Tom Spiller: It’s time to get real about Russia’s threat to Britain’s cyber security

9 Dec

Tom Spiller is the former President of the Conservative National Convention and chaired the 2017 party conference.

It is rare that a month goes by without the Russian regime broadcasting its noxious brand of propaganda, over-flying somewhere it shouldn’t, or harassing boats at sea – one might very-well be forgiven for telling them that they should shut up and go away.

Most recently, Russia’s activity in Ukraine puts into stark context its usual day-to-day energy diplomacy and acts of trespass. It is more immediate, more worrying and, sadder still, threatens to cause a significant number of deaths. No doubt President Putin has been emboldened by the naïve behaviour of Angela Merkel who approved Nordstream 2, but this article is not about that.

It is about something far more damaging that threatens our way of life here in Britain. I am talking about “ransomware as a service” or, to put it simply, Russian state-sponsored cyber criminality on an industrial scale.

Every day Russian cyber criminals look for ways to infect British businesses (the Labour Party has now been hit at least twice) with malware to prevent them from functioning until a ransom is paid, often in untraceable cryptocurrency.

This is no mere opportunistic and undirected crime. It is a sophisticated industry and our best guess is that it has cost the British economy several hundred million pounds a year since 2017.

The sophistication is clear from the structure of the industry.

The creators of ransomware operate a franchising system. They create and maintain top quality products, advertise their wares and provide all possible support to their franchisees, whose role is to identify targets, infect target IT systems and then negotiate ransoms in cryptocurrency.

The ransom transfers back to the franchisor, is laundered and divided between the criminals. Perhaps the most perverse part of this whole business is the brand-protection element. Ransomware brand names are ruthless in ensuring their affiliates remove malware upon the payment of ransom – after all, no one would pay an organisation that didn’t.

As with all significant organised crime, this level of sophistication is only possible where the criminals have safe territory in which to organise and protection from a host state. And they have found a home-base in Russia, a country which is seemingly immune from ransomware attacks.

One could draw a comparison to the British privateers of the Elizabethan era and the industries that supported and supplied them. The difference being that, if Drake hijacked a shipment of Spanish jewels at sea, it wouldn’t cause a hospital to immediately stop functioning. Food deliveries wouldn’t be disrupted on a nationwide scale. Power stations wouldn’t cease to operate. Entire borough councils wouldn’t grind to a halt.

Recent events (take your pick: panic buying, Covid restrictions, gas market disruption) have taught us that our economy has a sophisticated but fragile supply chain. It is a fragility that bad actors in Russia are keen to exploit. They live in luxury in Moscow, drive to work at offices in the most desirable sky-scrapers in the city’s financial district in fluorescent Lamborghinis and channel criminal money through Russian banks.

By some estimates there are 50 crypto-exchanges which serve to facilitate the conversion of ransom payments to cash. The Americans are certain of this and have sanctioned the worst offenders, who don’t try to hide their activity.

Predictably, Russian law enforcement has a standard, smirking line when asked to arrest these criminals: no Russian law has been broken so we cannot act.

Both the Russian state and the criminals that operate from Russian territory are ambivalent to the destruction that they cause. That is because they consider themselves to be at war. And this activity is surely what is now referred to as “war by other means”, or asymmetric warfare, to use an older phrase.

I have already listed some of the more jaw-dropping potential effects that cyber criminals can have – and we know that they targeted the NHS (and other European healthcare systems) during the peak of the pandemic – but just look at the headline figure. This activity is having an impact on a huge scale and is plainly designed to harm and drain our economy. To disrupt and damage our way of life in tangible ways that have an effect on British soil.

This brings British policy in this sphere starkly to light. In the world of crypto-currency the state’s efforts are focussed on introducing sufficiently robust anti-money laundering checks to attempt to separate the illegitimate actors from the crypto-pioneers.

In the slightly older world of ransom payments, the state’s policy is more akin to “don’t-ask-don’t-tell”, which leaves crypto-exchanges and insurance companies paying ransoms in an uncomfortably grey legal area.

The reality is that whatever steps we take to regulate activity on our own territory, the criminal cryptosphere (and of course the agencies of the state itself) in Russia will provide all of the services that the criminals need to steal money from hard-working British businesses and enjoy their ill-gotten wealth.

Surely it is time to now recognise the continuum that exists between Russians actions in Ukraine and cyberspace?

The level of Russian hostility towards us has been under-estimated. Now is the time to admit the significant threat that the state-sponsored Russian cyber criminals pose to us and disrupt them in the same way that we do drug cartels and terrorists.

Today, Russian cyber-warfare is sub-contracted to modern-day privateers but, if Russia were to take this activity in-house and use malware without seeking a ransom, the results would be truly crippling, and would cause injury and loss of life on a significant scale.

It is time to get real about this threat and to respond accordingly.

Emily Carver: Post-Brexit, the UK must stand strong against the authoritarianism sweeping the continent

8 Dec

Emily Carver is Media Manager at the Institute of Economic Affairs.

Last week, I tweeted what I thought was a rather reasonable statement. Having seen several people comparing Europe’s Covid response – mandatory vaccinations, de facto lockdowns for the unvaccinated, and self-isolation rules – to Nazi Germany, I argued that it is does those of us who are against ­such measures no favours to make such a lazy comparison.

I stand by what I said, but the replies I received reflect a growing concern that our European neighbours are heading down a dark path.

Hundreds of Twitter users argued that it was wrong to dismiss the comparison; in their view, you’d have to be blind not to see the parallels between Nazi Germany and what we’re currently witnessing on the continent. I imagine the hundreds of thousands of people protesting across Europe would agree.

Indeed, considering the ease at which once unthinkable restrictions have been brought in across the Western world, it is hardly surprising that people are drawing historical comparisons with authoritarian regimes of the past.

In recent days, we’ve seen the German government impose a nationwide lockdown on the unvaccinated, who are now banned from all but the most essential businesses.

In what was a startling example of doublespeak, Angela Merkel justified the move as “an act of national solidarity”. Now, what is essentially a policy of segregation, and one that will undoubtedly contribute to a climate of hostility for a minority of German citizens, is being framed as an attempt to unify. You couldn’t make it up.

A two-tier society is no longer an exaggeration. Sure, she may rationalise this as being for the good of the masses, but in so doing, she must recognise she is trampling on the rights of the individual.

Should we just shrug our shoulders and accept that people no longer have a right to their own bodily autonomy? And now, with booster jabs available, will the bar continue to be raised, as those who haven’t yet been triple-jabbed have their freedoms curtailed once again until they do?

And, as if that wasn’t disturbing enough, German politicians continue to consider bringing in  mandatory vaccinations; indeed, the incoming Chancellor Olaf Scholz reportedly supports such a policy – one which is already set to come into effect in neighbouring Austria from February.

Understandably, many people have questioned how governments intend to enforce such a law. Greece is threatening a fine of 100 euros a month for those over 60 years of age if they don’t get jabbed by mid-January. What happens if they refuse?

Brits may look across to Europe in horror. It’s true that right now we’re lucky to live where we live. No rising infections, no vaccine passports, no laws against gatherings. Besides from the nonsensical travel restrictions, isolation rules and mask mandates, we’re in pretty decent shape.

But we’re not out of the woods.

The language used to describe those who have chosen not to be jabbed is becoming more disturbing by the day. Respected journalists and commentators are arguing that the unvaccinated are “selfish”, that they are “taking beds from other sick people”, and that they deserve to be restricted from public spaces.

It’s not hyperbolic to argue that we’re seeing a demonisation of those who have not been jabbed. People in the healthcare profession have expressed their anger and frustration with the unvaccinated taking up ICU beds – indeed The Sunday Times splashed with the story ‘Doctors’ anger as unjabbed filled emergency beds’.

Yes, it is certainly true that unvaccinated Covid patients are more likely to need specialised care, but claims that they are responsible for overwhelming ICU beds are not. The data used in the article claims three quarters of the 20-30 per cent of critical care beds taken up by Covid patients are occupied by the unvaccinated. But this data is months old, only up to July this year.

It has been suggested that 90 per cent of Covid patients in hospital are unvaccinated – a statistic that continues to be shared online and on mainstream television.

But again, this refers to old data, covering months when there were very high hospital admissions and when very few people had been fully-vaccinated.

The real figure, as statistics from the UK Health Security Agency suggest, is now roughly 35-36 per cent, meaning over 60 per cent of adult Covid-related hospital admissions are fully vaccinated. It’s also worth noting that the total number of Covid patients in hospital is currently 80 per cent lower than the peak last January.

People who are unvaccinated must be free to make choices about their own health, even if that means they may be putting their own health at risk. Any liberal-minded person must reject the demonisation of what is now a small minority of people in this country – whatever your views are on vaccinations.

Ursula von der Leyen may believe it’s time for EU countries to start thinking about mandatory vaccinations, but the UK should not. It’s our opportunity to take full advantage of our independence, stand strong against the authoritarianism that is sweeping the continent, and ensure we’re on the right side of history.

Ben Roback: Biden’s Afghan pull-out represents the rash decision making we had expected from Trump

25 Aug

Ben Roback is Head of Trade and International Policy at Cicero Group.

Who has failed the people of Afghanistan more spectacular, the United States or the G7? Both have made a compelling case of late.

When the G7 nations met in June under Prime Minister Boris Johnson’s leadership, the group issued a customary Communiqué. The urgent priorities were clear and indeed perfectly logical – the Covid recovery, vaccinations, and “building back better”.

The middle priorities of the lengthy to do list were at times perplexing. Cyber space and outer space, a “values-driven digital ecosystem for the common good that enhances prosperity in a way that is sustainable, inclusive, transparent and human-centric”, and open societies.

Eventually, at point 57, the G7 remembered Afghanistan:

“We call on all Afghan parties to reduce violence and agree on steps that enable the successful implementation of a permanent and comprehensive ceasefire and to engage fully with the peace process. In Afghanistan, a sustainable, inclusive political settlement is the only way to achieve a just and durable peace that benefits all Afghans. We are determined to maintain our support for the Afghan government to address the country’s urgent security and humanitarian needs, and to help the people of Afghanistan, including women, young people and minority groups, as they seek to preserve hard-won rights and freedoms.”

With the benefit of political hindsight, was the Communiqué a clear sign that, just 10 weeks ago, the international community had such a miserly grasp of what was about to unfold despite the known deadline imposed by the United States?

Or being critical and almost certainly more honest, did it prove that the G7 countries were too caught up with their own agendas and so forgot about a weak, propped up government that was inevitably going to fall the moment the US initiated its withdrawal?

The chaotic scenes that have followed are a demonstrable failure of diplomacy and military intervention. In the first instance, it is the Afghan people and those who served in uniform and alongside them who will suffer the most.

The case for the White House: Putting an end to the ‘forever war’

There is no equivocation or discussion whatsoever about President Biden’s motivation for withdrawal. He wants to pull out American boots on the ground in advance of the 20th anniversary of the September 11th terrorist attacks.

He does not want to become the fourth president to phone the grieving parent of a soldier lost in Kabul, Kunduz or Kandahar. In that respect, he aims to “succeed where others have failed” given President Bush started the Afghan war and it dogged the Obama and Trump administrations subsequently.

The human and financial costs illustrate the domestic rationale. Brown University’s Costs of War Project estimates that since 9/11, 7,057 US service members have been killed in war operations, whilst 30,1777 US service members have committed suicide.

The cost of caring for post-9/11 American war veterans will reach between $2.2 and $2.5 trillion by 2050. The only way to stop that tide of misery, the White House argues, is to get out of Afghanistan. But at what cost to Afghans and the United States’ reputation abroad?

The White House might also argue that, whilst the eyes of the world are on the Middle East, the Vice President is in the Far East. Kamala Harris completed a three-day trip to Singapore where she fired warning shots about Chinese aggression in the South China Sea.

Did anyone notice? The international community remains entirely focused on the more pressing problems in Afghanistan. At home, Parliament was recalled from its summer recess to discuss saving lives, not the Spratley Islands.

The case against the White House: Biden out-Trumps Trump and hangs the world out to dry

Could we have expected such a gargantuan gaffe from President Biden? After all, this was supposed to be the president who returned America to a state of relative normalcy after four years of Trumpian volatility in the pursuit of “America First”. On the world stage, Biden’s message to historic allies has been clear: “America is back”. Is it?

Biden cannot reasonably claim a lack of foreign policy experience. 36 years in the Senate having been elected before his 30th birthday. 12 years as Ranking Member or Chairman on the Senate Foreign Relations Committee.

Eight years as Vice President, in which his White House bio now even boasts that “Biden played a pivotal role in shaping U.S. foreign policy and describes how he was point person for US diplomacy throughout the Western Hemisphere and led the effort to bring 150,000 troops home from Iraq.

The Afghan pull-out represents the kind of rash decision making devoid of any consultation with military allies that we had perhaps expected from President Trump. But for all of Trump’s bluster and wildly unpredictable rhetoric, he did not deliver the hammer blow to US foreign policy that many had expected.

It had started to look like death by a thousand paper cuts, but the capacity to do further incremental damage was limited by being a one-term president.

It is Biden, not Trump, who has shocked US allies. “Sleepy Joe” has sleep-walked the United States into its biggest foreign policy debacle for a generation.

From “mission accomplished” to “mission impossible”

Where does this leave Joe Biden and his administration’s relationship with the very same allies it sought to reassure after the Trump presidency? Johnson and Emanuel Macron led the call for President Biden to extend his self-imposed deadline of August 31 for the complete and total withdrawal of US forces.

At present, that has fallen on deaf ears trained solely on a domestic audience. News outlets report the president will not extend the deadline, agreeing with the Pentagon’s assessment. An imminent detailed report by Anthony Blinken, the Secretary of State. could yet reshape the decision.

The president has acknowledged that a completed withdrawal by the end of the month will be dependent upon the Taliban’s continued cooperation. The very same terror force the US entered Afghanistan to drive out is now needed to get Americans out of the country.

The administration has hinted at some flexibility. But each time Biden has spoken at the presidential podium since the fall of Kabul, he has doubled down on the decision with even greater tenacity. To alter course now would be political humiliation. From “mission accomplished” to “mission impossible”.

Perhaps the most striking remark the president has made since the Taliban takeover was when he said: “Our mission in Afghanistan was never supposed to have been nation building”. Really? Twenty years training and serving alongside the Afghan military. Two decades propping up a western-style government.

It begs the question: on what basis will the US intervene abroad now, if not to nationbuild? Just under 30,000 US troops remain stationed in South Korea, as the threat of war on the Korean peninsula looms perpetually.

But there is no nation building to be done in Seoul; will those troops be brough home next? Over 35,000 US troops are stationed in Germany; Chancellor Merkel needs no help maintaining her own democracy.

The Biden administration has rolled the international dice to take a domestic political gamble

The President, Defence Secretary, Secretary of State and National Security Adviser all clearly believe that most Americans do not care about the fate of Afghanistan or its people. According to YouGov America, at any one time only 0.5 per cent of Americans have ever though that the war in Afghanistan is a top issue facing the country.

They care more about a seemingly endless war in which too much American blood has been spilled. That is understandable with a domestic hat on, but deeply depressing when thinking globally.

Maybe Biden will be proven right. But at what expense? The fall of a nation into the hands of terrorists. It would be the most pyrrhic of all political victories.

Lord Frost’s opening speech to Königswinter Conference, June 17

18 Jun

As delivered, 1330h

It’s conventional at this point at events like these to reflect on the strength of our bilateral relationship.

But I hope that for the UK and Germany that hardly needs doing. The events, the connections, the reality all speak for themselves.

Let me give a few examples.

Germany, which we described as our “essential ally” in the IR, was the only country in the world in 2020 to receive visits from the Prince of Wales, the PM, the Foreign Secretary, and the Chancellor. And we were delighted to have Chancellor Merkel here for the G7 in Cornwall last week, with a very warm and friendly bilateral meeting with our Prime Minister too.

We will have soon a Joint Declaration on Foreign and Security Policy, to complement the existing Joint Defence Vision – and, I hope, with more to follow soon. I agree with Ambassador Michaelis that there is room to make the governmental relationship a bit more structured and we should work on that in the months to come.

There are 1800 cooperation projects between our universities.

We have huge investment in each other’s countries – 1400 British companies in Germany, 2500 German companies in the UK.

And cultural exchanges are equally rich. Neil MacGregor’s role at the Humboldt Forum is well known, as is Hartwig Fischer’s at the British Museum – but there is much more.

I could go on. But there is no need to. The short version is that this is what you would expect between two great European countries. There’s a rich set of contacts at all levels – government, business, broader civil society, and beyond.

And of course KW itself is part of that and has been since the beginning. And let me put in a plug here for not just the main event but for YKW. My own engagement in KW is actually framed, until today, by 2 YKW events – my first involvement, in 1995, in Berlin, and my last, as a speaker at YKW in Frankfurt in 2018, where HansHenning was present, where I fear I shocked some of our German friends, and quite a few Brits too, with my views on Brexit. So I’d like to say thank you and well done Annika Muller De Vries and everyone else who has kept YKW going and to underline my hope that we can keep and intensify the pipeline of people from YKW to KW proper. It’s crucial that KW makes an effort to be representative of all parts of our societies – by generation, by profession, by political views.

I want to say a little more on that last point. This is a UK-Germany event, not an EU one. All the same obviously Brexit has been a matter of huge controversy at KW over the years, even if the 52/48 split in British opinion hasn’t generally been reflected in the perspectives of the British guests!

This isn’t the moment to go over the arguments – they are done. It’s time to look forward and I want to set out how politics now feels here, and why, to help frame our discussions in the next 24 hours.

First, a reflection on the current situation. Our relations with Germany are, I think, good. Our relations with the EU collectively and with the institutions are a bit more bumpy. Obviously no one is happy with that situation.

Indeed I would go further. I think those who campaigned for Brexit wanted and expected genuinely friendly and free-trading relations between the UK and the European Union – and still do. Nothing was further from our thoughts than the current fractious and friction-filled relationship that we seem to have now.

Why is that?

  • Some of the current difficulties are teething troubles.
  • Some of it might relate to what happens when people can’t travel, can’t meet,
    have no real means to discuss things informally or to defuse arguments.

But I fear some of it goes deeper.

  • Some of it stems from lack of trust, for our part from the legacy of what seemed to be attempts to frustrate our referendum result during what seems to us to have been a period of British intellectual and negotiating weakness in 2018 and early 2019, which this government has had to spend a lot of time trying to correct.
  • And finally some also stems from what we see now. We have been surprised by the EU’s willingness to resort quite quickly to threats when problems arise – over vaccines, over fish, over financial services, and indeed over Northern Ireland.
  • I didn’t want to speak about Northern Ireland in any depth, but I do need to respond to Ambassador Michaelis’s comments. We are spending hundreds of millions on operating the Protocol, and that is the source of the problems, so we take no lectures on this. I am afraid the idea that we could take the politics out of Northern Ireland and the Protocol is not exactly realistic. We agreed the Protocol to deal with a very particular and delicate situation, and the best thing our European friends can do is to respect this delicacy and to work with us to find a pragmatic and negotiated solution.

So I want to be clear – we don’t wish for difficult relations, we look for this time to
pass, we will work to make it better – but it takes two.

Second, a reflection on why Brexit matters so much to us. It’s worth saying perhaps to our German friends that there is no longer any serious debate on the subject in Britain. No major political party advocates EU membership, and, while a proportion of the public may still regret Brexit, there is no energy behind a rejoin movement. Overwhelmingly we are now looking forward.

That matters. Those of us who became convinced, publicly or privately, in the years after 2010 of the need to leave the EU did so not because of some obsessional attraction to sovereignty. We did so because we believed EU membership had been detrimental to the UK, had sapped our energy and ability to solve problems for ourselves, and had stopped us making hard choices and clear decisions about how we wanted to run our country.

I think it’s worth making clear that this is not just a Brexit of the right. We’ve seen perhaps the most significant change in British politics for a generation – a profound shift towards Brexit, and the Conservative Party, from parts of the country which have traditionally leaned left.

Some are inclined, even now, to dismiss this as a cry of anger against “being left behind”. That is far too dismissive. What we have seen is a call for the country to be run in a different way, injecting new ideas into the political class, creating alternative possibilities, and crucially, holding politicians to account for different things, against different standards.

The point I want to make is that leaving the EU wasn’t the final goal – it was a doorway, a portal through which we had to pass, the beginning of a journey to national renewal and a repositioning of Britain on the world stage. I think it’s because people sense those possibilities that the mood in Britain is better than many thought it would be.

We think we have made a fairly good start to that renewal process, with a world class vaccination programme and indeed vaccine – as indeed does Germany. The predicted collapse in trade has not happened. We are putting in place a programme of reforms – to subsidy policy, to procurement rules, to agricultural support programmes. We are establishing genuine freeports to encourage investment and rebalancing around the country. We are setting up our own pure scientific research agency, ARIA. On the global stage, we are putting our money where our mouth is on defence, with spending going up to 2.3% of GDP, well above the NATO target. And just this week we agreed our first FTA, with Australia, showing as we always predicted that the ability to tailor agreements to our own needs would mean we could agree them more quickly.

All this is why, for those sitting in our government, it is hard to feel anything other than a profound sense of responsibility to deliver upon the trust bestowed upon us. And if you will forgive me a few personal remarks at this point – it is also why we must be vigilant. We do have a challenge as we take our programme forward as a Conservative Government. It is to respond to the new political configuration here without falling into the trap of statism or the intellectual fallacy that a big state, high levels of public spending, more regulation, and government-determined goals and investment plans can build sustainable economic growth over time. Germany demonstrated this was a false path in the Wirtschaftswunder and I think we could do worse than refresh our knowledge of the Ordoliberal tradition, weakened though it may be in the context of broader European policy-making, as we make our plans.

We must also avoid being too influenced by the current pandemic situation, that Ambassador Michaelis referred to. . The pandemic has ushered in a range of measures literally unprecedented in a free society – indeed for the last year or so we have not really lived in a free society. We now know governments can act decisively when there is a genuine crisis – but we always knew that. I personally don’t want to accept that the levels of state involvement in our lives and in the economy we have seen in the last year are in any way normal. I want to get back to the old normal as soon as we can. To me and to many Brits it is striking that it was in Germany, that has learned to be vigilant about these things, that we saw the first, and still in many ways the strongest, protests against lockdowns. As we emerge from the pandemic, we must not lose our conviction that individual not collective rights are paramount, that living with risk is inevitable, or our belief that free debate and free expression of opinion is the right way forward for a free society.

Of course we 100% do not have all the answers. As I hope I’ve made clear, I personally think we have a lot to learn from Germany. What we do have is the ability to make our own decisions, and yes our own mistakes, but also to correct errors and make changes. That is a crucial advantage in developing good public policy.

So, although we are rebuilding our relationships beyond Europe – and as the Integrated Review showed we are going to be putting lots of effort into that – relationships with Germany, and our other great European friends, remain crucial to us. We recognise we have to manage them not just bilaterally but through the EU institutions – but events like today show that the bilateral remains crucially important.

To conclude – as you may be able to tell I am profoundly optimistic about this country and our future. This is an optimistic government and we believe in the ability of the British people to recover from the setbacks we’ve all faced over the last year and to turn our country into something special. In doing so, we look for friendly collaboration wherever that is possible; with Germany I am confident it is possible; and KW has a huge role in keeping it possible. Thank you.

Stephen Booth: The Brexit trade talks, the romance and realities of fishing, and its crucial importance for Scotland

29 Oct

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

UK and EU negotiators are now targeting a mid-November deadline to reach a trade agreement. This would give the European Parliament enough time to consider the treaty and hold a vote on it in the last session of the year, due in the week of December 14 – only two weeks before the Brexit transition period ends.

A fortnight ago, a public row erupted due to the apparent suggestion from EU leaders that further compromises all had to come from the UK side and that this was a precondition for “intensified” negotiations. After Downing Street declared the talks “over”, some on the EU side, including Angela Merkel, the German Chancellor, and Mark Rutte, Dutch Prime Minister, sought to immediately defuse the situation, saying the bloc was also willing to make concessions. Ultimately, it took Michel Barnier’s speech to the European Parliament, in which he said it was his intention to “seek the necessary compromises on both sides”, to get the UK to confirm that talks were back on track.

After these theatrics, the EU does appear to have dropped its insistence that the most difficult areas must be settled before progress can be made on lower hanging fruit. The Financial Times reports that much of the talks this week have been engaged with the technical process of agreeing common legal text in areas where there is already considerable agreement, including many of the rules for trade in goods and services, with a mixture of EU and UK drafts being used to reach a consolidated text.

The fact that very little has leaked out of this week’s round of talks is a positive sign that these negotiations are now serious and, indeed, “intensive”. Simon Coveney, the Irish Foreign Minister, this week stated optimistically that: “We’re likely to get a deal, but it won’t be easy.” Charles Michel, the EU Council President, was more equivocal, noting that the two sides have yet to overcome their differences on “level playing field” guarantees, fishing, and the deal’s enforcement.

As I noted in my previous column, the differences over subsidies seem to be narrowing and fishing is increasingly emerging as the major sticking point.

Fishing’s political symbolism is outsized compared to its economic importance to either side. The industry is not significant across the UK – it makes up only around 0.1 per cent of gross value added. The economic contribution is similar in Spain, Denmark and France, which together account for over half the total EU catch.

On the UK side, we know that the Common Fisheries Policy was long viewed as one of the major inequities of British membership and fishing communities were among the most vocal supporters of Leave in the EU referendum. In 2017, around 35 per cent of fish landed by EU vessels from the north Atlantic came from UK waters. By contrast, only 13 per cent of fish landed by UK vessels came from EU waters.

There is a certain romance that an island nation attaches to the sea-faring industry. But cold, hard political realities also explain the significance of fishing in this negotiation. Although not a major national employer, the industry is of course very important to particular communities – often remote, such as along the west coast of Scotland, in Wales and Northern Ireland, with limited other employment opportunities – and, ultimately, the negotiation is a zero-sum game for both sides. More fishing quota for the UK means less for the EU.

For a Conservative Government with increasing reason to be concerned about the state of the Union, there is obvious political benefit to ensuring a better settlement. According to the Government’s statistics, the UK’s largest and most valuable fish landings are in the north-east of Scotland, where larger trawlers tend to operate. 40 per cent of fishers working on UK boats are on Scottish boats. Should the UK gain extra quota, this region is likely to benefit the most. A Brexit dividend for Scotland would be an important win.

The EU knows that the UK has leverage when it comes to fishing access. A failure to reach a deal would mean the UK was under no obligation to provide access to foreign boats at all. Brussels had therefore wanted a deal on fishing rights settled in July, well before the final horse-trading of end-game negotiations.

Nevertheless, a wider trade deal – if it includes a better quota share – is also in the interests of the UK fishing industry. The UK imports most of the fish British consumers want to eat but exports most of the fish UK vessels catch. The EU is by far the biggest market for UK exports. It should also be noted that the wider fish processing industry is a larger, although less vocal, employer than the catch sector. Failure to reach a trade deal would increase costs for UK exports and the processing industry via new trade barriers.

Brussels’ starting position – described as “maximalist” by Barnier – was essentially that its fishing rights in UK waters should not change after the transition period. The EU has so far turned down the UK’s request to move to a new regime of annual quota negotiations – a model the UK recently agreed with Norway.

A possible compromise is likely to rest on establishing a process under which EU fleets’ catch would be phased down over a number of years. The UK would regain a much greater share of future catch opportunities but EU fishing communities would be assured of their rights over the medium-term. How the 100 or so stocks that are up for discussion might be apportioned could also present opportunities to ensure certain political constituencies are prioritised.

So far, Emmanuel Macron, the French President, has been steadfast in his belief that the EU should stand firm on fishing access, vowing to scupper any Brexit deal that “sacrifices” French fishermen. He is aware of a potential political backlash in coastal and rural areas.

However, despite the rhetoric, reports suggest that in private, at least, the French government is preparing the industry for a compromise. It should be noted that Macron is also effectively negotiating with the rest of the EU about how much of the residual quota France will get in the future.

Given the wider economic and political issues at stake, it still seems unlikely that fishing will be the deal-breaker. Macron is likely to come under increasing pressure from member states most exposed to no deal – Ireland, Belgium, the Netherlands and Germany – to moderate his position. However, it is clear that the political choreography of reaching a deal on this issue is vitally important on both sides of the table.

Stephen Booth: As the Brexit deadline nears, the UK is strong on fishing rights – but Frost indicates movement on state aid.

15 Oct

Matt Kilcoyne: Anti-democratic China is testing the West’s resolve, and it’s CANZUK that has risen to the occasion

11 Aug

Matt Kilcoyne is Deputy Director of the Adam Smith Institute

When I was growing up, I believed that the West had won. Not just won militarily, economically, or even culturally. But philosophically.

The enlightenment values of the United Kingdom, the free market popularised by thinkers in the United States, and the pragmatism of European countries converging after decades spent tearing each other asunder. No more a half-century long battle between communism and capitalism, no more chance of fascism or socialism holding down the liberties of the world’s peoples.

Slowly, but surely, the world had changed. Gradual liberalisation was inevitable. I thought, foolishly, that the empirics of a world made richer, with more choice, happier, freer, more tolerant people, engaged in commerce with others right across the world would be obvious to all.

I had not yet got that old enmities die hard and traditions die harder, or even that institutions really matter. I had misunderstood that, to a great degree, the victory of the liberal world order was one built on universal claims of the rights of men, but predicated on an uneasy realist peace between American, CANZUK (Canada, Australia, New Zealand and the UK), and European ideals.

I had mistaken the peace and prosperity that coincided with the end of the Cold War as a victory of our civilisations – when really other rulers, some far colder and more cruel, were always waiting to stake their claim.

To do so was wrong. Russian expansionism has re-emerged in Ukraine and Georgia and Putin has spent the past decade sabre rattling at Middle Eastern and Baltic states. Erdogan’s Ottomanite expressions in Turkey and his dalliances in Syria and Libya stand out too. And, of course, China – in its outwardly hostile relations to Taiwan, military skirmishes over the border with India, and treaty-defying legislation over Hong Kong.

Each of these states are nations, but I suspect that the leaders of them think of the international order they find themselves in as too limiting of their ambitions. They mean to mould the world around their vision for their own seemingly exceptional civilisations.

I suspect you know this in your heart of hearts. Russia’s consecration of the Main Cathedral of the Russian Armed Forces was egregious in its scale and its pomp. Christ has been co-opted to glorify the victories of the Red Army. Erdogan’s reconversion of the Hagia Sophia to a mosque marks the effective end of the secular republic of Ataturk. China’s placement of party power in Hong Kong, in silencing critics and arresting students for holding flags, shows a commitment to its communist ideology above that of international treaty obligations.

Foreign policy is not something the Adam Smith Institute focuses on too heavily. We prefer the domestic, and learning from the best of the rest around the world. The relations between foreign governments and our own is a fascination of some policy wonks, but we’d far rather ambassadors were left handing out Ferrero Rocher than having any real bearing on the everyday dealings between companies, scholars, friends, and family.

To that end our policies are focused on trying to make life as free as possible for people here, while proposing policy that would open up new opportunities overseas for trade and exchange. Sometimes though, the rest of the world comes knocking and you should not ignore when wolves are at the door.

Adam Smith said in his Lectures on Jurisprudence that “Opulence and Freedom, [are] the two greatest blessings men can possess.” I do not for a second suppose that he mistook the order of his words. People can tolerate lower levels of freedom if they’re rich enough to have choices left. However, there comes a point where a lack of freedom threatens the peace of a place.

In his first book, The Theory of Moral Sentiments, Smith makes the correct observation that “little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.”

I’m afraid to say that Hong Kong’s opulence looks set to diminish. Yesterday the tolerable administration of justice was tested right to breaking point.

The arrest of the founder of Apple Daily, journalist Jimmy Lai, the arrest of ITV News freelancer and British National Wilson Li, young pro-democracy activist Agnes Chow and the likes of Reuters, AP and AFP from a news conference show that individuals are now targets of the state. It shows too that the commitment under Article 4 of the new National Security Law supposedly upholding freedom of the press is not worth the paper it is printed upon.

This is a test of the West’s resolve and our ability to act. But the West is splintered. Macron’s acquiescence to Xi Jingping showed up a coward’s response. The French president is a man of action as his stint in Lebanon shows but no action is forthcoming on China. Merkel decided her little chats with Beijing were worth more than the rights of Chinese people. The EU Commission called the National Security Law deplorable but again did nothing beyond pushing the press release to save face at home.

The CANZUK states though, and the US, have risen to the occasion. Canada, Australia, New Zealand and the United Kingdom joined the USA in condemning moves to shut down free and fair elections in Hong Kong this autumn. Australia and the UK joined Taiwan in offering refuge from those looking to escape communist control of the city.

The universal values that we preached, that we set in the basic law of Hong Kong, have been an inspiration to Hong Kongers that took to the streets. It was the Union Jack and the Stars and Stripes that flew in protestors hands.

Yes the fact of easy geography plays to regional blocs strengths. But our common cause in recent months with CANZUK states on Russia and Chinese aggression has shown the ease with which we, with common language, common political systems, common history, common sense of purpose, translate into a sheer force of fact re-emergence of a global role that has eluded the mandarins in the foreign office for far too long.

Our civilisation needs champions to save it from opponents and challengers abroad, but also nationalists at home. Greater freedoms for us all, and expanded out to include those in our sister countries overseas allow us all to be the champions of it through our deeds. We must defend the gains of globalisation for the whole of the world, while challenging those that seek to usurp the norms that made those gains possible.

Adam Smith was right when he argued that there was a great deal of ruin in a nation. But there might yet be a great deal of good in our civilisation.

At 6-7pm tonight, the Adam Smith Institute is hosting an event titled: In Defence of Globalisation. Click this link to register your place.