Garvan Walshe: The defeat of May’s deal was a consequence of half a decade of negotiation failure

Why should the EU offer any more to an inconstant departing member, which can’t be relied on to deliver ratification of any agreement?

Garvan Walshe is a former National and International Security Policy Adviser to the British Conservative Party. He runs TRD Policy.

Dominic Cummings imagines politics to be a branch of physics. There’s one respect in which he’s right, which goes by the unpleasant jargon-word entropy.

The word is ugly and so are its consequences. Entropy is a deeply depressing concept. It’s like a transaction tax applied by the universe on every conversion of energy. It’s why your car gets hot and your fridge makes noise. All that energy from petrol or electric power is dissipated into heat and sound waves. Once it has been so dissipated, it can’t be marshalled back into a useful form. It’s been spent.

The battle over Brexit has been a giant exercise in the production of entropy, the conversion of political energy and ideas into a disorganised and ineffective stalemate.

It is the result of a gross miscalculation of the amount of power available to the British Government. Unable to admit to itself the scarcity of available means, no leader or faction has been able to apply them to achieve any useful result. The result was a defeat for the Prime Minister’s deal so heavy that had it been a cricket score her team would have been forced to follow on.

From David Cameron’s Bloomberg speech in 2013 to the Prime Minister’s inept selling of her Brexit withdrawal agreement, through the ERG’s misfiring leadership plot, and Jeremy Corbyn’s failed attempt to bring the Government down, nothing – least of all May’s disastrous 2017 election – has worked. Political energy has been wasted. Political capital squandered.

Cameron imagined that British membership of the organisation was so important to the rest of the EU that they would grant an exemption from freedom of movement to keep the UK in. Instead they saw it as one opt-out too far. What he was offering was tantamount, from their perspective, to leaving the EU; this rendered Cameron’s threat to leave if he didn’t get what he want moot. If you don’t let me leave, I’ll go isn’t a strong negotiating position.

The Brexit negotiations themselves suffered what might be politely called a clash of negotiating cultures — a flexible British (and Irish) style, where everything is pinned down at the last minute; and a systematic Germanic one, where you work things through issue by issue.

In this May, at least, understood some limits. Ending free movement entailed leaving the Single Market. Remaining in good standing in international law meant continuing to pay bills already agreed. She failed only on the border in Ireland, where the EU acted to defend the interest of its member, the Republic of Ireland, at the expense of the country that was leaving.

British commentators usually considered informed (most recently Mujtaba Rahman of the Eurasia Group), have continually misunderstood the EU’s position. They simply haven’t adjusted to what it means to be outside the European tent. Considered on its own, it might indeed be in the economic interests of some powerful member states to push Ireland around. But considered as part of the EU system itself it would be very dangerous. The EU is not an intergovernmental organisation of sovereign states. It was created in order to restrain the rivalry of the big countries which had destroyed Europe twice in the early 20th century. Brexiteers find that a reason to leave, which is fair enough. What’s not reasonable is to pretend the organisation they want to leave for those reasons doesn’t behave as if it’s motivated by them.

This does not mean that big member states don’t have more power: they do. But they have less than size would suggest, and in exchange for giving it up they gain stability. In practical terms it means the small states gang together, and the Commission sets itself up as their protector. Were Ireland’s interests to be overridden today, what about Latvia’s tomorrow, or Portugal’s in five year’s time?

Faced with this, the confidence and supply deal with the Democratic Unionist Party was a huge mistake. Embedded in the DUP’s soul is fear that Britain will sell them out. The normal tricks of parliamentary management available to soothe the egos of Tory MPs (the Rt Hon Sir Edward Leigh, anyone?) — knighthoods, special envoy positions, the prospect of ministerial promotion — don’t work. A convoluted diplomatic text, produced by urbane Whitehall officials and their equally urbane counterparts at Dublin’s Iveagh House, is not seen by the DUP as an elegant compromise, but a plot at their expense. It is perhaps tragic that they attach themselves to an Albion they know is perfidious, as though an abusive relationship with Great Britain is the only one they know; and because leaving the UK cannot, by definition, be an option. Thus their tradition of obduracy is well justified, because it’s all they have.

It is fatal, however, that the only way to obtain a Brexit that meets the DUP’s requirement to avoid economic differentiation between Northern Ireland and Great Britain, and the EU’s requirement (and also British government policy) of avoiding a hard border on the island of Ireland, is to keep the UK in the Single Market. And while concerns about rule-taking have some weight, it is May’s insistence on ending freedom of movement, words she had inserted into the political declaration, that makes such an arrangement impossible.

There is still hope in Westminster that the EU will come back with some more concessions,or at least more time. What is not appreciated is that the all-UK customs union offered in the Withdrawal Agreement is such a concession. Why should they offer any more to someone who can’t deliver? And more time could even be counterproductive. Britain needs the pressure of a deadline. Given a can on a road, it will not be able to resist the temptation to give it a hefty kick.

Yet if it is a principle of physics that some energy must always be wasted, dissipated into heat and noise, it is a principle of conservatism that decisions and actions have consequences. The decisions — to demand an exemption from free movement; to leave the EU; to have a confidence and supply deal with the DUP; to both require and forbid a hard border in Ireland and to base a negotiation strategy on the hope that the EU would put leaving Britain’s interests ahead of those of its own member state — have been made. It’s now time to take the consequences whatever they turn out to be.

Almost good enough isn’t good enough

Strangely but truly, the best way of helping the Prime Minister is to send her back to Brussels to win concessions on the backstop.

ConservativeHome’s first rule of Commons votes is that the Speaker will do everything he can to spite the Government.  He is therefore unlikely to smile on any eleventh-hour manuscript amendment designed to reduce the scale of Theresa May’s loss this evening.  None of the Conservative amendments that would aid the Government are expected to pass – Andrew Murrison’s, Hugo Swire’s, Edward Leigh’s.  Labour will whip against them and ERG-aligned MPs will vote against them.  They take the same view of these as they do of yesterday’s letter from Donald Tusk and Jean-Claude Juncker to the Prime Minister: that they carry no legal weight of any significance.

The amendment that would most spare the Prime Minister’s blushes is Hillary Benn’s, which is both anti-her deal and anti-No Deal.  It is thought likely to be carried, thereby obviating her main motion – but by a smaller margin than she would otherwise lose by.  Some Tory MPs have therefore been discreetly lobbied by Whips to back this amendment that opposes her deal.  Since Benn’s anti-deal amendment is thus helpful to May (we hope you’re still with us), it follows that he may withdraw it: indeed, it is reported this morning that he has now done so.

When unclear about procedural malarkey, it’s usually best to turn to MPs’ motives.  It will do for our purposes today to look at the Conservatives only.  They fall roughly into five groups: loyalists, Remainers, Soft Brexiteers – and then two types of harder Brexiteers.  The loyalists will of course vote for the Prime Minister’s motion, assuming it is reached, as will those Conservative MPs convinced of the merits of her deal.  Remainers, such as Dominic Grieve, will largely vote against.  Soft Brexiteers, such as our columnist Nicky Morgan, will mostly vote for.  They will then cluster around Nick Boles’ Norway Plus scheme, or some variant of EEA membership.

The harder Brexiteers divide into two main tendencies.  First, there are those set against May’s deal at any price.  Let’s call them the diehards, adapting the use of the term by James Forsyth.  They actively hunger for No Deal and the WTO minimum.  The second are those who believe, as Jacob Rees-Mogg puts it in our Moggcast this morning, that “most of the poison is in the backstop”.  Again borrowing from Forsyth, let’s refer to them as the Ditchers.  Were the UK to have a unilateral escape clause from it, or were it to have a clear end-date, most of this band of MPs would drop their opposition to the deal and move to support it.  It just might then be able to pass.

It follows that it is therefore in the interest of this second group as well as the first to vote against the deal today – since, by doing so, they would send a message to Brussels that it will only clear Parliament if concessions are made on the backstop.  But not so fast.  Some of the Ditchers are brooding over the numbers.  They calculate that if the Prime Minister loses by a big margin tonight, the EU may give up on the deal together.  And that if she does so by a small one, it will offer no further concessions.  But if she loses by a margin somewhere in between the two, concessions of real value will be forthcoming.

They may be right.  As March 29 approaches, we are hearing rather less about how the deal represents “the last word” of the EU, that “rule-based organisation”, which “won’t budge”.  And more and more about how it may blink after all.  None the less, we hope that Ditcher MPs aren’t drawn into playing clever-clever games this evening, tailoring their votes according to what they believe May’s likely majority may be, and trying to game the result so that she loses by, say, 50 votes or so in order to squeeze those concessions out of the EU.  Such wheezes are not unknown among “the most sophisticated electorate in the world”.

The simple truth is that none are in a position to second-guess the mass of individual decisions that their colleagues may take.  And that, in such circumstances, the most straighforward course is nearly always the best.  Which is this case is: to judge the Prime Minister’s deal on its merits and demerits.  What are these?  In our view, Brexit is a film, not a photo.  In other words, where Britain is on March 29 is not necessarily where we will be in ten years’ time.  For example, it would be acceptable to stay in a customs union for a transition period.  Indeed, it is inevitable, since the systems are not yet ready to escape it.

What is not acceptable is for that film to be “Groundhog Day” – in short, for a backstop from which we have no guarantee of escape lock the whole UK in a customs union, with Northern Ireland none the less divided from Great Britain.  The proposed regulatory border in the Irish sea would separate the province further from the rest of the country.  That has implications not only for Northern Ireland but for Scotland, and thus for the unity of the UK.  The deal sets up an institutional tension between Eurosceptism and unionism, since Great Britain could move further, under its terms, from Single Market and Customs Union rules, but Northern Ireland could not.

For this reason, we hope that Conservative MPs vote against May’s deal this evening.  As we’ve said before, it almost works.  Theresa May won on borders and money in the negotiation, and minimised the ECJ’s scope on laws, which could reasonably be scored as a points win.  She gained the bespoke deal that her critics said would be impossible.  She has won almost no credit for this achievement, first, because she has no media allies or strong public backing, but faces formidable opposition from both second referendum Remainers and UKIP-type Leavers; second, because U-turns and broken pledges elsewhere have bust her credibility and third, of course, because of the backstop.

But almost good enough is not good enough.  Strangely but truly, Tory MPs can best help their leader by voting her deal down today, sending her back to Brussels, and gaining those backstop concessions.  This is far from being a guaranteed outcome but it is not at all an impossible one.  The EU doesn’t want a messy Brexit on its north-west frontier if it can be avoided, especially with the possibility of recession coming to the Eurozone.  Either way, the Commons should honour the referendum result.  May’s deal ultimately falls short of doing so – and guarantees losing the DUP, together with her majority.

Juncker and Tusk’s letter to Theresa May changes nothing: we must vote down the draft Withdrawal Agreement

The letter sent from Jean-Claude Juncker and Donald Tusk to Theresa May in the last 24 hours shows more clearly than anything else possibly could why the draft Withdrawal Agreement is fundamentally flawed: not only the lack of substance in the letter, which adds nothing new to the sum of human knowledge, but also the […]

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The letter sent from Jean-Claude Juncker and Donald Tusk to Theresa May in the last 24 hours shows more clearly than anything else possibly could why the draft Withdrawal Agreement is fundamentally flawed: not only the lack of substance in the letter, which adds nothing new to the sum of human knowledge, but also the lack of any form of collegiate kindness or helpfulness to the Prime Minister.

When the Prime Minister addressed the 1922 Committee on 12th December, she assured colleagues that she would secure legally-binding wording to address concerns over the Northern Ireland backstop. Now we learn there will be no end date to the backstop or unilateral exit mechanism for the UK. So, yet again, the EU have let the Prime Minister down.

The lesson is clear: we need to vote down the Withdrawal Agreement by as large a majority as possible. Only then can we move on and either negotiate a new agreement (as David Davis argued at the weekend) or Leave without a deal on World Trade Organisation terms with a view to later negotiating a new relationship.

The Government and the Conservative Party must remain committed to delivering the result of the referendum, as repeated in our 2017 manifesto, which pledged to leave the Customs Union and the Single Market, accompanied by the declaration that No Deal was better than a Bad Deal. Otherwise, the credibility of our democracy will be thrown into chaos.

The draft Withdrawal Agreement does not respect the result of the referendum. The Government should be seeking to unlock the negotiations by returning to the Canada-style option offered by President Tusk, using the tried and trusted techniques and procedures so that rules of origin and customs checks are conducted away from the Northern Ireland border, to make unnecessary the hard border that everyone agrees must be avoided.

The backstop means we will be trapped under the thumb of the EU with no date to escape – and unable to strike trade deals. It means we would be trapped indefinitely as a satellite of the EU, obeying its laws without a say, unless the EU and its Member States gave permission for us to leave. The UK will be paying £39 billion – equivalent to £1,443 per household, or £60 million per constituency – and getting nothing in return. We will not take back control of our money, laws and trade. Remaining in the Customs Union is a breach of the 2017 Conservative Manifesto on which I and all my colleagues stood.

The backstop drives a regulatory barrier down the Irish Sea, severely damaging the Union and moving Great Britain and Northern Ireland further apart. This deal keeps the supremacy of the European Court over our own law and sells out the UK fishing industry, excluding them from any trade deal, and envisaging a deal where the Prime Minister trades away our fish in return for market access.

We remain effectively in the EU for an extendable ‘transition’ period, paying and accepting new laws over which we will have had no say. Unrestricted immigration of EU nationals will still be continuing for years after we leave. This commitment comes with no guarantee of a future trade agreement. Worryingly, this deal will deny the UK an independent trade policy while potentially keeping us out of existing EU trade policy. We would be cut off from the world with our trade and economy regulated from Brussels without any say.

So, let us be honest: the Withdrawal Agreement is a terrible deal – worse than Chequers, less popular than the Poll Tax and only one in five voters think it honours the referendum result. The only way to get a better deal for the UK is for Parliament to reject it and force the Government to renegotiate with the EU.

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When it comes to the EU, the Treasury has never been impartial and its predictions cannot be trusted

Fear of leaving the EU without a deal, and of trading with the EU thenceforth under WTO terms, has been created primarily by the much-cited series of predictions of severe adverse economic consequences by HM Treasury. It is therefore of some importance to decide whether their predictions are credible. One set of their pre-referendum predictions […]

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Fear of leaving the EU without a deal, and of trading with the EU thenceforth under WTO terms, has been created primarily by the much-cited series of predictions of severe adverse economic consequences by HM Treasury. It is therefore of some importance to decide whether their predictions are credible.

One set of their pre-referendum predictions referred to the adverse consequences within two years of a vote to Leave the EU rather than leaving itself. Since we have now lived through the period they covered, we now know that apart from one minor point, the fall in the value of sterling, they were all false.  Every other prediction they made, on GDP, (which was predicted to fall rapidly by between 3.6% and 6.0%) on employment, house prices, wages, inflation, FDI and public finances, was wrong, often by risibly large margins, and always in the same direction. This suggests they were deliberately manipulated to give a politically helpful result for the then Government-backed Remain campaign.  They naturally raise questions about the Treasury’s other three sets of predictions about the long-term consequences of Brexit itself.

These cannot be tested by reality until 2030 or beyond, but since they rely on a number of highly improbable assumptions and estimates, they are no less contrived than their short-term predictions, and no more credible. These assumptions and estimates cannot all be examined here, but we can identify the most improbable and incredible, the ones that have contributed most to the Treasury’s characterisation of trading under WTO terms as the worst possible post-Brexit option.

Their first set of long-term predictions was published in April 2016, and depended to a large extent on the assumption that future UK intra-EU trade in goods would increase at the same rate as that of all other members. This was followed by the estimate that by 2030, if it remained a member then, UK trade in goods would have grown by 115%.  If, by contrast, the UK left to trade under WTO rules, it would not enjoy any of that 115% growth, and primarily for this reason, its GDP in 2030 would be 7.5% smaller than it would have been if it had remained a member.

This seems to have prompted Remain supporters to describe the transition to a no-deal exit as a cliff edge, a car crash, or a leap in the dark, and trading under WTO rules as chaos, catastrophe and Armageddon. Since most of world trade, and much of UK trade, is routinely conducted under these self-same WTO rules, the aptness of these metaphors is questionable, but what matters here are the assumptions on which the Treasury prediction was based.

Questions about it might first have been raised with the Treasury itself since a rare piece of in-house classified research conducted in 2005 had shown, like more recent studies, that the rate of growth of the UK’s intra-EU trade during the Single Market has differed greatly from that of other members, most especially from those in Eastern Europe. This HMT research also showed that over the 31 years from 1973 to 2004 it had grown by only 16%, while later IMF/DOTS figures showed that over the 22 years from 1993 to 2015 UK exports to the EU 14 had grown by 25%. To then ‘estimate’, as the Treasury authors do, that over a mere 15 years to 2030 UK-EU trade in goods would suddenly increase by 115%, may be reasonably called absurd, or even a deliberate manipulation to produce a highly misleading prediction. A recent re-examination of the same evidence, using the same gravity approach as the Treasury, but referring to the UK alone, estimated the likely increase of trade in goods with the EU by 2030 to be ‘in the range 20-25%’.

The Treasury was a contributor to the second set of predictions, the EU Exit Analysis Cross Whitehall Briefing of July 2018.  Its wildest assumption was that UK goods trading with the EU under WTO rules would immediately incur tariff, non-tariff and customs charges with a total tariff equivalent value of 30%. It qualifies as wild because the total tariff equivalent value of the goods exports of United States and Japan to the EU have been reliably estimated to be just 20%, or only two thirds as much as those the Treasury predicts for UK exports after a no-deal Brexit, even though its product standards are identical to those of the EU.

Patrick Minford analysed these non-tariff and customs charges in considerable detail, and pointed out that some of the barriers conjured up by the authors of these predictions would be discriminatory and therefore illegal under WTO rules, which the EU generally respects. Why UK civil servants should assume that their EU counterparts would deliberately ignore them post-Brexit is unclear. However, with the help of the 30% total tariff equivalent value, leaving with no EU deal and trading under WTO rules again emerges as the worst post-Brexit option, resulting in a shortfall in UK GDP by 2030 of about 7.7% versus what it would have been had the UK remained an EU member.

The third set of predictions was published in November 2018 specifically to inform Members of Parliament about the long-term economic consequences of various future relationships with the EU in advance of their fateful ‘meaningful vote’ on the agreement negotiated by Mrs May. It contrives, as Andrew Lilico observed, to show the ill-effects of trade under WTO rules by the simple ploy of exaggerating all the future gains of EU membership and minimising all the possible gains that might follow the UK taking back control of immigration, regulation and trade policy.

The outstanding example of the latter is the 0.2% gain to GDP that it estimates would result from FTAs that the UK might conclude with the US, Australia, Canada, India, China and 12 other non-members. It qualifies as an absurdity because the European Commission had previously estimated that the gain to EU GDP of concluding agreements with a similar set of countries would be 1.9%, almost ten times as much therefore as agreements negotiated by the UK alone which would, one imagines, be better tailored to British exporters.

By repeatedly making other estimates in a similar manner, the report arrives at the desired prediction. Indeed, the final prediction that made the headlines, a 9.3% shortfall in UK GDP by 2035-36, was reached simply by assuming that there would be zero immigration from EEA countries until 2035-36, a proposal that no one has ever made. The recently published White Paper suggests it is far removed from any likely future government policy.

The remarkable thing is that any of these Treasury predictions have been given any credibility whatever and were not dismissed with a laugh, just as the predicted immediate consequences of a vote to Leave have often been. Part of the explanation must be that specialist publications like The Economist and the Financial Times, and specialist correspondents of other media such as the BBC, Sky, The Guardian and The Times did not check and flag these and other questionable assumptions and estimates on which these predictions depend.

Perhaps they did not have the time or maybe they welcomed Treasury support for the Remain cause, but a further reason one suspects, is that, like the rest of us, they wanted to trust Treasury mandarins. They saw them as honest, upright, non-partisan experts performing their duties by providing entirely trustworthy and reliable evidence to inform ministers and public debate.

Unfortunately, on European issues at least, this image is woefully mistaken. The Treasury has never regularly and dutifully conducted impartial research on the impact of EEC/EU membership on the UK economy. And it has never been asked to do so by any government since 1973, probably because ministers were usually engaged in persuading the ever-sceptical British public of the merits of European integration and doubted that empirical research would be an altogether reliable ally.

Since 2000, the Treasury has, like other departments, been obliged to conduct impact assessments of proposed legislation derived from EU regulations and directives, but it never sought to translate them into a meaningful national cost/benefit analysis. In 2003, at the time of the debate on joining the euro, Treasury mandarins searched the world for experts on optimal currency areas and debated and published their differing views shortly before the Chancellor announced his decision. The research conducted in 2005 and mentioned above was a one-off, and remained classified until an FOI request in 2010.

When they were asked to make the case for Remain, Treasury mandarins therefore had no historical analyses to draw on, apart from the 2005 one they wanted to forget. And they did not instantly assume a quasi-judicial impartiality. Apart from the one month purdah periods before the 1975 and 2016 referendums, they had never been asked to be impartial on this issue, and they evidently felt under no obligation to be impartial with respect to the division of opinion in the country at large. Hence, they immediately showed themselves to be fervent, unabashed advocates for continued EU membership and produced predictions to delight their all those who shared their view.

All of us have paid, and are still paying, a high price for the Treasury’s failure to conduct and publish impartial analyses of the impact of EU membership on the UK economy over the preceding forty-plus years in accordance with our image of them, and with their own core values and rule books. Had they done so, the referendum debate would have been rather more informed and enlightening than it was. Instead of constructing Project Fear for the Remain side, they might have tried to match Business for Britain’s superbly documented case for Leave in Change or Go.

In the course of such research, they would necessarily have had to understand and explain why the exports of countries trading with the EU under WTO rules, like the United States, Canada, Australia, Singapore and a host of emerging societies have been growing so much faster than the supposedly frictionless ones of the UK over the life of the Single Market. American exports to the EU, for example, grew by 68% from 1993 to 2015, and the smaller British exports by just 25%. If trading with the EU under WTO rules has proved so successful for others, why would it be the worst possible option for the UK after Brexit?

They might also have been able to explain why it is that UK exports to 111 countries around the rest of the world under WTO rules have also grown so much faster than its exports since 1993 to the EU itself, and to those countries with which the EU has negotiated trade agreements from which the UK was supposed to benefit. These are questions that the Treasury mandarins have preferred not to address.

Much relevant evidence to determine whether or not trading under WTO rules is the worst post-Brexit option could be obtained from UK companies which currently trade with the EU from a member country and with the rest of the world under these rules, since they are able to make direct comparisons. The Treasury is well-placed to conduct such research via HMRC but this is more evidence that it has decided it, or the government, or the country does not need. Some companies have, however, spontaneously testified about their experience of trading under both systems. It directly contradicts the sharp contrast between them which the Treasury has sought, with some success, to make the centrepiece of the debate about the UK’s post-Brexit options.

Lord Bamford, Chairman of JCB, the UK’s largest manufacturer of construction equipment, for instance, recently felt ‘compelled to say this about a no-deal Brexit: there is nothing to fear from trading on World Trade Organisation (WTO) terms… Trading with Australia on WTO terms is as natural to us as trading with Austria on EU single-market terms. John Mills, founder of JML, which sells to ‘80 countries at the last count’, said that ‘about 80 percent of all our international trade is on WTO terms, so we know what the paperwork’s like. Once you’ve done it half a dozen times, you’ve got it all on the computer, it just isn’t that difficult.’

Even more emphatically, Alastair MacMillan, whose company exports to 120 countries in the world including every EU member, points out that ‘there is little difference in the way we handle freight going to the EU compared to the rest of the world. The United States is our biggest market and we compete directly against US companies in their own market, in part, because we deliver next day to anywhere in the United States by 1pm their time, customs cleared. That, to me, is frictionless trade and it is at a cost that is not dissimilar to the same service to customers in the EU’.

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Trading on WTO rules will be a liberation for the UK – and the Labour leadership needs to embrace it

Brendan Chilton is co-author with Lord Lilley of 30 Truths about leaving on WTO terms: Why WTO offers a safer haven than the Backstop, which is published today by Global Britain and Labour Leave.  The tone of the language we so often hear and the words we frequently read associated with trading on World Trade Organisation […]

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Brendan Chilton is co-author with Lord Lilley of 30 Truths about leaving on WTO terms: Why WTO offers a safer haven than the Backstop, which is published today by Global Britain and Labour Leave. 

The tone of the language we so often hear and the words we frequently read associated with trading on World Trade Organisation terms is negative and promotes images of chaos and disorder. All of this is based on deliberate fear.

Phrases such as ‘crashing out on WTO terms’ and ‘no-deal Brexit’ and ‘being forced to revert to the WTO option’ conjure up an image of a future in which the United Kingdom loses out and becomes an economic basket case. The terms are frequently and loudly spouted by those campaigning for a second referendum and are supported by biased voices within the media. Their objective is to determine that the United Kingdom must Remain in some shape or form entangled within the European Union even after the democratic decision of the people to Leave is implemented.

The reality of the situation, however, is that a United Kingdom operating under World Trade Organisation rules will be one of the greatest liberating experiences to achieved by this country in modern times. The United Kingdom always was a global free-trading nation – and now it will be once again, participating in every corner of the world. Far from being a perilous course, World Trade terms are a golden opportunity to reignite the industrial and commercial might of this country and it is a course that the Labour Party should completely support.

The Labour Party is not primarily a liberation movement. It is not primarily a social movement or a movement for emancipation. The Labour Party’s primary and fundamental nature and purpose can be understood by examining the title and description of the party – Labour. The Labour Party has been, is, and always will be a party of labour. Of work.

Its root and brain are an element of economy and its purpose is the representation of labour within the political institutions and a democratic framework of the nation state. Its motivation is the betterment of the lot of labour within the country and the world. Its purpose is to protect the advancement of labour and secure more for labour. This is achieved through an economy that is wealth-generating.

At its heart, Labour is a party of industry and commerce and, yes, of finance too. In the modern world, those factors are units of the economy not restricted solely to Europe but are the norm the world over. Labour’s standard should therefore be world trade and not an obsession with a Single Market serving the most developed, most privileged, most advanced part of the world shielded and protected by a great wall called a Customs Union.

The language of the Labour Party must turn from fear and concern to optimism and hope: the optimism that once again Labour can truly be the party of labour by embracing trading terms outlined under the World Trade Organisation to revitalise sectors of our economy, to embrace new markets, spread the protections and securities our workers enjoy to the rest of the world and ensure a wealth-generating economy improves the lives of people in this country and others.

Labour’s radical economic programme outlined in the 2017 manifesto is one that would restore industry, spread commerce and excite finance. In order for the manifesto to be delivered in the most productive way that manufactures growth, the Labour Party cannot support the Withdrawal Agreement negotiated by the Prime Minister and it cannot support an ongoing relationship with the European Union that grants economic jurisdiction to Brussels. The next Labour Chancellor of the Exchequer must be in a position to exercise all the levers of the state and tools as his disposal to ensure our economic programme can deliver for the many in this country and inspire others across the world in a true act of solidarity.

It is right that the Labour leadership is resisting calls for a second referendum on our membership of the European Union. It is now very unlikely that a second referendum will take place and this is, in part, due to the battle against one being fought by the leadership of the Labour Party. Now victory on that front is in sight, it is the time for the leadership to focus its attention on the next battle in this great struggle for the revival of our economy and the prospects of this nation in the long term.

The Labour leadership now needs to fully embrace with heart and hand a Brexit that enables the United Kingdom to be free from the shackles of Brussels and which allows our country to walk onto the platform of World Trade. By doing this, Labour will set the course for the future, it will demonstrate its ambition and ideals and will ensure that the next Labour government can embark upon a radical national economic agenda that transforms this country from a nation secluded in Europe to a nation manufactured and secured in global trade in the modern world.

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Nick Boles: Demolishing five myths about Norway Plus

The plan is not perfect. It is a compromise. But as its popularity grows, it has attracted some unfair and inaccurate criticism.

Nick Boles is a former Planning Minister and Education Minister, and is MP for Grantham and Stamford.

There is growing support in Parliament for the idea that after Brexit the UK should move to a position a bit like Norway’s or Iceland’s – inside the common market of the European Economic Area (EEA) and the European Free Trade Association (Efta) with some kind of customs arrangement that preserves frictionless trade. Just in the last few days Mark Hendrick, Labour MP for Preston, Paul Masterton, Conservative MP for East Renfrewshire, and Jonathan Djanogly, Conservative MP for Huntingdon, joined the ranks of those declaring their backing for a version of the plan.

As the idea has gathered momentum, so it has also attracted the attention of opponents. An unholy alliance of hardline Brexiters who want to crash out of the European Union with “no deal” and hardline Remainers who want to use a second referendum to overturn the result of the first has been born. One MP linked to the People’s Vote campaign recently told a Times journalist: “We have to kill Norway Plus”. I suppose we should be flattered that they are taking the idea so seriously.

The Norway Plus plan is not perfect. It is a compromise. It has downsides as well as benefits. But people should judge it based on the facts not on misleading claims put about by its opponents.

Rule taker

Some have claimed that Norway Plus would leave the UK as a pure ‘rule taker’. This is not true. Most EU rules would not apply to us at all as we would be outside the common agriculture, fisheries, justice and home affairs policies. Furthermore, as a member of the EEA, the UK would have a right to be consulted on proposed new Single Market rules. UK representatives would take part sit on the policy-shaping committees that draw up proposals for new Single Market legislation. In the EEA, EU law would no longer take effect automatically so the UK would have the power to delay the incorporation of laws we did not like, contest the Single Market relevance of such laws, negotiate derogations and in extreme cases refuse to incorporate Single Market legislation into UK law. All these options have been used by the existing EEA/Efta states. Under Norway Plus we would be under the jurisdiction of the Efta court instead of the European Court of Justice. We can expect to be able to negotiate the appointment of at least one British judge to the court.

Freedom of movement

Some have claimed that Norway Plus leaves the UK in the same position on free movement as we currently have inside the EU. This is not true. Free movement applies to members of EEA/Efta. But Article 112 of the EEA Agreement gives them the right to pull an emergency brake on free movement if events give rise to “serious economic, societal or environmental difficulties of a sectorial or regional nature”. We do not know exactly in what circumstances we could take advantage of this provision, or what it would deliver. But it is the very thing that David Cameron sought during his renegotiation of the terms of our EU membership and the EU refused. So it clearly has some legal force. From 2020, after the UK has required all EEA nationals currently living in the UK to register with the Home Office, the Government will be able to identify and remove new EEA migrants who do not find work after three months. This is something we could do as a member of the EU but successive governments have failed to grapple with the administrative reforms required to make it effective.

Financial contributions

Some have claimed that as a member of EEA/Efta we would pay about as much to the EU as we currently do. This is not true. According to the Norwegian Mission to the EU, Norway pays approximately £800 million a year in costs arising from its membership of the EEA. This amounts to £152 for each Norwegian citizen. The UK currently pays the EU £13 billion a year gross which amounts to approximately £220 for each British citizen.

£352 million of Norway’s £800 million total contribution relates to grants that Norway makes to European states via the EEA Grants Scheme. While the UK would be expected to make a contribution to this scheme, the level of contribution would reflect our GDP per capita which at $39,000 is not much more than half that of Norway’s at $76,000. So the UK could expect financial contributions in relation to membership of the EEA and Efta to be substantially less than our contributions to the EU.

Backstop

Some have claimed that signing up to Norway Plus would make no difference to the backstop. This is not true. While we would certainly need to sign up to the legal provisions relating to the backstop in the draft Withdrawal Agreement, joining Efta, moving into the Efta pillar of the EEA, and agreeing a customs arrangement that preserves frictionless trade are all arrangements that can be negotiated and implemented before the end of the transition in December 2020. So the backstop would never need to be activated. Last week, Guy Verhofstadt, the European Parliament’s Brexit representative, said, “If (Theresa May) is looking for a closer relationship with the EU to avoid the use of this backstop there will be no obstacle.”

Opposition in Norway or EU

Some have claimed that Norway is opposed to British membership of EEA/Efta. This is not true. A recent headline in Norway’s Nationen newspaper read “Solberg sier britene er velhomne i EFTA.” In the piece, Erna Solberg, the Norwegian Prime Minister, confirmed “if that is what they [UK] really want then we will find a solution in the future.” We would need to negotiate a derogation to the Efta Convention so we could be part of a customs arrangement with the EU. But this is something that could be negotiated by December 2020 as part of our Efta accession.

Others have claimed that the EU would not want the UK to join Norway, Iceland and Liechtenstein in the Efta pillar of the EEA. This is also not true. Michel Barnier has repeatedly offered Norway Plus as the only Brexit deal that guarantees ‘frictionless trade’. It may be that some people in the European Commission, and some politicians in Norway and elsewhere, would prefer to create a new EEA pillar for the UK. But what matters is what the leader of Norway’s government and the EU’s chief Brexit negotiator think, and they are clear: the UK would be welcome to join Norway in the EEA and Efta.

As MPs grapple with difficult choices about the Brexit deal, they should be in no doubt: Norway Plus is real, it is workable and it would deliver significantly more control over our money, our borders and our laws than we currently have as members of the EU.

Nicky Morgan: I won’t support a second referendum – even if the Government does. Here’s why.

At the heart of the disagreement between “People’s Vote” campaigners and the Norway Plus supporters is whether the result of the 2016 Referendum is accepted or not.

Nicky Morgan is Chair of the Treasury Select Committee, a former Education Secretary, and MP for Loughborough.

I warned in a previously on this site that, if Theresa May’s draft Withdrawal Agreement is voted down, the very people who so desperately want Brexit to happen to may instead secure the very outcome they don’t want – a second referendum with ‘Remain’ as an option on the ballot paper.

There is no majority in the Commons for a second referendum, as Chuka Umunna admitted yesterday. That could begin to change if the Labour Party’s official position changed to backing a second vote. But it can only be guaranteed with support from some Conservative MPs.

I’ve been clear about my support for a Norway Plus option, and I firmly believe that a cross party consensus can be built around access to the Single Market and a customs union. Tomorrow on this website, Nick Boles will set out why the People’s Vote campaign has got it so wrong about Norway Plus. But today, I want to explain why I, a Conservative MP and former Remain campaigner, will not support a second referendum, even if it becomes official Government policy.

At its heart, the battle between a second referendum, headed by the “People’s Vote” campaign, and the Norway Plus option is about whether the result of the 2016 Referendum is accepted or not.

The main aim for those behind the People’s Vote campaign is to overturn the referendum result so that the UK remains in the EU. As one of my Conservative friends told me, having said two years ago that they very reluctantly had decided to accept the result, they now don’t want the UK to leave the EU, and see a second referendum as the way to achieve this objective.

By contrast, those of us supporting Norway Plus accept that 17.4 million people were given the right to vote as they wanted and to expect the result of that vote to be respected. But just because someone has decided to move to a new house doesn’t mean that they want to leave the neighbourhood, and the mandate from the 2016 vote is to leave the EU.  It didn’t determine what the shape of the Brexit deal should be.

Those backing the People’s Vote campaign include some master media spinners and PR men. We now see a steady stream of selective polling and information being put out: Labour will fall behind the Liberal Democrats if they work with the Government on Brexit, it is claimed; Scottish Conservatives are apparently ready to back a second referendum; misinformation about the Norway option was provided in a document which Adrian Yalland has now pulled apart; Oliver Letwin and I are working on a second referendum plan, and that the Prime Minister’s Chief of Staff is also working on a way to deliver one. All of these tactics are designed to bounce people into backing a second referendum.

At my supermarket surgery on Friday, constituents who were on both sides of the Brexit debate agreed that, if a second referendum is held, they will never vote again – in their view, what would be the point if they could never be confident that a majority vote would be implemented?

We live in a representative democracy which was long fought for. Indeed, it is only a hundred years since 50 per cent of the population were allowed to become MPs. As we’ve found out over the past two years, referendums cut across our representative democracy in a way which is deeply undermining. I have been told too often about the “will of the people” or “we’re not interested in your view, just do what you’ve been instructed to do”. Such sentiments just don’t fit with how elected representatives should conduct themselves.

This complex national situation, which is not yet a crisis but could become one if a ‘no deal’ Brexit unfolds, requires MPs to do our duty and reach a solution in the Commons, not abdicate our responsibility because we can’t see a way to resolve things.

We need to vote on the Withdrawal Agreement soon – much sooner than 14th January – and, if the vote is lost for the Government, then we will need a cross party group of MPs to work together to reach a solution, which will be likely to be based on the Norway option, under which the UK would cease to be a member of the EU but we would avoid crashing our economy.

I sincerely hope that Cabinet ministers realise that such a solution is possible. In 2016, I saw my Party rushing to identify a party leadership candidate who they thought would be a safe pair of hands and find a way through the demands of Brexit. That isn’t quite the way it has turned out. So, this time, let’s try an alternative approach in which we all accept responsibility for our part in this Brexit saga and for reaching a conclusion which can be supported by a majority of MPs. If Parliament really can’t sort this out then, in the words of a constituent: “what are you all there for?” Good question.

How to get Brexit back on track when the Withdrawal Agreement is rejected by MPs

The current political turmoil and constitutional crisis has so many twists and turns that it makes House of Cards look pedestrian. Of course the real issue comes down to what happens when – rather than if – the proposed deal is voted down on tomorrow, 11th December (or even dropped). Here there is a clear […]

The post How to get Brexit back on track when the Withdrawal Agreement is rejected by MPs appeared first on BrexitCentral.

The current political turmoil and constitutional crisis has so many twists and turns that it makes House of Cards look pedestrian.

Of course the real issue comes down to what happens when – rather than if – the proposed deal is voted down on tomorrow, 11th December (or even dropped).

Here there is a clear gap opening up between media reports and hard legal reality – what the actual effects are of the political manoeuvring of Dominic Grieve, Sir Keir Starmer and their merry conniving bands. There have been desperate media reports that ‘no deal’ is off the table, when it is actually remains the ‘default position’ as Andrea Leadsom told Radio 4 just last week.

Let’s assume Conservative MPs think there is enough turkey on Christmas menus not to be part of the required two-thirds majority needed to vote for a General Election, and that the EU have indeed ruled out any major renegotiation.

The bottom line is that the various options being desperately pushed by those who want ‘anything but a true Brexit’ are just not viable. There is:

  • ‘Norway Plus’ – even worse that the slavish EEA, which adds back membership of the customs union, thereby killing all future UK trade deals, and with no control of immigration, no say over EU laws, and large payments;
  • A ‘Second Referendum’ – with its totally confused offer: ‘tell us if this final 2,000-page deal is better than staying in the EU when we’ve already left. Oh, and by the way you will have to join the euro and lose the rebate’. Pointless too in that Leave is predicted to win again; or 
  • Extending Article 50 to allow more muddle time – which will either mess up the EU by landing the Brexit issue right in the middle of European Parliament elections in May or mess up all the groups, chairmanships and procedures of the European Parliament in the farcical situation of British MEPs being elected for a few months.

But all such amendments to the motion are not legally binding anyway – they can only be advisory. They might bring political pressure, but they do not have legal effect. As the Commons Chief Clerk, Sir David Natzler, confirmed: whatever MPs vote on by way of motion “has no statutory significance”, as they do not constitute “a vote on whether to accept or reject no deal.” That requires new legislation. The actual law – in the EU Withdrawal Act – states clearly that we will leave on 29th March 2019.

Given that reality, and bearing in mind how rash it is to try to indicate a way forward in this maelstrom, this is what I propose now as the best next steps:

1) Assuming the vote fails on 11th December, or is put off, I believe the Government should make a statement immediately saying that preparations for a ‘no deal’ option – better called a ‘Clean Global Brexit’ or ‘World Trade Deal’ – will go into SuperDrive. Sorry, but defer Christmas!

Where there’s a will, there’s a way: in the Falklands War, the Ministry of Defence managed to put together a task force of 100 ships in just 48 hours. We can manage this process, and thousands of civil servants have been on the case for years. Like the Millennium Bug, claims of Armageddon and planes falling out the sky gave way to nothing happening on 1st January 2000.

2) The UK should then go back to Brussels, not to renegotiate this current draft Withdrawal Agreement, but to agree a pared-down, bare bones emergency series of bilateral agreements covering only the essential ‘must haves’: aviation, customs, citizens’ rights, medical products, European Investment Bank assets etc. The beauty of this is that if one agreement falls, then the others are not lost. The DUP’s Arlene Foster has proposed bilaterals. These bilaterals could be agreed by Westminster and the EU by March, and would any sane MP or MEP dare to seek to derail any such vital preparation in these circumstances? They should hold all further Westminster business, such as the Immigration and Trade bills, that may be hijacked.

3) The UK should also formally advise the EU that it wishes to accept the offer made not once but three times by the EU: that of a SuperCanada/CETA+++ Free Trade Agreement with 100% tariff- and quota-free access to the EU Single Market plus comprehensive services (first offered by Donald Tusk on 7th March), and which we could start negotiating from the day we become a ‘third country’ – 30th March next year.

We can build on the three pages on trade in the more appealing draft Political Declaration, but drop all notion of a ‘Single Customs Territory’ – the UK must firmly leave the EU’s Customs Union and Single Market. We are in a unique position to negotiate an FTA fast – as all our laws are convergent at present and we don’t have to spend years wrangling over which tariffs to keep or get rid of, as others do.

4) Having initiated moves to agree a SuperCanada FTA, the UK and EU can now jointly notify the World Trade Organisation (WTO) that in the light of working to agree a comprehensive FTA and future Political Declaration, we are invoking Article 24 of GATT (the General Agreement on Tariffs and Trade).

This is important because Article 24 allows us to maintain the same tariff-free access to both our markets without breaching WTO discriminatory Most Favoured Nation (MFN) laws. Article 24 allows “an interim agreement leading to a formation of a free trade area” and allows “a reasonable length of time” – up to 10 years – to negotiate it.

So, we whilst we will need customs declarations under WTO, we will be able to maintain the same zero tariffs as now with the EU – the free trade area will remain. EU exporters to the UK would save £13 billion in tariffs (and our consumers too) and UK exporters £5 billion. We will also be free to lower tariffs for other trading partners as we wish – something specifically excluded in the Backstop. Nor should there be any Non-Tariff Barriers (NTBs) either under WTO agreements.

We can also enact the WTO’s Trade Facilitation Agreement which recently came into force that obliges the EU27 to adopt measures like authorised economic operators (trusted traders), which are part of the solution for the Northern Ireland border issue along with electronic declarations and remote checks away from the border.

5) As a sign of Britain’s free trade intent, we can now immediately initiate full and unfettered negotiations with international trade partners such as the USA, China and India, without these deals being torpedoed by being tied into the EU Customs Union, Chequers or the Backstop. The picture would be clear at last, and not be delayed by unending years of transition. Similarly, we will seek to build on current work to ‘roll over’ the benefits and obligations of existing EU trade deals such as that with South Korea.

6) So, on 30th March the UK can be cleanly out of the European Union and back into the world, with an acceptable and managed World Trade Deal option in place, free of years more wrangling over transitional arrangements, cost demands, alternative models and heightened business uncertainty – and with negotiations underway for a closer SuperCanada trade deal. We can reallocate much of the £39 billion payment lost by the EU to compensate UK-based companies legally in terms of R&D, regional aid and transport infrastructure – helping to stimulate our economy.

Like an operation we know needs doing, let us get on with the surgery quickly and speed up the recovery process.

This is indeed a Clean Global Brexit. Brexit could be over in a few months, rather than drag on for years on end.

And, for all our sakes – both Remainer and Brexiteer – let’s just get it done.

The post How to get Brexit back on track when the Withdrawal Agreement is rejected by MPs appeared first on BrexitCentral.

‘No deal’ merely means trading with the EU on WTO terms – and trade on WTO terms is the norm

The alternative to Theresa May’s deal is not no Brexit, but no deal. Britain could leave the EU on 29th March 2019 without a deal and trade with EU member countries on World Trade Organisation terms. These are the terms on which we trade with non-EU countries already, without falling off any cliff. No deal […]

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The alternative to Theresa May’s deal is not no Brexit, but no deal. Britain could leave the EU on 29th March 2019 without a deal and trade with EU member countries on World Trade Organisation terms. These are the terms on which we trade with non-EU countries already, without falling off any cliff. No deal is Brexit. Her deal is no Brexit.

‘No deal’ merely means trading on WTO terms. Trade on WTO terms is the norm. 90 per cent of world trade is done on WTO terms. 60 per cent and rising of our trade with other countries is done on WTO terms. Our exports to the countries we trade with on WTO terms have grown three times as fast as our exports to the EU’s Single Market. Our businesses trading with the USA trade on WTO terms and we run a trade surplus with the USA. Our businesses trading with the EU trade on its Single Market terms and we run a trade deficit with the EU. WTO rules give us full access to the EU’s Single Market. Access does not require membership. It would be illegal for the EU to restrict our access to the Single Market.

No deal is far better than the alternatives, like Canada Plus, the Norway option etc. With no deal, there is no punishing transition period and no £39 billion given away and Brexit would come two years earlier. The average tariff British exporters would pay is 4 per cent. But applying EU tariffs to our imports from EU countries would yield possibly £13 billion, which we could use to compensate any firm losing out.

The French authorities in Calais have no intention of imposing a go-slow on British vehicles, rightly calling it ‘economic suicide’. Deliberate delays would breach three treaties – the WTO treaty, the Trade Facilitation Agreement and the Lisbon Treaty, which requires the EU to behave in a neighbourly way towards adjacent states. Do pro-EU enthusiasts really think the EU would use illegal bullying to punish us? If so, how can they urge us to re-join this body?

The Government, pro-EU MPs and peers, the stock markets, most business leaders and much of the media have been waging an incessant and hugely costly campaign informing us that leaving with no deal will be a disaster. Typically, Good Morning Britain presenter Piers Morgan casually referred to the “financial Armageddon of no deal” just last week (27th November).

We all remember the non-existent Weapons of Mass Destruction in Iraq that the Blair Government and much of the media warned us about. The same people now warn us about the mass economic destruction that awaits us on 29th March 2019.

Robert Azevedo, the WTO’s Director General, said after our vote that Britain’s leaving the EU will be ‘relatively straightforward’ and ‘smooth’:

“The UK is a member of the WTO today, it will continue to be a member tomorrow. There will be no discontinuity in membership… Trade will not stop, it will continue, and members negotiate the legal basis under which that trade is going to happen. But it doesn’t mean that we’ll have a vacuum or a ‘disruption’ in terms of trade flows or anything of the kind.”

We demand the Brexit we voted for: Leave on 29th March, keep the country united, keep our £39 billion the EU wants and trade with its members on WTO terms, as we and others trade with the rest of the world.

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Corbyn: I will prevent no-deal Brexit, ax backstop

UK opposition leader makes bold promises to a conference of European socialists.

LISBON — Labour leader Jeremy Corbyn said Friday he would ensure “there is no situation where we crash out with no deal” amid an escalating Brexit-fueled political crisis in Britain.

Corbyn, speaking at the congress of the Party of European Socialists, promised to renegotiate the Irish border backstop arrangement with the EU if given the chance.

He warned that Prime Minister Theresa May is now “reduced to threatening economic chaos” in the face of certain defeat in a House of Commons’ vote set for December 11, describing the coming week as “constitutionally unprecedented” to reporters in Lisbon.

Asked if he could guarantee there would be no Irish backstop in a Labour-negotiated Brexit deal, Corbyn told Euronews “there certainly wouldn’t be a backstop from which you can’t escape.”

May told the BBC Thursday it would be impossible to seal a Brexit deal without a backstop, a view the EU has consistently repeated since the backstop was negotiated as an insurance policy for Ireland in December 2017.

“The backstop is an integral part of the Withdrawal Agreement but the backstop would be an integral part of any Withdrawal Agreement and of any deal negotiated with the European Union,” May said.

Corbyn said that he would instead seek to agree a tailored customs union that “does give us the opportunity to have a say in it all.”

The EU regards that position as an example of “cherry-picking,” which it insists is not possible when it comes to the EU’s single market and freedom of movement of workers within the single market.

Corbyn told the socialist congress that May’s Brexit deal is doomed because “it’s a bad deal that will make most Britons worse off,” adding that “the prime minister has signed up to an agreement that has united all of the opposition parties.”

However, Corbyn declined to commit to submitting a vote of no confidence in the prime minister if MPs reject the deal.

Corbyn gave some of his strongest pro-EU statements to reporters outside the congress hall: “I campaigned to remain. I voted to remain,” he said.


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