway option "is the best available for the UK".

The Norway option, the Great Sage says, is "the economically most benign of all" and "is economically almost neutral" – which is exactly what I've been saying forever. But in FT land, time has stood still, as Wolfgang gravely informs us that "it would not allow Britain to curtail free movement of labour".

But at least this man is also thinking "transitional arrangement", arguing that you could impose a time limit - say, ten years. We could then continue the arrangement indefinitely, opt out of the EEA and seek a bilateral trade agreement, opt back into full EU membership under Article 49.

Gradually, but oh so slowly, the message is beginning it get through – more than two years after I launched the idea in my paper rejected by the IEA. But then, at least we have a Ukip plan on which to rely.

How interesting it is, therefore, that about the only politician so far to offer anything sensible about leaving the EU is the dyed-in the wool "remainer" Theresa May. The mumsy Andrea Leadsom clearly isn't cutting it, thus opening the way for May's uncontested "coronation" some time next week – or so the "Fleet Street" scuttlebutt goes.

By then, one suspects, the "rats" who so quickly deserted the "Norway option" ship will all be swarming back on board. 

*****

I'm shortly off to Bristol, thence to attend Yeovilton Air Show tomorrow (Saturday) – something of an annual North tradition – returning late Sunday. Until I return, blogging will be light to non-existent.



Richard North 02/07/2016 link

Brexit: letting off steam

30/06/2016  


What does not come over from the media reports, but is extremely evident from President Tusk's statement, is that the meeting in Brussels yesterday of Heads of States and Governments (HSGs) was an informal gathering which had no official status whatsoever.

The gathering, from which the UK was excluded, was not meeting as the European Council (even though it was using – or abusing – Council facilities) and had thus no authority to make decisions or policy on behalf of the European Union. Effectively, this was an exercise in letting off steam.

On the receiving end of the messages, we assume that the "colleagues", individually and collectively, are talking to us. This isn't always the case, and sometimes it isn't the case at all. For the most part, these are politicians speaking to their own domestic audiences - especially Merkel and Hollande, who are facing re-election next year.

What this means, though, is that the much-touted "decision" that the UK "will not be given access to Europe's single market without accepting freedom of movement rules", has no legal force – and probably no practical effect.

Even the choice of terminology is a bit odd, with President Tusk, speaking in English, saying that: "Leaders made it crystal clear that access to the Single Market requires acceptance of all four freedoms, including the freedom of movement. There will be no single market à la carte".

One is never really sure in these circumstances what is meant by "access" to the Single Market. Properly defined, the Single Market is a common regulatory area. A country is either part of it, or it is not. If it is not, then it can trade with the countries forming the Single Market, on defined terms. But for the most part those countries which have trading privileges are not required to accept the full freedoms.

The more one explores this subject, though, the more anomalies are thrown up. For instance, it is common to talk of the Single Market acquis is if it was a monolithic block, common to the entire area. Yet, that is not the case. There is unrestricted trade in agricultural products between the EU-28 but not within the EEA. The Efta states are not part of that market.

Thus, while all Single Market legislation supposedly has the description, "EEA Relevance" appended to it, this is not the case with laws governing agricultural products. We can see that from this example. Norway, Iceland and Liechtenstein do not apply these standards (through the EU).

The point that emerges from this is that the Single Market is actually quite flexible - more so than would appear. It can be modified according to circumstances, and different versions of it exist, in different areas. There is no reason in principle, therefore, why the UK should not negotiate its own specific version of the supposedly Single (but actually "variable") Market.

And that very much appears to be the case with freedom of movement. It actually matters not what the HSGs say in an informal meeting because – as we saw with Leichtenstein - the provision for exemption is built into the EEA agreement.

The important thing here is that invoking Article 112 is not bending or twisting the law. Nor is the Article a "loophole" – it is a fundamental part of the Agreement. Thus, to use it to cap immigration is to use it precisely for one of the purposes for which it was intended. And, given that – for Efta states – its application is unilateral, there is no mechanism for over-riding it.

It could of course, come to pass in the Article 50 negotiations, that the remaining EU members refuse to allow the UK to stay in the EEA, or seek to modify the Agreement.

Either would be problematical, and would create as many problems for the EU as it would the UK. Administratively, the EU simply does not want another unique arrangement with a neighbour, absorbing disproportionate amounts of resource.

This has actually been the problem with the Swiss agreements. From the EU's point of view, they are resource-intensive. It would prefer to fold Switzerland into a standard "neighbourhood agreement", common to all its near-neighbours.

Switzerland also has another edge to it, with the outcome of the 2014 referendum on immigration quotas, which is very far from resolved. The EU could find itself fighting quota battles on two fronts, from a weaker position than currently appears.

Nevertheless, as always, our own people are proving to be the greater part of the problem. Fresh out of the "stupid bin" is our old friend Farage who is blithely disowning the Norway option. "We didn't vote for that", he says. "We did not vote to be part of this outdated cartel that is called the single market. We voted to be free of it, to stop regulating the 88 percent of the economy that does not export goods to the European Union".

Having given no serious thought to a post-exit settlement, it is not helpful to have the likes of Farage sounding off, especially as he is speaking against the one option that has any great utility as part of an interim settlement.

He is by no means the only one, but gradually, Flexcit is getting an airing. We're now recording well over 90,000 downloads and will be reaching 100K shortly. The determination in some quarters to ignore the only plan in town is now looking not just small-minded but downright silly. 

For all that, I'm glad I called it Flexcit, with the "Fl" standing for flexibility. We are having to adjust to the changing circumstances, but at least we can. It's the EU which is having the problems adjusting. We're ahead of the game.



Richard North 30/06/2016 link

EU Referendum: so it's out then!

24/06/2016  

Guest post by Pete North
Well, we've done it. Defying all of my expectations. Firstly, I want to get some things out of the way. Though I was wrong about the result I think the Vote Leave campaign was dismal. I believe it is responsible for this being a slim victory and not a landslide. Those ideas put forth by the leave camp have been wholly disgusting and factually incorrect. I do want to leave the EU but I do not seek the Britain as envisaged by the Tory right, the Labour left or Ukip. Thankfully, reality stands in the way of that.

As campaigner and contributing editor at The Leave Alliance, you should know this. The official Leave campaign was one widely opposed and we never wanted the likes of Boris Johnson or Farage. These are not informed men and they have no idea what they are talking about. Our ethos at TLA was to make a liberal case for leaving the EU, seeking not to dodge the political realities.

To that end, we produced a comprehensive Brexit plan which is rumoured to be required reading in the civil service. We make the case that leaving the EU in a single bound is impossible as it is damaging both to the EU and the UK. And so our recommended path is similar to that of Norway whereby we retain single market membership and freedom of movement.

The funding for the official Vote Leave campaign dries up today and that malign entity will be dismantled. What Ukip says will no longer be relevant. This is now a decision for the adults.

The majority of MPs are opposed to leaving the EU and so they absolutely will not support any moves to leave the EEA as well and so there are democratic safeguards in place to ensure extreme measures are not taken. 

We are meeting on Tuesday to discuss future direction. The proposal will be to continue making the case for Flexcit and for Efta membership under the banner of TLA. It sees us as close allies of the EU but not subordinate to it, which I believe is best for the UK. It retains most of the advantages of the EU without requiring a political merger and gives us control of key policy. I think it is the right move.

This is not about hostility to Europeans or Europe. This is hostility to our political class who continued to commit us to further subordination without public consent. One way or another, Britain will remain a liberal and tolerant nation. We are simply choosing a different mode for our relations with Europe. 

The EU is based on a dogmatic principle of supranationalism. We are departing from that to a more multilateral mode both in Efta and the WTO. This is not the end of the world and I can assure you Ukip and the likes will not get their way. We know this because they only scored 14% at the general election. There are more of us than there are of them.

As a committed leaver for all of my adult life I detest Ukip and what they stand for. And so do our thousands of supporters. I believe this is the right move because the question is now resolved, we can reboot British politics, redesign British governance and move on from a 40 year quarrel. Politics will be far healthier for it at the end of this process.

In the meantime, nothing happens immediately, there is no need for alarm. Brexit is a process, not an event and we will see in due course that the propaganda spouted by the remain campaign was a gross distortion of the facts. 

Though if you wish to guarantee Britain remains a liberal and tolerant country, it will require of you that you maintain current levels of political particpation and speak up for what you believe in. We have been disengaged for far too long which is why we are even here in the first place.

There will be more to discuss and this blog will continue as normal and I expect there is more work to be done. Meanwhile, enjoy the party. You have earned it.

Pete also blogs here, on Pete North's political blog.



Pete North 24/06/2016 link

EU Referendum: "glib and kipperish"

02/06/2016  


Although we've never been particularly impressed by politicians as a breed, the thought that Boris Johnson, Michael Gove and Priti Patel sit either in the main or political cabinet of this Conservative government is pretty daunting. That such low-grade people can get so close to the reins of power perhaps explains why our government is so incompetent.

Now these people have been visited on Vote Leave, we are having to suffer their stupidity in public without the filter of an obliging Civil Service to protect us from their worst excesses. The latest round is their crass intervention on immigration, doing exactly what they said they wouldn't – producing an "exit plan", covering one aspect of the Brexit policy domain.

The flatulent Johnson at least has a sufficient glimmer of intelligence to realise that he is compromised, arguing that he is not offering an "alternative vision" but merely addressing "policy options". Given that this is a distinction without a difference, it is unsurprising that he has referred to his idea of a "points-based system" as a policy that would be carried out by "the government of the day" and "any government" that might be in power after the 23 June referendum, rather than this current government.

But this is a policy which has already been demolished by Migration Watch some eighteen months ago. It is one that has no redeeming features. It can only do harm. With its disadvantages so well rehearsed, however, that even David Cameron is able to trash it within hours, leaving the "remain" campaign with a gift that it will not be slow to exploit.

Crucially, the insistence on rejecting freedom of movement means that Vote Leave has completely and irrevocably ruled out any deal on Single Market participation. It thus excludes the Efta/EEA (Norway) option, just at a time when we are starting to see a recognition that this is the only safe way to leave.

Thus, instead of progressing to a scenario where the electorate is reassured that we can leave without any significant economic penalty, we are instead being regaled by Mr Cameron claiming Vote Leave's ideas, if implemented, would "crash the economy".

In terms of detail, rejection of free movement would cause massive disruption in Ireland. As Mary Ellen Synon remarks, any significant divergence between immigration policies of the UK and the EU would mean that the Common Travel Agreement (CTA) could not survive.

But not only are we looking at the very real prospect of having to reinstate border controls between Northern Ireland and Ireland itself, we are confronting the near certainty of reciprocal action from EU (and Efta) member states.

After enjoying visa-free travel with France and other European countries, since 1946, there is a possibility that we could once again be seeing visas in order to travel to mainland Europe. Certainly, there is no chance that we could start excluding workers from EU Member States and not expect retaliation.

To add to this, the Vote Leave trio are also talking of an early repeal of the European Communities Act, specifically to make it easier to remove criminals and other people whose presence in the UK is "not conducive to the public good". Without going through the full Article 50 process, that would put the UK in breach of its treaty obligations, a move likely to precipitate a complete breakdown in relations between EU Member States and the UK. Such a move would be insane.

Of course, no government would even consider such a rash action, with Lost Leonardo confident that an interim solution would be sought. So the very fact that politicians from Vote Leave should be suggesting it says a great deal about how far the "leave" campaign has departed from reality.

Despite this, some will argue that it represents a robust stance on immigration, which is a sure-fire vote winner. And we may even see a boost in the polls as the intent of this move percolates through to the electorate.

Nevertheless, there are so many hostages to fortune being offered, that the "remain" campaign would have to be even more incompetent that it has already shown itself to be if it didn't make the most of it. Vote Leave has suddenly become the gift that keeps on giving. It is not going to take very long, for instance, for the "remain" campaign to recall that Owen Paterson has already dismissed the Australian system, saying it would not guarantee lower migration.

At a fringe meeting organised by Conservative Home and British Future on immigration, he observed that the issue was "a huge recruiting agent" for UKIP, which was "quite ruthless" at exploiting the issue, then going on to point out that "we do need to have open borders to have a dynamic, thriving economy".

This, in October 2014, was against the background of Mark Reckless's defection, and his claim that unless we leave the EU we shall be unable to restrict immigration. This is quite wrong, Paterson averred. About 13 percent of the UK's population consisted of immigrants, but the equivalent figure for Norway was 14.9 percent, for Switzerland it was 23 percent, and for Australia, with its much-vaunted points system, the migrant level stood at 27 percent.

None of those countries was in the EU, which had Paterson arguing that, "there are no glib, easy, quick-fix answers". Copying Australia's points-based immigration system may sound to some like the answer, he said, but it was "glib and Ukippish". 

Amonth later did we have Lord Green of Migration Watch explain why a points based system for immigration control was "a bad idea". How it is, he asked, that the Australian Points Based System keeps cropping up in the British debate, venturing that it must be because the term has become shorthand for an effective system and, perhaps for that reason, it is regarded by some as an electoral asset. If so, he said, "it is fool's gold".

The Independent, however, suggests that the "Australian-style points system" has become the preferred way of opposing immigration without actually saying that we do not want so many foreigners here. But if that's fool's gold, it's also kipper's gold. It was a bad idea when it was the centrepiece of Ukip's immigration policy for the general election, but it is even worse in the hands of Vote Leave, which is fighting a referendum campaign.

Even without that, says The Sceptic Isle, the abolition of freedom of movement makes the campaign look "negative and regressive". Between that and charge of "fantasy politics", the sight of Vote Leave going "glib and kipperish" is not a pretty sight.



Richard North 02/06/2016 link

EU Referendum: open thread - immigration

01/06/2016  

In the light of Vote Leave's suicide note on immigration, we're putting up this open thread for the day, which I'll convert into a post this evening.

A point to take on board is that this proposal completely and irrevocably rules out any deal on Single Market participation, and thus excludes the Efta/EEA (Norway) option. Therefore, Vote Leave wants to commit us to a second-tier relationship which, in the short- to medium-term would involve significant economic perturbation.

Another crucial point is that the Australian so-called "points" system is not well named. It is in fact a hybrid quota system. The points get you on the waiting list, but the overall limit is determined by an annual quota. In between is an expensive, cumbersome, bureaucratic system that has central government deciding on access to labour for a large number of companies.

Thirdly, the UK is not Australia. It is only 20 miles from France with a multiplicity of entry points and a long tradition of visa-free entry (since the War, from 1946 on onwards). We have 32 million visitors to the UK each year, as opposed to the seven million or so in Australia – a flow which makes a huge economic contribution.

Experience worldwide shows that where artificial restrictions on entry are imposed, illegal immigration increases exponentially. One set of problems is thereby exchanged for another. Crime rates increase as does the black economic which, of course, does not pay its taxes.

Overall, the Australian system doesn't even work very well for Australia. In a far more complex economy such as the UK, with its entirely different geography and neighbourhood relationships, it is totally inappropriate. Applying it to the UK when Ukip thought of it was a stupid idea. With the outcome of a referendum resting on it, it is insane.

As to Flexcit, there are some who run away with the idea that accepting continued free movement means abandoning any control over immigration. This could not be further from the truth – see Chapters 7 & 8. There are many things we can do, right down to applying unilaterally an "emergency brake" on immigration. 

To secure an exit from the EU and – as much to the point – to win the referendum, we are going to have to compromise. Insisting on a doctrinaire approach to immigration might play well to the faithful, but it has a mixed impact on the "undecideds". In what at best is a very tight contest, the wrong move could cost us the referendum. This may just be the move that has that effect.

More later, as the debate evolves.



Richard North 01/06/2016 link

EU Referendum: a lack of informed consent

31/05/2016  


Courtesy of Jacob Rees-Mogg, we learn that 23 June, Referendum Day, falls on the anniversary of the Battle of Plassey in 1757 when Clive of India's victory over the Nawab of Bengal and his French allies ushered in over a century of unsurpassed greatness for this country.

But then, it will also be the 50th anniversary of an adjournment debate in the House of Commons, initiated by Mr John Cordle, MP for Bournemouth East and Christchurch. His subject was "Synthetic Detergents (Import Duty)", and he was complaining about an increase in the import tariff from 10 to 20 percent on short-chain fatty acids used for the manufacture of household detergents.

The interest here was that the tariff was imposed to protect just one British manufacturer, owned by Albright & Wilson and employing a mere 35 people. This is something which, six years later, no British Government was able to do, or would be ever again – perhaps until after 23 June 2016 – because we had by then joined the Common Market.

On that same day, however, in 1966, journalist Nigel Lawson was writing in the Spectator about how Harold Wilson's government, in maintaining a weak pound, would ensure that we are frustrated in our desire to become a member of the Common Market.

If the French object to our increasing economic, and therefore political, dependence on the United States, Lawson wrote, both they and the Germans were likely to share the view recently transmitted to Brussels by a German member of the Common Market delegation in London and leaked to Le Monde.

According to this German diplomat, it appeared, were we to join the Community, the English sickness would merely contaminate the economies of the Six and drag them down too.

Perhaps now, this is the reason why the "colleagues" are apparently so unhappy to see us go, fearing that the loss of the UK's buoyant economy will do even more damage to the eurozone economies than the EU has already managed.

Whether or not we break the link, though, Rees-Mogg thinks the "verdict of the British people has to be respected". There can be no rerun of the contest just because one side does not like the outcome, he says. In "the unlikely event of a Remain victory", he adds, and the British people vote to stay, "then I will have to accept that, and shut up".

That, no doubt, will be the view the Prime Minister and the entire establishment will be keen to pursue – but it is not one that I could endorse or in any way will be bound by.

This referendum campaign has been so badly conducted by both sides that the outcome can hardly be representative of anything other than the confusion engendered by the warring tribes.

While the Government – and Mr Cameron in particular – has seen fit to lie openly (as indeed has Vote Leave), the nominal anti-EU factions have been more concerned to use the referendum (and the supposed freedoms gained by leaving the EU) as a platform to promote their favoured nostrum.

Thus we get the "fee traders" using the debate to push their ideas of a tariff-free, regulation-free nirvana, while the anti-immigration lobby – of which Ukip is a prominent part - see this as their opportunity to curtail the movement of people to this country. Others are using the campaign as a proxy leadership contest, and as a means of settling scores within the Conservative Party.

No one on the "leave" side seems to be addressing the issue of what it takes to win this referendum. Leaving the EU, rather than an end in itself, seems to have become a means to an end – actually, to many different ends and not all of them mutually compatible.

We have thus an absurd situation where the "remains" have not even attempted to make the case for continued membership while, on the other side, the case for leaving the EU is not being argued. To argue, for instance, that we want to see immigration reduced is to argue for reduced immigration. It is not primarily an argument for Brexit.

On this basis, we would have to conclude that, whatever the outcome of the referendum, there will be no informed consent – either for staying or leaving. The waters have been well and truly muddied.

What really emerges from this campaign, therefore, is that we don't really know how to fight referendums in this country. This has been more like a general election than anything, with political personalities to the fore. Quite frankly, I don't give a tinker's about Mr Cameron's succession, but that has become a dominant issue. Channel 4 News presenter Jon Snow has said he cannot remember a "worse-tempered or more abusive, more boring UK campaign" than that for the EU referendum.

He condemns the media's coverage as "no way to run a chip shop, let alone an interesting and informative campaign for a vote upon which all our futures hang". The campaign, in his view, compares unfavourably to the "coherent and comprehensible" precedent set by the 2014 referendum on Scottish independence, saying it has been dominated by abuse and "intemperate challenging of facts by both sides".

To be absolutely fair, one could thus argue that we should discard the result, whatever it might be. That is not going to happen, but if the result goes against us, I have no problem is saying nothing will have been resolved. The fight will have to continue as if nothing had happened.



Richard North 31/05/2016 link

EU Referendum: the wages of stupidity

26/05/2016  


One can fully understand the sharp reaction of Vote Leave to the publication of the Institute of Fiscal Studies' report on "Brexit and the UK's public finances". For in that report is written two passages which identify clearly why their campaign has failed to dominate the economic arguments, neutralising them as contentious issues and taking them out of the fray.

Firstly, we see the Institute write that the more we can replicate current access to the single market – for example, by membership of the EEA – the lower the cost of exit will be. By contrast, it says, the further we move from that model – for example, relying on World Trade Organisation (WTO) rules – the greater the cost.

Then, as we highlight in the graphic above, we see it observe that: "Key Brexit campaigners seem to have ruled out any deal that would involve membership of the European Economic Area (EEA), like Norway".

This, of course, was the whole point of Flexcit, one about which we almost weary of writing. But the simple fact is that, to protect the UK's economic position in the first instance, we had to preserve our participation in the Single Market. And here we see the IFS confirm what we've now been writing about for several years.

However, the problem came in October last year when Cameron flew to Iceland specifically to diss the "Norway model". Despite its attractions, we had the idiotic Dominic Cummings agree with the Prime Minister, sternly declaring: "Vote Leave does not support the 'Norway option' for Britain". After we vote leave, he said, "we will negotiate a new UK-EU deal based on free trade and friendly cooperation. We will end the supremacy of EU law".

When Farage joined in, saying "I don't want a Norwegian deal", followed by Richard Tice of Leave.eu, Douglas Carswell and then John Redwood and Ruth Lea, Cameron had achieved a clean sweep of the noisemakers, and effectively taken the "Norway option" out of the game.

The IFS suggests that part of the reason for these "leavers" rejecting the option was because the UK would likely have to make a significant contribution to the EU budget, but it was as much the case that it would also require continuation of freedom of movement – something to which Farage, in particular, was opposed.

With that, though, the main campaigners are determined to proceed without a plan and cede the economic argument – with Vote Leave relying on the offset from the EU contributions, claiming to save £350 million a week from the EU budget contribution.

This pretention, though, is badly damaged by the IFS, which reminds us that this figure is ignoring the rebate, which "is clearly inappropriate". It is equivalent, says the Institute, "to suggesting that were the UK to leave the EU and not make any financial contribution to the EU’s budget then remaining EU members would continue to pay the rebate to the UK". With brutal simplicity, it concludes: "That is clearly absurd".

Yet, still the Muppets in Vote Leave don't get it. In a bizarre press statement they claim that the rebate is "a discretionary grant which the European commission can pay to the UK if it so chooses". The organisation adds that: "There is no obligation on the commission to pay it", and then seeks sustenance by citing out of context a remark by George Osborne at the Treasure Select Committee (see para 15) – a remark which in itself was disputed.

So totally without foundation are their claims that there is no easy way to describe such crass ignorance. Originally agreed by Margaret Thatcher as the Fontainebleau Abatement in 1984, the rebate relies for its legal base of Articles 311 and 312 of the TFEU and is firmly locked into EU law. It is not in any way a discretionary matter.

It is now firmly entrenched in the budgetary system, having in 2004 become the Generalised Correction Mechanism for all Member States, after a Commission Proposal (COM(2004) 501 final/2).  Currently, it is given force by Council Decision 2014/335/EU "on the system of own resources of the European Union", implementing the European Council decision of 7-8 February 2013. This concluded that the then existing correction mechanism in favour of the United Kingdom was to continue to apply.

This Decision is augmented by Council Regulation (EU) No 608/2014 of 26 May 2014 "laying down implementing measures for the system of own resources of the European Union", and by Council Regulation (EU) No 609/2014 also of 26 May 2014 "on the methods and procedure for making available the traditional, VAT and GNI-based own resources and on the measures to meet cash requirements" (Recast).

Vote Leave, however, have got themselves into a typical bind, trying to defend the indefensible because one of their "stars" is committed to an error and cannot row back from it - as we had with Johnson and his three-fingered banana clusters.

In this case, we have Dominic Cummings who is insisting on using the £350 million figure, come what may - even after having been challenged on it during his session with the Treasury Select Committee. Presumably on the basis that there is no such thing as bad publicity, he believes that the controversy plays into Vote Leave's hands. Despite that, almost everyone around him is telling him that the false claim just detracts from the argument. It is certainly giving the BBC endless opportunities to point out the error.

Such is the notoriety of the £350 million claim that it has even spread to the New York Times giving an international dimension to Vote Leave's stupidity, further degrading the credibility of the leave campaign. And with nowhere else to go, Vote Leave supporters are reduced to whingeing on the sidelines, having already destroyed the best and only counter to the IFS report.

Thus will they find in good time that the wages of stupidity are defeat.



Richard North 26/05/2016 link

EU Referendum: Gove - the fantasy option

19/04/2016  


This is what Michael Gove said (part of it) on the BBC Radio 4 Today programme this morning:
Robinson: What will the UK be like if we're outside – what relationship would we have with our closest neighbours and important trading partners?

Gove: We would have a relationship of free trade and friendly cooperation. We would be able to demonstrate that democratic self-government, the model of government that we've had in the past and that other countries like Australia and Canada use to their advantage, can be deployed by us in order to spend money on our priorities and indeed in order to negotiate new trade deals with other countries.

Robinson: Forgive me, I want to pursue your positive vision of what 'out' looks like. So free trade like Canada. Now as you know – just take that example because you mentioned Canada – Canada is forced under its free trade deal … to pay tariffs in its services, to pay tariffs on manufacturing components, to pay tariffs for many farming goods as well. So is that the best you can hope for?

Gove: Absolutely not. One of the things about the different models that different countries have is that it proves that there is no single model that Britain has to accept, which is the currently existing alternative. Look, we'd be part of a free trade area.

It's already the case with the European free trade area that extends from Iceland to the Russian Border. The only country in the European land mass outside that is Belarus. We would be part of that and we would benefit also from being able to take back control of our seat on the World Trade Organisation …

Robinson: Would we be in the Single Market, in the European Single Market?

Gove: We would be part of a free trade zone.

Robinson. We would not be in the European Single Market.

Gove: We would have access to the countries of the Single Market by being in a free trade zone.
I was still struggling with that when I read his speech, and this in particular:
There is a free trade zone stretching from Iceland to Turkey that all European nations have access to, regardless of whether they are in or out of the euro or EU-26 After we vote to leave we will remain in this zone. The suggestion that Bosnia, Serbia, Albania and the Ukraine would remain part of this free trade area - and Britain would be on the outside with just Belarus - is as credible as Jean-Claude Juncker joining UKIP.

Agreeing to maintain this continental free trade zone is the simple course and emphatically in everyone's interests.
Amazingly, the reference cited, giving apparent credibility to this mystical creature is this - a colour map showing EU trading partners. Strangely, one might think, there is absolutely no sign of a European free trade zone. It simply does not exist.

But that, is seems, it Vote Leave's picture of what "out" looks like - a totally mythical construct, through which we would gain access to the Single Market. However, I suppose there's a certain logic to it. If Mr Cameron can get away with a pretend treaty, why shouldn't Gove get away with having a completely fictitious European free trade zone?

This is getting almost like the Telegoons - the sketch where Neddy Seagoon decides to hold up a bank to get some money. He doesn't have a gun so he goes in and waves a colour photograph of a gun at the bank staff. They give him a colour photograph of some money.

We are descending into the depths of the surreal. There is nothing here, any more - nothing real - that we can take seriously. Perhaps we've slipped unknowingly into a parallel universe. 



Richard North 19/04/2016 link

EU Referendum: the irony in honesty

06/04/2016  


It is hugely ironic that, when Prime Minister David Cameron comes close to telling the truth about the EU in his recent article in the Telegraph, a lot of people thought his claim so exaggerated that they were prepared to dismiss it as a lie.

This was his scenario where he asks us to "Imagine a world where a British airline wasn't allowed to fly between Rome and Paris", as a consequence of us leaving the EU.

It could have been better phrased, because what he was referring to was the right of a UK-registered airline picking up paying passengers in Rome and dropping them off in Paris, or vice versa, when en route from a UK destination.

This, though, is not a given right and, in aviation terms is known as the sixth freedom. The first five rights, which include the right to fly to and from a foreign county, the right to overfly others, and the right to refuel or carry out maintenance in a foreign country without embarking or disembarking passengers or cargo, come as part of the package written into the Convention on International Civil Aviation of 1944, otherwise known as the Chicago Convention.

The so-called "sixth freedom" is one of several known as "beyond rights", which do not come automatically. They must be negotiated and agreed separately between individual member states or, in the case of the EU, within specific trading blocs.

For the UK, these rights came about in respect of other EU members states in what was known as the "third package" of liberalisation and other rules, embodied in Council Regulations (EEC) Nos 2407/92, 2408/92 and 2409/92, agreed in 1992.

Since repealed, there have been recast as Regulation (EC) No 1008/2008 on common rules for the operation of air services in the Community, a text which also applies to Efta states within the EEA.

As an EU regulation, this would fall if we adopted the stratagem favoured by some Ukip members of unilaterally repealing the European Communities Act, in order to leave the EU.

But, as Mr Cameron also points out, we would lose this freedom if, as Mr Alexander (aka Boris) Johnson once suggested, we adopted something like the Canadian free trade agreement (CETA) as a model for a post-exit Britain. Under this deal, Canadian airlines are only allowed to operate routes in Europe if they start or end at a Canadian airport. If this rule was applied to British airlines, they would have to scrap hundreds of routes.

Of course, if we adopted the exit stratagem recommended in Flexcit, and rejoined the EEA under the Efta banner, these regulations and many more would stay in force, and our airlines could continue operating just as before.

The trouble is that none of the noise-makers – the "GO" movement, Leave.eu or Vote Leave – are actually proposing this stratagem. Variously, they all want some kind of (unspecified) free trade deal with the EU, effectively giving them full market rights without the commitment to free movement of people.

Doubtless, this magical "bespoke deal" that the noise-makers want is attainable – although no-one has yet committed any details to paper. But what is becoming increasingly apparent is the number of side-issues that are going to have to be settled.

Only the other day, we were discussing specific arrangements for the Irish land border, which will have to deal with movement of goods and people.

There are issues which have been widely discussed about the rights of expats, there are the reciprocal medical treatment agreements, the replacement for the European arrest warrant, the treatment of asylum seekers in Calais, and dozens of other issues that have been raised recently.

To those, Mr Cameron adds the problems of British farmers being slapped with tariffs if they wanted to export more beef to Europe, and of British telecoms companies and car manufacturers facing new barriers when trying to sell their goods and services to customers in Europe.

The Prime Minister also raises the issue of broadcasting. Under EU rules, once a broadcaster is licensed in one member state, it can broadcast in all. If we replicated Canada's deal, companies would have to choose between seeking separate licences in all EU states in which they want to broadcast, and moving out of the UK altogether.

Then, Mr Cameron reminds us, there's our biggest service industry: financial services. Half of all international financial firms base their European headquarters in the UK. From their one office here, EU membership allows them to do business in all 27 other EU states.

These are the so-called passporting rights, and if we are to have a "bespoke deal", we will need to carve out replacement arrangements.

Then, if freedom of movement is not to be unrestricted, then we are going to need negotiations on access provisions. We are gong to have to negotiate separately access to the various security databases, and to market surveillance information, to sharing information on plant and animal diseases, and we're going to need to agree common maritime rules, and air traffic control regulations.

Altogether, it would be rather nice if some of those gifted researchers in either Leave.eu or Vote Leave could get together and list all the separate issues that will have to be negotiated and agreed. And if just the basic Single Market acquis is 5,000 legal acts – without taking account of the CAP and CFP, one might imagine that this could be a rather long list.

If we now remember that it took Mr Cameron ten months to come to a non-deal on his five "baskets", what we then need is for those gifted researchers to come up with a sensible, evidence-based estimate of how long they think it might take to negotiate all the issues which they have listed.

So far, all we seem to be getting is a variation of "alright on the night". The EU needs our trade, so they will want to come to an agreement. And, while that may well be the case, to give that a veneer of credibility, we need some detail on the issues that need to be settled and a timescale.

Without this, Mr Cameron has a point. It's all very well dismissing him as pushing "project fear", but there are real issues which have to be settled and agreed with 27 member states, all within a period of two years – unless someone feels brave enough to rely on unanimous agreement for an extension.

And this, of course, is where the noise-makers are increasingly being caught out. They don't actually know what they want. They've never set out the details and they haven't a clue what it will take to get an agreement. All they can do is fall back on the mantra that EU Member States will want a deal, without any ideas of how to achieve it.

With that, there is no real need for "project fear". The noise-makers are creating a huge vacuum of expectation, allowing Mr Cameron and his remainers to ask them, quite reasonably, to supply some of the detail.

The embarrassing silence that follows tells its own story. Soon, there will be a low murmur, building steadily to a crescendo, recognisable to anyone who has spent any time with battery hens. It will be the sound of chickens coming home to roost – or maybe just Mr Cameron laughing.



Richard North 06/04/2016 link

EU Referendum: border checks for Ireland?

03/04/2016  


In the battle to leave the EU, the situation between Eire and Northern Ireland is emerging as a major fault line in the campaign. Specifically, when we leave the EU, there the land border between the newly-independent UK and the remains of the EU will also become the external border to the EU.

The implications of this are serious enough to have had the Joint Committee on European Union Affairs of the Irish Parliament in June last year express concerns about the re-imposition of border controls and customs checking, with potentially highly damaging effects on Anglo-Irish trade, with serious effects on the economies of the North and South.

This concern was amplified by Irish Prime Minister Enda Kelly and more recently in the BBC and currently in the Irish Times.

Interestingly, this latter piece, by Deputy Editor Denis Staunton, picks up on what he calls the "leave" campaign's greatest weakness - its failure to answer the question of what happens next if Britain leaves the EU and what kind of arrangement with Europe it should pursue.

Vote Leave, he notes, expects Britain to negotiate a trade deal with the EU, something it expects to be a straightforward process. "The heart of what we all want is the continuation of tariff-free trade with minimal bureaucracy", it says.

The Ukip-dominated Leave.eu campaign, Staunton adds, is even more relaxed, suggesting trade with the EU could continue on just the same terms if Britain leaves. "Given that we buy more from the EU than it buys from us, it is unlikely that the EU would seek to change this in the event of us leaving", it says.

When the government published a White Paper on the alternatives to EU membership, Leave campaigners dismissed it as a "dodgy dossier". Britain would not follow the path of Norway, Switzerland, Canada or Turkey in its post-Brexit relationship with the EU, but it would find a solution of its own, they said.

However, Staunton observes that it is an "an irrefutable fact" that in all third-party relationships with the EU, there is a direct relationship between the level of access granted to the single market and the number of EU rules any country must accept.

As a member of the EEA, Norway is more integrated into the single market than any non-EU country. "In return for such access, it must pay into the EU budget, adopt most new single market rules without being able to influence them and accept the free movement of people from the EU".

Switzerland's bilateral agreements with the EU involves similar obligations, while Canada, which has an advanced free trade agreement with the EU, has to accept EU rules when exporting to Europe but has much less access to the single market.

Says Staunton: "All of these countries, including Norway, are outside the EU customs union and, the White Paper warns, if Britain were also to be outside it, there would be a return of customs checks on the border".

Specifically, the White Paper states that, "under most of the alternatives described … the UK would be outside the EU customs union and so trade across the Border with Ireland would be subject to customs controls and rules on the origin of products".

To avoid this, the Joint Committee of the Irish Parliament recommended that, in the event of Brexit, "no external EU border is established on the island of Ireland separating North from South" – wishful thinking that is about as far from reality as it is possible to get.

With the prospect of border checks, however, there are fears there there will be customs posts on the border and huge queues as trucks wait for clearance. But this is a fantasy. It is wrong to assume that, because the UK would fall outside the Customs Union, it necessarily follows that there would have to be checks on goods crossing the border.

This perhaps harps back to the 19th Century origins of the Customs Union as the German Zollverein, as a means of removing time-consuming and costly border checks. In that case it certainly reflects the limited vision and the extraordinary lack of knowledge displayed by EU supporters.

The myopia is all the more remarkable as in 1949, eight years before the Treaty of Rome which put the Zollverein into effect for the original six members of the EEC, and organisation called the United Nations Economic Commission for Europe (UNECE) launched a scheme to remove cross-border checks of goods in transit.

This system, known as the Transports Internationaux Routiers (TIR) was so successful that it led to the negotiation of a TIR Convention which was adopted in 1959 by the UNECE Inland Transport Committee. It entered into force in 1960. It has since been updated and revised, currently standing as the 1975 Convention, as amended, forever breaking the link between customs control and border checks.

At the heart of the system is a document known as the "TIR carnet", issued to registered transport operators for each truck journey, listing the details of the consignments. These have to be kept in secure load compartments and sealed for the duration of the journeys. The specially marked vehicles are given free passage across borders, with any tariffs or other taxes becoming payable only when the final destination is reached.

Currently, thee million carnets are issued each year, equating to 10,000 trucks a day. Between them, they make 50,000 TIR border crossings daily. And the system has since 2003 been undergoing simplification and computerisation, to become the e-TIR system. As a 21st Century system, it is on its way to emerging as a fully electronic, paper-free operation.

As to Brexit, providing that the UK is prepared to re-enact the Community Customs Code and other flanking legislation to which EU recognition of the TIR system is tied, we could adopt the TIR system for Irish trans-border goods traffic.

This would allow for the worst case scenario, where no trade agreement was reached with the EU. Goods would be subject to varying tariffs and conformity inspections, but there would be absolutely no need for customs posts or border checks.

Where unloading has to be supervised and inspections have to be carried out, there is already an established system of what are known as "inland ports" or "inland clearance depots", where checks can be carried out on goods before delivery. Often, these coincide with break-bulk facilities and local distribution hubs, allowing operations to be combined.

As for the Republic of Ireland, a significant proportion of its trade is with other member states. A significant volume transits through the UK and sometimes other Member States before reaching their final destinations. For this, the EU already has a system in place known as the Community Transit System (CTS), its equivalent of TIR.

By this mechanism, goods travelling between Ireland and other EU Members States can use the system, passing though Northern Ireland, if necessary, and other parts of the UK. There will be no customs checks or physical inspections.

The UK can, of course, go further than the bare minimum provision, relying on TIR. If it joined EFTA, it could then take advantage of the Convention on a Common Transit Procedure, as amended, which initially agreed in 1987. This again allows cross-border movement without the need for border checks, bringing it into the ambit of the EU's CTS. The UK currently recognises this for shipping goods between EU member states. It is used for goods travelling through Switzerland.

Within the EU, the UK integrates the harmonised procedure into our own systems, implementing a substantial body of EU legislation. As part of the Article 50 settlement, it would also be open to the UK to re-enact this body of law, and agree to continue the harmonised system. This would have to be settled during the negotiations, but should not present any undue problems, as long as we don't seek to change anything.

Failing all that, there is the possibility of signing off a special, one-off deal. This is exactly what happened in 2004 with Cyprus to facilitate trade between the divided Greek and Turkish zones. Similar in many respects to the TIR and CTS, this could as a last resort provide a model for trade between the North and South.

All in all, therefore, the chances of a Brexit bringing chaos to Ireland, with new customs posts and border checks, is vanishingly slight. And what could be agreed for Ireland could also be applied to Scotland in the event that it became independent. There is little possibility of reactivating the modern equivalent of Hadrian's wall.

Scaremongering apart – for which the major culprit seems to be the UK Government – there is little for Ireland to fear from Brexit, in terms of any disruption to trade. The day after we leave, reporters on both sides of the border will be scratching their heads, wondering what all the fuss was about, as they find they have absolutely nothing to report.



Richard North 03/04/2016 link
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