Monday 21 October 2019

Brexit: another momentous week ahead and the shape of things to come

If last week was momentous, the coming one looks even more so.  Parliament will take centre stage.  The government is to try and table another 'meaningful vote' with many now wondering if Bercow could block it on the grounds it's bringing the same motion to the House twice. If he does, the government is apparently planning to bring the main implementing Withdrawal Agreement Bill (WAB) forward. This, as far as I know, has not been published and was once described as 'dynamite' by people who looked at it in May. I assume the latest 100+ page bill is different but nonetheless the idea that it will pass quickly through parliament seems highly unlikely.

Labour have already said they would table amendments on a 2nd referendum and a customs union and these will need to be debated. Bercow will I am sure give back benchers plenty of opportunities for delay. I shall be glued to BBC Parliament most of the week I think.

There are several accounts coming out about how Johnson's deal was made if you're interested, although it's really academic now because it looks like it will eventually form the basis of any deal that is finally signed even if it's amended slightly as it's forced through parliament at gun point. A complex, expensive, reluctant and potentially unworkable solution to a problem we never had before Brexit.  It is a poor tourniquet, sold as the answer to the self-inflicted bullet wound in our own foot.

This thread beginning with this tweet from Peter Foster of The Telegraph explains it:
If we don't get a second vote, I think we might begin to look ahead slightly. Tim Shipman, political editor at The Sunday Times, had a report yesterday which, if true, should be extremely worrying for business.  Shipman has close connections in No 10 and I assume he is providing an accurate picture of what's really happening behind the scenes. 

He confirms that Michael Gove and Raab have been telling the ERG Spartans that Britain could still leave on WTO terms at the end of the transition period in December 2020 if we failed to negotiate a trade deal.  It's hard to know if Gove is being serious or not. Is he dangling a bit of red meat in front of an extreme faction that he never intends to deliver, or does he really want a no deal Brexit? He has already triggered the yellowhammer no-deal plans as if he intends to leave on October 31st - come what may.

Readers of this blog will know I have never thought we would or could leave with no deal. It's a scenario that no politician could opt for and survive more than a couple of weeks. However, I read that:

"On Friday afternoon the prime minister’s office resounded to the sound of shouting. Johnson was under fire from Mark Francois, the pocket-sized pugilist who is the ERG vice-chairman. Francois was demanding that in exchange for backing the deal Johnson scrap the Brexit transition phase in the withdrawal bill."

" 'Francois’s ask was to remove the entire transition period from the Wab,' one senior Tory said. 'He had a meeting where he shouted at the PM and demanded he concede it. Whitehall advice is clear that this would negate ratification entirely and certainly cause a no-deal exit on November 1 if the government proceeded with it.' Another source said: 'He was at peak maximum Mark'."

Is this why Johnson so easily conceded everything last week to get a deal signed?  A deal that he has no real intention of keeping to? Our shallow and unpredictable PM has already said he will not request an extension to the transition period as though he has set December 31st 2020 as our "independence day" in his own mind.

All this will lead many to conclude we have another 12 months of uncertainty and another cliff edge coming up.

Shipman writes:

"At issue in these exchanges was a lack of trust in Johnson’s motives and intentions by MPs on both sides of the divide, alongside confusion about whether he had planned to get a deal when he became prime minister on July 24."

Mrs May was often accused of being a blank page because she never revealed her own thinking until her mind was made up. Perhaps this also owed something to her upbringing as a clergyman's daughter: she is simply unable to tell a lie. Thus, no one trusted her. Johnson is distrusted for the opposite reason. His incontinent mendacity means you can assume everything he says is a lie, because he is simply unable to tell the truth.

One might go further and say he is a cut above the ordinary liar since he doesn't know the difference between a porky and the truth anyway. It's all the same to him.

But we are coming to the end of the sparring and the real fight will soon begin. Once out of the EU (assuming we do actually leave) we will be a third country with all that that involves, following EU rules but with no influence over them.

We have until December 2020 to conclude a free trade deal with Johnson saying he will not extend the transition.  Any decision on extending must be taken in July next year. Johnson will be under pressure to use the same high risk tactics to force MPs, industry groups and the EU to rush through a trade deal. Nobody seriously expects a FTA to be agreed by December next year. Business will not appreciate more uncertainty and white knuckle rides. We should make the most of this.

One of the most iconic groups likely to be impacted more than most will be the fishing industry. The Political Declaration calls (paragraph 74) for the UK and EU to "use their best endeavours to conclude and ratify their new fisheries agreement by 1 July 2020 in order for it to be in place in time to be used for determining fishing opportunities for the first year after the transition period."  This is fraught with problems for the government.  Fishing employs about 10,000 people and contributed about £980 million to the UK economy in 2017 (64% in Scotland, 28% in England).

John Ashworth, described as an expert on the fishing business wrote a piece the other day about how he fears they will be sold down the river again.

Paragraph 73 of the new PD says:

"Within the context of the overall economic partnership the Parties should establish a new fisheries agreement on, inter alia, access to waters and quota shares."

Mr Ashworth also points to an EU document circulated in November 2018 which says explicitly:

"On the basis of its successive guidelines of 29 April 2017, 15 December 2017 and 23 March 2018, the European Council will demonstrate particular vigilance as regards safeguarding the rights and interests of citizens, the necessity to maintain ambitious level playing field conditions and to protect fishing enterprises and coastal communities."

"As recalled in the Withdrawal Agreement, a fisheries agreement is a matter of priority, and should build on, inter alia, existing reciprocal access and quota shares. Such an agreement should be negotiated well before the end of the transition period."

Note the words "existing reciprocal" were not in May's PD or in Johnson's but they are in the EU guidelines.

So, I think Mr Ashworth is right. They will be sold down the river again. The industry thought Brexit would bring them exclusive access to our own coastal waters. If the EU make it a condition of any future FTA that they have 'reciprocal' access to our waters, as Ashworth think they will, is the government going to put at risk car manufacturing of the financial sector?  I don't think so. These will be painful trade offs and we shouldn't hesitate to point them out as they come along.

Steve Baker, chairman of the ERG, said on Radio 4 this morning that they will support Johnson's meaningful vote (assuming they get the chance) although they have had to "choke down" compromises. After Brexit he will have to "choke down" many more. And not just from the EU, but from the USA and China and India as well, because this is what happens to the smaller partner in trade negotiations.