“No Deal” is Coming Up Fast on the Rails by Rob Lee
Written by Robert Lee
Rob Lee views the recent White Paper on Brexit as meaning no realistic prospect of future trade deals, no effective parliamentary control over many of our laws and regulations, the continued supremacy of the ECJ in key areas, and no independent immigration policy. And we still agree to pay the EU 39 billion pounds, with the probability that even more will be added to this sum in the negotiations. He concludes that the probability of the “no deal” scenario has risen dramatically.
"The so-called Chequers Proposals are the final straw. It is clear now that Mrs May has no intention of delivering the kind of Brexit that she has all along promised. The brilliant forensic legal examination of the proposals by Martin Howe QC is particularly damning and clarifies in precise legal terms just how far the government is going down the road of capitulation.
Why are these latest government proposals so bad? On the surface the twelve point summary released after the Chequers meeting sounds okay. Here it is:
1 - Leaving the EU on 29th March 2019
2 - Ending free movement and taking back control of our borders
3 - No more sending vast sums of money each year to the EU
4 - A new business friendly customs model with freedom to strike new trade deals around the world
5 - A UK-EU free trade area with a common rulebook for industrial goods and agricultural products which will be good for jobs
6 - A commitment to maintain high standards on consumer and employment rights and the environment
7 - A parliamentary lock on all new rules and regulations
8 - Leaving the Common Agricultural Policy and the Common Fisheries Policy
9 - Restoring the supremacy of British courts by ending the jurisdiction of the European Court of Justice in the UK
10 - No hard border between Northern Ireland and Ireland, or between Northern Ireland and Great Britain
11 - Continued, close cooperation on security to keep our people safe
12 - An independent foreign and defence policy, working closely with the EU and other allies
The key problem lies in point 5, with very serious knock on negative effects in virtually every other area. If the UK adopts the proposed “common rulebook”, it will in effect have to obey and apply all current AND future EU laws relating to industrial and agricultural products, without having any say in those laws. In large swathes of our economy we would be a “rule taker” not a “rule maker”, and will have signed a treaty committing ourselves to this. This is what is meant by being a “vassal state”.
What about the “parliamentary lock” referred to in point 7? Surely this means sovereignty still lies with Parliament? We would theoretically have the “ability to choose not to” incorporate any future changes in EU law (though not to change existing laws that do not suit us). However, the treaty would give the EU the right to punish us – for example by withdrawing market access – if we were ever to actually exercise this apparent freedom. It is important to note that Norway has a similar theoretical right not to impose relevant EU laws, but has never successfully exercised it. Norway last tried this in 2013, only to back down in the face of severe EU countermeasures. Furthermore, according to Howe’s detailed legal analysis, the ECJ will remain the ultimate arbiter of law in all related areas. The “parliamentary lock” is a phantom.
It is crucial to note that although only around 12% of UK companies export to the EU, the “common rulebook” would apply to all UK companies involved in UK production of industrial and agricultural products AND to all such imports from third countries. The fact that the EU would be the rule setter over such a large field would give it great scope to hinder our competitiveness and development of new technologies. It is important to note that many such EU rules are not based on genuine safety grounds or scientific principles but are hidden forms of protectionism. This is particularly so in agriculture. Equally if not more significant, inability to set our own rules will be a great hindrance in achieving new trade deals. Modern free trade deals are concerned more with non-tariff barriers to trade than with tariffs. Without the flexibility to agree to accept goods from other countries that have different standards – “mutual recognition” agreements – the scope for new trade deals is very limited. The two countries that are the most keen to negotiate trade deals are the USA and Australia, but neither are going to be much interested if agriculture is effectively off the table as it would be under these proposals. The proposed new Facilitated Customs Arrangement is a bureaucratic, costly, unproven and possibly unworkable system. In any case it would take a number of years before the UK could reduce tariffs under this system. The proposed arrangement is therefore a further major impediment to trade deals with non-EU countries. It is surprising that the International Trade Secretary, Liam Fox, has not resigned as under these proposals his department will have little to do.
Even more disturbing is that the government is signalling even further concessions to the EU, particularly relating to freedom of movement. As it stands the EU is most unlikely to agree to the proposal for full access to the single market in goods without insisting on continued free movement of labour. The government seems to be hoping that if the UK concedes some preferential access for EU citizens then the EU will bend on single market access. This is conceivable but unlikely, but in any case would be another clear betrayal of the government’s election manifesto and all Mrs May’s previous Brexit statements.
So, on closer examination we find that these proposals mean no realistic prospect of future trade deals, no effective parliamentary control over many of our laws and regulations, the continued supremacy of the ECJ in key areas, and no independent immigration policy. And we still agree to pay the EU 39 billion pounds, with the probability that even more will be added to this sum in the negotiations!
Where do we go from here? The political situation is now extremely fluid, and I am not even going to try to guess possible future permutations. However, there are some things that we can be fairly sure of. Firstly, the EU is unlikely to accept these proposals as they stand and will demand further changes. Secondly, there are certain to be a large number of Tory MP’s who will vote against any deal reached on this basis. Any further concessions from the government will only increase this number. It is furthermore unlikely that Labour will be able to resist opposing any deal that the government reaches, no matter how similar it is to Labour policy (to the degree we know what that is). Furthermore, the legal process by which the UK leaves the EU is well advanced and will be very difficult if not impossible to stop.
This analysis leads me to conclude that the probability of the “no deal” scenario has risen dramatically. The terms “soft” and “hard” Brexit were always misleading – “messy” (which is what the government is now aiming for) and “clean” are much more properly descriptive. “No deal” is similarly misleading terminology. There will be agreements in place on issues such as security cooperation, citizen’s rights, UK participation in selected EU programmes, an aviation deal, and the like. What there won’t be is a free trade deal with the EU, though agreement can be reached to pursue one after the UK has left the EU.
EU/UK trade will in the meantime then revert to WTO terms. Although there will be some adjustment costs and transition hiccups, the alarmist fears raised about this scenario are ridiculous. After all more than half of our trade already takes place on this basis, as does the bulk of world trade. There are tight legal protections and procedures governing such trade, with strong enforcement mechanisms available, to allow the free flow of goods and services without the need for a trade deal (much less membership of the single market or customs union). One of the few positives to come out of the Chequers meeting was an agreement to step up preparations for “no deal”, and David Davis himself has said that such preparations are already far more advanced than generally realised (Mrs May having stopped announcements of such progress, in case the EU found them provocative!).
It would be ironic indeed if the “clean” Brexit that many Brexiteers hope for is in the end brought about not by a determined and principled UK government, but by accident and incompetence and by the unfailing inflexibility of the EU itself!"
Brexit is a wake-up call to the EU, but so far it is not being answered. By Paul Sheard
Written by Paul Sheard
"The European Union is an inherently unnatural and unsustainable configuration of sovereignty-sharing, constructed in a way that defies economic and political logic, and hence is a lurking source of economic and financial (and therefore political) risk. The UK is not leaving a fixed political entity: it is leaving a political entity that is in flux. Instead of taking a political and flexible approach, the EU has taken an inflexible and technocratic one. This is often ascribed to fears that giving the UK a “good deal” would run the risk of other member states wanting to leave the EU too or negotiating some kind of bespoke arrangement. Such an attitude is a thin reed on which to build a Union, and likely will not work in the end.
The European Union is a fundamentally flawed political and economic entity, resting as it does on a selective and inconsistent sharing of sovereignty by 28 nation states. That is a harsh judgment, but it doesn’t make it any less true. The Brexit process needs to be understood and approached in that context. That it is not, on both sides, is a lost opportunity and is making the whole process all the more fraught.
In the Westphalian system of modern nation states, sovereignty, or political autonomy and legitimacy, resides and reaches its pinnacle in the nation state. Nation states issue passports to their citizens, and confer rights and responsibilities on them; nation states have borders and devote resources to controlling them; nation states conduct monetary and fiscal affairs; nation states enter into international treaties; national states have sovereign identity; and so on.
Sovereignty has several dimensions or manifestations, relating, for instance, to: political decision-making; constitutional rights and the legal system; the protection of external borders and maintenance of internal security; the maintenance and use of military power; the regulation of finance by the state (itself having three components: fiscal policy; monetary policy; financial system regulatory policy); and cultural affinity and identity.
Nation states take on different forms, such as federalist or unitary, and they can incorporate within them different configurations of political or “sovereign” units, such as countries (as in the case of the UK), states (as in the case of the US), provinces (as in the case of China), and municipalities (as in most nations). The various aspects of sovereignty are often manifest in different forms at the level of these sub-political units. However, all of the key aspects of national sovereignty tend naturally, as if by gravitational pull, to be aligned on the same political and territorial unit: the nation state.
Thus, the normal pattern is for a nation state to have its own national government and parliament, its own constitution and legal system, a geographical border and system of border controls, an internal police and security system, its own military, diplomatic corps and foreign intelligence agency, its own currency and monetary and fiscal system, including importantly the ability to tax its citizens and issue debt, and a set of national symbols and sense of shared identity and history.
The distinguishing feature of the EU is that the various aspects of sovereignty are shared or pooled at the supra-national level in a partial and inconsistent way (in EU-speak, this is called “variable geometry”). Certain dimensions of national sovereignty are pooled at the EU level; on those dimensions, it is as if the 28 member states (or in some cases a subset of them) are one nation state. But other dimensions of sovereignty are retained at the member state level; on these dimensions, it is as if the EU is just a loose affiliation of member states.
There are two aspects of this selective sharing of sovereignty that are particularly problematic, one relating to the monetary union, the other to the freedom of movement. The EU is designed to be a monetary union but not a fiscal union. Other than for the UK and Denmark, EU members are supposed to adopt the euro and join the monetary union, and 19 of the 26 member states have done so. Constructing a monetary union that is not also a fiscal union defies economic and political logic, and is the source of the post-crisis poor macroeconomic performance of the euro area as a whole and is a lurking source of economic and financial (and therefore political) risk (the latest unemployment rate in the euro area is 1.1 percentage points above its pre-crisis trough, whereas the UK unemployment rate is 0.9 pp below its pre-crisis trough and the US rate is 0.4pp below; the latest level of real GDP in the US is 16.1% above its pre-crisis peak and that in the UK is 9.4% above, while that in the euro area is only 6.3% above).
The ability of a nation state to issue its own currency and operate its fiscal affairs (taxing, spending and issuing debt) in that currency is a core aspect of sovereignty. By design, the EU divorces one half of that sovereign right, usually called “monetary policy”, from the other half, usually called “fiscal policy”, pooling sovereignty when it comes to the monetary half, but retaining sovereignty at the member state level when it comes to the fiscal half. This creates an inherently unnatural and therefore ultimately untenable and unsustainable configuration of sovereignty-sharing.
It also imposes considerable economic costs, for three reasons. Most importantly but least ecognized, being a monetary union but not a fiscal union creates a situation which is tantamount to members of the euro area issuing debt in a foreign currency, that is, a currency which they do not have the sovereign power to create (that power lies with the European Central Bank) (leaving aside Emergency Lending Assistance, over which the ECB also has the final say). To many, this might seem to be a desirable, Ulyssian-like design feature because taking the printing press away imposes the ultimate fiscal discipline on governments. But, it creates an inherently dangerous situation for sovereign borrowers: ask any emerging market government that is not able to issue debt in its own currency about that.
Secondly, the euro area not being a fiscal union severely hampers its ability to engage in meaningful counter-cyclical fiscal policy. By construction, there is no single fiscal authority to do this; in theory member states could coordinate fiscal policy expansions, but in practice, largely because of the next point, doing so sufficiently quickly and on a sustained enough basis is exceedingly difficult.
Thirdly, and adding insult to injury, the euro area, by design, imposes serious fiscal constraints on member states, hampering their ability to operate their own counter-cyclical fiscal policy. It is hard to conceive of a more badly designed system for speedily restoring lost aggregate demand, as became only too painfully evident in the wake of the financial crisis.
To see this point, consider a euro member that suffers from a sudden and large drop in aggregate demand (the condition faced by all euro area members in after the 2008 global financial crisis). The normal macroeconomic prescription in such a situation is to implement monetary and fiscal policy expansions sufficient to restore the lost aggregate demand, the monetary expansion in particular being likely to lead to a lower exchange rate. But a member of the euro area does not have its own monetary policy or exchange rate, and its ability to engage in a fiscal expansion is heavily constrained by rules and by the fact that any fiscal expansion has to be financed by issuing debt in what is in effect a “foreign” currency.
The welfare costs of this dysfunctional economic and monetary mousetrap are not to be dismissed lightly. Take, for instance, the case of Italy, the euro area’s third largest economy and the EU’s fourth. Real GDP in Italy is still 5.5% below its (first quarter 2008) pre-crisis peak level and its unemployment rate is 4.9 percentage points above its pre-crisis trough. The corresponding numbers for Greece are 24.8% below and 12.8pp above, respectively. These are truly shocking numbers.
Freedom of movement within the EU is similarly problematic, because it is not paired with the necessary degree of the pooling of national sovereignty when it comes to the definition and protection of the EU external border and when it comes to internal intelligence-gathering and maintaining internal security. For a set of nation states to agree to cede the right to control who comes into their country and who is able to live and work in that country to their supra-national level is to cede a core aspect of national sovereignty.
There is nothing wrong with that per se and it is a sovereign choice of the nation states to make, but it seems inconsistent with member states on the EU border maintaining control of their external borders and maintaining largely national internal security apparatuses, even arguably national defense systems. If people, not just EU citizens but in the case of the 22 EU members of the Schengen area anyone who has entered one of those countries, are free to traverse national borders at will, it would seem logical and fiscally equitable for the EU Leviathan to have responsibility for maintaining the external border.
Partial steps have been made, and are continuing to be made, in that direction with the recent upgrading of Frontex to the European Border and Coast Guard Agency. But, according to European Commission President Jean-Claude Juncker (2017 State of the Union speech), the Border and Coast Guard have only 1,700 officers compared with 100,000 national border guards. What sense does it make for EU member states to operate as (largely) one state when it comes to freedom of movement within the EU and as (largely) separate states when it comes to protecting the EU’s external border? That, when it comes to the sharing of sovereignty, the EU is a work-in-progress, a metaphorical half-built house, is well recognized in Brussels and in other national capitals. The June 2012 “Four Presidents’ Report” and its successor June 2015 “Five Presidents’ Report”, both presented to and discussed at European Council meetings, among other vision-laden documents, have identified the challenges facing the EU, and the euro area in particular, and laid out a roadmap for addressing them over time. Considerable progress has already been made towards “completing the Economic and Monetary Union”, notably by establishing a European Stability Mechanism, by putting in place the building blocks of a banking union, and by the ECB crossing Rubicons to provide effective backstops (via its Outright Monetary Transactions and its Asset Purchase Program) for the monetary union. But the European Commission and the European Council are eyeing much more to be done.
Which brings me to Brexit. Three points bear highlighting. One, Brexit is all about the UK deciding to repatriate some, much or all of the sovereignty that it had previously shared with the other member states in the EU. That is, the decision by the UK to withdraw from the EU speaks to the fundamental nature of the EU: it is a political entity which rests on varying degrees of the pooling of the various aspects of sovereignty.
Second, despite Brexit being framed as a zero-one, in-or-out decision, there is a spectrum of possible arrangements, associated with varying degrees and forms of repatriation of sovereignty, that would satisfy the referendum result. The amount of sovereignty that the UK wishes to take back (as opposed to “may be able to take back”, given that it takes two to tango) is a decision for the British people to make, through their own democratic processes. “Hard” versus “Soft” Brexits, while convenient short-hands, do not capture the subtlety of this point. Given that it is the future of the UK as a sovereign entity that is at stake here, it is not surprising that Brexit is the subject of fierce public and political debate and contest in the UK. Viewed in this light, nor is it perhaps too surprising that, according to some commentary, the Brits have been too busy negotiating with themselves to be able to negotiate with Brussels.
Third, because the EU itself is struggling deeply with the question of its own future, with a view to “completing the EMU” and forging “ever closer union”, it would have made sense for the EU to have linked the issue of Brexit to that of its own future architecture. The UK is not, as an uninformed observer might infer, leaving a fixed political entity: it is leaving a political entity that is in flux. A critical aspect of crafting a mutually beneficial future relationship between the UK and the EU27 is to have a clear idea of what the EU27 itself will look like in the future. The two questions should have been, and still should be, dealt with in the same frame of reference.
That the EU did not take such an approach is even more curious when it is considered that, just four weeks before the UK triggered Article 50, the European Commission released a White Paper on the Future of Europe: Reflections and scenarios for the EU27 by 2025. This White Paper, which was grew out of the earlier Four and Five Presidents’ Reports, set out five scenarios for the future of Europe, although not necessarily couched in these terms, each implying different degrees and configurations of mutual sovereignty sharing: “Carrying on” (“The
EU focuses on its positive reform agenda”); “Nothing but the single market” (“The EU is gradually re-centred on the single market”); “Those who want more do more” (“The EU allows willing member states to do more together in specific areas”); “Doing less more efficiently” (“The EU focuses on delivering more and faster in selected policy areas while doing less elsewhere”); “Doing much more together” (“The EU decides to do much more together across all policy areas”).
The premise of the Commission’s White Paper, that the EU needs to decide on its future and that there are multiple visions on offer, was quite consistent with approaching the issue of Brexit through the same lens.
Instead of taking a political and flexible approach, the EU has taken an inflexible and technocratic one. Brexit and the future of the EU are issues crying out for political leadership and treatment, not handing off to technocrats and negotiators. In this regard, the approach to the Brexit negotiations taken by the EU of refusing to discuss the nature of the future relationship before certain withdrawal issues were agreed upon, is particularly disappointing and puts the technocratic cart before the political horse. Article 50 states clearly that: “…the Union shall negotiate and conclude an agreement with [the Member State that is withdrawing], setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union.” [my emphasis] If anything, high level political discussions about the desirable and feasible nature of the future relationship, in the spirit of seeking solutions to the mutual challenges discussed above, should come first; the tackling of technical and operational details after.
The insistence by the EU that there be no “cherry picking” by the UK and that the so-called “four freedoms” (the free movement of goods, persons, services and capital) are indivisible lacks a defensible basis and is counter-productive. In a sense, the very basis of the EU is one of “cherry picking”, that is, the selective and partial pooling of sovereignty by member states. And the very fact that the EU has laid out visions and roadmaps for completing the European project, involving such aspects as completing the banking union, building a capital markets union, pursuing greater economic integration in the services area (such as a digital union and an energy union), and introducing a macroeconomic stabilization function and elements of fiscal union, and the fact that the EU is facing deep political challenges over uncontrolled migration, undercuts any notion that the four freedoms are complete or sacrosanct.
Because the starting point is the UK being in the EU (although not in the euro area or in Schengen), a more sensible (welfare-optimizing) negotiating stance of the EU would have been informed by the following question: what is the minimal amount of sovereignty we can allow the UK to take back, that will satisfy the UK’s wish to withdraw from the EU? That the EU has not taken the above kind of approach is often ascribed to fears that giving the UK a “good deal” would run the risk of other member states wanting to leave the EU too or negotiating some kind of bespoke arrangement. But, to the extent that is the case, it is a thin reed on which to build a Union, and likely will not work in the end. It is not too late for Brexit to be seized as an opportunity, on both sides of the English Channel, to reconfigure the sharing of national sovereignty in a more politically and economically sustainable way. That will require recognizing that the European project is about the transfer of sovereignty from the member state to the EU level and so, at heart, is a political project, and cannot proceed or succeed without obtaining and maintaining political legitimacy in the eyes of national electorates. It will also need political leaders to take on the mantle of statesman and stateswomen. Big ideas and big challenges call for big figures to step forth."
Paul Sheard is the former Vice-Chairman and Chief Economist of S&P Global, which includes the international ratings agency, Standard & Poor’s.
Not your stereotypical remainer my ass. When are you all gonna stop following these idiots like sheep on twitter. He tweets about 5 times a day slating brexit and has always done.
[Post edited 27 Jul 2018 22:44]
ECB hasn’t got a clue. He got the 2015 general election completely wrong. He got the Brexit referendum completely wrong. He got the USA presidential election in 2016 completely wrong.
So his views on post Brexit U.K. are no doubt wrong again. This is a guy who admires Ken Clarke ffs Ken bloody Clarke, and no doubt the likes of Soros too. He’s also now involved with the trust at the club - 😬
[Post edited 28 Jul 2018 9:03]
The Countdown begins. on 09:00 - Jul 28 with 3250 views
Boris Johnson may have saved the EU In the wake of the Brexit vote, support for the EU around the continent is at its highest since 1983 By Simon Kuper
FT, 26 July 2018
It’s hard now to recall, but until quite recently many people thought Brexit would start a stampede out of the EU. After the British vote, Europhobe politicians Marine Le Pen and Geert Wilders schemed to duplicate the result in France and the Netherlands. In October 2016, Britain’s Daily Express newspaper chirruped: “Europe is in trouble as across the continent countries are gearing up to hold their own referendums on membership of the superstate.”
Then Donald Trump arrived to usher Brexiters into their glorious free-trading future. Just before taking office, he assured Brexiter Michael Gove in a newspaper interview: “I’m a big fan of the UK. We’re gonna work very hard to get it [a US-UK trade deal] done quickly and done properly.” As recently as this February, Matteo Salvini, leader of Italy’s far-right League, compared the EU to “the Titanic about to sink”. When Salvini helped form a Eurosceptic government this spring, even some sensible people expected him to sink the EU ship.
But since then, the risk has all but vanished. That’s largely because we now know one thing about Brexit: it will be a failure, in the sense that it will make Britons’ lives worse. Brexit has saved the EU.
Most of the time, Brexit seems like the worst British comedy series ever: a robotic main character, sparring with a couple of stock British eccentrics; endless bureaucratic arguments; and almost no plot development. Yet this month, something finally happened: the British cabinet, gathered at prime minister Theresa May’s country house Chequers, ditched “hard Brexit”. This had been the fantasy (or “dream”, to use Boris Johnson’s word) that the UK would leave all European institutions and jet around the world signing amazing trade deals. After the cabinet’s decision, several senior Conservatives resigned. However, they don’t even have a majority within their party to revive hard Brexit, especially as their fantasy trade partner has just started an international trade war.
That leaves the UK with three options: 1. “Soft Brexit”, which means paying the EU to obey almost all its rules, accepting “the status of colony”, as Johnson says, and forgoing trade deals. 2. No-deal Brexit: crashing out of the EU, queues at the border, flights grounded, the Royal Air Force delivering food and medicines etc. 3. No Brexit.
Whichever option the UK stumbles into, the final outcome is now clear: British humiliation. Brexiters will blame it on May and the EU, while Remainers will blame Brexit, but both will agree that it’s humiliation. Given that, you really have to love 19th-century sovereignty (or regard yourself as being outside the economy, which probably means retired) to keep supporting Brexit.
Most Europeans got bored of Brexit long ago, but thanks partly to anglophone dominance of the European public sphere, they are vaguely aware that the British master-planners are in the soup. The farce travels the continent in a way it wouldn’t if it were playing in Germany, which remains a mysterious black box for most Europeans. While covering the World Cup, I even noticed Борис Джонсон (Boris Johnson) trending on Russian Twitter.
And Brexit’s failure fits a continuum. In 2015, Greece’s Syriza government tried to renegotiate its relationship with the EU, or maybe leave, and failed too. Today, Syriza is a docile pro-EU government. Italy’s new government has already stopped talking about leaving the EU or the euro, frightened by spikes in Italian bond yields this spring. In France, Le Pen now says: “We can improve the daily life of French people without leaving either Europe or the euro.”
Explaining her change of mind, she admits: “We have heard the French.” And not just the French: support for the EU around the continent is at its highest since 1983, according to the European Commission’s survey of 27,601 people in April. Brexit has converted many young Britons into fanatical Europhiles of a type that barely existed in the UK before. The EU has also acquired the perfect external enemy: Trump is even less popular in Europe than at home, so when he calls the EU a “foe”, he helps unite Europeans behind it.
Populists are quietly dropping EU exits from their offering. They will still have enough to talk about. They may simply get nastier: Salvini now bangs on nonstop about migrants. Vladimir Putin is supplanting Brexit as the latest populist geopolitical cause. However, Brexit may persuade many voters that the thing populists do best is sloganeering.
The vote for Brexit was in part an attempt to relive the emotional heights of Britain’s second world war. Fittingly, then, Brexit will probably end up re-enacting wartime Britain’s selfless rescue of continental Europe, only this time as farce. Johnson will go down in history as a European hero: the man who saved the EU at its moment of peril. One sacrifice was required to bury the whole issue of leaving Europe, and the UK happened to get there first. Like the EU or loathe it, the Brits have shown you can’t leave it. For better or worse, the EU now looks as inevitable as capitalism.
Dominic Raab: the face that says, ‘I need to take back control of my sphincter’ By Marina Hyde
Guardian, Fri 27 Jul 2018 17.27 BST
Even for those who’ve been stockpiling I-told-you-sos for two years, there really is zero satisfaction in watching Brexit secretary Dominic Raab wanly assure a parliamentary committee that, post-Brexit, “there will be adequate food”. Just like the al-Qaida number three job used to be, the DExEU gig really is dead men’s shoes. Give it a year and it’ll be Secretary of State Ray Mears.
To everyone writing about adverts, microtargeting, the law, Turkey, racists, Jo Cox today, never forget this graph. It's absolutely key. To everyone who says "Does advertising work?" Yes. Yes, it does. pic.twitter.com/h3DQPBNL92
A humiliating Brexit deal risks a descent into Weimar Britain The EU must not impose a punitive exit agreement on the UK. The fallout from a resentful nation would be felt throughout the continent By Timothy Garton Ash
Guardian, Fri 27 Jul 2018
Over the next year or two we could witness the emergence of a rancid, angry Britain: a society riven by domestic divisions and economic difficulties, let down by its ruling classes, fetid with humiliation and resentment. Any such country is a danger both to itself and to its neighbours. This prospect will come closest, fastest, if there is no deal on Brexit and Britain crashes out of the European Union, with what the country’s top civil servant has described as “horrendous consequences”. We have been warned that these could include miles-long queues of lorries at Dover, planes grounded, and the army called in to distribute emergency supplies of food and medicine.
In such circumstances, Britain’s rabid tabloids would certainly blame the chaos on the bloody Europeans – especially the French – and demand we immediately stop paying any more money to the EU. The new Brexit secretary, Dominic Raab, has already said London won’t pay its agreed £39bn divorce bill if it doesn’t get a satisfactory deal. Angry Brits will go on to ask: why should our troops be protecting faraway Europeans when the Europeans are screwing us? And then: why not go back to the traditional British policy of trying to divide and rule on the continent?
Such a Britain could also arrive more slowly, if the other 27 member states of the EU impose a humiliating divorce deal – a milder, peacetime, bureaucratic version of the punitive Versailles treaty imposed on Germany after the first world war, which sowed the seeds of German nationalist revisionism. Britain’s Brexiteers are already talking about a Brexit 2.0, to follow and revise any makeshift deal cobbled together so that Britain can formally exit the EU on 29 March 2019.
Am I exaggerating the danger by even hinting at a comparison with Weimar Germany? Indeed I am. I don’t seriously envisage millions of newly unemployed, or a new Hitler coming to power, or a world war started by Boris Johnson. But it’s surely better to overdramatise the risk, to get everyone to wake up to it, rather than do what most of our continental partners have done for the last two years, which is consistently to underestimate the dangers for the whole of Europe that flow from Brexit – especially a mishandled Brexit.
To everyone writing about adverts, microtargeting, the law, Turkey, racists, Jo Cox today, never forget this graph. It's absolutely key. To everyone who says "Does advertising work?" Yes. Yes, it does. pic.twitter.com/h3DQPBNL92
British ‘fake news’ committee says democracy is facing a crisis by Karla Adam and William Booth
Washington Post, July 27
LONDON — The “very future of democracy” is being threatened by “fake news,” a British parliamentary committee is warning, and the government response should include making tech companies legally liable and subject to algorithm audits.
That’s the conclusion after a lengthy probe by Britain’s Digital, Culture, Media and Sport Committee.
The plucky little panel, led by Conservative lawmaker Damian Collins, has covered issues including Facebook data mining, Russian election meddling and questionable Brexit financing. Witnesses who have testified before it — Christopher Wylie, Arron Banks and Alexander Nix, to name a few — have generated some of the biggest political stories of the year.
Its interim report was made available to news organizations, stakeholders, politicians and individuals for review before its official publication Sunday. After several British news organizations broke the embargo, The Washington Post decided to publish also.
The report concludes that an even bigger concern than obviously false information is the manipulation and misuse of personal data and the deliberate stoking of fears and prejudices — by state-sponsored actors, private companies and other groups agendas — to influence voting.
In an interview with The Post last month, Collins said that after interviewing U.S. tech companies and researchers in Washington in February, the commitee realized that fake news based on lies was only a small part of the problem.
“One of the bigger areas, the much more difficult area, is the relentless targeting of people with hyper-partisan content that’s not necessarily fake, but it’s highly skewed to a particular point of view,” Collins said. “The issue there is: Do people understand why they are receiving this information? And also where is it coming from?”
He added, “One of the big issues with the Russian activities is it’s not just that they are doing it but they are masquerading as people in your country.”
Among the commitee’s recommendations are that the government should update electoral law to account for modern campaigning techniques, consider new restrictions for political advertising on social media and “establish clear legal liability for the tech companies to act against harmful and illegal content on their platforms.”
The report suggests that companies should be responsible for both “content that has been referred to them for takedown by their users, and other content that should have been easy for the tech companies to identify for themselves.”
It cites some free-speech concerns related to a German law that fines companies up to 50 million euros (almost $60 million) if they don’t remove hate speech from their sites within 24 hours. But the report also notes, “As a result of this law, one in six of Facebook’s moderators now works in Germany, which is practical evidence that legislation can work.”
The report also proposes that the government should have the power to audit tech companies’ nonfinancial aspects, including their algorithms.
In a statement, Facebook’s vice president of policy, Richard Allan, said, “We share their goal of ensuring that political advertising is fair and transparent and agree that electoral rule changes are needed.”
He noted that Facebook has already made advertising on its network more transparent and has been investing in people and technology to detect and remove bad content, but that it would go further still.
“We are working on ways to authenticate and label political ads in the UK and create an archive of those ads that anyone can search,” he said. “We will work closely with the UK Government and Electoral Commission as we develop these new transparency tools.”
Facebook founder Mark Zuckerberg has declined to testify before the committee, sending his chief technology officer and two policy staffers in his stead. Lawmakers have threatened to formally subpoena him when he next steps foot in Britain.
The wide-ranging report also highlights concerns over the funding of one of the campaigns that pushed for Britain to leave the European Union. “Arron Banks is believed to have donated £8.4m to the leave campaign, the largest political donation in British politics, but it is unclear from where he obtained that amount of money,” the report says. “He failed to satisfy us that his own donations had, in fact, come from sources within the UK.”
The committee heard evidence from 61 witnesses and received more than 150 written submissions. It held 20 oral evidence sessions, including one in Washington — the first time a select committee has held a live broadcast session in another country. A second report is expected to be published in the fall.
Collins said that during the 18-month probe, “what blew the doors off was when Wylie came forward.” That was the moment that “started to show the interconnectedness” of various digital advertising companies, such as Cambridge Analytica, SCL and AggregateIQ.
When asked if he thought micro-targeting by data analysis firms on sites such as Facebook actually influenced behavior, Collins said: “You wouldn’t spend millions of pounds doing it if you didn’t think it worked.”
. . ."When asked if he [Damian Collins chairman of the Digital, Culture, Media and Sport Committee (Conservative) ] thought micro-targeting by data analysis firms on sites such as Facebook actually influenced behavior, Collins said: “You wouldn’t spend millions of pounds doing it if you didn’t think it worked.”"
Copyright: iStock Friday, 27 July 2018 10:06 AM No deal is one of those really bad ideas, like shell suits or Celine Dion, which we thought we could leave in the past. But this summer it's somehow all the rage. It's discussed as if it were just another Brexit option.
It is not. No-deal is probably the most demented policy put forward by mainstream British politicians in the modern era. To see how it would work in practice, this piece looks at what would happen on day one. Doing this for the whole economy would take countless pages of Stephen-King-style horror, so it's stripped down to one topic: food. This is the story of how our system for importing and exporting food implodes almost instantly.
You may remember 'Brexit means Brexit' - that nursery rhyme from the bygone days of late 2016. It was false. But no-deal, on the other hand, really does mean no-deal. The withdrawal treaty comes as one package, so if Theresa May fails to secure it, everything falls down. There are no deals on anything.
March 30th 2019 becomes Year Zero. Overnight, British meat products cannot be imported into the EU. To bring these types of goods in, they have to come from a country with an approved national body whose facilities have been certified by the EU. But there has been no deal, so there's no approval.
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Cost of no deal
Cost of no deal This sounds insane. After all, British food was OK to enter Europe with minimal checks on March 29th, so why not on March 30? Nothing has changed.
The reason is that food is potentially very dangerous, so we have strict systems in place for it. Imagine that right now someone is eating a burger made from the meat of a cow with a neurodegenerative disease, like BSE. This is what happened in Britain in the late-80s and led to the deaths of 177 people. Tomorrow's tabloid front pages will ask certain very important questions. Where did the meat come from? Was it produced domestically or imported? Who was responsible for its production, transport and storage? The people responsible will be hauled in front of cameras and Commons select committees. Ministers will have to give statements to parliament. The press will demand that heads roll.
The BSE outbreak almost brought down the government. That's how severe these threats are. And there are plenty more around, including foot and mouth, avian flu, and African swine fever, plus those that do not exist yet.
This is why the certification system for food coming into Europe is so stringent and detailed. After Brexit, we will fall out of the eco-system of EU rules, agencies and courts and become an external country. That means certification requirements will apply to us too.
Certificates are approval stamps, designed per product and country, documenting the fact that it meets the various standards for human health and animal welfare. Say a container full of pork loins is sent from Leeds to Amsterdam after Brexit day. It will need to be signed off by a vet to say that the meat was slaughtered, stored, quality assured, sealed and despatched in a certain manner, with appropriate documentation proving compliance.
This will be a cold splash of water to the face for Britain. We've grown so used to frictionless EU trade that our food system is based on something called Just In Time. The idea behind this is that products are constantly cycling from producers to consumers, without being stored in big cargo holds. It's more efficient and also more pleasant. This is why you eat fresh tomatoes from countries miles away without ever really having to think about how extraordinary it is. Under your feet, a miraculous logistical engine is constantly pumping ham and cheese and fruit and veg and bread around the continent. It's a circulatory system of yummy wonderfulness.
2/ @IanDunt on the 'modern day miracle' of Just-in-Time (JiT) inventory systems that we all secretly take for granted, when we visit the supermarket. #skypapers pic.twitter.com/t4feiNn6BP
— Martin Cooper (@mpc_1968) July 26, 2018 The UK is particularly reliant on Just in Time because it doesn't feed itself. Domestic food production has been steadily declining from the early 1980s and is now at just 60%. Most of our imports come from the EU because it is closest to us. With food more than arguably any other good, distance is important - because it'll go off. About 10,000 containers of food come into the UK from the EU daily. (This is an excellent recent report on Britain's food security and its vulnerabilities.)
But the efficiency makes it fragile. The impact of no-deal Brexit on this system would be an implosion in the trade network. Suddenly, the full certification system would need to be checked at the border. Frictionless trade would be replaced by standard-issue bureaucracy.
This is where the crunch point will be. The main ports affected will be the ones at Dover, Calais, the Eurotunnel, Dunkirk, and Holyhead, for trade to and from Ireland.
Products of animal origin from non-EU states must pass through special border inspection posts, manned by a vet. Calais and the Eurotunnel are not equipped for this. Dunkirk is, but it has a very low capacity.
We have a very significant infrastructure problem here. We don't have enough inspection posts, we don't have the staff to man them, we don't have the means to divert product to them and we don't have the cold storage capacity to handle product going in and out. Many ports don't have space to install more facilities.
Inspections take time. Where a product must be detained and a sample taken off for testing, the process can last around 36 hours.
It is fatal. A study by an expert on traffic modelling from Imperial College London earlier this year found that if the current average paperwork clearance of two minutes at Dover was increased to just four, there would be a 20-mile tailback within 24 hours on the UK side. This would balloon as the days wore on.
It doesn't really matter which side the tailbacks start on - European or British. One side affects the other because there is limited space for goods to move. Some experts predict a total breakdown of the Just In Time system by day five. That's where the horror stories you read about stockpiling come from. Very quickly, we'd see empty supermarket shelves.
At this point, Downing Street could decide to unilaterally give up all these tests and procedures for goods coming into the UK. After all, it is now unbound from EU law. It can do what it likes.
There is some evidence that this is what ministers are planning. In February, Defra minister George Eustice told a Lords committee his department would implement a 'mutual recognition' regime, which ultimately amounts to assuming food from the EU was safe to eat and hoping they did the same. Transport secretary Chris Grayling told the BBC categorically in March that "we will not impose checks" at the port of Dover.
But this approach would have profound consequences. Overnight, there would be no protections whatsoever for UK consumers on the food they eat.
This would be a betrayal of ministers' assurances of high food standards after Brexit, but put aside the morality and think about the practicality. Opening the border in this way would provide an open invitation for fraudsters. They could send anything to the UK they like - any food product, any drink, with any ingredient - knowing there would be no checks. The spot check system operating under EU law would vanish. There would be no documentation, no safeguards, no court oversight, and no supervision.
The UK would be instantly downgraded to pariah status by the EU and the rest of our trading partners. British food exports would shrivel up.
The other solution would be to turn away from the continent and start importing our food from across the Atlantic.
The problem with this idea is the existence of geography. The EU is not our main food supplier because of some metropolitan conspiracy by people who like brie. It's our main food supplier because it is close to us. The US, regardless of its 'Anglophone' cultural credentials, is further away. US exports to the UK are proportionately tiny. They are ranked 10th, behind a host of European countries. For America to replace this volume of trade flow in nine months is simply not realistic. No-one with any understanding of the industry thinks it is possible.
But ministers like Liam Fox will likely demand this anyway - not because it makes sense, but because it provides them with a historic and irreversible opportunity to break Britain away from the continent and towards the US.
This is because of something called 'sanitary and phytosanitary standards'. These are global measures to protect people, animals and the environment from diseases. The EU has one approach to these and the US has another.
Years ago Nasa developed something called Hazard Analysis and Critical Control Points (HACCP). It was an extremely systematic approach to guaranteeing quality control on foods, primarily for the reason that it is very, very problematic if an astronaut gets diarrhoea. The EU adopted this very high standard in 2006.
The US, on the other hand, has much lower standards. The EU rejects US standards on the levels of pesticides residue in fruit, for instance, hormone injections in beef and chlorine wash for poultry. It has strict and very welcome requirements on the excess and routine use of antimicrobials in agriculture. Anyone who has had their life saved by antibiotics will recognise why this is sensible long-term rule-making.
Brexiters pretend post-Brexit Britain will forge its own standards in trade, but that is false. We're a medium-sized country surrounded on both sides by massive trading entities. The reality is we'll either snuggle into the EU ecosystem or the US ecosystem - it's as simple as that. On food, this is basically about which set of sanitary and phytosanitary standards we adopt.
If Brexiters can force a situation - especially in the chaotic furnace of no-deal - where the UK starts de-facto accepting US standards by having to bring in lots of their food, it makes it harder for us to align with the EU again in the future. It's a fait accompli, except that Fox would consider that phrase unforgivably continental. Maybe he'd prefer Mission Accomplished.
As the days and weeks wore on after a no-deal Brexit, British agriculture would be pulverised.
Tariffs are exorbitantly high for food products. Under a deal, they'd be kept at zero, but without one they'll average 22%. This would devastate UK agricultural exports, whose main market is Europe.
Britain could decide to unilaterally bring these tariffs down to zero. But you can't discriminate between countries under World Trade Organisation (WTO) rules, so it would then have to do this for the rest of the world as well. That would bring in a flood of cheaper agricultural products from countries with lower standards and protections.
Food prices would come down for some consumers. This would force domestic British agriculture consumption into a death spiral. They'd be blocked from exporting to their largest foreign market and suddenly faced with impossible competition at home.
Alternately, the UK could try to move past the immediate chaos of no-deal, pull itself together, and level-up capacity so it could get the certification system demanded by the EU up and running. But here it runs into another problem, which feels disturbingly like the twist at the end of a morality tale: there aren’t enough vets, because they're all from the EU.
British vets like setting up small clinics in a village somewhere and saving the family dog. Admit it. That's the image in your head when someone says the word 'vet'. They do not envision spending their career watching cow carcasses being washed down in an abattoir. The culture of veterinary checks in food is much more common in Europe, especially in Spain. EU citizens consequently make up 95% of the veterinary workforce in UK food production.
If Britain is going to suddenly have to do all these checks to export food to the EU, it will require a massive increase in these types of vets. But at the moment we can't even keep the ones we've got. European workers are leaving, sick of the lack of security about their status and a national conversation which only ever treats them as a problem. We lose about 20 EU vets a month from the sector.
Without a deal on Brexit, it becomes hard to fill that gap, because new EU workers would find it harder to come to the UK. This hinges on something called 'mutual recognition of professional qualifications'. If there's a deal, the qualification you have in Europe entitles you to work in the UK and vice versa. If there isn't, all that falls down.
This is the scale of the catastrophe no-deal entails. And this is just one area. It does not cover what would happen to services, or industrial goods, or the fact planes would be grounded, or energy, or any other part of the economy. This is just one sliver of the chaos which would hit the UK. There are simply no precedents for this scenario.
It remains, even now, unlikely that it would happen. No advanced country has committed hara-kiri like this. The weeks leading up to no-deal would likely see a form of market panic. Once investors decided it was really going to happen - say late January or mid-February - they would act accordingly.
That would sharpen minds in London and Brussels. Some kind of emergency provision would probably be passed. This would not be a deal. It would be a sticking plaster saying existing UK-EU arrangements on trade are carried over past Brexit Day for a limited period.
This would prevent catastrophe, but not for long. It would probably be a matter of weeks.
So even in this best-case no-deal scenario, things would be very intense. Britain would have to make crucial decisions about its future very quickly. That core issue in the Brexit debate - do we pick the EU ecosystem or the US one - would suddenly have to be dealt with. It would be a decision made to a razor-sharp timetable, amid scenes of extraordinary political chaos, with consequences that would define the economic future of the country.
We'd be fiddling, while drunk and hysterical, with the levers of the country's engine room. And we would make mistakes: long-term, core-function errors under impossibly volatile conditions.
No matter how soothingly they suggest it, this is not something any rational person would want. The fact we are even talking about it suggests there is something deeply wrong with us.
This piece is based on conversations with…
Jason Aldiss, managing director of Eville & Jones, a leading provider of official veterinary controls, and former president of the Veterinary Public Health Association.
Tim Lang, professor of food policy at City University London
Tony Lewis, head of policy at the Chartered Institute of Environmental Health
Sam Lowe, senior research fellow at the Centre for European Reform and visiting research fellow at the King's University Policy Unit
...and several others in London and Brussels who chose not to be named.
Ian Dunt is editor of Politics.co.uk and the author of Brexit: What The Hell Happens Now?
The opinions in politics.co.uk's Comment and Analysis section are those of the author and are no reflection of the views of the website or its owners.
Anyone interested in how the 'Remainer' establishment are going about trying to stitch us up (Chequers) should read through this...and yes, he is another 'Brexiteer' with a fantastic education and a distinguished career, don't believe the hype...