Wednesday 12 February 2020

Does the government know what it's doing?

Occasionally, I find odd snippets of fascinating detail on Brexit emerge from the unlikeliest of people and places. At the top of the Brexit heap are men like Johnson and Gove and Davis and Baker. I'm told they're clever men and they know what they're doing, they'll get us a good deal and so on. But occasionally you note ordinary people, those at the coal face as it were, raise serious problems and you wonder if the government has any idea what it's doing.

A courier tweeted yesterday about the Swiss border with the EU. I know the border post at Ferney Voltaire just outside Geneva airport very well, having used it regularly to cross into France. This has had years and years to bed down, I suspect most companies transporting goods through it have used it countless times previously but they still get a 20% error rate in the documentation.
As this courier points out, you can have as many 24 hour border posts as you like but if a problem emerges where the driver has to contact his or her office or the importer or exporter out of hours to clear up the mistake, the truck can't be cleared and has to be parked overnight.  Even during normal hours it will take time to resolve the simplest of mistakes.

With 10,000 trucks per day on the Dover/Calais route alone, many encountering these customs formalities for the first time, one can imagine the error rate being far higher with all the chaos and potential for food and medicine shortages that that means. I am not convinced anyone has a handle on this at all.  It makes the prospect of introducing checks next January, already impossible, even more unlikely.

Next, George Peretz QC, a man who understands the law, claims that the state aid provisions in the NI protocol actually go much further than is appreciated. He says that under Article 10 and Annex 5, the "full panoply of EU State aid rules (the law; its application by the Commission and ECJ; enforceability in the UK courts) to 'the United Kingdom' in perpetuity."
While Johnson is banging on about not following EU rules, he has apparently already agreed in the Withdrawal Agreement Bill, a ratified treaty, to abide by EU state aid rules forever. I'm really not sure he knows what he has signed up to or if his officials have explained it to him in a way he can understand.  Barnier is reported by The Times saying:

"Mr Barnier suggested that Mr Johnson’s demand to be free to diverge from EU rules was at odds with the deal he signed off last year. He said:'The political declaration which was agreed line for line with Boris Johnson last October will remain the foundation of all negotiations'."

 The EU has our measure I think.

At the moment the whole UK position on Brexit is irrational. We already have identical minimum basic standards throughout the EU. The EU does not prevent us having higher ones. In many areas we take advantage of this and gold plate EU directives. In his Greenwich speech recently Brexit Johnson himself points to better paternity and maternity leave, wider flexible working rights, the banning of veal crates, etc, to show that this is so here in the UK. And he proclaimed:

"We are not leaving the EU to undermine European standards, we will not engage in any kind of dumping whether commercial, or social, or environmental, and don’t just listen to what I say or what we say, look at what we do."

So, essentially our position seems to be this: Brexit Johnson says we aren't about to lower standards. Chris Giles of the FT told us recently that the government does not necessarily want to diverge, it just wants the right to do so later. Since the government has ruled out lowering standards it must mean achieving the same minimum standard (or a higher one which makes the minimum meaningless anyway) but by different rules.

Hence the conclusion is we are putting ourselves through all this massive upheaval in order to have the right to potentially alter, at some notional future date, the means by which a particular standard is achieved. It doesn't take much imagination to see that sitting down with EU negotiators is going to be difficult. How do you explain what the divergence is doing for us?  Why are we doing it? I would find it very hard to argue the case. It all sounds so completely nebulous. What do you say, seventeen million people voted for it?

The talks are going to be a bit strained anyway.  As we know they will be the first trade talks in history specifically intended to raise barriers to trade. And the first to be conducted against the clock. More than that, when the clock ticks down we don't return to the status quo as you might expect, instead we drop into a legal and commercial void.  But now yet another unique angle arises.

These will also be the first trade talks to begin with both sides openly threatening to walk away before they reach the table.  In Greenwich, Brexit Johnson said, "But in the very unlikely event that we do not succeed, then our trade will have to be based on our existing Withdrawal Agreement with the EU". For all his reassurances that it will be like Australia's relationship with the EU, this is no deal spoken softly.  Yesterday Ursula von der Leyen, addressing the EU parliament, upped the ante:

"Australia, without any doubt, is a strong and a like-minded partner, but the European Union does not have a trade agreement with Australia. We are currently trading on WTO terms and if this is the British choice, well, we are fine with that, without any question," she said.

In other words, don't threaten us. You will come off worse.

Gove's announcement yesterday that we will be shooting ourselves in both feet and applying the full range of border checks made explicit that, whatever lingering hopes industry might have had, the prospect of frictionless trade is now gone. Both Gove and the Chancellor have told industry they have eleven months to prepare, however unrealistic that is, they need to be 'ready'.  What does that mean? For some like the digital bank N26, it means leaving the UK.

Business groups are very unhappy:

"Some of Britain's biggest business groups are urging Boris Johnson to abandon his policy of threatening to walk away from the European Union without a trade deal, warning that it would unleash economic chaos costing billions of pounds."

"Dominic Goudie, the Food and Drink Federation's Head of International Trade, said 'calling it an Australia approach is fairly meaningless,' as such an arrangement 'would have very little of substance that would do anything to help food and drink businesses'."

 I wonder what is happening in hundreds of boardrooms across the country as the sheer import of what Gove said on Monday sinks in?  Does this government really know what it's doing? I don't think they do.
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