This past week has sadly brought further damaging rhetoric in the Brexit process and some who ought to be statesmanlike have been anything but.
This is surely a moment for statesmanship and for finding a way through the current impasse. We must calm things down and focus on developing a common sense solution to Brexit and the Irish border question in particular. In this context I welcome the visits of both the Prime Minister and the Taoiseach to Belfast and the meeting between both leaders in Dublin: this is the kind of engagement and leadership that is needed to help find a sensible way forward.
I recognise that the UK and the Irish Republic do not agree on Brexit itself and that many in Ireland feel hurt by the decision of the UK to leave the EU. Nevertheless, it is important we all respect democratic decisions of this nature, even when we don’t agree with them. Undoubtedly, the last two years have seen damage done to the three sets of relationships that formed the core of the Good Friday/Belfast Agreement.
The absence of the political institutions, including the Assembly and the North-South Ministerial Council, has been to the detriment of all of us. Just think how differently we might have handled this very difficult situation if such institutions had been in place to provide a forum within which Belfast and Dublin could engage and take a more considered view on all of this. Instead, the politics of cooperation has been replaced by the old ways of megaphone diplomacy.
However, we are where we are and leaders on both sides of the border have hitherto shown a remarkable capacity to overcome enormous challenges in the peace process to find our way to the common ground. In the remaining weeks leading up to 29th March, we must do so again. Whilst it is London and Brussels who take the lead in negotiations, I believe that Dublin and Belfast can play a constructive role in helping to find the solutions.
We can begin by recognising that we already occupy significant common ground.
We all agree that the need to protect the peace process and the political and institutional arrangements of the Good Friday, St Andrews and Stormont House Agreements is vital.
Secondly, none of us want a hard border on the island of Ireland or the creation of a new border in the Irish Sea. Both the Republic of Ireland and Northern Ireland do a substantial amount of trade with Great Britain as well as with each other. The Common Travel Area ensures the free movement of people across the islands and is accepted by the EU. Now we need to find a sensible solution to ensure a similar approach on the smooth movement of goods. We in the DUP are of the view that a pragmatic approach can deliver an outcome on customs and trade that does not fundamentally undermine the EU single market or the UK single market.
Thirdly, both countries want to avoid a ‘no-deal’ outcome if possible as we recognise this could have significant implications for the short- to medium-term economic stability and prosperity of both parts of the island. Building stability and prosperity goes hand in hand with building peace.
For us, the primary problem with the draft Withdrawal Agreement is the backstop. It is not only the DUP that has concerns about the backstop and our opposition to it has been supported by many from all parties across the House of Commons.
On two occasions now, the House of Commons has voted decisively to reject the backstop in its current form and to call for legally-binding changes to these potentially harmful proposals. Our position on the backstop is also supported by other unionists like Nobel Peace laureate Lord Trimble, who has said that the proposals have the potential to “turn the Belfast Agreement on its head and do serious damage to it.”
Lord Trimble is in the process of taking legal action to challenge the legality of the backstop and his case is supported by leading experts on the Good Friday Agreement such as Professor Lord Bew. For such key architects of the Good Friday Agreement to raise serious concerns about the damaging nature of the proposed backstop must surely encourage the Taoiseach and others to pause and consider other options which are capable of commanding a wider cross-border and cross-community consensus.
If the current impasse between the UK and EU over the backstop results in no-deal then it will further damage relationships between Northern Ireland and the Republic and undermine the prospects for restoring the political institutions. The absence of these institutions over the past two years has seen a re-polarisation of attitudes on both sides in Northern Ireland.
In my opinion, securing a deal on Brexit that is broadly acceptable can only improve the prospects for restoring the institutions. It may suit Sinn Fein to have a chaotic situation, but it surely can’t be in the interests of anyone else. Sinn Fein has tried to exploit the uncertainty over Brexit to raise the border poll issue, hoping to force a referendum in the near term. This is, of course, a party that was fiercely opposed to Ireland’s membership of the EU and sought to vote down each successive European Treaty. Clearly, Sinn Fein is self-serving, and its claim to act in the wider interests of the ‘Irish people, north and south’, is bogus.
The consequences of a no-deal outcome will undoubtedly impact on the economies on both sides of the border, with their heavy dependence on the agri-food sector. InterTrade Ireland commissioned the Economic and Social Research Institute (ESRI), an Irish think-tank, to conduct an analysis of the impact of Brexit on the Irish border. ESRI looked at several different scenarios, including one where trade between Ireland and the UK would be based on WTO rules. The resulting imposition of tariffs and non-tariff barriers in this scenario could result in Irish trade to Great Britain falling by 12%, British trade to Ireland falling by 6%, Irish trade to Northern Ireland falling by 14%, and Northern Irish trade to Ireland falling by 19% – resulting in a total reduction in cross-border trade of 16%.
Agri-food in particular is a sector that has expressed concerns about no-deal. A study of the impact of a no-deal Brexit on the EU’s agri-food industry has claimed that beef and cheese exports from Ireland to the UK could collapse by up to 90% with the loss of over 3,500 jobs. No amount of preparation by any government can nullify the significant economic implications outlined.
Additionally, a further fall in the value of sterling in a no-deal scenario would worsen the outcome for Irish exports to Great Britain and Northern Ireland. In this scenario, Irish trade to Great Britain would fall by 20%, British trade to Ireland would remain broadly similar (at +0.3 %), Irish trade to Northern Ireland would fall 21%, and Northern Irish trade to Ireland would fall 11% – so there would be a total fall in cross-border trade of 17%.
Despite these stark statistics, there are some who seem determined to impose the backstop. Yet the Withdrawal Agreement and backstop in their current form have been roundly rejected in the UK Parliament because they could lock us indefinitely into an arrangement that undermines the economic integrity of the UK. The backstop is designed to prevent a hard border but could ultimately result in no-deal and actually compel the EU to impose a hard border in Ireland.
Having been an MP for over 20 years and in frontline politics since the early 1980s, too many times have I seen politicians become wedded to an idea and intent on implementing it, even when they are aware of the dire consequences. Now is not a time for brinkmanship but for leadership.
I am convinced that there are better solutions than this. Whilst I am not going to be prescriptive in this article about what they may be, I am aware of several ideas, including the ‘Malthouse Compromise’, that are surely worthy of serious consideration. If the political will is there on both sides, I firmly believe we can find a solution.
The people of the United Kingdom voted by a majority to Leave the European Union. Despite this, the leadership of the EU and some in the UK have sought to frustrate the will of the people and to make it as difficult as possible for our country to Leave. The indefinite nature of the backstop would harm the constitutional and economic integrity of the UK.
The EU leaders have asked Parliament to state clearly what we want. That answer is now clear and the EU must address British concerns about the backstop if a no-deal outcome is to be avoided.
If the EU truly want to avoid harm to the peace process and to protect the political arrangements established under the Belfast/Good Friday Agreement, then they need to take account of unionist concerns as well as those of nationalists, otherwise, as Lord Trimble has said, they violate the core principles of the Agreement.
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I read the news with increasing incredulity. After Michel Barnier’s spokesman told us that in the event of no deal there would have to be a hard border (How? 275 manned border posts? Expecting people to accept the blocking off of all but a few crossing points?), Barnier himself was forced to admit: “We will have to find an operational way of carrying out checks and controls without putting back in place a border”.
Later, speaking at an event in Brussels, Barnier’s deputy, Sabine Weyand, said that other options for the Irish border had been extensively discussed, the EU side were agreed that a time-limit to the Irish backstop defeated the purpose of having one and that “there is a very high risk of a crash-out, not by design, but by accident…”
So Barnier and Weyland have acknowledged that the EU’s insistence on including in the Withdrawal Agreement a temporary backstop – that will only be lifted by entering into a permanent trade agreement on the same terms because soft border controls will never be acceptable – will have the consequence that the Agreement will be rejected, leading to soft border controls being applied immediately.
The only possible explanation for such blatant perversion of logic is that the EU (Germany, France, the European Commission) are not interested in pragmatism, fairness or negotiation to mutual advantage but only in the exercise of power (‘winning’) – whether it be over the UK or over its own member states such as Greece, Hungary and Italy – regardless of the adverse consequences to their populace.
Weyand has kindly explained her justification for insisting on the temporary backstop (and presumably similar terms of any trade deal that will supersede it):
“We looked at every border on this earth, and every border the EU has with a third country – there’s simply no way you can do away with checks and controls,” she said (referring presumably to a hard border since checks and controls of some kind are, of course, essential).
This, then, is the EU’s irrefutable justification for saying that soft border controls are impossible: anything that has not been done before is, by definition, impossible. It is precisely this stifling, rigid, rule-driven madness and resistance to innovation that we must escape in order to be able to prosper on the world stage.
Meanwhile, we have to listen to the ludicrous predictions of Armageddon that will arise from “no deal” (i.e. leaving without the Withdrawal Agreement and transition period) Most famously recently we’ve had the Border Force’s prediction of an 87% fall in throughput through Calais (which even the Border Force described as the ‘reasonable worst case’). It’s impossible for us to know how they have arrived at that bizarre conclusion because no-one has seen their report. The story emanates from Sky News which stated that they hadn’t seen any leaked Border Force report but only “a slide from an internal government presentation marked ‘Official-Sensitive’ and titled ‘Freight Traffic Contingency Assumptions’” which purported to be “a recent internal assessment much of which was omitted from public no-deal documentation”.
It is upon that prediction, of an 87% fall in throughput through Calais, that the chief executives of Sainsbury’s, Asda, M&S, Co-Op, Lidl, McDonald’s, KFC and others have based their dire warnings of severe food shortages and higher prices; and now we have Imperial College predicting an additional 12,000 deaths in Britain caused by increases in the cost of fruit and vegetables leading to people being unable to afford to eat enough of them. Quite why the costs of such foods should increase so substantially when we move outside the trade barrier wall erected to protect French farmers isn’t mentioned, let alone explained.
UK food exports to the EU will be damaged by the imposition of the Common External Tariff that the EU imposes on all third counties. Reuters reports that France is hiring an additional 700 customs staff to be ready to deal with imports from the UK in event of a no-deal Brexit because “merchandise coming from Britain could face up to four separate customs procedures under a post-Brexit regime against only one currently. That could translate into an extra two minutes per truck going through border controls, which could potentially lead to long queues gridlock in ports,” according to French minister Gerald Darmanin. However, it’s puzzling to me as to why extra procedures will be required since all EU regulations are to be incorporated into UK law on exit, so nothing will have changed in terms of standards when we leave. And any departures from those standards (probably not imminent) will not be clandestine but by well publicised statute or statutory instrument.
Whether or not UK food exports will be hit by extra customs controls as well as tariffs, there’s an apparently obvious solution in that, if there’s a reduction in the flow of food from EU farmers supported by our CAP contributions, there’ll be more space on our shelves for us to buy and consume home produce. True, that will not be sufficient to help us as consumers because, as the British Retail Consortium tells us, “in March, the situation becomes more acute as UK produce is out of season [so] at that time of year, 90% of lettuces, 80% of tomatoes and 70% of soft fruit sold in the UK is grown in the EU”.
Of course, the potential starvation and deaths to which the food retailers and Imperial College refer relates not to the processing by Calais of imports into the EU from the UK, as discussed above, but to the processing through Calais of EU food exports to the UK and I’m puzzled as to why French customs are interested in produce leaving France and what they might need to do differently post-Brexit. In any event, it would be very surprising indeed if the EU didn’t do its utmost to ensure the continued smooth delivery of agricultural produce to its biggest customer. Where does all this nonsense come from?
But back to the Irish border, and Sabine Weyand’s description of the EU’s stance – captured on film here – is of great assistance and significance. She makes statements that, on the face of it, don’t seem to be capable of being reconciled.
On the one hand she says [at 11:44] that “there are ways out by alternative arrangements” but then a few seconds later [at 12:00] says, referring to the Brady amendment, that “they don’t exist”.
She says [at 10:15] that “technological solutions are not enough to do away with the border” but [at 12:30] opines that during the transition period they will discuss “what additional facilitative measures will be needed on the Irish border in order to do away with a hard border”.
It seems to me that all Theresa May has to do in her negotiations is to draw attention to that last statement and emphasise that that is all that we are asking for – namely that there is no need for the backstop because it is agreed that the border will be policed by soft border controls using such facilitative measures as are deemed necessary.
The Irish say the backstop is essential because they think that, without it, there will need to be a hard border. But there doesn’t need to be – as Michel Barnier has now admitted.
What are the EU afraid of? Soft border controls are in use now at the Irish border – a combination of administrative cooperation, whistle-blowing, auditing and site raids by customs, tax and regulatory enforcement officials, all supplemented by occasional random spot-checks on roads leading up to and cameras at the border.
The thoroughness of such controls is a matter of degree. No border is fool-proof as only a very small proportion of cross-border consignments is ever physically checked, even at hard borders. By the end of the transition period, the Irish border could be controlled by the system of checks by then developed and, if either party considers that more robust controls are required, the nature and timing of such further improvements could be settled by agreement or arbitration. A no-deal scenario would remove that head start, but the same evolution process would apply.
It is only the nature of the goods and produce crossing that border that can be of relevance. Other aspects of the Free Trade Agreement, such as access to fisheries, have no relevance whatsoever to agreeing appropriate controls on movements across for the Irish border.
Currently the UK is in full alignment with EU standards. Any future divergence will require monitoring. If, say, chlorine-washed chicken is permitted in the UK but not in the EU, that fact will be known to and respected by reputable suppliers. If considered necessary, regular supply chains can be monitored at the origin or destination.
Whether the backstop has been invoked is of no relevance to the ability to combat smuggling. Smuggling can be detected and deterred, as at a hard border, only by intelligence and random checks, methods that are already employed at the Irish border, for example, to inhibit VAT evasion.
Rejection of a legally binding agreement that the border will be policed by soft border controls will demonstrate beyond doubt that Parliament was right to reject Mrs May’s Withdrawal Agreement but, furthermore, that even without the backstop, we cannot proceed with negotiations in a situation where the Irish border question remains open – since it will only be closed by a long-term arrangement that replicates the backstop. The only solution is to close the issue now by presenting the EU with a fait accompli on 29th March.
The EU’s position is so ludicrously irrational that it can have only one of two explanations. The first is that they are unbelievably stupid. The alternative is that they regard it as totally impossible that the UK will leave the EU without a deal (and thus the currently offered deal) – but that is despite saying, publicly, that they now see no deal as becoming an increasing possibility.
Since this makes no sense whatsoever, I am confident that, as David Davis told the Exiting the EU Select Committee back in October 2017:
“It’s no secret that the way the union makes its decision tends to be at the 59th minute of the 11th hour of the 11th day and so on, and that is precisely what I would expect to happen… If there is a time limit on a negotiation the union stops the clock, it assumes that it’s still at 11:59 until it is concluded, sometimes over the course of 24, 36, 72 hours thereafter and that’s what I imagine it will be.”
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“If things go very wrong it will look like it looked 20 years ago. It would involve customs posts, it would involve people in uniform and it may involve the need, for example, for cameras, physical infrastructure, possibly a police presence, or an army presence to back it up.”
So said Irish Taoiseach Leo Varadkar on Bloomberg during the recent World Economic Forum in Davos.
Over the past few days, the Irish Government has been scrambling to play down those comments. In fact, our Minister for Foreign Affairs and Deputy Prime Minister, Simon Coveney, attempted to frame these ill-thought words as anecdotal in order to remind people what things were like before the peace process was finalised. But these comments unnecessarily antagonise our neighbours and jeopardise co-operation going forward; there is no explaining them away.
In a time of polarised politics and social upheaval, the leader of my country shouldn’t be making comments in jest about The Troubles in the North which resulted in the death of over 3,500 people. It is not appropriate, nor is it wise, to be smiling and joking on camera while thousands of people on the island of Ireland face an uncertain future.
The Taoiseach should recall the help we get from the UK’s armed forces. When Russian aircraft regularly enter controlled Irish airspace without their transponders on. it is the Royal Air Force that scramble jets to monitor the risk. So, as an avid member of the European Union that claims to be “United in Diversity”, why does Varadkar see it as acceptable to make a call to arms? Is it ironic or moronic?
Furthermore, the draft Withdrawal Agreement currently on the table proposes internal borders that directly contradict and undermine the integrity of the Good Friday Agreement. There is work to be done, and we should work together. The assumption of a “stronger together” EU that works for us, not against us, may not be true in this instance. Let us segue to the story of Sir James Dyson to shed light on why we need to co-operate with our neighbours going forward.
Over the last week or so, the media in Ireland and the UK has been awash with criticism of James Dyson for moving his company’s headquarters to Singapore. In fact, it was met with raucous indignation by most media outlets as it was seen to be in direct contradiction with Dyson’s support of Brexit. This is either a simple assumption or a convenient opinion. Dyson has simply identified the shift in global trade and economic power away from the West – something the UK will soon be free to exploit on their own.
The reality is that the 21st century will see Asia increase in its ascendancy. During the first decade of this century, a rapid shift in the world’s economic centre of gravity showed the wilting power of the West and Europe. Airports such as Addis Ababa International in Ethiopia or Dubai International Airport serve as some of the busiest in the world due to growth in the South and East. It is time Europe adapted to this shift in power.
At present it seems highly unlikely that Ireland will be adopting our own portmanteau and rushing to have a referendum on Irexit, but maybe we can actualise some of the possible benefits the UK will see. With the UK soon to be creating their own trade agreements outside of the EU’s purview, Mr. Varadkar should seek to cooperate with our friends across the Irish Sea rather than antagonise them.
Perhaps the UK could become Ireland’s ‘Gate to the South’ rather than a conflict zone? Our Taoiseach’s salivating lips are anticipating a full plate of opportunity when Big Ben knells 11pm on 29th March; however, perhaps he ought to remember Pavlov’s dogs and be wary of an empty bowl. After all, friends make the worst enemies.
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Plaid Cymru recently elected Adam Price (pictured above) as its new leader. The Welsh Assembly Member for the 53% Leave-voting Carmarthen East and Dinefwr constituency evicted Plaid’s hapless former leader Leanne Wood and fended off Rhun ap Iorwerth to lead Wales’ pro-Brussels separatists in Cardiff Bay.
Shortly after taking office, Price claimed to espy the “dying days of the British state” with its “shackles” of post-imperialism and called Brexit “a cataclysm”. He said Wales’ heritage and culture “must be protected” from the “Brexit catastrophe” and “every opportunity should be taken to “stop this madness” rather than respecting Wales’ Brexit vote.
In a similar vein, the Cardiff University academic and former Plaid candidate Laura McAllister OBE opined on WalesOnline that Brexit means Wales will be “stuck on the Western fringe of a shaky, outdated union of four increasingly different nations” and “won’t survive outside the EU as we stare at a future without natural allies.”
This is an odd thing to say about Wales’ neighbours on the British archipelago. Wales has been in a union with England since 1536, with Scotland since 1707 and with Northern Ireland since 1800. Alongside the English, Scots and Irish, the Welsh enjoined in the progress of British parliamentary democracy, fought two World Wars and established a modern welfare state.
The roadblock to the Plaid’s separatist project is not Britain. Rather it is the people of Wales through their Brexit vote and their Unionism.
Price won Plaid’s leadership election with 2,863 votes. Yet 854,572 Welsh voters backed Leave, more than those voting for devolution in the Welsh referendums of 1979, 1997 and 2011. Indeed, the House of Commons Library’s EU Referendum constituency estimates show that even in Plaid’s Senedd seats an average of 49% of voters voted Leave, as did 45% of voters in their parliamentary constituencies.
At Plaid’s annual conference in Cardigan, Price claimed that Brexit means Welsh independence “must be on the table” and achieved by 2030. But Cardiff and Edinburgh universities’ recent YouGov ‘Future of England Survey’ found only 19% of Welsh respondents backing separatism. The same survey found that when Welsh respondents were asked which term best described them 47% said Welsh, 34% said British but only 4% said European.
Neither is Welsh politics becoming “increasingly different” from politics in England. In the European Referendum of 2016, the Brexit vote was 52.5% in Wales and 53.4% in England. And at the 2017 General Election, 90% of Welsh voters supported Unionist parties. Welsh turnout in this General Election to the UK Westminster Parliament was 69% compared to 45% in the 2016 elections to the Welsh Assembly (barely more than those voting in the 2017 Welsh local authority elections).
The vast majority of people in Wales are rightly patriotically Welsh and British, but unlike Plaid’s elitist ideologues they don’t want Wales run by the EU. Plaid’s problem is that the popular conception of sovereignty in Wales is that of a people who overwhelmingly self-identify as Welsh and British, most of whom also voted for their United Kingdom’s departure from the EU.
Simultaneously trying to overthrow the Welsh electorate while demanding independence by 2030 shows a lack of respect for the wishes of the people Plaid wants to govern. It is therefore unsurprising that at the 2017 ‘Brexit General Election’ Plaid candidates lost their deposits in over a third of Welsh seats and polled only 10% of the Welsh popular vote.
The nationalist paradox of supporting national independence and European integration comes from Plaid Cymru and the SNP’s attachment to the federalist ‘Europe of the Regions’ agenda through which the EU has sought to undermine nation state sovereignty from below by fostering separatist movements while stripping powers away from the United Kingdom Parliament in Westminster.
One of Price’s first acts as leader of Plaid Cymru was to pledge fealty to the Remainist SNP at their Glasgow conference where he told SNP activists to ‘Let old Britain die’ in the wake of Brexit. Price also travelled up to meet Nicola Sturgeon in Remain-voting London to promise that Plaid’s MPs would be lined behind the SNP in a league of losers calling for a ‘People’s Vote’ to overturn the Welsh people’s historic Brexit vote.
Wales appears to be incidental to Plaid Cymru’s EU nationalism. What looms larger in the rhetoric of Plaid politicians often seems to be first and foremost a negative anti-British nationalism similar to the anti-imperialist left-wing ideology espoused by Jeremy Corbyn.
George Orwell wrote about negative nationalism in his Notes on Nationalism, observing that “intellectuals follow the principle that any faction backed by Britain must be in the wrong. ‘Enlightened’ opinion is quite largely a mirror-image of Conservative policy.”
Plaid’s left-wing pro-Brussels elitism has little resonance outside of the CF10 postcode bubble. Adam Price’s neo-Corbynista politics might go down well with voters in the London Borough of Islington and London-based Guardian journalists. But neither have a vote in Welsh elections.
Plaid’s SNP fanzine is enthralled with all things Scottish. Yet they seem less interested in the experience of Wales’ Celtic neighbour to the west which, after all, is both independent and in the EU. The inconvenient truth is that Brussels doesn’t have a good track record of looking after small countries like Ireland where Euroscepticism is on the rise.
Now that it is a net contributor to the EU budget, the terms of Ireland’s EU membership are changing. The European Commission has played fast and loose with Ireland’s land border and its trade with the UK disregarding the Republic’s economic interests.
Brussels has treated Irish democracy with contempt. When 54% of Irish voters rejected ratification of the EU’s Nice Treaty in its 2001 referendum, the EU pressured Ireland into a second referendum in 2002 to reconsider. Then in 2008 53% of Irish voters rejected ratification of the Lisbon Treaty before being told by Brussels to vote again in 2009.
The Irish Republic will soon become the only Atlanticist, economically liberal and English-speaking EU member state, in an increasingly dirigiste, anti-American bloc, which is already hungrily eyeing up the Ireland’s corporation tax regime with Emmanuel Macron’s proposals for a single European Union corporate tax remittable to Brussels.
Plaid Cymru would leave Wales languishing in the stifling embrace of a European Union that by 2030 will either be well on the way to becoming a fully-fledged Bundesrepublik Europa or it will be in the process of unravelling through its omnicrises.
And since we have never been good Europeans, Wales would be saddled with Carthaginian, not Cambrian, terms of membership. Wales would be made to sit on the naughty step all the better to punish Welsh voters for voting to Leave in 2016 and for being less enthusiastic than the English in the European Community Referendum of 1975.
Wales would end up with at best four out of 751 Members of the European Parliament, no Commissioners and possibly one seat on the Council of Ministers. Plaid would give control over Wales to the remote and unaccountable Brussels apparat in which we have no “natural allies”.
Plaid’s new leader claims Brexit is a “disaster” for Wales. Yet Brexit is only really a disaster for the left-wing state-building ambitions of Plaid’s delusional would-be governing class. Their soft nationalist left-wing elites in Cardiff Bay seem to be undergoing an existential crisis as their worldview implodes. They want Wales to be more ‘progressive’ and ‘supranationalist’ than England. But Wales’ Brexit vote denies their SNP allies the charge that Eurosceptic England is pulling the Celtic nations out of Brussels’ orbit.
Wales voted to Leave the bad union of the EU, not the good Union of the United Kingdom. In seeking to repudiate Brexit and Welsh Unionism, Plaid Cymru repudiates the people of Wales.
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I was pleased to attend the publication of Lord Lilley’s Fact – NOT Friction in London this week; an excellent, informative paper published jointly by the European Research Group and Global Britain explaining how there are widespread misconceptions about the costs and implications of not being in a customs union with the EU. I agree with him: these misconceptions have led the Government into the wrong negotiating strategy for Brexit.
In Rotterdam the week before last, I saw how transit documents procured in advance and lodged electronically allow veterinary goods from third countries all over the world outside the EU to move predictably and rapidly into the EU, and be cleared by their import declaration and any other checks necessary in commercial premises 40km behind the border.
The three essential documents to make this run are the export declaration; the transit document to get the goods through and behind the frontier; and the import declaration that can then clear the goods once inland.
Non-veterinary goods go deep into Europe under such documents and are cleared when the import declarations are made on arrival at customer warehouses or kept in bond for future clearance.
The cost of this whole customs process is around €25 per document or between 0.1 to 0.4 per cent of value for the average consignment value of €25k depending on whether a company gets a customs broker to procure some or all of the documents, (plus up to another 1 per cent for the veterinary inspections on veterinary goods, around a third of which could be subsidised by our government if it chose to do so, being the government vet fee).
The export declaration is fairly easy for companies to do themselves, but the transit document and import declarations take a bit more customs expertise. Specific border inspections for veterinary goods can take place in authorised commercial premises well away from the frontier itself, and from the perspective of their authorisation they just need access to adequate space and facilities, government vet availability, and reasonable off-site access to professional sample testing facilities.
These processes do not require the exporting country’s domestic regulations to be aligned with the EU. EU standards need to be met for imports in the same way that goods exported to the US need to meet US standards.
What they do require for borders to remain efficient is for the documents to be prepared in advance so that lorries do not need to be stopped before leaving because they can’t be guaranteed to get through the other side.
The costs involved were corroborated by a major Japanese car company operating in the UK which told us in our International Trade Committee a few weeks ago that they can run these documentary procedures in-house for about £30 per shipment of equivalent salary cost. Multinational firms such as these are already well used to the data and documentary requirements for sourcing components globally.
I also met roll-on roll-off ferry operators in Rotterdam who have Nissan’s UK operation as a major client, who are expanding capacity to meet demand for regular just-in-time shipments and are most focused on getting their customers, who are often the freight forwarders, geared up to ensure all arriving trailers have the right pre-cleared documents. They need them an hour in advance to be able to match up their port traffic management systems with the documents of the lorries they expect to arrive.
There is no reason why similar processes could not also be effected behind the border at Calais to keep the frontier flowing freely and shipments being cleared with predictable timing as in Rotterdam, and if the authorities there want to keep their business that is what they will end up doing.
We need to get our exporters and our exporting ports and service providers geared up to have their export and import declarations and the transit documents ready in the same way. That way just-in-time supply chains are not threatened.
Businesses need to be ready with processes for generating the data to lodge electronically. Dover, Folkestone and Calais need to adjust their port inventory management so as to reconcile their traffic bookings and manifests with the documents matching the shippers’ documents. At first this might have to be somewhat rudimentary because the authorities have left preparation so late, perhaps being done by hand and needing more advance notice; however more efficient modern systems could be introduced fairly quickly.
Investing in these logistics processes will be equally useful for trade, whether, as is my preferred option, we end up with a regular free trade agreement as offered by the EU in March (and the processes can be adapted to ensure no hard border in the island of Ireland too); whether we leave the EU at the end of next March without agreeing a Withdrawal Agreement; or whether we have an “orderly no deal” with side agreements in key areas like transport and licensing which can help the logistics industry, as the “no-deal” preparation the EU has set out suggests they want. The basic requirements for borders are the same, and are what businesses all around the world manage successfully with standard processes every day.
If we prepare in this way, we will be prepared, whether we are able to arrange zero tariff and zero quantitative restriction trade with the EU before or after the end of March next year.
It is worth considering the costs of these processes in the context of the rest of the transport supply chain. They are a very minor part of the cost of the overall shipping cost, which is often many hundreds of pounds for each of the inland transport legs, from premise to port, port to premise, and the ferry or rail crossing carrier cost.
At 0.3 to 1.4 per cent of average shipment value they are also only a tiny fraction of the 12 to 24 per cent non-tariff barrier costs that were assumed in the “Cross-Whitehall Briefing” leaked in February, which were the major factor in the Government’s negative economic forecasting of World Trade and FTA scenarios for our trade with the EU.
The Government has ill-advisedly been using these hugely over-negative estimates as the reason for its negotiating strategy of high regulatory alignment and “frictionless” trade with the EU, and this has landed it in its current mess. Ironically the outcome of that mess is the idea of the customs union “backstop”, which when you read the small print contains the more costly and completely antiquated requirement for physical paper forms inspected and stamped by customs officers, for every commercial shipment between the EU and Great Britain, and every shipment across the Irish Sea.
While there may be a few teething troubles with the above processes being implemented from the second quarter of next year, with the right application by authorities and businesses costs of such high scale shouldn’t eventuate, and in any event won’t persist for 15 years as Government assumes.
In particular the car industry should be able to adapt relatively easily, and rather than prejudice our independence by worrying about overestimated costs, we should focus on getting small- and medium-sized businesses ready, and improving general business conditions. Whatever the size of business, most just want certainty as to what they need to do, and that is of far more value right now than indefinite transition, more political argument and risk.
The perfectly normal customs processes I saw, available now, without new technology and under current EU law, should be the focus. Preparing them is a far better strategy than tilting at the windmills of a never-to-be practical “Facilitated Customs Arrangement”, suffering under the illusion that economic Armageddon is the alternative, and waking up to the reality of the EU being in control of our destiny.
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Neutrality towards the Prime Minister’s Brexit plan to lock the UK into an EU customs union is crumbling. Two Cabinet ministers have resigned, with other senior and junior resignations coming in. Already Chequers, the ‘half in, half out’ scheme, had provoked the resignation of two Cabinet ministers, with voters polling two to one against the plan and many MPs opposing it.
But this week’s formal 585-page draft deal goes further. The UK would have no say over many of the laws under which it is governed. It would also be locked into a customs union (‘single customs territory’) with the EU under the Single Market rule book, potentially forever. With no legally binding exit day, no means agreed to end the backstop written into the treaty, Britain, as Ireland’s Sunday Business Post claimed last weekend, is in reality ‘on track to stay in the customs union forever because it will not be able to achieve a better deal with the EU’.
Although it is alleged that only such a route would preserve a soft Irish border, the claim is no more than a pretext, a political fraud in which the leaders of both Ireland and the UK have been complicit with the EU. In fact, the EU has made clear from the start that reducing the UK and its economy to the EU’s ‘level playing field’ and so to subservience is the long-term aim.
The Prime Minister came to accept the long-term advice of her chief negotiators that economic ‘alignment’ with the EU and remaining in a quasi-customs union was a must. EU demands to uphold the soft Irish border have turned out to be a very useful whitewash for the breach of promises involved in accepting such an arrangement. Now that the political battle is to the fore, such deceit should be revealed for what it is. Whether there is or is not to be a deal, no one believes with any seriousness that there can be a return to a hard border in Ireland when Britain leaves the EU.
Not only has the UK made clear it will not instigate one, but international trade has moved on to technological borders, advocated not only by the WTO but by the EU, and proposed by the UK for the Irish border as far back as 2017. In fact the militarised 1970s borders, the barbed wired, sentry posts, police checks and shootings have been consigned to the films of the Soviet era – or the footage of the 20th century Troubles in Northern Ireland.
Militant IRA, of which Sinn Fein was the political arm in those days, used bombs, booby traps and bullets in guerrilla warfare to reach the goal of an ‘all Ireland’ republic, while equally militant Loyalists took to the gun to prevent it. Then the state and its police force were thought by many moderate nationalists to be a vehicle of repression. Northern Ireland’s civil rights movement followed, as did the outbreaks of violence and repression and over time the negotiation, ‘agreements’, stalled talks with interventions from both UK and Dublin governments.
The 1998 Belfast (Good Friday) Agreement, which recognised Northern Ireland’s status could only change by the ballot box, proposed a power sharing executive, to which nine years later the Reverend Ian Paisley and Gerry Adams, the two totemic symbols of orange and green militancy and the apartheid of their communities, signed up. By then, Paisley’s DUP and Adams’ Sinn Fein were the biggest parties in the elected Assembly.
Adams agreed to end the military ‘campaign’ in 2005, calling instead for peaceful means to establish Ireland’s unity and calling on the IRA to dump arms. He sealed the deal by camping his Sinn Fein tanks on the lawns of Dublin’s parliament, Dail Eireann, to which he was elected in 2011. Having positioned Sinn Fein to be ‘the only All Ireland Party’ and a socialist republican anti-imperialist party, it now has 23 seats in the Irish Dail to (the nationalist) Fianna Fail’s 44, while Leo Varadkar’s Fine Gael won 50 seats.
Sinn Fein therefore is a potential rival in the political battle being played out with Brussels to win Ireland’s voters. Fine Gael aims at the elites and metropolitan classes and younger voters with their unquestioning europhile sentiment. Sinn Fein aims at the anti-establishment and those left behind in Varadkar’s new Ireland in rural or inner-city Fianna Fail and Labour strongholds.
Varadkar, modernising and europhile, is pitched against Adams’ successor Mary Lou McDonald, a radical, republican former MEP. Both are ready to play whatever it takes to win on EU terms, even if in the process they destroy their country’s close economic, social and historical ties to the UK.
Instead of falling in with the ploys of Brussels to manacle the UK economy and prevent a true Brexit, Britain’s leaders should respect their own voters. In that way they will also help the stability of their neighbouring island, the victim of a misleading EU campaign accommodated by Dublin’s warring leaders.
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It seems fair to say that the draft withdrawal agreement agreed between negotiators and published this week has not been universally welcomed. In particular the Protocol on Ireland/Northern Ireland has been the source of much criticism. In a detailed briefing by the Institute of Economic Affairs, I described how, if it were to come into effect, this Protocol would effectively rule out an independent trade policy for the UK, and would throw up serious trade barriers between Great Britain and Northern Ireland.
It’s worth reminding ourselves of why this Protocol was thought to be necessary. Our government agreed in December last year to guarantee that there would be no physical infrastructure or related checks and controls at the border between Ireland and Northern Ireland. In order to achieve this they conceded that, unless they could put forward alternative solutions, Northern Ireland would stay in alignment with the rules of the customs union and single market in all areas necessary for north south cooperation, the all-island economy and protection of the Belfast (“Good Friday”) Agreement. It was also stated in the Joint Report that the UK would not allow new regulatory barriers between Great Britain and the United Kingdom. The EU’s interpretation of that was a draft agreement under which, “unless and until” other terms were agreed that would meet the objectives for the Irish border, Northern Ireland would remain in a customs union and regulatory area with the EU. This is what the backstop is.
The facilitated customs arrangement and common rulebook of the Chequers plan were an attempt to provide the alternative arrangement that would mean the backstop would never be activated. When Chequers was roundly rejected by the EU, and the Prime Minister declared after the Salzburg summit that no prime minister could accept the EU’s terms, the negotiators went back into their tunnel and reformulated the backstop so that Northern Ireland and the rest of the UK would be in the same customs territory, and Northern Ireland would retain EU regulations on goods “unless and until” a new agreement could be reached. Mrs May is now satisfied that this is something that a British prime minister can sign up to.
Some of us have long been convinced that keeping the Irish border free of infrastructure could be achieved by way of legal, technical and technological solutions. European customs experts Hans Maessen and Lars Karlsson have confirmed to the Northern Ireland Affairs Committee that this can be done. But the EU negotiators and the Irish government have been adamant that the requirements of EU law mean that only a customs union and regulatory harmonisation on goods can achieve this, as even with a free trade agreement with zero tariffs and quotas, the risk of goods that have not been duly declared for customs purposes or that do not meet EU regulations might cross the border cannot be tolerated. Except, it now transpires, for fish. Because under article 6 of the Protocol, fisheries and aquaculture products will be excluded from the customs union arrangements (and therefore fish caught by British and Northern Irish boats would be subject to tariffs) unless an agreement between the UK and the EU on access to waters and fishing opportunities is reached. But by the EU’s own reasoning, the exclusion of even one product would require a full customs border, to ensure that that product isn’t smuggled in undeclared. Now Irish government and EU negotiators could be forgiven for assuming that the British negotiators will concede on this as they have on almost everything else, and sign away fishing rights to the EU. But they might not, and then we would need a hard border wouldn’t we, and the Protocol would be for nothing? Or could it be, that for fish, as for everything else, it is possible to manage a customs border without physical interventions, and the EU is prepared to take the risk of having to do so in order to leverage access to UK territorial waters.
It is often overlooked that as well as being by far the biggest market for goods sent outside Northern Ireland 64% of goods brought into Northern Ireland come from Great Britain, with 12% from Ireland and 59% of its external sales are to Great Britain, as against 12% to Ireland. In seeking to preserve frictionless trade with Ireland, the Protocol, if it were to come into effect, would introduce costs and formalities for the vastly more significant trade within the UK. As former Brexit minister Suella Braverman noted in her resignation letter, customs professionals are clear that this could have been avoided. It’s time to start listening to them.
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The 1998 Good Friday Agreement (GFA) is constructed on the principle of consent, including;
- Consent of the British Government that a part of its territory, Northern Ireland, will be subject to special arrangements, including those with the Irish Republic;
- Consent that any change in the constitutional position of Northern Ireland can only occur if desired by a majority;
- Consent by the Nationalist community there to the present constitutional status, along with a mechanism to change that status, if a majority so desire; and
- Consent of the Northern Ireland Assembly to any alteration in the cross-border arrangements
All these interlacing sets of arrangements are delicately balanced and were arrived at after many years of painstaking discussion and compromises. The Agreement represented no single party or side’s ideal but there was enough consensus there to achieve a durable settlement on the basis of consent.
The hardline demands of the EU today, essentially driven by the Government in Dublin, are light years away from the approach which characterised that of former Taoiseach Bertie Ahern in the late 1990s and made the Agreement possible. The Agreement was designed to usher in a new and constructive era of mature relations between the UK and Ireland. We were to become close partners over a whole series of areas.
The reaction of the authorities in Dublin to British efforts to negotiate a sensible and smooth Brexit has been the antithesis of the process that led to the GFA. Instead of the two Governments’ commitment to “develop still further the unique relationship between their peoples and the close co-operation between their countries as friendly neighbours “, there has been a stubborn resistance to accepting the UK decision to leave the EU. This has been alongside a strong alliance with implacable Remainers in London. This has made the Brexit process much more difficult and fed into the agenda of those in Brussels, and also Paris, who are determined to make an example of Britain for daring to leave their club. It is completely contrary to Ireland’s real national interest and the spirit of the GFA.
This hardline policy from Dublin is now endangering the entire GFA, which can only function as long as the participants in that Agreement are willing for it to do so. Demanding that Northern Ireland is detached economically from the rest of the United Kingdom, without the consent of the population, carries the danger of strongly alienating one side of the community there. Frustrating the UK’s efforts to come to a balanced accommodation with Brussels will inevitably lead to some in London questioning the foundation on which the GFA is based, trust that Ireland and the UK can be close and mutually supportive allies. There is also the damage that is being done to community relations in Northern Ireland.
The GFA recognised that cross border co-operation was dependent on consensus north of the Border. Meetings of the North-South Ministerial Council always had at least one Minister from either side of the communal divide; and the GFA specifically states that any further development of North-South arrangements is “to be by agreement… with the specific endorsement of the Northern Ireland Assembly and the Oireachtas (Irish Houses of Parliament)”. By seeking to bypass the consent of one side of the community, the Irish Government is deepening division and undermining the whole basis on which the GFA was built. This position is developed further in our recent Policy Exchange paper The Irish Border and the Principle of Consent.
The upholding of the GFA is, of course, a laudable aim and is shared by authorities in Dublin, Brussels and London. The maintenance of the present mutually beneficial arrangements on the Irish border is also very desirable. The present policy course by Dublin is unlikely to achieve either. By ignoring the essential element of consent, the Irish Government is placing the progress of decades of good work in jeopardy.
There needs to be a new British/Irish initiative to break the present logjam by making a declaration that the future of the border will not be used to stop the signing of a Withdrawal Agreement. Both the EU and the UK should undertake to use their best efforts to preserve all existing measures to secure an invisible border and to preserve all existing measures of cross border co-operation under the aegis of the GFA. This would allow Brexit to proceed in an ordered manner and the two-year transition period to kick in. The future trade talks would hopefully achieve the above aspiration.
The alternative – a continued impasse, economic damage and resultant ill feelings all round – is in nobody’s interest.
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