Last weekend Northern Ireland played host to the British Open for the first time since 1948. Irishman Shane Lowry won emphatically and as the week rolled on, the congratulations continued to roll in for the Offaly man. Naturally our media-savvy Taoiseach was quick with the praise and, as so often is the case, what was particularly interesting to see on Mr. Varadkar’s Twitter feed was not his congratulation but what lay below that – a seemingly innocuous tweet referencing a French minister’s pledge of Brexit solidarity with Ireland.
In fact, this is a symptom of something much greater and we don’t have to delve too deep into the recesses of our memories to the last time Mr. Varadkar stood by a promise from the French government.
When I cast my mind back to Leo and his trademark grin propping up the under-pressure Emmanuel Macron in March as he pledged his solidarity to the Irish, I wince. Only a couple of days later, the French leader was holding up Brexit extension talks to the detriment of the Irish. A No Deal and no plan on the Northern border meant Ireland would have temporarily been withdrawn from the customs union until such a time that we could verify all goods leaving Ireland had not come from the North.
At the time, Simon Coveney refused to entertain the notion of border checks and simultaneously refused to accept the possibility that Irish goods could be stopped in the Irish Sea before entering Europe through France or elsewhere – two contradictory ideas. The Irish Government sees Brexit as a zero-sum game and this is detrimental.
Interestingly, as Brendan Simms pointed out last week, this approach by the Taoiseach and his Government may well be in breach of the Good Friday Agreement. Simms argues that if Varadkar insists on refusing to allow checks at the North-South Border, then equally he should refuse to create checks in the Irish Sea. As the border checks would affect Nationalists in Northern Ireland, the check in the Irish Sea would affect Unionists in Northern Ireland.
Therefore, Varadkar’s insistence on supporting nationalists and ignorance towards unionists is diametrically against the spirit of the Good Friday Agreement, which acknowledges the rights of both Nationalists and Unionists. Therefore, it is in the interest of the Taoiseach to seek an outcome that satisfies this agreement and their zero-sum approach is particularly lacking.
To borrow more thoughts from the Irish golfing success, it is interesting to note how many people delivered their praise while referencing how this result was “fantastic for such a small country”. Common among praise from Irish people was a sense of ‘aren’t we great punching above our weight?’.
However, I would vehemently disagree with such an affectation being attached to our success as a nation in any regard. Not only does Ireland produce a significant number of top-class sport stars (England’s Cricket World Cup-winning captain Eoin Morgan honed his cricket ability in my own school), we compete on the world stage on a number of levels – industry, arts and of course business.
We are a small island, but one that belongs on the world stage; we don’t momentarily appear on it. However, when our Taoiseach stands up and remarks that Boris Johnson’s claims are “not in the real world” and that he will not discuss any terms with the UK, he perpetuates a small nation attitude.
This has been the Taoiseach’s approach for some time now, as he regularly made jibes and slights at Theresa May’s expense. A nationalistic overture runs rapid through Mr. Varadkar’s Brexit rhetoric and, as I have discussed, this is damaging to the spirit of the Good Friday Agreement and all the good it does for people on the island of Ireland.
With Boris Johnson installed as the new Prime Minister and his new Cabinet now having been revealed, there is a chance for a new approach to Brexit for European leaders and, in particular, for Leo Varadkar and Simon Coveney.
Ireland might be a geographically small country, but there is no need for us to behave like a small nation and, while the new Prime Minister may be accused of unfortunate comments in the past, we should never measure ourselves with someone else’s ruler. The changing Cabinet brings with it a chance for change and a chance to lift the deadlock on Brexit.
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Today the Prosperity UK Alternative Arrangements Commission, which I co-chair with Nicky Morgan, has set out its road map to a Brexit deal, by finding a way to supersede the maligned Irish Backstop, while simultaneously ensuring there is no hard border in Ireland and the Belfast / Good Friday Agreement is upheld.
Critically, our Final Report includes two new draft Alternative Arrangements Protocols, produced with the help of the international law firm Herbert Smith Freehills. The new Prime Minister, the EU and the Irish Government will now have both the technical material and the legal basis for coming to a Brexit agreement as soon as possible.
The first Protocol, Protocol AB, could be used within the existing Withdrawal Agreement. It incorporates a list of obligations that the UK must satisfy in order to ensure the Backstop would not be triggered. The second, Protocol C, is a stand-alone Protocol that delivers Alternative Arrangements in any other Brexit scenario, such as a Free Trade Agreement or even a No Deal.
There should be confidence that a Brexit deal is now achievable. Adopting Alternative Arrangements to the Backstop, as construed by the Brady Amendment, have already achieved a majority in the House of Commons. The Prosperity UK Commission has taken that vote, and with the help of a team of 23 technical experts, we have turned it into something tangible and workable.
On the EU side, it has already conceded that both sides should seek to find Alternative Arrangements to the Backstop via the Strasbourg Declaration. But it said it would only commence the work after the Withdrawal Agreement came into force.
These Alternative Arrangements can be up and running within three years, with the ability to implement some measures far sooner. They consist of harnessing existing technologies and customs best practice, currently used on borders around the world; they do not rely on futuristic high-tech solutions.
Furthermore, they have been compiled within the boundaries of certain constraints, namely, the supremacy of the Belfast / Good Friday agreement, the preservation of the Common Travel Area, the need for a deliverable and real UK independent trade and regulatory policy, the need to ensure the seamless flow of East-West trade flows and the need to ensure that all proposals can be up and running within two to three years.
Our Alternative Arrangements Commission advocates the maximum possible choice of options for people and traders, respecting the Common Travel Area Agreement. It suggests a multi-tier trusted trader programme for large and medium-sized companies, with exemptions for the smallest companies; no checks at the border and a common Sanitary and Phyto-Sanitary (SPS) zone for the UK and the island of Ireland, but with the right for the UK to diverge and a mechanism to ensure that the people of Northern Ireland can make the choice as to whether to follow the UK divergence or remain aligned to SPS rules in Ireland. In the event this cannot be achieved, SPS checks can be carried out by mobile units away from the border.
As regards implementation, the Commission recommends the creation of two new funds, paid for by the UK, to assist with the implementation of Alternative Arrangements on both sides of the Irish border for small businesses, as well as a capacity building fund to support customs development. It suggests the creation of an independent arbitration panel and a specialist committee to advise on implementation.
The work of the Commission, conducted in good faith, following the failure of government to start this work much earlier, has been entirely focused on delivering solutions that are politically independent and sympathetic and which can ultimately deliver Brexit. This report has not only been based on the work of technical experts, but on feedback from numerous stakeholders on the island of Ireland and in the EU. It should therefore be considered very carefully by all parliamentarians in the House of Commons as well as by the Irish Government and by the EU to ensure that they use this piece of detailed and technical work to present a way forward.
So far, the two contenders for the leadership of the Conservative Party have endorsed our Alternative Arrangements Interim Report. I am now confident that our plan to develop the Alternative Arrangements outlined in our Final Report today can pass in the House of Commons. It is imperative that MPs from across the House come together to read this report and to find a way to implement Brexit so we can all move on to delivering the better country the voters want.
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Throughout the negotiation of Mrs. May’s Withdrawal Agreement (WA), and her subsequent attempts to have Parliament approve it, the issue of the Irish border loomed large. In fact, it was the EU’s intransigence over the border issue that finally undermined the WA.
But it has now become totally clear that the EU’s position on the border was a falsity peddled in order to exercise maximum pressure on the UK while they negotiated the terms of the WA and then to maintain that pressure, via the backstop, while a free trade agreement was established.
The EU’s argument was essentially as follows:
Any Withdrawal Agreement must simultaneously assure the integrity of the Single Market and the adherence by the UK to the terms of the Good Friday Agreement (GFA). It was claimed that the GFA requires that the border between the Republic of Ireland and Northern Ireland be open at all times, thereby prohibiting border infrastructure/a “hard border”.
The argument continued that the only way to achieve this, without breaching the integrity of the Single Market, was to keep Northern Ireland within the Single Market (the backstop) until such time as adequate technology existed for customs controls to be implemented away from the border. The EU further insisted that, without its agreement, Northern Ireland would not be entitled to exit the backstop.
Had the UK signed up to the backstop, it would have been locked into the EU – possibly in perpetuity – without any say and obliged to adopt all EU laws as well as freedom of movement. As a result, it would have found itself without any negotiating position while the future trading arrangements with the EU were being established. It was the invidious potential effects of the backstop, amongst other things, that prompted many, including myself, to describe the WA as the equivalent of political and economic unconditional surrender by the UK.
But the EU’s position has now been busted.
First, the Good Friday Agreement does not require an open border. The only place in which the border features in that agreement is in the section on security. During the Troubles there were heavily fortified army barracks, police stations and watchtowers along the border. The GFA merely required the removal of these and the demilitarisation of the border. It refers to the normalisation of security arrangements. There is no suggestion that there should not be any arrangements for customs to be collected or passports checked.
Second, it is frankly impossible to close the 300-mile border. The notion is absurd.
Third, also from a practical perspective, the value of cross-border trade on the island of Ireland is about €2.6 billion per annum or less than 0.5% of total UK trade with the EU – it is tiddly in trading terms. Irrespective of the mechanisms put in place to collect tariffs, any customs leakage would not even amount to a rounding error in the accounts of either the UK or the EU.
And finally – and what has prompted me to write this article – is the declaration by the Irish Government yesterday that, in the event of a no-deal Brexit, it would not implement a “hard border” and that customs checks would, as has been argued by the UK Government for years, take place away from the border. It has at last admitted that it can live without such a border.
This admission has revealed that the EU never actually needed the backstop. In that revelation it has proven itself to have always been in bad faith in its negotiations with the UK.
In commercial negotiations of lesser importance, such bad faith may have been tolerable, but this act of bad faith all but triggered a constitutional crisis in the UK. It is abhorrent that the EU held such a false position, given the enormity of the consequences. It proves that the institution is entirely untrustworthy. Armed with that knowledge, we must decline any further negotiations with it. We must simply leave the wretched institution at the very earliest opportunity.
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Only a credible non-cooperative strategy that cannot be blocked by either the EU or Parliament will get us out of the EU by 31st October 2019. And that strategy needs to be executed with ruthless conviction and commitment by the new Prime Minister. To demonstrate his support for Global Britain, his first trip abroad should be to the US to kick-start the UK-US Free Trade Agreement.
As the largest ever list of candidates to offer themselves as the next British Prime Minister has been whittled down to the final two, it is clear that we are in grave danger of validating Einstein’s definition of insanity – doing the same thing over and over and expecting a different result.
Between them, Boris Johnson and Jeremy Hunt have said that they will: renegotiate the Withdrawal Agreement (WA) and the backstop; leave the EU with a ‘deal’ on 31st October; and get parliamentary approval for their new improved deal. They both claim to be skilled negotiators, implying that this makes them ideally suited for the most important job in their career. There are differences, however: Johnson recognises that the WA as a whole is dead and just wants to lift some of its acceptable features, such as on citizens’ rights; while Hunt is prepared to delay leaving the EU for ‘a short while’ to achieve a ‘better deal’.
The naivety of the candidates’ positions is breath taking. Have they not observed how easily the EU has run rings around our current ‘skilled negotiators’? Are they like the Bourbons and learned nothing and forgotten nothing?
The new Prime Minister needs a credible negotiation strategy
It is going to be déjà vu all over again, unless the new PM has a clear strategy to leave the EU on the basis of what game theorists call a non-cooperative solution. That is one that the EU cannot block if it is not willing to cooperate in producing a solution that makes both sides better off.
This means that the starting point for any negotiations with the EU cannot be the WA. The EU says that it will not renegotiate this and it remains completely unacceptable to the vast majority of the British people. As Chairman of Lawyers for Britain, Martin Howe QC, says:
‘I can’t think of any clause in the WA end-to-end which is actually in the interests of the UK. The only neutral part of the agreement is the reciprocal rights of UK and EU citizens, in which the clauses on substantive rights are acceptable. However, even those are surrounded by completely unacceptable requirements that the treaty must perpetually have direct effect and must (as interpreted by the courts) override future UK Acts of Parliament in our own courts, and must be “interpreted” by the European Court of Justice for about 10 years by direct references and thereafter via a back-door mechanism in an international arbitration clause’.
His devastating criticism of the WA is here: Avoiding the Trap – How to Move on from the Withdrawal Agreement. How a British Prime Minister could collaborate with the EU to produce this document and how so many MPs could subsequently vote for it is beyond me. The WA is nothing less than a venus flytrap. It therefore needs to be avoided at all costs.
In any case, the WA does not offer a ‘deal’ about a future relationship in any meaningful sense. For example, there is nothing on services which account for 80% of UK GDP. Trade in services will be negotiated after the UK leaves the EU. It is completely bizarre for MPs to object to leaving the EU without a deal, when the WA itself involves leaving the EU without a deal.
A non-cooperative solution requires the UK to specify both the terms under which it will leave the EU and the terms under which it will trade with the EU in the future. And to do so in a way that the EU cannot block.
Theresa May specified the leaving terms very clearly in the Lancaster House speech in 2017. They were to leave the Customs Union, Single Market and the jurisdiction of the ECJ. In other words, a clean Brexit. This was a clear deliverable strategy that did not require EU cooperation. But then Remainer Philip Hammond stepped in and said there needed to be a transition period which would require EU cooperation and this was the beginning of the backtracking that led to the toxic WA and the equally toxic Political Declaration (PD).
The non-cooperative solution involves three steps. And each one has to be credible to the EU
The first step is for the new PM to restate that the clean Brexit set out in the Lancaster House speech will be implemented by 31st October 2019. This is credible and does not require EU consent.
In parallel with this, the new PM should immediately inform the US President that the UK will enthusiastically take up his long-standing offer to negotiate rapidly a US-UK Free Trade Agreement (FTA). This also is credible and does not require EU consent once we leave. During the few weeks that remain before 31st October, the UK can make much progress in setting the stage for post-Brexit negotiations – a task that the International Trade Secretary, Liam Fox, has consistently dragged his feet in doing. This will send an electric shock to the EU that will tilt every aspect of subsequent negotiations with the EU in our favour. The prospect of us concluding an FTA with the US when the EU has been struggling for years to achieve this will motivate the EU to conclude an FTA with us. They will fear the fact that the UK would be able to import virtually all of its requirements from the US and at lower world market prices. This would signal to the EU that we can leave them behind if necessary.
The second step is to set out in a new Departure Statement (DS) how the principal issues involved in departing from the EU will be implemented: citizens’ rights, the financial settlement and the border between Northern Ireland and the Republic. The PM can guarantee the rights of EU citizens living in the UK without granting them the special status of the WA. He can agree to pay our financial obligations up to the point of departure. Any additional money is not a strict legal requirement but can be used as a bargaining tool in negotiations about the future trade deal – as the EU is fond of saying, ‘nothing is agreed, until everything is agreed’. Let the EU take the UK to international arbitration if they want. Finally, he can restate that the UK will not impose a hard border. All these are credible and do not require EU consent.
The big advantage of being absolutely clear on the border is that it will force the EU and, in particular, the Irish Taoiseach Leo Varadkar to agree a workable solution that allows the UK to leave the Customs Union and Single Market at the end of October. Solutions exist to protect the integrity of both the UK and EU internal markets without any physical infrastructure on the border or any need for new technology. The Smart Border 2.0 report commissioned by the European Union Parliament from customs expert Lars Karlsson confirms this – as does the more recent report of the Alternative Arrangements Commission. Annegret Kramp-Karrenbauer, Angela Merkel’s successor as leader of the Christian Democratic Union, has said that a workable solution could be agreed in five days of discussions. There were discussions between British and Irish customs officials on creating an invisible border, but Varadkar stopped these when he came to power. In doing so, he politicised the border issue and turned it from being the EU’s Achilles’ heel into the UK’s – ably abetted by collaborating British ‘negotiators’.
It was this single issue that was then exploited in order to propose the backstop comprising a ‘single customs territory between the (European) Union and the United Kingdom’, without rules of origin. Northern Ireland, in addition, would have to abide by the rules and regulations of the EU Single Market. So long as the backstop is in operation, the UK would have to meet ‘level playing field conditions’ that prevented the UK competing against the EU. The UK would not be able to leave the backstop without the consent of the EU.
This, of course, is completely unacceptable. By making it clear that the UK will leave the EU on 31st October, the positions are immediately reversed. Both the EU and Varadkar have said that there will be no hard border. Varadkar would be forced to restart the discussions between British and Irish customs officials. He knows full well how devastating for the Republic’s economy a ‘no deal’ Brexit would be: the Irish Central Bank predicts a 4% cut in GDP and 100,000 job losses. And there are plenty of five-day periods between now and the end of October to agree a workable solution. But it requires the UK side to make it absolutely clear that we are leaving on Halloween, come hell or high water. This too is credible and again does not require EU consent.
The third step is to make a Future Relationship Statement (FRS), setting out the terms on which the UK will agree to trade and cooperate with the EU. Again, this has to be done in a way that cannot be blocked.
There is only one set of trading terms that the EU cannot block. Under WTO (World Trade Organisation) rules – which almost all international trading arrangements follow – we are free to set the tariffs and product standards for trade with the EU, so long as these are the same as for all members of the WTO under MFN (Most Favoured Nation) rules, unless we have a FTA with any country or group of countries. This is the default position, so is also credible and does not require EU consent.
We can actually do better than that and offer the EU to continue trading in goods on current zero-tariff terms under Article XXIV of GATT (General Agreement on Tariffs and Trade) and in services under Article V of GATS (General Agreement on Trade in Services) – while a full FTA is negotiated. But if they refuse, we can temporarily revert to the MFN rules under Article I of GATT.
The EU will ultimately agree to a FTA. In the meantime, we need to exploit the fact that the UK has a huge trade deficit with the EU – we are net buyers of goods of around £100 billion, equivalent to 5% of our GDP. Since the customer is king – and we are the customers – it should be us who decides the quality and prices of the goods and services we purchase from not only the EU but from the rest of the world. But what the WA and PD do is to allow the EU to determine these things. The audacity is astonishing. Did the EU and our ‘negotiators’ seriously believe that they could get away with this – and not just in the short term but indefinitely?
Since we will no longer be bound by the EU’s Common External Tariff, we can lower the tariffs we set on goods that we do not produce domestically. But whatever tariffs we set, the EU will be worse off given that they sell us mostly high-tariff goods like cars and agricultural products. We would pay tariffs to the EU of around £5 billion and they would pay tariffs of £13 billion. In addition, we would save the £11 billion net contribution to the EU.
This provides a strong incentive for the EU to agree a FTA, unless they want to continue punishing us for leaving the EU, and in doing so damage the EU economy even more. Given that we have a services trade surplus with the EU of around £30 billion, it is essential that this is secured in a future trading relationship. This means a SuperCanada deal, already offered to us by the EU in March 2018.
But although there is a strong economic incentive to agree a FTA, we cannot force the EU into accepting any deal that works for us in terms of services, and, in particular, financial services. Still this does not prevent us leaving the EU on the basis of the above DS and FRS. There are enough ‘mini deals’ in place – covering visa-free travel, aircraft landing, rail and shipping agreements, road haulage licences, student exchanges, defence and security etc – for the citizens and businesses of both the UK and EU to continue visiting and trading with each other. In addition, a sufficient number of the international trade deals negotiated by the EU have been novated that we can continue trading on the same terms with most of these countries as we do now. A key example is Switzerland which accounts for more than a quarter of our trade under these EU-negotiated deals.
A number of proposals have fleshed out the details of a future relationship along the lines outlined above: A Clean Managed Brexit from Steve Baker MP, The EU, The UK and Global Trade: A New Roadmap from Professor David Collins, A Better Deal from Shanker Singham, Robert MacLean and Hans Maessen, A World Trade Deal from Economists for Free Trade, and the Howe et al report cited above. For example, Baker suggests that we should send a draft UK-EU FTA to the EU – such as the ones proposed by Shanker Singham, Victoria Hewson, Hans Maessen and Barnabas Reynolds or Dr Lorand Bartels of the University of Cambridge – rather than wait until they do the drafting – which was such a disastrous error with the WA and PD. The EU could agree such a FTA under Article 207 of the TFEU (Treaty on Functioning of the European Union) on the Common Commercial Policy on the basis of qualified majority voting.
But unless the strategy is clear about what is needed to deliver these outcomes, we will soon be back wading through the same treacle of compromise and capitulation that have been the hallmark of our negotiations over the last two years. The only strategy that is guaranteed to work by 31st October is the non-cooperative one outlined above.
The new Prime Minister also needs to demonstrate conviction and commitment – and that involves putting Parliament in its place
A credible negotiating strategy is necessary, but this will not be sufficient. The new Prime Minister also needs to have ‘conviction and commitment’, as Dominic Raab has pointed out. But Boris Johnson – the front runner to be PM – has already wavered by first stating categorically that the UK will leave the EU by 31st October and subsequently saying that this is merely ‘eminently feasible’. This change was immediately picked up by EU negotiators, one of whom told The Times: ‘Even the boldest Prime Minister for a no-deal will have to demonstrate that he has had one serious try and that means an extension [beyond 31 October]’. Another told the Daily Mail that the EU believes Johnson will end up trying to sell an amended version of the WA: ‘If people really brief Boris and talk him through the implications of ‘no deal’, I think he will really think twice’. The first view is perfectly plausible and, unless further wavering is prevented, then we are very likely to end up with the second. After all, Johnson supported the Withdrawal Agreement on the third vote. Hunt voted for it three times. Johnson’s declared position, however, is that he is seeking a FTA with the EU and clarified that he will leave the EU by the end of October ‘do or die’.
The new PM also needs to demonstrate conviction and commitment with the other group trying to block Brexit: the British Parliament. It too needs a lesson in democracy. Read our lips: we voted to leave the EU in June 2016 by a bigger majority than any vote that any individual MP has ever received. We understood the decision we made. We understood why we made it. No amount of scaremongering by the majority of MPs who oppose this decision or their friends in the civil service and CBI etc will change this.
So if MPs are still determined to block the deal that the next PM sets or try to insist that the deal is put to a ‘confirmatory vote’ – weasel words for a second referendum to try and get Brexit reversed – then they also need to be blocked. They need to be made to understand that it is the people who are sovereign not MPs. And the people are here for ever, they are not.
If this, in turn, means that Parliament is prorogued until after 31 October 2019, then so be it. Constitutional historians like Professor Jonathan Clark argue that this would not be ‘“unconstitutional”:
‘[It] would be in accord with statute law, but applied in a situation that legislators could not foresee. [Nor] would [it] be “undemocratic”, for the point at issue is the clash between two sorts of democracy, representative and direct. Whatever the merits of these two, Parliament recognised the priority of the People in legislating for the referendum of 2016. Parliament’s claim to control prerogative depends also on public opinion, and support has ebbed away as Brexit has not been delivered’.
However, prorogation might not be necessary since, in June 2019, Parliament voted down a Labour motion to block a no-deal Brexit. Indeed, Maddy Thimont Jack from the Institute of Government argues that MPs have no decisive route – such as legally binding backbench motions, emergency debates, amendments to the Queen’s Speech, or ‘no confidence’ votes – to stop a PM determined from leaving the EU on 31st October.
Only a credible non-cooperative strategy executed with ruthless conviction and commitment by the new Prime Minister will get us out of the EU by 31st October
The message needs to be clear, simple, with no compromises. Theresa May said in her resignation speech outside No. 10 that the next Prime Minister must compromise. Well just look where that got her. Time’s up for doing the same thing over and over and expecting a different result. Only a credible non-cooperative strategy that cannot be blocked by either the EU or Parliament will get us out of the EU by 31st October. And that strategy needs to be executed with ruthless conviction and commitment by the new Prime Minister. Given that both Johnson and Hunt have voted for the WA, the new PM would need to signal his conviction and commitment by appointing a Brexit Secretary who refused to vote for the WA on all three occasions. To demonstrate his support for Global Britain, his first trip abroad should be to the US to kick-start the UK-US Free Trade Agreement. There is no need to make another round of humiliating visits to Brussels or to Europe’s capitals – as Theresa May repeatedly did.
This is an extended version of a blog originally posted on Briefings for Brexit
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Developing Alternative Arrangements to avoid a “hard border” on the island of Ireland is the key to unlocking Brexit, solving the problems created by the Irish backstop in the Withdrawal Agreement and thereby restoring business and investor confidence – not just in Britain but across the EU.
Prosperity-UK, an independent organisation I co-chair, will today be publishing its interim report, setting out the blend of arrangements which we believe will make it possible to avoid a “hard border”. In July we will be publishing a new Alternative Arrangements Protocol, framed in such a way that it could be inserted in the Withdrawal Agreement or utilised in any other Brexit outcome.
The combination of these two elements could be enough to deliver a path to agreement and to solve the Brexit conundrum.
Prosperity-UK was set up two years ago to bring people together, on a cross-party basis, to examine Brexit solutions and opportunities. When 10 Downing Street failed to address adequately the fundamental issue of the Irish border, we established the Alternative Arrangements Commission to do so, chaired by the senior Conservative MPs Nicky Morgan and Greg Hands and supported by 23 technical experts.
Our Commission had three strict remits. First, that any Alternative Arrangements must uphold the Belfast/Good Friday Agreement. Second, that any solutions would be based on existing best practice and would not be dependent on “unicorn” technology. Third, that the Alternative Arrangements should be compatible with any Brexit outcome.
We believe our Commission has met all three remits and that delivering Alternative Arrangements within three years, so that the backstop is superseded, is eminently achievable.
There is not a single answer to Alternative Arrangements. The solution will be found in a combination of political, practical and technical arrangements. These will include use of existing flexibilities in the WTO and Union Customs Code, multi-tier trusted trader schemes and Approved Economic Operator schemes; pre-clearance in facility and special solutions for small traders as well as exemptions for those below even the VAT threshold.
Agriculture is a vital sector in Ireland and the development of satisfactory phyto-sanitary arrangements is a key challenge. The report discusses the pluses and minuses of an all-Ireland Sanitary and Phyto-Sanitary (SPS) Area, echoing the already existing Common Bio-Veterinary Area, which applies to livestock, as well as the Common Travel Area, which operates for people movement. Another option would be a Common SPS Area which applies not only for the island of Ireland but for the whole of the UK plus Ireland.
The report also examines inspections away from the border such as already happen in Rotterdam (up to 40km from the order) and will occur in France post-Brexit.
Although our solutions do not rely excessively on technology, there is scope for technological innovation. Many companies, such as Fujitsu, Vodafone and others are contributing exciting ideas to make transit and border arrangements work more effectively.
Ultimately of course the Brexit conundrum is less practical than political. It is primarily a trust issue – and therefore soluble under the right political leadership.
The UK has had the wrong leadership.
In the summer of 2018, it redefined the original EU requirement of “no physical infrastructure at the border nor related checks and controls” to a much more onerous self-imposed hurdle of “no checks or controls in Northern Ireland.” In 2019, despite the Brady Amendment (in favour of Alternative Arrangements) being the only vote to pass the House of Commons during the parliamentary farce of the past nine months, the British Government itself made no effort to develop these arrangements. Indeed, the Treasury and No. 10 seem to have actively blocked efforts by the Home Office and others to make progress on Alternative Arrangements.
On the EU side, there has been an unwillingness to provide an end-date for the backstop or to reopen the Withdrawal Agreement. But there has been some diplomatic movement. The Strasbourg Instrument, published in March 2019, committed both sides to work on developing new technologies at the border to be ready for December 2020 “with a view to assessing their potential to replace the backstop solution in the Protocol on Ireland/Northern Ireland.”
But this work was only due to begin after the Withdrawal Agreement had been ratified, which means that precious months are now being wasted.
Our proposal is that a new Protocol is drafted which could be inserted into the Withdrawal Agreement or used on a stand-alone basis. Such a Protocol would describe the necessary steps for the UK, Ireland and the EU to be satisfied that the new arrangements adhere to the Belfast/Good Friday Agreement. Either there are conditions which can realistically be met to solve the border issue, in which case all sides can work on them in a spirit of goodwill. Or there are no conditions which will satisfy the EU, in which case the UK would be ill-advised to enter the Backstop.
Finally, we need a recovery of political goodwill on the island of Ireland. As we have learnt from our own visits to Ireland, there is a perception on both sides of the border that the UK and the EU have been aloof, showing no attempt to engage the local communities. Yet it is they, rather than civil servants in Brussels and Whitehall, who should be looked upon to develop practical, local solutions. As one very senior politician said to us in Dublin, “what needs to happen first and foremost is the restoration of trust on the island of Ireland.”. That is where we hope to have made a start.
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In April, Prosperity UK, the politically-independent not-for-profit organisation, launched its Alternative Arrangement Commission, co-chaired by Nicky Morgan and Greg Hands. The cross-party Commission will seek to explore practical and detailed Alternative Arrangements relating to the Irish border, deliverable in a timely fashion and ultimately clear a path for the UK to leave the EU. The work builds on the Brady Amendment which commanded majority support in Parliament as it proposed to replace the Northern Ireland backstop with Alternative Arrangements.
I am pleased to be one of the Commissioners, taking evidence from border and trade experts. Last week, we heard from members of the Technical Panel: Frank Dunsmuir, a logistics and licensing expert; Lars Karlsson, one of the best-known customs leaders in the world and former Director of the World Customs Organisation; Hans Maessen, a customs and business advisor; and Shanker Singham, a leading trade and competition lawyer.
Whilst I was a Minister at the Department for Exiting the EU, I visited several of our ports and borders to see first-hand the challenges – and opportunities – presented by Brexit. Whilst, of course, Brexit will involve change at some level at many of our borders and ports, there is every reason to see how new systems can be implemented in a way so as to minimise friction. And this is the case at the Irish border.
No one wants a “hard” border – and rightly so. No-one on either side of the debate wants to violate the Belfast Agreement or upset the lives of those living near the border. Nobody is seeking to create a climate for violence. That is why the UK has guaranteed that it will not introduce border posts and checks, HMRC has said that it will not need physical infrastructure at the border “in any circumstances” and the Head of the Irish Revenue has said that he is “practically 100% certain” that there will be no need for new customs facilities along the border.
Much of the evidence has been well-documented already and it is clear that existing technology and administrative procedures can enable any customs formalities to be carried out electronically and physical checks to be carried out away from the border. There is, of course, presently a border between the two countries for tax, VAT, currency, excise and security; these are managed using technologies without infrastructure at the physical border.
Administrative procedures and existing technology will enable customs formalities to be carried out electronically and any physical checks (of which few would be needed) can be carried out elsewhere.
So far the Commission has taken a wide variety of new evidence. I was encouraged to hear how countries like Brazil, Australia and Dubai are using away-from-the-border arrangements such as sophisticated Authorised Economic Operator schemes. The UK already has AEO in place but with a very low take-up by businesses and traders. By incorporating a multi-tier Trusted Trader system with incentives and benefits for different types and size of business, both friction can be eliminated at the border and intelligence on contraband goods can be enhanced. Inland declarations can be made so that checks at the border are avoided.
With regards to sanitary and phytosanitary matters (SPS), whilst the Union Customs Code states that goods must be cleared at a border, there exist several precedents where away-from-the-border exceptions have been made to facilitate trade such as San Marino and Andorra (which are microstates outside of the EU, land-locked by EU Member States and enjoying special exemptions when it comes to EU customs rules).
Given that 4.9% of Northern Ireland sales are with the Republic (accounting for less than 0.2% of UK GDP) compared to 20.3% with Great Britain, we need to also keep this issue in perspective. The vast majority of sales is internal to Northern Ireland and, when combined with sales to Great Britain, Northern Ireland sales within the United Kingdom make up 85.3% of its economy.
Prosperity UK’s work on this matter will be invaluable in identifying solutions and I hope that the next Prime Minister will consider its conclusions seriously.
The post The solutions to the Northern Ireland border question are out there appeared first on BrexitCentral.
First the bailout, now the backstop. The Irish Government’s solution to the financial crisis in 2008 was a blanket guarantee for the liabilities of the failing banks. It has some worrying similarities to the current position on the backstop.
Initially, the guarantee was regarded as an extremely clever move which would put one over on other jurisdictions, stabilise the banking system and would never be called in. It was tactically clever, but strategically disastrous. It was based on a bluff and our bluff was called. Large deductions are still being made today from every pay packet in Ireland to pay for this folly.
The backstop appears to have been retrieved from the same bluffer’s drawer in Dublin’s Government Buildings. The original backstop, which only covered Northern Ireland, was hailed as a smart manoeuvre which gave Ireland and Brussels the whip hand in the Brexit discussions.
Again, the early expectations that the backstop would be a trump card began to fade as the House of Commons refused to stomach it. The British Government had it extended to cover the whole of the UK in the Withdrawal Agreement, but again it hit the rocks. In reality, it was never a runner.
Not only has it has scuppered the premiership of Theresa May, it has also sent the moderate, pro-EU wing of the Conservative Party into total retreat. Meanwhile, Nigel Farage’s Brexit Party is threatening to inflict huge damage on both Conservative and Labour traditional bases outside London.
Boris Johnson is odds-on favourite to move into 10 Downing Street and adopt a much more confrontational attitude to Brussels, and indeed Dublin. Even if Boris stumbles yet again, the next occupant of that famous address will have a fairly similar approach.
We may be faced with a demand from London to conclude a free trade deal on the lines of the Canada-EU agreement (CETA), coupled with a declaration that the UK will not initiate any hard border on the island of Ireland, using advanced technology instead.
It would be the Taoiseach’s nightmare that in a messy Brexit, Brussels demands that Dublin respect the integrity of the Single Market and start erecting barriers. Ireland’s junior European minister, Helen McEntee, took up this theme when she opined that in a no-deal outcome, it would be very difficult for the Irish Government to reconcile its obligations to the EU with protecting the Good Friday Agreement.
And it was all so unnecessary. A few simple concessions could have allowed both sides move on to the next stage of Brexit, the future trade arrangements. The insertion of a time limit on the backstop would, in all probability, have secured the passage of the Withdrawal Agreement through Westminster.
The Irish Government’s bluff is being called and its Brexit policy is in tatters. Instead of giving lectures to the British people, the authorities in Dublin need a deep and critical examination of how they managed to contribute to the present unsatisfactory situation.
But such a reflective process is not the forte of Irish administrations and the Irish media, with the occasional notable exceptions.
Even if Boris or another new Prime Minister is not able to get the House of Commons to back his or her approach to Brexit, it is only a matter of time before a Brexiteer administration is returned to power, even if we have a short interregnum of a Corbyn/Lib Dem administration. No wonder that Presidents Macron and Juncker are coming around to the view that keeping a fractious and divided UK inside the EU would be a major mistake.
Meanwhile, our recent guest, the US President, is leaving nobody in any doubt about his support for a true Brexiteer in power in London. A future trade deal between a fully independent UK and the USA, coupled with trade wars between Washington and Brussels, is the stuff of nightmares for Ireland.
The London consultancy firm Primary Access, in analysing Irish investment abroad and Foreign Direct Investment in Ireland, stated that “Ireland has €93bn committed to the US, and €88bn to the UK in direct investment abroad; the comparable numbers for France and Germany are €4.4bn and €3.1bn respectively. The same pattern repeats in terms of inward direct investment. The US has €179bn, and the UK €58bn invested in Ireland; France has €15bn and Germany €5bn”.
As I have stated on many previous occasions, Ireland’s economic connections with mainland Europe are overwhelmingly those of the multinational (mainly American) companies located within the Republic.
If the international climate changes and these companies no longer feel comfortable in Ireland, we will be left with precious little else. In the meantime, our two closest economic and cultural partners, our neighbours to the west and east, as well as home to the majority of our diaspora, will have moved on without us.
In the European elections, the governing coalition parties in Germany recorded a vote which was over 18 per cent below their totals in 2014. The Greens and the Eurosceptic AfD gained ground. In Britain, the Brexit Party emerged as the clear winners, while Marine Le Pen’s group outpolled Macron’s party in France. In Italy, the Lega under Matteo Salvini stormed to victory and the left-wing pro-EU Democrats suffered heavy losses.
The four largest countries in the EU all recorded deep disillusionment. Yet to listen to Irish media, or indeed the EU Commission-financed Euronews, one would have imagined a triumphant endorsement of the present set-up.
Ireland (North and South) was one of the few countries which experienced a drop in turnout, which was particularly noticeable in Dublin, where only a 42 per cent poll was recorded. So much for Euro-election enthusiasm.
The Taoiseach is right. We are entering a dangerous period. And we have the backstop, and that bluffer’s drawer, in significant measure to thank for it.
The post The Irish Government’s Brexit policy is in tatters and its bluff is now being called appeared first on BrexitCentral.
As a linguist, the way people use language has always been of great interest to me. In a political sense, it reveals much about their intentions and their character. It was once a topic of much consternation, for example, that when asked repeatedly to define what Brexit meant, the Prime Minister would only assert that “Brexit means Brexit”. How revealing that has come to be…
But certainly, it is a perfectly valid question to ask what leaving the European Union means, and the language that we use around this is important. What, then, does it mean in clear and unambiguous terms?
It means that no EU institution, court or legislature can pass any law, ruling or judgment whatsoever that is in any way binding upon, or otherwise holds sway over, this United Kingdom ever again. This is the bare minimum requirement for restoring “sovereignty” – i.e. full, national sovereignty.
We do of course continue to be bound by commitments we have agreed to as a party to plenty of other international treaties, but this is because we have chosen to be. We are free to rescind these obligations at any time by withdrawing from those treaties, and that will not lead to political ruin or economic disaster. This is not something that those proponents of the EU who claim that Britain has, in fact, always remained fully sovereign appear to understand.
Indeed, it is only in the EU where national sovereignty is at issue when it comes to international treaties and agreements. It is only in the EU that “co-operation” means “integration”, “collaboration” means “subordination”, “unity” means “some people doing what others are telling them”, and “impossible” means “we’d rather not, thanks” (as with re-opening the Withdrawal Agreement, for example). Nobody else in the world behaves this way, and this is why the EU is stagnating and fraying. It is trying, and failing, to change the rules of the game.
So, what are the rules, and what is this game?
We have mercifully not seen a return to the World Wars of the last century; however, a good friend of mine from the Netherlands (with a Masters in International Relations) once told me that what far too few people seem to have grasped is that, as far as affairs on the world stage are concerned: “it’s war”. In fairness, “war” is rather a strong term. In truth, the reality is more like “competition”, and in this sense the various countries in our world are more like siblings or even families.
Throughout history, human beings have always lived in groups, and always will. Nobody would question the reality, or indeed the morality, of individuals putting their families’ needs before those of others – and this, really, is all that national sovereignty is about. It acknowledges the principle that there is no reason why anyone else, from anywhere else, is likely to place the interests of another country before those of their own – unless, of course, they make a genuine and principled choice to apply to change their citizenship and move there.
Another thing that the European Union likes to talk about a lot is “unity”, but in reality it does not truly understand this. What, then, can unity be said to mean?
Unity means mutual collaboration, in the face of difference and diversity, through choice. Without that choice, it becomes fairly meaningless, yet it is precisely by means of the removal of choice – or national sovereignty – that the EU seeks to “unify” its members. With that in mind, the reason why it is not, has never been, and likely never will be as united as it claims, becomes clear.
Take the Irish, for instance. Two things were needed for the Republic of Ireland to recover its economy after the financial crash of 2008: in the first instance, a massive bailout from, amongst others, ourselves; in the second, a radical pro-business reform of their economy to slash the rates of things like corporation tax, attracting huge inward investment and job creation from major American behemoths such as Microsoft and Apple.
Only with the two in combination was Ireland able to survive, recover and even prosper – once again, highlighting the success of right-leaning economic policies on the world stage. This, however, has come to anger certain other powerful interests and voices within the European Union, who have resented Ireland’s ability to out-compete them in this respect. They are now moving, therefore, to remove the national veto from the arrangements for setting tax rates within the European Union, swapping this instead for the much-reviled Qualified Majority Voting mechanism (because, as
mentioned earlier, on the world stage, countries are going to want to compete).
In doing so, they are taking away the right of the Irish government and its people to make their own choice as to how to run this aspect of their country. Yet, how do they choose to describe this? As a need for “greater unity”. It is when we see their use of language for what it truly is that we come to understand why this European Union is failing – and thereby why it is imperative for the UK to extricate itself as soon as possible.
When we use language disingenuously in this manner, and in so doing make a mockery of notions such as unity and sovereignty, we might fool many – but we will not pull the wool over the eyes of all. The meteoric rise of the Brexit Party over a period of scant weeks to the point that it won the European election lays bare the fact that the scales have fallen from the eyes of the British public – and our siblings just across the water should be afraid of what they have done.
The post Don’t be fooled by the EU’s disingenuous use of language appeared first on BrexitCentral.
We have reached a fork in the road. Collective political failure from the top of government has left the country – and my party – in a perilous position. We need to do more than rearrange the deck chairs, we need a new start and a fresh approach.
Whether it was agreeing to the sequencing of the talks, approval of the joint report which included the backstop, the failure at Salzburg or the sanctioning of talks with Jeremy Corbyn which led the Prime Minister to put a second referendum on the table – it’s clear that mistake after mistake has damaged the trust and credibility we need to unite the country, Parliament and party to deliver Brexit and build a better future.
My clear preference is to leave the EU with a deal. However, we do need to leave, so if I am faced with the choice of leaving without a deal or never leaving at all – I will choose to leave. We should take every step necessary to ensure that we are in a position to do so if the time comes.
The current extension to Article 50 runs to 31st October. I voted against this, but that is the position I would inherit as Prime Minister.
As a former Chief Whip, it is my judgement that it simply isn’t credible to suggest that you can renegotiate a deal with the EU and get it through both Houses of Parliament by 31st October. Candidates who suggest this is possible need to explain how.
The first stage of my plan to deliver Brexit involves doing something that the current Prime Minister failed to do.
As Prime Minister, working closely with the new Cabinet, I would lead a proper process to work through all the challenges and opportunities to arrive at an agreed negotiating position.
We also need to re-open the doors of Number 10 to our broad church of MPs to properly engage and listen to the views of our representatives from across the country. In September, the Conservative Parliamentary Party, having been heard and properly consulted, can unite around a new strategy.
A key ingredient of this first stage is the realisation that we can only get Brexit delivered, as I argued last October, with the votes of Conservatives, our DUP allies and a handful of backbench Labour MPs. We cannot trust the Labour front bench – their job is to oppose us, and Jeremy Corbyn wants to destroy us.
We must also face up to the reality that the current unamended ‘deal’ is dead. The only thing for which Parliament has signalled approval is the bulk of the present ‘deal’ minus the backstop.
We must go back to Brussels and open real and transparent discussions to change the backstop. After the Brady amendment’s approval in January and credible work on alternatives, I haven’t seen any evidence that the Prime Minister or Cabinet properly requested the EU to respect the views of Parliament.
The second part of my Brexit plan involves building strong relationships with the Republic of Ireland, both communities and all parties in Northern Ireland.
The EU will only move on the backstop with reassurance about both the integrity of the Belfast Agreement and the Single Market. We should take these concerns seriously and tackle them head on.
It is vital to rebuild a proper relationship with the Republic of Ireland. We work incredibly closely with Irish officials on everything from the operation of the Common Travel Area, to our efforts to crack down on smuggling at the present currency and VAT border and regularly share intelligence and security resources to ensure both countries are kept safe. This was something I saw first-hand when serving as Immigration Minister under David Cameron.
Our relationship with the Republic of Ireland should not only be with the Taoiseach and Tánaiste, but also with the main opposition party, Fianna Fáil. As a General Election in Ireland becomes a less distant prospect, we need to avoid the backstop becoming a partisan electoral issue in the Republic.
When it comes to Northern Ireland, we need to make urgent progress in re-establishing the Executive at Stormont, assisted by a renewed effort from the Northern Ireland Office and the new Prime Minister. We owe it to everyone in Northern Ireland to restore a functioning devolved government.
The third element of my Brexit plan involves setting the right relationship with our EU partners – both the Commission and the Heads of Government of the Member States.
Our Prime Minister must have the diplomacy and communication skills needed – both on a bilateral and group basis – to get the tone of these relationships right. We need to show them what a positive post-Brexit relationship looks like – covering trade and the economy, security and defence – and clearly articulate how it’s best for both sides to get this right.
Then we can put forward a proper plan to change the backstop and protect the constitutional integrity of the United Kingdom.
This task will be difficult, but the best chance we have is with change – and that is something only I can offer.
The post Here’s how I would deliver Brexit as Prime Minister appeared first on BrexitCentral.
The Prosperity UK Alternative Arrangements Commission, which launched earlier this week, is a serious attempt to address the complexities of the Irish border and break the Brexit logjam. Co-Chair Nicky Morgan and I have decided to take an entrepreneurial approach to solving the conundrum of the Irish border, and ask the private sector for its help.
Our starting point is to find out what is possible by asking a panel of technical experts to develop credible Alternative Arrangements for the Irish border, which can be delivered in a timely fashion, and without the presence of physical infrastructure at the frontier.
The Commission will be made up of a broad spectrum of MPs and Lords, representing many different views on Brexit. The Commission is agnostic on the preferred future relationship between the UK and EU. Our work will be compatible with virtually all of the EU-UK end states currently under consideration and will ensure that the UK retains full flexibility in its future negotiations with the European Union.
There are three common misconceptions about Brexit which are relevant to the Commission.
The first is that Alternative Arrangements will not be necessary. But in every single scenario bar staying in both the EU Customs Union and the Single Market, for goods and agrifood, alternative arrangements of some kind will be necessary. And if we are in that scenario, we would have no ability to execute an independent trade policy or improve our domestic regulations, taking away all the potential economic gains of Brexit.
It is not well understood that free circulation of goods comes from both the Customs Union (CU) – and the rules of the Single Market. If the UK were a full member of the EU Customs Union, this would only address rules of origin. Checks would still be needed on animals, animal products (including processed food), plants and plant products. Technical regulations and standards that define specific characteristics of a product would also require checks. If the UK was in a CU, not the CU (like Turkey), the UK would need movement certificates for all relevant goods. For these very reasons, a customs union on its own does not solve the Irish border question.
Let us look at some of these potential scenarios:
- Membership of the EFTA/EEA? We will need to prove origin, and consequently, there will be customs checks.
- Membership of a Partial Customs Union? We will need movement certificates and there would need to be checks for standards, TBT (Technical Barriers to Trade) and SPS (Sanitary and Phytosanitary) issues.
- A Customs Union and EEA? We would still need movement certificates and some customs checks.
- A comprehensive Free Trade Agreement between the UK and the EU? Yes, this will require the complexities of the Irish border to be addressed.
- But what about leaving on WTO terms, a so-called ‘no deal’ scenario? Leaving the EU without a deal doesn’t absolve us from finding a solution to the Irish border. If anything, it makes it more important.
The second misconception is that there is no majority in Parliament for any Brexit alternative. But as avid BrexitCentral readers will know, the Brady Amendment was the only amendment during the recent Brexit debates to gain a parliamentary majority. Central to the amendment was the need to come to an agreed path on alternative arrangements for the Irish border.
The Alternative Arrangements Commission is – and was designed to be – a broad church. We welcome any parliamentarian who is committed to finding a workable solution to the Irish border, which means the UK can leave the EU.
The third misconception is that Alternative Arrangements for the Irish border would be a hi-tech unicorn, dreamt up by some futurologist in Silicon Valley and which would take years to develop. To that, I say, no, absolutely not. We are seeking solutions based on existing, working technology and processes. There just has not been sufficient practical work done on this by the Government or anyone else. And whilst this lack of work is regrettable, it does no good to look backwards.
The Commission has engaged a Technical Panel comprising border and customs experts, practitioners and lawyers with detailed knowledge of Ireland as well as the EU, UK and international trade regulations in order to create draft processes and procedures to fulfil our goal. In addition, the Commission will engage with established technology providers in order to develop a comprehensive set of solutions and timelines for review.
The Technical Panel will address the most challenging aspects of the Irish border including small traders, tax issues, security and movement of people, trusted trader schemes, rules of origin, financial settlement and issues relating to Sanitary and Phytosanitary Measures (i.e. treatment of food and plant-based goods).
The Commission is seeking solutions that are both realistic and sustainable and recognises that their formulation and implementation will require the engagement of many stakeholders in the UK, the Republic of Ireland and Europe. Central to the proposals will be a commitment to protecting the Good Friday Agreement.
There are no easy answers with Brexit, but I hope this Commission into Alternative Arrangements is the impetus for finding both the technical solutions and the political consensus for a deal with the EU. We owe it to the country, and Northern Ireland in particular, to do everything we can to create a seamless border in Ireland. Just because it has not been done before, does not mean it is impossible.
Anyone wishing to offer their expertise or to make a submission to the Commission can do so by emailing Greg Hands.
The post Here’s how I want to address the complexities of the Irish border and break the Brexit logjam appeared first on BrexitCentral.
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