David Gauke: The pluses, minuses and risks of Trussonomics. And the looming shadow of Lord Frost.

1 Aug

David Gauke is a former Justice Secretary, and was an independent candidate in South-West Hertfordshire at the 2019 general election.

Economics is at the heart of this leadership election and will be at the heart of the wider political debate for the foreseeable future. Low growth, soaring inflation (especially energy prices), high taxes and public services under financial pressure all contribute to a focus on economic vision and competence.

Part of Liz Truss’s appeal to the party membership is that she is the economic change candidate. She has a retail offer – tax cuts – and a willingness to challenge powerful institutions such as the Treasury and the Bank of England. She believes that her policies will increase economic growth by strengthening the supply side of the economy. The big question is whether Trussonomics will work.

The issue that has attracted the most attention is her policy on tax cuts. Her argument is that by not going ahead with the increase in National Insurance Contributions and Corporation Tax she will assist with the cost of living challenge and attract more investment to the UK. She maintains that these tax cuts will encourage economic growth and, therefore, help the public finances and strengthen the supply side of the economy, thus potentially being deflationary. Rishi Sunak’s counter-argument is that loosening fiscal policy will be inflationary at a time when there is no spare capacity in the economy.

On Corporation Tax, Truss has a point that international investors have a choice as to where they invest and reducing their rate of return on investment (which is what increasing Corporation Tax does) is bound to have a negative behavioural impact. It is not the most important factor influencing investment decisions (our falling rates were insufficient to counteract the uncertainty created by the result of the 2016 referendum), but it is one that the Government can easily control. An efficient tax system would seek to rely less heavily on it as a source of revenue.

I spent six years in the Treasury bringing down the Corporation Tax rate and was one of the few who objected to its increase when announced in March 2021. Having said that, Corporation Tax cuts do not pay for themselves and the benefits will only be seen over a long time period. They are certainly not disinflationary in the short term.

The more fundamental argument on tax policy is whether her approach is reckless. The inflationary argument can be overstated. When Sunak announced in May measures to help with the cost of living with a net giveaway of £10 billion, the Treasury thought that this might add 0.1-0.2 per cent to inflation all other things being equal.

A £30 billion giveaway would presumably add 0.3 to 0.6 per cent to inflation. In practice, looser fiscal policy will result in tighter monetary policy, so the net effect will not be higher inflation but higher interest rates. Assuming that market confidence is maintained (to which I will return), the additional increase in interest rates is unlikely to be very substantial.

The real problem is not inflation, but that Truss’s plans look set to widen the structural deficit by reducing the tax base. It is not plausible to think that this is going to be removed by lower spending (she plans to spend considerably more on defence and the pressures on health spending are immense), with demography increasingly working against us.

Truss has a point that the UK is moving faster than other countries to restore the public finances post-Covid, but it is not clear when or how she would ever take action. For a party that once prided itself on fiscal responsibility, it is an approach that looks risky.

In addition to having a go at Treasury fiscal orthodoxy, Truss has also been critical of the Bank of England and talked of setting “a clear direction of travel” on monetary policy. The Bank of England has been slow in tightening monetary policy and cannot expect to be exempt from criticism, even though it has been operating in challenging circumstances.

What is not yet clear is whether Truss’s intention is simply to tell the Monetary Policy Committee to pull its socks up and be more vigilant in future (with an implicit rebuke to the Chancellor of the Exchequer for the past two years) or if Ministers are set to interfere more. There is a lower profile debate ongoing in respect of financial services regulation, in which Ministers may end up with greater powers contained in the Financial Services and Markets Bill to rewrite regulations not to their liking.

If Truss’s plan is for a greater role for Ministers – and a reduction in independence for bodies that were previously operationally autonomous – problems lie ahead. Some will argue that such moves would increase accountability, but they would also mean a greater concentration of power and greater politicisation of matters that have, until now, been in the hands of experts insulated from public opinion. Many Conservatives may welcome this; the markets may not. Weakening independent institutions also comes with substantial risks.

An issue that has not featured heavily in the leadership debate so far is Europe. Both candidates are (now) Brexiteers, both deny that Brexit has contributed to delays at Dover (which is clearly untrue), both support the Northern Ireland Protocol Bill. Sunak, however, gives the impression of being a relatively pragmatic. Notwithstanding his vote for Leave in 2016, party members are detecting this attribute and do not like it.

Truss, by contrast, has the zeal of the convert and owes the European Research Group and Lord Frost for getting her to the final round. Rumours are swirling in Whitehall that a Ministerial position at the Foreign Office – possibly as Foreign Secretary – awaits Frost, and it is difficult to see how Truss can retreat from the hard line position she has taken in negotiations with the EU hitherto. It is also hard to see that the EU would be keen to reset its relationship with the UK in the event that Truss won, especially if they have to deal with Frost.

This issue has attracted little attention during the contest but the risk of a further deterioration in UK/EU relations is underestimated. A failure by the UK to comply with our obligations under the Trade and Cooperation Agreement may result in severe retaliation from the EU which could involve the loss of tariff-free, quota-free access to EU markets.

Finally, Trussonomics apparently involves lots of deregulation. But promises of deregulation in the abstract without the details count for little. Vague pledges won’t unleash growth.

So where might Trussonomics leave us? The best case scenario is that her fiscal policies give us a short-term boost, an increase in the structural deficit and marginally higher interest rates; the institutional changes amount to very little; and she finds a way to resolve the Northern Ireland Protocol challenges that leaves the TCA intact, even if that means disappointing some of her backers.

The worst case is that the UK appears fiscally irresponsible; our independent institutions are undermined; and we have a trade war with our most important export market. This combination of factors causes a perfect storm in which we lose market credibility, sterling takes a further hit, interest rates rise sharply and business investment and consumer confidence collapse.

My guess is that she is too smart to allow the worst case scenario to happen. To do that, however, she is going to have to move swiftly from focusing on winning the confidence of Conservative MPs and party members to winning the confidence of the markets. That may prove to be a much tougher test.

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David Gauke: The tests this leadership contest would meet to persuade me to return to the Conservative Party

18 Jul

David Gauke is a former Justice Secretary, and was an independent candidate in South-West Hertfordshire at the 2019 general election.

“Now that Boris Johnson has gone, I’ve a request for your next column,” said the Editor. “In the context of the leadership race, tell us what it would take for you to return to the Conservative Party.”

I worried to myself that this might be a little self-indulgent. It would be much more fun for me to write than for anyone else to read but, then again, one could say that about most of my columns. I was also conscious that this was not likely to be the question that was at the forefront of the candidates’ minds when trying to win the support of Tory MPs and members. This is explicitly not advice on how to win the leadership election.

The Editor’s case was that – given I had been a long time Conservative member, MP and Minister but had become estranged from the Party – there might be some interest in seeing what it would take to end this estrangement. After all, my estrangement is not unique.

My views remain centre-right. A strong economy is most likely to be delivered by creating a stable, predictable and competitive business environment where hard work and enterprise is rewarded. Government expenditure ultimately has to be constrained by what the Government is able and willing to raise in revenue. A successful society must be built on a belief in personal responsibility. The State has an important role to play, but it cannot do everything. The market is, as a rule, efficient at allocating resources. Robust institutions – especially those supporting the rule of law – are vital in delivering peace and prosperity. We should be sceptical about ideology. Change is often for the best, but it is not necessarily so. The practical and realistic should triumph over the sentimental and idealistic.

These values are not exclusively conservative but, by and large, the Conservative Party has adhered to them more faithfully than other parties. Those who share these values have, by and large, voted Conservative.

In recent years, however, some of these voters have had a problem with the Conservatives. Far from creating a stable business environment, the Conservatives have created great uncertainty that has diminished investment and made us less competitive. Institutions – the judiciary, Parliament and civil service, for example – have been disparaged. A purist view of sovereignty has become an ideology that has trumped practicality.

How does the Party win back such voters? Speaking for myself, it made a start by ridding itself of Johnson as leader. I am conscious that anything I will say could be put down to the fact that he threw me out of the Party, but it is striking to read the very many resignation letters that demonstrate that even his own Ministers thought he lacked the integrity to be Prime Minister. I worry that there are already moves to rehabilitate him, but the belated action of Ministers was encouraging.

Whoever succeeds Johnson will need to establish and demonstrate higher standards of integrity. It is a test I would expect any of the candidates to meet.

Johnson’s casual dishonesty was not the only problem. A change of tone is also needed. I remember being told regularly that once the general election was out the way and Brexit delivered, Johnson would revert to the earlier, more emollient Mayor of London version. It never happened. Brexit and the culture wars seemed to be the agenda on which he was going to fight the next general election, picking at the wounds of 2019. It would be very welcome if the new leader could eschew all that.

It is all too obvious that on most issues there was a lack of seriousness about Johnson. The Conservative Party should be a natural party of government – administratively competent and capable of articulating and delivering coherent policies. There continues to be many able Conservative MPs but very few of them were in Johnson’s Cabinet.

A very obvious first test of the new Prime Minister is whether they put in place a Cabinet based largely on talent, or on the basis of personal loyalty and the need to buy off particular sections of the Parliamentary party. Cabinet selections are always something of a compromise but, nonetheless, this should give us a good indication as to what qualities matter most to the new leadership. Greater meritocracy is desperately needed.

A new seriousness about policy is also required, which means focusing on the big issues of the moment and of the longer term. We have not heard that much of this in the leadership election, but that should not be held against whoever is the winning candidate. Good, brave policies will probably be held against them; it is what they do when in office that will really count.

There is a cost of living crisis on the horizon. What is the plan? (For a start, the Government could put a bit more enthusiasm into explaining what it has already announced.) How is the Government going to improve our productivity? What does it want to do about public services reform? Specifically, what is it going to do about social care? (Ministers still boast about solving this ,but the tax rise that was announced to fund reform has already been partially reversed, and the rest may go depending on who wins.) If the Government is committed to Net Zero, how is it going to deliver? The same question applies to levelling up.

Different candidates will have different answers to these questions. In some cases, I am sure I would reach different conclusions, but the point here is that a serious Conservative Government would at least be engaging in these matters and providing answers. Serious but wrong would still be an improvement.

Any such seriousness would have to be accompanied by a greater degree of honesty about the trade-offs involved. This brings me to my greatest problem with the modern Conservative Party – our relationship with the EU.

The decision to leave the EU in 2016 was, in my view, a big mistake. I was one of those who believed that this decision should be implemented, but in a pragmatic way which mitigated the damage caused. Sadly, this was not to be and we have found ourselves with an inadequate relationship that is damaging our prosperity with the potential for matters to get worse if we descend into a trade war over Northern Ireland.

I do not expect the Conservative Party to reverse course any time soon, but some degree of honesty about where we are and some pragmatism as to where we go next would be welcome. A party that dances to the tune of the European Research Group is not for the likes of me.

So to answer the Editor’s question, what would it need for me to want to return? This is a non-exhaustive list but, for starters, a leader with integrity, a reasonably competent Cabinet, a less divisive tone, a new seriousness of purpose on policy and, in particular, some pragmatism on Europe. It is not too much to ask, is it?

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David Willetts: A Conservative case for welfare spending as well as tax cuts to help working people

5 Jul

Lord Willetts is President of the Resolution Foundation. He is a former Minister for Universities and Science.

It is a key promise of modern market economies that they boost living standards – both for us during our working lives and also for our children who we hope will be better off than us. British capitalism is failing to deliver on this promise. Unless we can raise our game, both our economic model and our politics will face deep challenges.

New research just out from Resolution Foundation shows that the typical non-pensioner income grew by 12 per cent between 2004 and 2019 compared to the previous average of 40 per cent every 15 years since 1961. This shocking decline in economic growth per head and household incomes is a problem which afflicts other countries as well post the crash.

But we have it worse – and one of the most depressing ways in which our situation feels like a return to the 1970s is that dismal sense of relative economic decline. Now typical incomes are higher in France (10 per cent) Germany (19 per cent) and even Ireland (six per cent).

There is one clear overwhelming way of tackling this: increase GDP per head – which means increasing productivity. But although we may endorse that in theory, it is much harder to do in practice. Look at attitudes to reform of planning restrictions. Moreover, a long term growth agenda is not quite the whole story. The working of our labour market and our tax and benefits system matter too.

First, the good news. We continue to enjoy the benefits of a flexible labour market with a relatively high employment rate. One of the protections for household incomes has been the continuing increase in the number of women working. We are now at 75 per cent employment overall. America used to be the model of a high employment flexible economy but it is down to 70 per cent. We can do even better – getting to 80 per cent would be a good target. That means more to get older workers staying in work. And more help into work for people on disability benefits too.

The increase in the minimum wage has also helped. The sceptics – and I was one – were wrong to fear it would cost jobs. But we made another point too: that it could not on its own boost household income and reduce inequality because some low paid workers are in high income households. And there are low income households without an earner at all. Whereas in the past Labour over-claimed for the benefits of the minimum wage, now it is some Conservatives who love the idea that it can raise incomes without having to do anything about benefits. But that is to expect too much of the minimum wage.

It is also hard to tax cut our way to higher household incomes for people on low and middle incomes. One reason is that we have taken so many people out of income tax already – and now national insurance. As a result, average direct rates on low paid employees fell from 13 per cent in 2010 to four per cent in 2019.

They are now rising, but are still very low on any historical measure. I personally have always thought raising income tax allowances is over-rated. It is very expensive, as it is an increase in the tax allowance for everyone, and if the gains are recovered from higher earners it means a messy and very high marginal rate for then.

Moreover, if possible voters should have a real interest in how the Government is spending their money and paying income tax can boost that. (This was of course the old argument for the Poll Tax – so no wonder it has fallen out of favour.)

If there are limits to what can be done for living standards via regulating wages or cutting direct taxes, then benefits have a role to play. There are specific pressure points which need to be addressed. Incomes after housing costs are very low by European standards because rents are so high. And rents are so high because the price of houses is so high. That in turn is because of planning controls and quantitative easing. There could be better targeted help with the cost of childcare.

And, yes, getting rid of the triple lock is one of the ways to pay for this. The total effect of benefit policy changes on the incomes of working-age adults and children since 2010 has been an average loss of £375 per year compared with a boost to pensioner incomes of £510 per year. Shifting the balance of the welfare state like that is very hard to justify.

Is there a Tory case for a fair, balanced welfare state? I think there is.

The classic argument for the welfare state is that the Government is the biggest bearer of risk we have got: it bears the risks we face from sickness, retirement, or unemployment. It is the case made by Bismarck and Beveridge – neither of them socialists. Tories hoped that commercial insurance and friendly societies between them could discharge this role, but there are limits to what they can do – even the US ended up with Medicare and Social Security.

It is not an argument about equality. It is about insurance.

If we don’t have a social security system which protects us from some of these risks, we end up with expensive ad hoc measures in crises. A massive furlough package has now been succeeded by another massive package to help with the cost of energy. They were both bold moves by the Chancellor, but one reason he had to act so boldly was that the tools available in our existing welfare state were so limited.

There is a political argument too. A long term secret of Conservative success is the appeal to people in the middle realistically aspiring to some of the incomes and security enjoyed by the very affluent. There is a real danger if people in the middle instead see their circumstances and their families’ more like the sadly precarious lives of poor people. Then a very different Coalition starts taking shape and one which is much more threatening to Conservatives.

Of course in the long run it is growth and productivity that matters. But there are things we can do now as well to rebalance our welfare state to make it make it more fair and more effective.

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Bob Neill: Where is the evidence that justifies the need for the Northern Ireland Protocol Bill?

5 Jul

Sir Bob Neill is MP for Bromley and Chiselhurst, and is Chair of the Justice Select Committee.

You do not have to be a classicist, like the Prime Minister, to understand the importance of the phrase “Pacta Sunt Servanda” – in English, “agreements must be kept”.

It is a fundamental principle of international law concerning treaties, but it goes further. Based as it is upon the principle of good faith between contracting parties, it is also fundamental to any nation’s reputation as a reliable ally or partner in agreements of any kind, and as an upholder of the rule of law. It is also, of course, a basic standard that most of us expect to see met in our own business and personal dealings.

That reputation for standing by our word has served the United Kingdom well over the years. It has given us the moral authority to be a leading force across the world, and it has been the foundation of our success as a global trading nation. Such an asset should be held dear.

In the political context, it does not mean that international agreements are incapable of change, or that there are not times when they should be changed. The Northern Ireland Protocol is one such case.

The Protocol sought to reconcile difficult and sensitive issues post-Brexit: protecting the Belfast (Good Friday) Agreement, preventing a hard North-South border, protecting the EU Single market and safeguarding Northern Ireland’s position within the UK.

Unfortunately, it has failed, as demonstrated by the disruption to trade between the province and the rest of the UK, a growing sense in the province of being separated from the rest of the UK and the collapse of the power-sharing Executive. The need for change is clear.

The normal route should be by renegotiation of its terms. The Protocol makes provision for this in Article 13(8). Article 164(5) (d) of the Withdrawal Agreement itself recognises that the text of the Protocol can be changed to address “deficiencies” or “situations unforeseen”. The situation that has developed in Northern Ireland arguably meets those tests.

Further, Article 16 of the Protocol permits a party to take unilateral “safeguarding measures” (albeit on a temporary basis) to suspend parts of the Protocol if its operation gives rise to diversion of trade or “societal or economic difficulties”.

Regrettably, attempts at renegotiation have so far failed. The needlessly rigid and, at times dogmatic, approach adopted by the EU side has certainly been a major cause of this. I can understand the frustration of Ministers. It has led them to act unilaterally – though not in the first instance by invoking the Article 16 procedure. Instead, the Government has introduced the Northern Ireland Protocol Bill, which had its second reading in the Commons last month.

The Bill would unilaterally disapply almost all of the Protocol from UK domestic law, which if enacted, would breach an international agreement and therefore, with one caveat, international law. To deliberately legislate to do this is unprecedented.

The Government justifies this by invoking the international law doctrine of “necessity” – a concept very rarely used but recognised by Article 25 the 2001 United Nations International Law Commission on State Responsibility, codifying previous case law. For Conservatives, committed as we should be, to upholding the rule of law at home and abroad, and to preserving the UK’s international reputation for good faith, this raises three obvious questions.

First, is the legal necessity test really met? My good friend and colleague Robert Buckland, who I greatly respect, has argued on ConservativeHome that it is. In this case, and unusually, I am not so sure.

The “necessity” doctrine allows a state unilaterally to depart from a treaty if it is the “only means” it has to “safeguard an essential interest against a grave and imminent peril”. In case law, this has also been described as when there is a “real and pressing” need to act.

Even if one accepts that the EU is being unreasonable in its refusal to negotiate meaningful changes to the Protocol under Articles 13 and 164, and also accepts that the disruption caused in Northern Ireland threatens an “essential interest” of the UK, it is difficult to see how legislation is the “only means” available to us when the Article 16 provisions have not been used.

However much we want, for example, to see the DUP return to a power sharing Executive, to ignore the explicit provisions of the treaty is to put the political cart before the legal horse. The Government would be on much stronger ground were it to invoke the Article 16 procedure before legislating.

Second, where is the evidence that the peril is “grave and imminent”? That has not so far been presented to the House. Surely a decision to break treaty obligations is of such significance that Parliament itself should take a view as to whether the very high bar of the “necessity” test has been met. As currently drafted, the Bill gives exceptionally wide “Henry VIII” powers to do this by regulation, with very limited Parliamentary scrutiny. To give Ministers a near blank cheque on such an important issue will strike many as being constitutionally objectionable, and rather un-Conservative.

Third, “necessity” involves only taking such steps as are necessary to remove “the grave and imminent peril”. The Bill goes beyond this. Removing the jurisdiction of the European Court of Justice over some aspects of the Protocol may be a legitimate objective of renegotiation, but where is the evidence that it poses an “imminent” threat? Potential future threats are not sufficient in law.

I have tabled an amendment to place a “parliamentary lock” on the Bill, requiring the Government to bring the evidence they have to the House and obtain a specific vote in favour of bringing its provisions into force. That does not resolve every concern about the Bill, but it does ensure proper democratic scrutiny. Politically, it might be in the Government’s own interest to be able to pray such endorsement in aid.

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Stephen Booth: Macron’s Grand Project and Johnson’s Mare Norstrum. Are the two leaders talking past each other about Europe’s future?

30 Jun

Stephen Booth is Head of the Britain in the World Project at Policy Exchange.

At last weekend’s G7 summit in Germany, Emmanuel Macron tweeted that the Prime Minister had “expressed interest” in his new grand project, a proposal for a European Political Community. An Elysée Palace spokesman suggested the UK delegation showed “beacoup d’enthousiasme” for the idea.

Earlier this week, Downing Street sources and Liz Truss appeared sceptical that Macron’s proposal would appeal to the UK. However, in a further twist, yesterday afternoon, the Prime Minister told reporters that Macron’s idea was “worth looking at” and even laid claim to coming up with the idea first. “I had this idea back when I first became foreign secretary,” Johnson said. “There’s got to be a role for all of us in a wider conversation about issues that affect all of us.”

So, does this mark a new shared Franco-British vision for organising security and diplomatic relations across the European Continent? Not quite. As the Prime Minister acknowledged, “I think possibly what’s going on here is that there are several different ideas.”

Macron first outlined his proposal on 9 May in a speech to the European Parliament. His European Political Community would be open to those countries in the European neighbourhood who may or may not one day join the EU, and “it would not be closed to those who have left the EU”, i.e. Britain. However, while Macron has suggested his proposed new club could provide a vehicle for UK-EU relations, the primary consideration is the politically delicate matter of responding to Ukraine’s application to join the EU following the Russian invasion.

Ukraine’s membership bid was backed strongly and early by Eastern EU states, and EU leaders granted Ukraine and Moldova candidate status last week. However, Macron has also argued that the accession process cannot be fast-tracked and Ukraine must be held to the same standards as other candidates. He said the process could therefore “take several years, and most likely several decades.”

Macron’s solution is that his proposal could provide a means of binding Ukraine to the EU pending a lengthy accession process. It would provide a similar function for other EU membership candidates, particularly among the Western Balkans. He added that –

“This new European organisation would allow democratic European nations that subscribe to our shared core values to find a new space for political and security cooperation, cooperation in the energy sector, in transport, investments, infrastructures, the free movement of persons and in particular of our youth.”

This description sounds a lot like a “shadow EU” replicating much of what Brussels does already. It reflects previous Macron speeches advocating a “Europe of several circles”. At the heart of Macron’s proposed architecture is a more deeply integrated core group centred on the eurozone and inevitably led by France and Germany. The next circle consists of EU members outside of this core group, and Macron’s proposed European Political Community is the latest French attempt to define an outer tier of EU satellites.

Between 1989 and 1991, Francois Mitterrand proposed a European Confederation stretching from the Atlantic to the Urals. After the fall of the iron curtain, the proposal was for a Europe of concentric circles in which the Central and Eastern European countries would be put in a political halfway house, providing a path to deeper political integration in Western Europe. The organisation would provide a forum for cooperation with the Soviet Union but excluded the United States. Understandably, the newly free Central and Eastern nations were not keen on sharing a new club with the Soviet Union and did not wish to be confined to a second-class European status. Consequently, Mitterrand’s project failed to attract support outside of France.

Macron’s proposal suffers from similar flaws. Because it is defined as an outer tier of EU membership, it is likely to both alienate Britain and prospective EU members who see it as an attempt to hold them at arm’s length indefinitely.

Ukraine’s Foreign Minister, Dmytro Kuleba, has stated that “no alternative to EU membership for Ukraine would be acceptable.” If Macron’s project were to keep his country permanently out of the EU, “it would be discriminatory, unfair and would contradict public statements from France and other countries that Ukraine is part of the European family,” he added.

Meanwhile, the UK already has a bespoke trade and cooperation agreement with the EU, which could be developed further in the future if thorny issues such as the Northern Ireland Protocol can be resolved. However, while Macron’s suggestion that the free movement of people should be a building block of his political community might appeal to aspirant EU members, it is an instant red flag that is likely to be anathema to any British government.

This is not the first time that Macron has tried to find a role for the UK in a post-Brexit relationship. He had previously suggested a European Security Council, yet the perennial question of how any new European security architecture would sit alongside and not distract from NATO remains. Finland and Sweden’s bids to join NATO, following a deal brokered with Turkey, simply illustrates the pre-eminence of the transatlantic alliance in the wake of the Ukraine crisis.

Johnson’s admittedly briefly sketched out alternative to Macron’s political community would be a lot wider, including North Africa, and therefore need to be a looser institutional configuration. “My view is that we should rebuild the whole concept. I think that Turkey should be there. I think that Maghreb should be there and I think we should basically be recreating the Mare Nostrum of the Roman empire,” he said yesterday. “I think possibly rather than inventing new structures, let’s look at building up relationships.”

On the subject of building relationships, the Johnson-Macron meeting at the G7 summit appears to have proven something of a positive step towards a reset in Anglo-French relations. Both leaders have identified the opportunity and need for a wider European dialogue. However, delivering the right vehicle requires further thought and cannot be premised on the idea that non-EU states are merely satellites of Brussels.

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Pieter Cleppe: The EU, Spain and arbitration – and why it should spare us lectures on the sanctity of international law

21 Jun

Pieter Cleppe is an EU policy analyst, based in Brussels, a research associate at various think tanks, and the editor-in-chief of BrusselsReport.eu.

With Boris Johnson having secured his job for now, attention returns to the ongoing tussles between the UK and the European Union – and Government has published plans to change the Protocol section of the Brexit deal. The goal is to make it easier for some goods to move between Britain and Northern Ireland. The EU is against this, as it claims this would break international law.

So what are the merits of these plans? And how unreasonable is the UK to tear up an international deal after having agreed it?

Yes, the UK signed up to checks in the Irish sea in return for avoiding a hard border on the island of Ireland, but the actual extent of the checks was never agreed. The understanding was that both sides would be reasonable and meet each other somewhere.

Surely this should not be so hard. If the EU is actually worried about goods sneaking into its Single Market – a fair concern – it ought to double down on checks in the ports of Rotterdam and Antwerp, the two big entry gates, not some back alley in Northern Ireland. According to the Mayor of Antwerp, both ports are “leaking like a sieve”.

The EU claims that its proposal amounts to minimising checks. However, what is often lost in this debate is that the EU has attached a stringent condition to ‘minimising checks’. It is demanding that, in return, the UK agrees to a Swiss-style deal on animal and plant standards, which would require the UK to continue to align its regulations with the EU’s.

As Daniel Hannan has argued, this, therefore, does not amount to a concession but to an extra demand, stating: “the real threat is this lamentable tendency in Brussels to think of the UK as a renegade province that needs to be brought to heel rather than as a strategic ally”.

This is really unfortunate, given that the EU could simply offer to minimise checks without making extra demands for regulatory alignment. Due to the standoff, the political situation in Northern Ireland is becoming even more complex than it already was. The Brexit deal did not provide each community in Northern Ireland with a veto, whereas this is one of the core pillars of the Good Friday Agreement to appease the situation. Perhaps one could argue in favour of this factor, but it doesn’t make it easier to sell the Brexit arrangement to the likes of the DUP.

In the end, the EU can drag the UK to court. Strangely, the EU’s own top court, the European Court of Justice, in Luxembourg, has been tasked to serve as the arbiter for differences resulting over anything to do with Northern Ireland. The UK now wants to water down the ECJ’s role. Perhaps the EU should take this request seriously, since having the top court of only one of the parties to serve as the arbiter may not be conducive to getting both parties to accept a fair resolution.

Indeed, the European Commission has already dragged the UK – the UK’s Supreme Court to be precise – before the ECJ, claiming that a February 2020 UK Supreme Court ruling in the “Micula” case – whereby Romania was ordered to pay compensation to investors who lost out on state subsidies – “breached the principle of sincere co-operation, and violated EU law”.

Clearly, the EU’s urge to respect international law does not seem to extend to cases where it is less convenient for the EU or certain member states. At the moment, the EU is also urging a D.C. federal court to overrule a €291 million arbitral award against Spain for having introduced drastic changes in 2013 to its financial support scheme for renewable energy installations, thereby changing the rules of the game for bona fide investors.

The award is one of many imposed on Spain, which is frantically resisting to pay its debt to companies like Nextera, Antin, Eiser or Greentech, having lost pretty much all of the many legal cases against it. Instead of simply compensating the investors, as it is ordered to do, the Spanish government legally challenges everything it is able to.

Overall, Spain has a pretty poor record of complying with arbitration rulings, whereby it finds itself in questionable company, together with the likes of Russia, Argentina and Venezuela. Last year, Spain even intervened in favour of Russia, in the Yukos case, encouraging them also not to pay. In 2011, when the lawsuit against Spain on the basis of the Energy Charter Treaty was launched, Spain was only the second Western European country to face a challenge. At that time, a person close to the groups bringing the case commented: “Spain is now in the same league as Kazakhstan and Azerbaijan when it comes to investor confidence.”

Today, however, in its quest to challenge arbitration, Spain is receiving back-up from the European Union. During its intervention for the American court, which needs to rule on an appeal against the arbitration judgement which Spain lost, the EU is not merely arguing that the private arbitration court would not have properly interpreted the law.

It goes as far to claim that the case should not have gone to arbitration in the first place, referring to the 2018 “Achmea” ruling by the European Court of Justice, which decided that intra-EU legal disputes should not be subject to arbitration.

The reason why arbitration is relevant here is due to the fact that the EU signed up to the multilateral Energy Charter Treaty back in the 1990s. A number of EU member states, including Spain, are now trying to renegotiate the international agreement and have even threatened to withdraw from it.

Perhaps for the future, the EU should spare us its lectures about international law, and focus on finding satisfying solutions on how to implement checks in the Irish Sea that are proportionate with the risk that this would become a back door into the single market. The UK’s proposal to merely check goods arriving into Northern Ireland from Great Britain that are not destined to remain in Northern Ireland is a more than reasonable contribution to squaring the circle.

The post Pieter Cleppe: The EU, Spain and arbitration – and why it should spare us lectures on the sanctity of international law first appeared on Conservative Home.

Stephen Booth: Brexit is a process, not an event. So it’s far too early to judge whether it’s working.

16 Jun

Stephen Booth is Head of the Britain in the World Project at Policy Exchange.

Next week will see another Brexit anniversary as we reach six years since the 2016 referendum. Meanwhile, the UK-EU Trade and Cooperation Agreement (TCA), which marked the beginning of the UK’s new relationship with the EU has been in place for nearly 18 months. No doubt we will be debating the merits and consequences of Brexit for many years to come, but what can be said at this point?

Much of the Brexit debate has focused on trade and the economy, and the deteriorating economic situation has prompted some commentators to lay the blame squarely at the door of Brexit. However, it is almost impossible to disentangle any Brexit effect from the much larger economic shock resulting from the pandemic, and now the war in Ukraine, which have taken a heavy toll on the global economy.

Due to the volatility caused by these global events, it is difficult to make short-term comparisons across economies. However, according to OECD figures, the UK economy exceeded its pre-pandemic (Quarter Four, 2019) level of GDP for the first time in the first quarter of 2022, by 0.7 per cent. I

By contrast, German and Italian GDP was still below pre-pandemic levels (by 1.0 per cent and 0.4 per cent respectively) in the first quarter of 2022. And while UK inflation is at the high end compared to other economies, the Netherlands and Poland are both experiencing higher levels, illustrating that the UK is not a particular European outlier.

Given the degree of change to the UK’s trading arrangements, it would be a surprise if Brexit had no impact. At the time of the Spring Statement, the Office for Budgetary Responsibility noted that UK trade had not recovered as quickly as other advanced economies and that the trade intensity of the UK economy had fallen as a result. However, looking beyond the headline figures presents a complicated picture, not easily explained by Brexit alone.

The biggest contributors to the UK’s decrease in trade intensity are from a decline in imports of goods and services from the EU, even though the barriers to trade have overwhelmingly been erected on the EU side of the border (the UK has delayed imposing checks on EU goods entering the UK).

Equally, UK exports of goods to the EU have recovered more strongly than UK exports to non-EU countries. The reorientation of supply chains may have played a role in this. However, much of the global demand for goods was generated by US consumers, and the UK is not a major exporter of the products (computers and electrical equipment) that the US imported over this period.

Finally, the UK’s export mix is more dominated by services than its competitors. The pandemic has had far-reaching consequences for trade in services and, paradoxically, again it is imports rather than exports of services to the EU that have seen the biggest falls since the pandemic. This evidence would suggest that greater barriers to exporting to the EU seem to be playing only a limited role in the UK’s disappointing post-pandemic trade performance. This shouldn’t be cause for celebration, but it is important to diagnose the problem properly.

On the question of immigration, which dominated political debate prior to the referendum, it is notable that the UK has remained open to global talent and skills. The tight labour market is primarily to do with older UK workers exiting the market rather than the loss of EU workers, the vast majority of which have been replaced from outside the EU under the UK’s liberalised visa system.

Net migration to the UK was estimated by the Office of National Statistics to be 239,000 in the year ending June 2021 and work-related immigration to the UK has recovered strongly in the wake of the pandemic. There were 277,069 work-related visas granted in the year ending March 2022 (including dependants). This was a 129 per cent increase on the year ending March 2021 and is 50 per cent higher than in the year ending March 2020.

It is also clear that despite continuing high numbers of arrivals, public attitudes on immigration have softened significantly now that the UK is able to devise its own policy without the strictures of EU freedom of movement. According to Ipsos-Mori, the proportion of people wanting to see immigration reduced has fallen from around 65 per cent in 2015 to 42 per cent in 2022. The share saying immigration levels should stay the same or be increased has risen to 50 per cent from around 30 per cent. Those dissatisfied with the Government’s handling of immigration are largely concerned with illegal Channel crossings.

Meanwhile, there was a fear that Brexit would consign the UK to geopolitical irrelevance on the global stage. However, the UK entered into the new AUKUS security partnership with the US and Australia and it has played a leading role in the international effort to support Ukraine.

The crisis with Russia has not united the EU behind a common foreign policy to the exclusion of Britain. As I noted in a previous column, Emmanuel Macron’s drive for EU “strategic autonomy” on foreign and security policy has been severely undermined, probably fatally, by the fact that many in Northern and Eastern Europe have concluded that the US and the UK are more reliable partners in this field than France and Germany.

This is not to suggest that Brexit has been plain sailing or that the UK does not face significant difficulties. Clearly, the row between London and Brussels over the Northern Ireland Protocol has the potential to escalate and fundamentally destabilise the UK-EU relationship yet again. The domestic economic and political challenges of increasing productivity, improving economic performance across the entire country, and reforming public services pre-date Brexit.

Some Brexiteers are impatient for greater divergence from the EU. Some Remainers will continue to see Brexit as the root of every problem. However, Brexit is a process rather than an event and the experience of the past six years should demonstrate that the UK’s decision to leave the EU does not in of and itself mean it is on the road to success or failure.

The post Stephen Booth: Brexit is a process, not an event. So it’s far too early to judge whether it’s working. first appeared on Conservative Home.

Andrew Bowie: I’m a Conservative MP, and I ask. Where’s the big idea? What’s the offer to the country?

10 Jun

Andrew Bowie is MP for West Aberdeenshire and Kincardine, and a Vice-Chair of the Conservative Party.

“People in this country are crying out for a Conservative party that is decent, reasonable, sensible, commonsense, and in it for the long term of this country. And that is the party we are going to build, and I want everyone to join in.

“If you want to build a modern, compassionate Conservative party, come and join us. If you want me and all of us to be a voice for hope, for optimism and for change, come and join us. In this modern, compassionate Conservative party, everyone is invited. Thank you.” – David Cameron, 6th December 2005

When I am conflicted about an issue, a policy or a vote; when I, not infrequently, question why I do what I do, why I am here, what drove me into politics and particularly, into the Conservative Party, I recall the words above.

I first heard them sitting in my mum’s car outside Morrisons Supermarket in Inverurie, the town I grew up in. I was 18 years old, had passed the Admiralty Interview Board for the Navy and was awaiting entry. And as the rain came down on that car in that supermarket car park, I heard on Radio 5 Live the result of the Conservative Party leadership election.

No one in my immediate family were Conservative voters in the 2000s. Not one of my friends voted Conservative in the 2000s.

But I heard those words from David Cameron. And I knew then that the Conservative Party was my party. I knew then that the country I wanted to see: a country built on positive, optimistic, compassionate, foundations, could only be built by a Conservative Party that spoke to a new generation – a generation fed up of Labour’s failures but unsure of the Tories; built with the words and actions of a new generation of Conservative MPs – Cameron, Osborne and a guy called Boris Johnson.

And that’s why I’m a Conservative. Because of those words and those people.

In 2010, I was so excited to read the foreword to the Conservative Manifesto

“A country is at its best when the bonds between people are strong and when the sense of national purpose is clear. Today the challenges facing Britain are immense…But these problems can be overcome if we pull together and work together. If we remember that we are all in this together.

Some politicians say: ‘give us your vote and we will sort out all your problems’. We say: real change comes not from government alone. Real change comes when the people are inspired and mobilised, when millions of us are fired up to play a part in the nation’s future. Yes this is ambitious. Yes it is optimistic. But in the end all the Acts of Parliament, all the new measures, all the new policy initiatives, are just politicians’ words without you and your involvement.”

This is what I believed. It is what I still believe. And those words inspired me not only to vote for, in my first general election, but to join the Conservatives.

But something has gone wrong.

Charlotte Ivers recently wrote a Sunday Times column headlined “The Tory party hasn’t had an idea since 2005.” In it she suggested that, secure in power for over a decade, we in the Conservative Party have no motivation to innovate.

Sadly, I cannot disagree.

We see evident now in the Conservative Party, my party, a strange mix of complacency, entitlement, fear and exhaustion.

Complacency bread from the fact that the Labour Party, after more than a decade in turmoil and opposition pose no electoral threat.

Entitlement bred from the comfort of office and power.

Fear bred from the nagging doubt that we might actually be wrong, and that years on the opposition benches await.

And exhaustion from twelve hard years of Government that have seen economic crises, migrant crises, an independence referendum in Scotland, Brexit, snap elections, a global pandemic and war in Europe.

It is a toxic combination. Made even more difficult by the need to keep on side the majority of that unwieldly coalition of electors that returned the Conservatives to Government in 2019.

So we end up here. Talking the talk of lowering tax whilst increasing National Insurance. Giving investment incentives to increase our domestic oil and gas production whilst imposing a windfall tax. Making the right noise about cutting the size of government not recognising it was our party that created two new departments in the last six years. Espousing the values of Global Britain whilst shrinking our diplomatic presence overseas.

Entering into a race with the Labour Party about who can spend more on x.

Where’s the spirit of 2005? Where’s the big idea? What’s the challenge to us? What’s the offer to the country?

I often say I am an optimist. Being an Aberdeen Football fan, a Scotland Rugby fan and a Scottish Conservative, I have to be. That’s why I backed Johnson for leader in 2019, because I knew he was too.

And I firmly believe, whoever is leader of my party, the Conservative and Unionists remain the only party capable to tackling the challenges that face us as a nation.

But we need to rediscover that confidence. We need to look back to our recent past. We need to reach out, think radically, be bold. Explain, again and again, that to taking our country forward requires all of us, not just Government, to make a difference.

That chucking money at a problem rarely solves the issue but that targeted investment can.

We need to be proud of ourselves and our past, but understanding of different opinions of it.

We need to build a new, positive relationship with the EU. Never compromising on our sovereignty or the integrity of our union, but working with them to resolve issues and together to tackle our shared challenges.

We need our Foreign Office to shout from the rooftops in every capital in the world how great a country, how great an enabler for change, how positive a force the United Kingdom is.

And we need to talk to a new generation in the same way Cameron, Osborne, and yes for eight great years, Boris did in London.

That is why I am a Conservative. That is why I joined this great Party – the most successful political party in the history of the world. Because I truly believe, if we start doing all this, now, our future is bright. And it is Conservative.

The post Andrew Bowie: I’m a Conservative MP, and I ask. Where’s the big idea? What’s the offer to the country? first appeared on Conservative Home.

David Gauke: It’s right that the civil service become more efficient, but I doubt that these plans to reform it will work

23 May

David Gauke is a former Justice Secretary, and was an independent candidate in South-West Hertfordshire at the 2019 general election.

Government Ministers want to reduce the size of the civil service. Jacob Rees-Mogg, the Minister for Government Efficiency, has let it be known that he wants to reduce the civil service headcount by approximately 90,000 which would be a fall of 20 per cent and return the numbers to the levels of 2016. Sky News reported on Friday that departments have been asked to model headcount reductions of 20, 30 and 40 per cent.

There is plenty of politics in these announcements and I will get to that in a moment. There are also a large number of practical challenges which are worth highlighting. Having served as Chief Secretary to the Treasury as well as being the Minister responsible or relevant for the three biggest employers of civil servants (at the Department of Work and Pensions, HMRC and the Ministry of Justice), I have a few thoughts on that.

Before turning to those issues, however, it is worth acknowledging that seeking to ensure that public money is spent wisely and that public services are delivered efficiently is a perfectly reasonable thing to do.

Indeed, it would be irresponsible not to seek to do this. We spend taxpayers’ money on public services in order to serve the public. This requires the employment of public servants, but the employment of public servants is incidental to the Government’s purposes, it is not an objective in itself. This is an obvious point, but I can remember at least one meeting with civil service staff where this point had been lost.

Governments should seek to achieve more for less and, if it is possible, to deliver satisfactory public services whilst employing fewer people. This can result in savings for the taxpayer and release workers to make a contribution elsewhere in the economy. Jobs are a cost not a benefit.

Some will argue that reducing headcount results in a deterioration in public services. That is not inevitably so. To take HMRC, for example, this is a department that has grown in confidence and capability over the last twelve years at a time when the number of employees has fallen.

The reason it has been able to do this is that it has embraced technology which means that many clerical tasks which once had to be undertaken manually have been automated, whilst its sophisticated use of data has enabled it to deploy its skilled workforce more efficiently, significantly reducing the tax gap.  But this does not mean that the plan to reduce numbers by 90,000 is realistic.

It is worth analysing why civil service numbers have increased over the last six years and well worth looking at a paper by the Institute for Government on the topic.

The principal reason is that we have wanted the civil service to do more things. The obvious example of this is Brexit. We have returned certain responsibilities to the UK Government from the European Union, and we need to employ people to fulfil those responsibilities. We previously did not have (or need) a Department for International Trade; now we have one employing 2,000 people. We have increased the number of policy staff in the Environment and Culture departments because there is now more policy that needs to be done here. We also have new operational requirements, such as operating a new customs border with the EU, which will require civil servants to operate.

The employment of a few thousand extra civil servants as a consequence of leaving the EU is not a killer argument against Brexit (there are better arguments, but let us leave that for another day).  However, it is an undeniable consequence and it cannot be dismissed, nor is it just temporary. If policy for some matters is permanently going to be located in the UK, then we permanently need to maintain policy capability here.

There are other policy objectives that have risen up the political agenda. Levelling-up – ensuring that prosperity is more equally shared across the country (I think that is what it roughly means) – will not be achieved without a vast effort. This will require people – civil servants – to be employed to make the vast effort.

In some cases, the Government has observed what civil servants are doing and concluded that we would like more of it. Let us take DWP’s work coaches who provide holistic support for those looking to get into employment. Successive Work & Pensions Secretaries have been impressed by the contribution they have made to turning people’s lives round, solving problems ‘upstream’ and contributing to low levels of unemployment. So the number of work coaches has been expanded. For a Government that believes that work is the best way out of poverty, it would be very odd to reverse this.

Of course, some of the additional tasks have been pandemic-related and there are saving to be made. But Covid also raises questions about our overall resilience to future public health emergencies which will have ongoing implications for staffing.

Looking at the public sector as a whole, the Government has clearly concluded that job cuts went too far in some areas over the ‘austerity years’, hence the pledge to recruit 20,000 more police officers. If our intention is to reduce crime, there are other (arguably better) examples of where numbers fell by too much after 2010. The Government is rightly committed to offender rehabilitation. This means we need more probation officers. Probation officers, like work coaches and customs officers, are civil servants. As are those who work in DVLA, the Passport Office and the Courts where there are backlogs and delays that need to be addressed.

There is also something odd about a process which requires departments to come forward now with proposals which in aggregate sees a 90,000 headcount reduction. It is right that spending departments, the Treasury and the Cabinet Office work together to ensure that strategic and bold thinking is undertaken to identify possible savings, including by deprioritising some activities and identifying opportunities for automation. The problem is that there is a time at which this should happen – at the point at which the Comprehensive Spending Review is being determined – and that happened only seven months ago alongside the 2021 Budget.

At the time of the CSR, the Government set out plans which implied a reduction to the civil service headcount of 28,500. This, presumably, was part of the discussions within Government and provided a key assumption in the departmental spending settlements. Now, we have new numbers and a new process is being commenced. Spending departments are entitled to ask what is going on. Is the CSR being reopened or not?

The suspicion is that this is driven by political considerations as part of a desire to be more ‘ideologically Conservative’, appealing to those who think that civil servants are lazy and useless and spend all their time watching daytime television whilst claiming to be working from home.

Putting aside the unfairness of this observation (most current and former ministers would, I suspect, speak highly of the professionalism of the civil service), it is not an attitude that is likely to bring out the best from those upon whom the Government depends to get things done. Nor is it coherent with the big state conservatism that contributed to the 2019 general election victory.

Squeezing greater efficiency from the civil service is to be welcomed but I fear that these proposals have all too familiar characteristics – unrealistically optimistic, politically motivated and ideologically incoherent.

John Redwood: The EU is failing to implement parts of the Northern Ireland Protocol and has damaged the Belfast Agreement

16 May

Sir John Redwood is MP for Wokingham, and is a former Secretary of State for Wales.

Brexit was a vote to take back control. Remain tried to turn it into a narrow discussion of trade and trading arrangements, denying much more constitutional significance to the EU. Brexiteers wanted our country back. We knew that greater prosperity and freedom as a result would depend on what use Parliament made of the freedom to make our own choices. The public, in anger at the way the 2017-19 Parliament tried to undermine the verdict of the people and tie us back into much of the EU’s laws and arrangements, voted for the big Brexit majority in 2019.

Given the hassle and the anti-democratic efforts of so many in a Remain-dominated establishment to keep us close to the EU, it was understandable that the Prime Minister would rush through a Withdrawal Act before the last election when he was still hamstrung by the absence of a Brexit majority.

After the Conservative win, he speeded up negotiations on a future relationship. The EU had insisted on a two-stage process, agreeing terms of withdrawal, leaving and only then negotiating a future relationship. A possible trade agreement to supplement WTO most favoured national trading that would otherwise apply helped them more than us, but was used by the Remain establishment to keep us closer to EU rules.

The EU broke its own interpretation of EU law which it said necessitated this phased approach by inserting a Northern Ireland Protocol into the Withdrawal Agreement which did tackle some future relationship issues which were meant to be out of bounds at that stage.

The Protocol it drafted was contradictory and ambiguous. It contained a lot of clauses requiring Northern Ireland compliance with the EU Single Market, but it also included clear statements that Northern Ireland would be part of the UK’s internal market and would benefit from UK free trade deals, and that Northern Ireland’s status as part of the U.K would be confirmed.

Both sides recognised the the Protocol did not represent the final answer, which is why it included Article 13.8 which provided for cancelling or replacing it in due course. It was assumed by many there would be a clearer statement in the future relationship treaty. When it did not produce one, Northern Ireland was left facing an uncertain future. Conflicting jurisdictions in the EU and U.K took very  different views of what the contradictory and ambiguous document meant.

The EU decided on a maximalist interpretation, imposing or seeking to impose a vast array of controls and checks on internal U.K. trade passing between Great Britian and Northern Ireland. The U.K. politely spent two years asking for some give as well as take from the EU with no success. The Unionist parties in the recent Stormont elections suffered from the damage done to Great Britain/Northern Ireland trade, and to the sense of identity of the Unionist community in Northern Ireland by the intrusion of the EU into  their lives.

The U.K according to the EU cannot change VAT in Northern Ireland when we change it for Great Britain against EU laws. Northern Ireland has to accept an avalanche of new law from the EU every year while Great Britain does not have to accept or legislate for anything similar. Northern Ireland gets no vote or voice on the laws the EU imposes

As a result, unionist members of Stormont are refusing to join an executive or government in Northern Ireland until the Protocol is removed or substantially amended. They see an EU understandably on the side of its member state, the Republic of Ireland – out to govern against their wishes and interests, forcing on them an unwanted border between Great Britain and Northern Ireland and many costs and impediments to Great Britain/Northern Ireland trade. The U.K. has refused to implement all of them, but the ones already in place are damaging enough.

The Government needs to take action to remedy this big problem. The Belfast Agreement which established peace in Northern Ireland after years of violence is important and is rightly backed by the President of the USA. This agreement has now been undermined by the Protocol . Both the unionist and the nationalist communities need to giv  their consent to any major decision in Northern Ireland. The unionists do not consent to the Protocol which they think undermines the Act of Union and deprives them of full and equal membership of the Union of the U.K.

As the EU seems to delight in forcing Northern Ireland against its will into dependence on EU laws and rules that the Government must act soon and unilaterally  to remedy this. The EU mouths its meaningless and wrong soundbite that the UK and Northern Ireland have to stick to an international treaty and must not break their law. The truth is that the EU is failing to carry through the parts of the Protocol it does not like and has damaged the Good Friday Agreement. It is controlling parts of tax policy in Northern Ireland and stopping British supermarkets delivering food to Northern Ireland’s shops.

The U.K. anyway has the power to legislate independently reserved carefully in the crucial Clause 38 of our Withdrawal Act which is the only form of the Treaty which has power in U.K. law. That Article reserves the right for the U.K. to assert its sovereignty over any of these matters if it needs to. The Government could also operate legally under the terms of the Protocol itself as Article 16 allows us to take unilateral action where the other party has damaged the economy and society of Northern Ireland and or where trade with the U.K. has been impeded. Clearly, both tests have been met.

Many British businesses have stopped selling into Northern Ireland or have streamlined what they sell faced with ridiculous EU imposed checks. More importantly, the delicate balance between the two communities has been fractured with unionists wanting their country back. It is important that the Government upholds the Belfast Agreement. That means explaining all this to US Democrats who do not understand the unionist position or the legal background

It means acting unilaterally and fairly to take control of Great Britain/Northern Ireland trade whilst guaranteeing the full force of the state to prevent non-complaint goods travelling into the Republic. It means standing up to the EU as it mouths falsehoods and threatens illegal responses. Brexit is not done all the time it does not extend to Northern Ireland. Our Union is not safe all the time when the people who believe most in it are treated so badly.