Oxford For Europe
24 December 2020
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“Our position on fish has not changed. We’ll only be able to make progress if the EU accepts the reality that we must be able to control access to our waters.”.
-Boris Johnson, at PMQs, 25 Nov 2020
“We want to know what remedies are available in case one side will deviate in the future, because trust is good but law is better”.
-Ursula Von Der Layen, 25 Nov 2020
The 11th hour, much less the 1439th minute, is not the right time to have negotiations about points of detail. We are now six weeks past the point where both sides said a deal should be concluded. And yet talks continue, as I speak Michel Barnier is in London, and so far neither side wants to be seen to be the one to pull the plug.
In any sane world we could not be in this situation. Against the background of a pandemic which is consuming the energies of all governments and the lion’s share of media attention, decisions have to be made which will affect Britain and Europe for years to come. In any sane world we would be about to begin a two year extension period, during which rational negotiations could be completed, preparations made and, hopefully these things could be done in a post-pandemic world. There is a government which is giving in willingly to pressure from the Spartans of the ERG, and which is not going to behave rationally if it is has any alternatives.
Lies and Damned Lies
Again and again we have the same platitudes from the Brexit side. Firstly that the Europeans need a deal more than the UK does, and during the German presidency of the EU Angela Merkel would be pressed by German exporters to compromise. Secondly that in EU negotiations it is normal for everything to be decided at the last minute and unless there is time pressure the Europeans will not come to their senses. Thirdly that 95% of the measures in contention have already been agreed. Fourthly that British resilience is such that we can cope with the pandemic and therefore can cope with anything, so if our bluff is called and we finish up with ‘an Australian solution’ ie no deal, that would be, in the PM’s words, ‘a good outcome’..
I think this is the same delusional thinking that told us in June 2016 that we would have “the easiest deal in history“. And the same thinking that rejected the unanimously dire predictions of all economists as “project fear“. It has not gone away.
Firstly, no other European country, even Ireland, will see the same impact on its economy as the UK. The latest OBR (Office for Budget Responsibility) projections, commissioned by the government, indicate a long-term loss to GDP of about 4% even if there is a deal, and about 6% if there is none. This is considerably greater than the impact of Covid, which is obviously massive in the short term but will diminish, it is expected, over subsequent years. European governments know this, even if the UK government pretends not to. And they are united in pushing the integrity of the single market ahead of trade with the UK. They recognise the benefits of the single market, ironically enough bearing in mind that it was very much the creation of Margaret Thatcher.
And yes, the EU has form in agreeing internal deals at the last minute. This is not an internal deal, as the UK is now a third country. What is more, a deal reached in haste is not necessarily a good one. The Withdrawal Agreement was signed about a year ago in a very great hurry, and was ratified by the prime minister and approved unanimously by Conservative MPs who actually voted not to give themselves time to read it. Now many, as articulated by Iain Duncan Smith, are repenting at leisure, and this government is blithely telling us it is so unsatisfactory that it has no choice but to break it in defiance of international law.
The deal is indeed 95% agreed. That appears to have been the figure for several months and of course it reflects that the remaining 5% is the most difficult part. Final agreement has been about a week away for a very long time, just as, we are told, nuclear fusion power has always been about 50 years away ever since the 1950s. Perhaps it will never come closer.
And then of course this dreadful lie about resilience. What these people are actually saying is that it is okay to take advantage of the disruption caused by the pandemic because it may mask that caused by Brexit. This is as mischievous as it is untrue. It is like saying to a man who has had one arm cut off that he seems to be coping fine and therefore it doesn’t matter if he gratuitously has the other one cut off as well. Industry is suffering and the pandemic has made it even more difficult to prepare for a no-deal Brexit than it would be otherwise. The constant refrain from government that it should do so, when even now it does not know what is supposed to be preparing for, is deeply hypocritical.
The Stumbling Blocks
Even at this late stage new problems seem to be coming out of the woodwork in negotiations, an example being the difficulties faced by Irish manufacturers whose products come from both sides of the border, and how these will be dealt with under rules of origin. However, the three principal stumbling blocks are the same as always, namely fisheries, the level playing field, particularly in regard to state aid, and governance.
The state aid issue is actually something of a straw man, as this is not an issue which has traditionally been prioritised by Conservative governments, and state aid in the UK is significantly less than in some EU countries such as Germany. Besides Liz Truss has already bargained away the UK’s rights to set its own state aid levels to the Japanese. In regard to governance, to some extent this is a self-inflicted problem for the UK government: the Internal Market Bill has turned it into an untrustworthy partner (Von Der Leyen’s observation above is made with feeling), but presumably the offending clause would not be necessary if an appropriate deal could be achieved.
So really this is all about fishing. The value of UK fishing is perhaps 1/80th of that of the automotive industry and 1/200th that of the financial sector. It is nonetheless understandable that to those who have not looked at the facts it has it has talismanic significance. Yet negotiations are bound to fail if the UK government is unwilling to compromise. The French in particular have much to lose if they do not have access to UK waters, whereas the UK fishing industry has little or nothing to gain by not letting them in. Indeed the penny is beginning to drop and there are increasing voices within UK fishing which, like manufacturing and agriculture, condemn the prospect of a no-deal Brexit. Frankly it is no good catching fish if you lose your largest market, and 60% of fish caught by the UK fleet are exported to the EU. The British are not enthusiastic eaters of fish, and such fish as they do eat, eg cod, are caught abroad. In a no-deal scenario tariff barriers would be potentially fatal. So the constant talk about fishing is based on yet another lie.
Deal or no deal
We do not know whether there will be a deal, nor do we know much about what it would look like.
What if there is one?
There will be impossibly little time to ratify it, or indeed to read what may turn out to be a 1000 page document. The opposition parties will have a painful dilemma, and even before they know the details Labour are reportedly sharply divided. On the one hand they would prefer to see a deal passed than no deal at all, but on the other they are very clear that any deal which can be achieved now would be nugatory, and nothing like as good as what is being left behind. Understandably they do not want to be seen to abet the government in getting it through and in effect to have dipped their fingers in the blood. Allegedly Keir Starmer is inclined vote pro, and many others, including Oxford’s Annaliese Dodds, would wish to abstain. At the same time there are pro-EU groups such as Another Europe Is Possible who are calling upon Labour to vote against, in the expectation that the deal will go through anyway despite opposition from the ERG. This seems an odd position to take: do Labour MPs really want to be seen as allies of the ERG? It is not an easy choice for Labour, especially since it has tried every possible tactic since the election to avoid any mention of something as divisive for the party as Brexit has turned out to be.
However, devoutly though we may wish for a deal of any kind, thin though it may be, it will not help in relation to non-tariff barriers. We will still get the queues of 7000 lorries at Dover which now even Michael Gove admits are unavoidable, there will still be a shortfall of 50,000 customs officers and there will still need to be 200 million extra pieces of paper completed every year by exporters. The haulage industry faces a very painful time indeed. The BMW factory in Oxford, which is reliant on supply chains involving the EU, will still be threatened. It is significant that BMW are now planning to manufacture Minis in Leipzig in Germany, and the Cowley works may well finish up at best an assembly plant for UK production. And even if the deal means that some companies remain viable who would otherwise not do so, it does nothing for the services sector, which is 80% of the UK economy, and which has known for at least the past three years that such essential rights as passporting will go out the window.
And if there is no deal?
The fact that EU countries have been making preparations and the UK has not will be unmasked on day one. WTO tariffs will be applied to British exports to the EU, because they have to be. Examples are 10% on cars and 30% on lamb. The UK has said that it will waive tariffs, but in the absence of a deal it will be obliged to do this for all, not just EU, imports. So a perfect storm of increased costs and increased bureaucracy for exporters, undercutting of domestic producers by cheap imports, and reduced revenue for government. All the while this Government will blame betrayal by the damned Remainers (who happen to include almost everybody with responsibility for putting Brexit into practice, against their own better judgment) and the intransigence of the EU (who have only ever done precisely what they said they would do from the start).
And as for fishing, yes, the UK will proudly claim control of its 200 nautical mile limits (mainly be it noted relating to Scotland rather than England or Wales – see map) but good luck with trying to enforce them or to gain redress against offenders in any international forum. And who on earth is going to buy all these extra fish? They will finish up dying of old age in the sea or rotting in the harbours or in the backs of lorries. As an impoverished Britain flounces away from the greatest missed opportunity in history, the words of Douglas Adams will ring in its ears: “So Long, and thanks for all the fish”
In short, our Prime Minister has just told us he is walking away from negotiations which might have mitigated the disaster of Brexit, he is by common consent throwing British industry and agriculture under the bus, all for the dream of creating a “global Britain” which is based nothing but fantasy. We must speak out and do all we can to make sure this never happens.
The views stated here are those of the author, and not necessarily those of Oxford For Europe