Tuesday 4 February 2020

Johnson's 'newly forged United Kingdom is on the slipway'

The EU published their draft negotiating guidelines yesterday and Brexit Johnson gave a speech at the Old Royal Naval College in Greenwich, billed as setting out the UK's position. The difference between the two was stunning. The EU's document was a tight 33-page affair, very detailed and professional with all the possible areas for discussion covered.  Johnson's was a vacuous rambling effort containing enough hot air to power an entire balloon festival but saying nothing of value. It was pure bloviation.

Could there be a better example of how differently each side approach the task?  I am 99% certain the PM wrote his own speech because it reads like a cross between a cheap Hornblower novel and a music hall script for Leonard Sachs written by Edward Lear. It summed up better than anything the contrast between Britain and the EU. They are serious minded and clinical, we on the other hand are just 'aving a larf.  When Brexit goes wrong our PM will shrug his shoulders, look around as if seeking an emergency exit as he usually does in awkward situations and treat us all to his stupid OE grin.

He is winging it, using bluster and rhetoric to mask the absence of any sort of detailed strategy, swaggering like an England football fan just before we get beaten by Monaco or Iceland.  Beside Johnson, Donald Trump begins to look almost grown up.

The Chief Secretary to The treasury, 'rising star' (God help us) Rishi Sunak even claimed the UK doesn't 'need' a trade deal because we've got 'other options' - although he didn't say what they were.

To give you a flavour of each sides work, here is a bit of Johnson's disjointed, incoherent and circumlocutory peroration:

"And above and around us you can see the anchors, cables, rudders, sails, oars, ensigns, powder barrels, sextants, the compasses and the grappling irons.

"In fact the only important bit of kit that is missing is Harrison’s sea clock – also exhibited close-by here in Greenwich and also commissioned in the same era, that allowed every ship in the world to determine how far they were from this Meridian.

So this is it. This is the newly forged United Kingdom on the slipway: this is the moment when it all took off.

"And - you know where this is going - today if we get it right, if we have the courage to follow the instincts and the instructions of the British people, this can be another such moment on the launching pad."

Newly forged?  Did something happen last week that I didn't notice? Echoing Sunak, the PM who I am beginning to suspect is abusing some illicit substances, then went on to say:

"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."

It's not clear if he even knew what he was talking about because he was peppered with questions about it afterwards. Sky's Beth Rigby tweeted:
And the BBC's Laura Kuenssberg:
And listen to this from the great wise-cracking delusionist:

"We do extraordinary things as I never tire of telling you. Tea to China, cake to France, TV aerials to South Korea and so on. Boomerangs to Australia - Nigel Farage to America. Then he came back of course.

"But this is the moment for us to think of our past and go up a gear again, to recapture the spirit of those seafaring ancestors immortalised above us whose exploits brought not just riches but something even more important than that – and that was a global perspective.

"That is our ambition.

"There lies the port, the vessel puffs her sail…the wind sits in the mast".

I wonder what the EU will make of it? Perhaps some origami?

Now compare the EU's sharply coherent, all-embracing effort, free of the flowery twaddle that is Johnson's speciality:

1. BASIS FOR COOPERATION

A. Core values and rights

11. The envisaged partnership should be based on shared values and commitments, which should be expressed in the five binding political clauses (which underpin all comprehensive relationships between the Union and third countries) regarding: human rights, democracy and rule of law; non-proliferation of weapons of mass destruction; the fight against terrorism; prosecution of those accused of the most serious crimes of concern to the international community; small arms and light weapons. The respect for and safeguarding of human rights and fundamental freedoms, democratic principles, the rule of law and support for non-proliferation should constitute essential elements for the cooperation envisaged in the partnership. The fight against climate change, as elaborated in the UNFCCC process and in particular in the Paris Agreement should also constitute an essential element of the envisaged partnership. The envisaged partnership should reaffirm the Parties’ commitment to promoting effective and rule-based multilateralism.

What a tragedy at this crucial hour we are led by men like Brexit Johnson. Incapable, self-serving, cheats and liars with no idea what they want beyond a lot of neuralgic (yes I know) stuff about how we invented a clock 300 years ago.  However good a clock-maker John Harrison was a giant mechanical chronometer isn't going to serve us at all in the digital age - for heaven's sake! We are totally different people in totally different times.

I have skim read the EU's guidlines and as far as I can see they set out carefully in writing what their negotiators will be trying to achieve. The scope is absolutely frightening. There is zero chance of covering it all in the next eleven months.  One thing leapt out at me and this is in paragraph 69:

As third country operators, United Kingdom road haulage operators should not be granted the same rights and benefits as those enjoyed by Union road haulage operators in respect of road freight transport operations from one Union Member State to another (“grand cabotage”) and road freight transport operations within the territory of one Union Member State (“cabotage”).

I mention this because I happen to know, through a friend, that the owner of a local transport company with trucks which regularly travel onto the continent, voted to leave. Now it appears they will lose cabotage rights which means they will be unable to pick-up loads inside the EU and deliver them to another Member State or indeed within the same MS.  I think the RHA might be a bit concerned about that.

Brexit Johnson made quite a bit of UK standards being higher that the EU's and said he would not lead a "cut throat race to the bottom" which is at at odds with his wish to diverge or even to leave the EU, since we can and always have been able to apply higher standards if we wish. We are diverging because we are diverging. Like Brexit itself, there is no discernible reason for it.

Sky News report the UK and the EU are on a collision course over trade but this is true only in the sense of the Titanic meeting the iceberg. Ignore Johnson, the EU's guidelines will still look pretty good afterwards - as the iceberg did in 1912. They are not going to bend. We are.

Nissan

I would also like to touch on the Nissan story which hit the headlines yesterday with the suggestion after a hard Brexit they would pull out of Europe and invest MORE in Britain to focus on expanding its share of the UK market. Notwithstanding that the company has denied the story is true, I was interested in it because I had an email exchange with Sunday Times columnist Dominic Lawson about this very thing in March 2016. Here is my argument:

We have an insatiable appetite for foreign goods.   To pay for our imports we need to export.  We already rely excessively on foreign businesses to make the goods we export.  Being outside the EU we will be a less attractive place to invest.  Over time, some manufacturers may reduce output to the level of domestic demand only.  Others may relocate into the single market. This will have a double effect of reducing our exports and increasing our imports as well as unemployment.

If this happens I cannot see what would attract any British (or indeed other foreign) business to build new plants from which goods can be exported if we are on the periphery of the largest single market but not actually in it.  I may be overstating the risk but I don’t believe we can conclude there isn't one.   At least inside the EU we will continue to be an attractive base from which to sell goods into Europe.

Lawson wasn't impressed. He replied:

"Perhaps what this actually suggests is that we have made a big error by concentrating on the EU for our foreign trade-- an EU which is actually not a free trade area but a customs zone. (which means that we can't negotiate other free trade deals with the rest of the world for ourselves), A tiny example: what would a free trade agreement with India mean for our whisky distilleries? Currently they face a 150 per cent tariff and our whisky has barely a one per cent share of that market. Imagine the prospects for growth there--dwarfs any future they have for increasing sales in the EU"

On the surface it might make sense for Nissan to concentrate on the UK and there is a lot of speculation about it on both sides of the Brexit divide. The difficulties are on several levels. First, Nissan would have to raise its UK market share from 4% to 20% - quite a task in any event but to do that quickly is impossible. Jobs in Sunderland would go while they tried to raise sales to meet the plant's capacity.

Don't forget, Ford, the current market leader only has about 10% and there are 30+ competing brands so in anybody's language it's not easy.

Second, Brexiteers assume Nissan would just displace imported EU27 cars like Mercedes, BMW, Audi, Volkswagen, Renault and so on.  Quite a leap of faith. In truth it would impact JLR, Toyota at Derby and the BMW mini plant equally badly.

Thirdly, about half the value of Nissan cars is in imported parts from Europe. Trying to reach and to keep a 20% market while somebody is applying a tourniquet to your supply chain would add to the problem.

Fourth, why would Nissan give up on a 450 million consumer market to concentrate on a 65 million market? It would not make any sense.

Above all, we would lose all those Nissan exports to Europe and my guess is that while imports would probably be reduced, it would be by a much lower figure. The British do like quality German cars and I can't see a Mercedes or BMW owner switching to a Nissan Juke or Qasqui. At the end we would still be the losers and undergo a massive upheaval in the meantime as jobs transfer from one area of the country to another. 

This should not be entirely surprising since all modelling of Brexit shows domestic UK production would increase after Brexit.  But, unless we were competitive (and if we were why were UK customers importing?) this would simply be import substitution which will add to our costs. It is not a  'benefit' of Brexit, it's the cost of it..

None of this stopped Brexiteers like former UKIP MEP Roger Helmer gloating about it:
Faisal Islam explains the truth:

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