The government is certainly going for a unique relationship with the EU, not so much a Free Trade agreement as the Most Expensive one, a META perhaps. At a Border Delivery Group stakeholder event yesterday Michael Gove confirmed that as of January 1st next year the full range of checks and barriers would be in place for trade with the EU, imports as well as exports. What Margaret Thatcher would have made of it I do not know. Whatever you thought about her, she understood and supported the single market, something she was more than instrumental in bringing about. We are about to introduce masses of bureaucracy and red tape where there was none before. It as insanity.
Some of the things he said seem unbelievable and undeliverable to me. Not for the first time he found himself at odds with, well....himself. Let's look back to what he was saying in March 2016, before the referendum:
Michael Gove (March 2016): "We know that the European Union depends more on us than we do on it. The idea that when we have a free trade area extending from Iceland to the Russian border, that we're going to be outside it is nonsense." #GoveLies pic.twitter.com/uvus5UIIiV— Property Spotter (@PropertySpot) March 26, 2019
To suggest we would not be part of the free trade area stretching from Iceland to Russia was nonsense, said Gove - in 2016. Of course, that was then, when a fearless campaigner to leave, someone on the management board of Vote Leave, was licensed to say anything and promise everything without any possibility of challenge. Business had a bucket of ice cold water thrown over it yesterday when the now Chancellor of the Duchy of Lancaster made his speech and answered questions. Later an official statement was released presumably in case the audience thought he'd been at the white powder again.
According to The Independent:
He told the event: “The UK will be outside the single market and outside the customs union, so we will have to be ready for the customs procedures and regulatory checks that will inevitably follow.
“As a result of that we will be in a stronger position, not just to make sure that our economy succeeds outside the European Union but that we are in a position to take advantage of new trading relationships with the rest of the world,” he claimed.
Four years after his reassuring claim that we would be part of the Iceland to Russia free trade area, not only is it not 'nonsense' it's become mainstream thinking and official government policy which Gove is solidly behind. Amazing, eh? A complete volte face - just like that. But that isn't actually the most amazing thing, no. Not at all. Gove told his audience yesterday that because we will be outside it "we will be in a stronger position"! What on earth was was he thinking in 2016?
"According to attendees, Gove was also adamant that the government would stick to its vow to no longer follow EU rules that would allow it to minimise future barriers in cross-border trade.
" 'The only way in which you could avoid those customs procedures and regulatory checks would be if you were to align with EU law and if you were to align with EU law we would be undermining the basis on which the prime minister secured the mandate at the general election to affirm our departure' Gove said in comments that were recorded."
The government actually think they got a mandate from the British people at the election in December to implement what is likely to be a massively damaging Brexit.
Not reported but included in the official statement was a warning that the "policy easements put in place for a potential no-deal exit will not be reintroduced as businesses have time to prepare". This was the government's stated intention to waive through all imports from the EU and defer payments of VAT in the event of a no-deal Brexit. At the time many people pointed to the WTO's Most Favoured Nation rules which seemed to mean we would have to throw open our points of entry to anything from anywhere check and tariff free. Obviously, reality has kicked in. We can't do that.
The VAT question is likely to cause a few problems since VAT, previously not paid until much later, will now be due at the time of import. This has huge implications for cash flow. Jill Rutter from the Institute for Government, as reported in The Guardian, tweeted:
Business is sceptical this morning that what Gove said can actually be delivered despite the official statement that businesses have "time to prepare". And rightly so, for two reasons. First of all, I am not sure businesses do have time to prepare. For what? We don't actually know what might be agreed and we won't know for months. But even if business did have time, the government does not.This will at a stroke remove any benefits from any business trading with the EU of @sajidjavid red tape challenge.. this is a massive increase in red tape... https://t.co/xc704Ql5Iu— Jill Rutter (@jillongovt) February 10, 2020
Where are all the border facilities, systems and personnel going to come from? I don't see any planning applications going in or adverts for the hundreds of Border Force personnel or veterinary surgeons needed to check and certify foodstuffs. Which ports will have BIP (Border Inspection Posts)? We don't even know that.
There is zero chance of everything being in place next January. This is the only certainty.
And the second reason for yesterday's bombshell is that talks with the EU, US, Australian and other countries are about to get started. We need something to negotiate away. Gove's speech was not dissimilar to DFS sticking a big price tag on a three piece suite only to be able to offer a big discount later.
Like much of Brexit, it is more smoke and mirrors.
