Tuesday 17 December 2019

Johnson doubles down on pledge not to extend the transition period and dark clouds over the economy

It's being reported this morning that Johnson will add a clause to the Withdrawal Agreement Bill to make it illegal for MPs to extend the transition period beyond the end of next year. This pledge was already in the manifesto and the law can easily be changed anyway, as it was for the extension period we are in now, so it's just gesture politics isn't it?  Or is it?  Sam Lowe of the Centre for European Reform was on the Today programme this morning with a possible explanation.

He thinks the proposed change is for the domestic audience and MPs only.  When the next deadline is racing up and the cliff edge of another no-deal Brexit approaches he will use it as an excuse to make concessions on level playing field (LPF) issues, non-regression clauses and future dynamic alignment. 

If Johnson isn't aware of the potential damage to the UK economy of a no deal Brexit or the sheer futility of trying to bounce the EU into anything, his advisers will be. Any self-imposed hard time limit is only going to reduce our own room for manoeuvre. It is breaking the bats of your two openers as they start their innings, to use an old Geoffrey Howe analogy.

We are all going to pay a high price for Johnson's impatience to 'get Brexit done'. He is like a podgy fingered brain surgeon rushing a particularly difficult job so he can look good and swan off to play golf afterwards, regardless of the long-term consequences for the patient.

I have been saying for some time that Britain's fishermen should be concerned that they are about to be betrayed sometime in the next few months. All this talk about the UK becoming an independent coastal state' is rubbish as this article in an Irish magazine makes clear. I don't see reports in the British media of the EU Fish Council assembling in Brussels this week to set annual quotas, but the Irish representative Michael Creed has made it clear the EU expect Britain to negotiate away reciprocal access to British Coastal waters.

"Minister for Agriculture, Food and the Marine Michael Creed has laid down a clear marker that this will not be tolerated, warning that the issue of fisheries is central to agreeing a trade deal between the EU and Britain.

" 'What we will be saying is ‘you want your financial passporting into the European Union from the City of London and elsewhere, you want open skies and we want access to your waters', Mr Creed said in an interview with The Sunday Business Post."

In the report, he poured cold water on Michael Gove's claim that "somehow access to our waters and access to the EU’s markets will be mixed up - absolutely not...”. Only a fool could think they are not linked or that the EU are not going to apply maximum leverage - but then Mr Gove and Boris Johnson are fools.

We were unhappy with the Common Fisheries Policy but I note we were also unhappy in 1963 with the previous North Sea Fisheries Convention of 1888. We repudiated this agreement and got all the original contracting parties to renegotiate something called the London Fisheries Convention which was subsequently replaced by the CFP.  One cannot help but note it is always the UK who are unhappy for one reason or another. I assume the new deal (assuming one is reached) will be a cause of dissatisfaction in another 25 years or so when we can't make that work either.

Yesterday I wrote a post about the economy using articles from the Sunday Times' economics editor David Smith. No sooner was the post published than we get news of the UK's worst manufacturing output figures for seven years and The Guardian report the OBR's warning that government borrowing was on course to be about £20bn higher than previously expected in each year to 2023-24, "dramatically cutting the government’s room for manoeuvre after Boris Johnson’s election victory."

Bloomberg also report it HERE. Some of the increased borrowing is due to student loans being treated differently in the public accounts, but the £20 billion extra borrowing does not include any of the extra spending commitments made in the Tory manifesto. Over to you Sajid Javid.  See if you can get the economy up to speed while Johnson steps hard on the brake pedal.

Those who will seek to blame global conditions on the fact we are in the doldrums might, before they comment, have a look at this report about solid Irish growth of 2.9% (annualised) in the third quarter following figures of 3.7% and 3.2% in the first two quarters respectively.  At this rate the Irish economy will soon overtake ours.

I am grateful to someone who, in reply to me posting this on Facebook, said 3% growth was actually low by Irish standards and their debt to GDP fell to 63% from 120% in 2013. Exporting of all those financial sector jobs from London to Dublin was clearly very generous of us. I am sure Leo Varadkar is grateful.

So, let us keep our eye on the economy as well as the Irish sea border and the betrayal of the fishermen in 2020.  These are all looming problems for Johnson.