Come together? We're still here

"It’s an insult to the people of Britain to demand that we 'come together' to support a Brexit that almost half who voted did not want, and in a form that more than half of them certainly don’t want" writes Professor Chris Grey in one of his invaluable Brexit chronicles (my emphasis).

No, this is not "Leave voters didn't know what they were voting for". This is asking who May has behind her in the Brexit she's trying to construct. Media attention this weekend is on whether the Tory soft-Brexiters and the headbangers are reconciled by May's 45 minutes at a Mansion House lectern, but should the concern not be for the preferences of "the British people", to coin a phrase?

Six weeks ago, George Osborne's London Evening Standard quoted a poll for "website Left Foot Forward" which found 60% support for remaining in the single market and 57% support for the customs union. Even 44% of those who voted Leave in 2016 supported single market membership. The actual numbers are on the BMG website.

And yet, to quote May's speech, "We are leaving the single market".

This is far from the only recent poll which gives a similar picture. When the question reminds respondents that the single market includes free movement the score goes down; when they're offered some form of reform of free movement the single market is more popular, but membership of the EU's internal market is still there as an option.

Tom Newton Dunn claimed on Radio 4's Week in Westminster on Saturday that the subject of the customs union wasn't mentioned in the 2016 campaign, at which Jacob Rees Mogg protested that we obviously hadn't been listening to his speeches. Clearly not.

Later that year Liam Fox told Andrew Marr that the customs union was still being considered: "The UK may seek a compromise deal to remain in the EU customs union... the cabinet would 'take a collective view on this once we have looked at all the issues'". January's BMG figures suggest that people are willing to consider it.

And yet, to quote May's speech: "The UK has been clear it is leaving the Customs Union".

But everybody knew that voting Leave meant leaving the single market!
Not those who wanted an EEA Brexit.

And everybody knew we'd be leaving the customs union!
Perhaps not the majority who missed those Rees Mogg speeches.

But Cameron told us!
This from those who didn't believe another word the then prime minister uttered.

Two weeks after the referendum vote in 2016, Comres ran a poll on what people expected to happen. David Cameron had resigned and we had no prime minister; the Tory leadership election was well under way but Andrea Leadsom had still to drop out of the contest. People were asked who they trusted to "carry out the will of the British people" and answered:

A few questions later they were asked what kind of new deal they expected. Looking just at the single market (the customs union wasn't considered in this poll)...

As you can see, fewer than 30% expected to leave the single market (35% of Leave voters).

Chris Grey's two sentences before the one I opened with are: "The most depressing aspect of it, as with the Florence speech, was the sub-text that it would be better for Britain not to leave the EU at all or, at least, to do so whilst staying within the EEA. It is a terrible, tragic failure of political leadership that a British PM is enacting a policy which is not only harmful to Britain but which she clearly realises is harmful to Britain."

So, come together? We haven't gone anywhere.

Brexit - the sonic screwdriver approach

Michel Barnier, walking the border
between Ireland and Northern Ireland
with representatives of the Irish government

One of the big questions raised by this week's draft withdrawal agreement (and a hundred documents and meetings before it) is "How do we avoid a return to the borders of the past?". Or, as it's normally put now: "How do we avoid a hard border between Northern Ireland and the Republic of Ireland?". All sides have stated that they want the border to continue to be as open as it is today and, as we know, if "everybody wants it" and "it's in everybody's interests" then it will happen.

Theresa May was interrogated on the subject by the House of Commons Liaison Committee - a daunting assembly of the chairs of all the Commons select committees (though there are usually only about a dozen of them on any particular occasion). As the Times reported, "Asked about her government’s plans to avoid a hard border the British prime minister refused to rule out the use of cameras to monitor people and goods between the Republic and the North". But then "Pressed by Yvette Cooper, a senior Labour MP and chairwoman of the home affairs committee, on whether she could confirm numberplate recognition would not be used, Mrs May said: 'We have said that there will be no physical infrastructure in relation to Northern Ireland. We have put forward a number of suggestions as to how we think that border issue can be addressed'".

Those suggestions can be found in papers issued last summer on customs arrangements and specifically Northern Ireland and Ireland. A major suggestion for the border is what's usually referred to as "technology", which is taken to mean online registration of shipments, with VAT and customs duties being treated as an accounting process, plus the recognition of the largest companies as "trusted traders" who are assumed not to need stopping for customs checks.

That doesn't cover everyone of course, and former Taoiseach Bertie Ahern sums the scheme up as follows (see Give the impression of doing no work until it's far too late): "Our economy is relatively small, a huge amount of the trade is multinationals; it should be possible, I think, to do that by technology," Then: "But of course, when you come down to agriculture and smaller items, I don’t think technology would work. One thing we do not want, can’t have, is back to a physical border.” And then: "Theresa May, take her at her word, she’s confidently said she doesn't want a physical border, the EU don’t want a physical border, the Irish Government don’t. So you’re left down with the one alternative — to make technology work in most cases and to throw a blind eye to those areas that can’t come in within technology". The number of border crossings which would have to attract the blind eye (though obviously not the volume or value of goods in transit) has been estimated at 80%.

The proposals have been rejected as inadequate, unworkable or "magical thinking" by the Irish government and EU negotiators, probably because there is little detail. Brexiters pour scorn on this, accusing everybody of just being negative. After all, they say, other countries have frictionless borders - look at Switzerland and its neighbours, Norway and Sweden, Canada and the USA. They don't always recognise that Switzerland has free movement and is in the Schengen zone (people cross borders as well as goods) and has a raft of bilateral agreements replicating much of the single market and easing customs. Neither do they mention that both Norway and Sweden are inside the single market. And how frictionless are those borders anyway?

Excellent visit by select committee to Swiss border to see how political will and co operation and technology makes Swiss/German/French border crossings smooth. Useful info for our enquiry into land border issues NI/ROI pic.twitter.com/LPrVV7r5qK

— Kate Hoey (@KateHoeyMP) November 23, 2017

That's a border post. You know, the kind that nobody wants on the Irish border. "Zollabfertigung" means "customs clearance". The evidence that Hoey and the rest of the committee heard from the head of Swiss customs demonstrated that the vast majority of personal travel between Switzerland and its neighbours involves no stopping, and the vast majority of trade is done by pre-notification, trusted traders, risk assessment and technology, like cameras and ANPR. That's the vast majority, not all. There are stops, there are checks, and occasionally there are follow-ups away from the border.

But, the Brexiters cry, the EU itself has done the work... and they refer to a report called Smart Border 2.0 - Avoiding a hard border on the island of Ireland for Customs control and the free movement of persons. It's not clear that they've read it though. 

(Incidentally, another Brexiter line is that neither Ireland nor the UK wants a border at all; it's "the EU forcing Ireland to erect checkpoints". However, this favoured report says "the withdrawal of the UK from the EU will create a requirement for some form of border controls on both sides of the Irish border" which presumably refers to the international legal context as set out in the rather technical Article XXIV of the General Agreement on Tariffs and Trade (GATT 1947) which effectively states that either you have a border or you form part of a customs union.)

Smart Border 2.0 seems a good report, with useful data such as numbers of person and vehicle movements across the border, and studies such as the Swiss, Norwegian etc cases mentioned above. But what it sees as eliminating a "hard border" seems rather different from May & co's idea. To take the list of features from the executive summary (comments in round brackets come from elsewhere in the report) and [comments in square brackets are my additions]:

Free Movement of persons under CTA (Common Travel Area):

• Free movement lanes at major border crossings for eligible people covered under CTA (special lanes at major crossings, minor crossings completely open)
• Use of enhanced driver's licenses [this is a US notion; is it relevant here?] and RFID (Radio Frequency Identification Device) capabilities [the range at which such devices can be read varies with the chosen technology]
• Use of ANPR (Automatic Number Plate Recognition) at manned and unmanned border crossings (for example, at unmanned crossings to identify vehicles which should present at a manned border crossing) 
• Requirement for people not eligible under CTA to present at a manned border crossing (if such a person uses another crossing they're considered to have entered illegally)
• One check: at jurisdiction of entry [I assume this means that everything can always be done at the border]
• Creation of a frequent travellers program for people not eligible under the CTA
• Legal basis for collaboration and data exchange between Ireland and Northern Ireland/UK

Create a low-friction border for the movement of goods by:

• A bilateral EU-UK agreement regulating an advanced Customs cooperation that avoids duplication and where UK and Irish Customs can undertake inspections on behalf of each other
• Mutual recognition of Authorized Economic Operators (AEO)
• A Customs-to-Customs technical agreement on exchange of risk data
• Pre-registration of operators (AEO) and people (Commercial Travellers programme in combination with a Certified Taxable Person programme)
• Identification system by the border
• A Single Window (this is an international standard for information management between the private sector and government in relation to import and export) with one-stop-shop-elements (coordinated border management approach where businesses, at import and/or export, have a single contact with one government agency also representing other agencies at the release of goods [I assume this would cover things like (phyto)sanitary checks on farm produce])
• A Unique Consignment reference number (UCR) (A specific number regulated by a standard from the World Customs Organization that follows a consignment through its life cycle in the global supply chain, making it possible for governments to identify and follow a specific consignment from a risk and compliance perspective)
• A simplified Customs declaration system (100% electronic) with re-use of export data for imports
• Mobile Control and Inspection Units
• Technical surveillance of border (CCTV, ANPR etc)

A Swiss border crossing

There's a lot of technology there, and lots of structures to be designed, implemented and staffed, but the report does talk in terms of it being available by March 2019, and also serving as a model for future UK/EU working, so I'll leave that for now. For the purposes of this post I'll just point out that here we have:

• manned crossings
• free movement lanes (and therefore other lanes where you have to stop)
• radio frequency readers for people via their passports, and for goods
• ANPR and CCTV

This is infrastructure at the border - quite a lot of it - including several items which the UK government has said will not be present, or Northern Irish representatives have said must not be there.

Then there are significant logistical and legal agreements, including:

• an agreement that UK and Irish Customs can undertake inspections on each other's behalf
• mobile control and inspection units (at the Swiss border the two countries' people can operate on either side of the border; they even have helicopters)

When these measures were mentioned in the evidence session with Swiss and Norwegian customs staff, eyebrows were raised and committee members expressed some doubt that they were appropriate for this case.

In addition there are several requirements for data sharing, which in other areas raises the question of which legal jurisdiction is to be used, and which court or other body is required to settle disputes.

This is an idea of "smart borders" that claims to bring together international standards, best practice and new technologies to create low-friction borders that support fast and secure movement of persons and goods. Coordinated border management, with trusted trader and trusted traveller programmes, it says, can significantly reduce compliance requirements and make borders almost friction free [my emphasis]. That sounds very much like the Swiss or Norwegian/Swedish borders, or even the idea presented to cabinet by Boris Johnson (and then publicly rejected by his boss) which considered: "Even if a hard border is reintroduced, we would expect to see 95% + of goods pass the border [without] checks."

It doesn't sound quite like the Irish border someone ordered.

And finally

Why did I mention a sonic screwdriver? Robert Shrimsley in the Financial Times wonders whether Boris Johnson, Michael Gove and other leading Brexiters are big fans of Dr Who, because he observes "much evidence of sonic screwdriver strategy (the all-purpose get out of jail free card for scriptwriters) in their thinking. Their mystical faith in technological solutions is most obvious in discussions about the Irish border". If you can get round the paywall, it's worth a read.

Deep, special and ambitious managed divergence

Cabinet members arrive (at some speed) at the Chequers
front gate

War cabinet is a snappier name than European Union Exit and Trade (Strategy and Negotiations) Subcommittee but a depressing one nonetheless ("dreamy nickname" anybody?) Who's supposed to like the short name? People who think about Brexit in World War 2 terms? Who's not supposed to like it? EU27 heads of government who think of the EU partly in terms of preventing war? Who invented the term? The idiot Boris Johnson who still seems to think at least partly in headlines, or somebody in the media who at least is supposed to? More interestingly, are people aware that those people on the other side of the table actually read our papers?

T

Olly Robbins Europe Adviser to the Prime Minister

The subcommittee gathered at Theresa May's prime ministerial retreat last Thursday to work out what Brexit might mean, what kind of future relationship to seek in the remaining eight months of negotiation. According to Tim Shipman in the Sunday Times, the plan they came up with (which was the plan May went in with, though she gave it to her top Brexit civil servant Olly Robbins to present), the position that has led to so much manoeuvring and low-level blood-letting in recent weeks is to

• Demand mutual recognition of standards for goods traded between the UK and the EU
• Make a public commitment that British standards will remain as high as those of the EU
• Pledge to keep rules and regulations “substantially similar”
• Insist upon the creation of a dispute mechanism to oversee areas where the UK wants to diverge from EU regulations — and that the European Court of Justice would have no role in it

To which I can only say, Is that it? Isn't that just a restatement of the three baskets idea which the EU side has rejected as cherry picking?  A narrative description of this "ambitious managed divergence" is more telling: "We are going to be associate members of various agencies on things like aviation, chemicals and pharmaceuticals and then we get [EU] market access and don’t need to have our products checked in more than one jurisdiction. We can decide at any time, in the full knowledge that there are consequences, that we don’t want to be regulated in this way" which seems just a little naive and/or presumptuous.

One particular disagreement Shipman mentions was between Greg Clark, the business secretary, and Boris Johnson, still astonishingly our foreign secretary. Clark "gave a presentation on the consequences of divergence for the car industry" and Johnson stressed that "divergence was essential to ensure innovation".

Honda's plant in Swindon

I'd normally refer to Nissan on the subject of Brexit and the automotive industry, but let's talk Honda for a change. Patrick Keating, Government Affairs Manager for Honda Motor Europe, told the Commons business select committee last November that the company "would need clarity" by March this year on "what happens to the customs border". It would be "a year-long process between deciding we need to invest in additional warehousing and going through zoning, planning and investment" plus "internal decision-making procedures and the need to get clearance from Japan".

In addition, Honda is concerned about "regulation, and particularly type approvals". Talking to the EU Commission, said Mr Keating "there is a real risk that, as the UK leaves the single market, the type approvals issued by the... UK Vehicle Certification Agency, will either no longer hold validity or not be able to be extended". As we've heard recently this is a real problem - at Brexit "the United Kingdom approval authority [VCA] will cease to be an EU type-approval authority".

The Japanese ambassador to the UK accompanied a party of Japanese businessmen to No 10 on 8 February and was "unusually candid" afterwards in the view of several commentators: "If there is no profitability of continuing operations in the UK - not Japanese only - then no private company can continue operations. It is as simple as that. This is all high stakes that all of us, I think, need to keep in mind." Days later, Honda's management in Swindon stressed that the company "remains committed to our operations in the UK and Europe" and declared "we are working closely with the government to ensure the best conditions for our business following the UK’s exit from the European Union".

Greg Clark, Secretary of State for Business,
Energy and Industrial Strategy 

Honda don't want to have to build new warehousing or relocate their type approval people, and neither do they want to move production, not least because they have no similar plant elsewhere in the EU. Any of these things would cost money that's not in their current plans. They will be making full use of their contacts in London and Brussels to get some of that precious clarity by the end of next month - the EU Council meeting on 22-23 March might be the target date.

That kind of mundane stuff was no doubt part of Greg Clark's presentation, but Johnson countered with his characteristic bluntness. As Shipman puts it, "Johnson interrupted to say divergence was essential to ensure innovation. He cited the way EU rules had stopped him changing the design of lorries in London while he was mayor to make conditions safer for cyclists".

It's one of his favourite moans about EU regulation, but it has the disadvantage of being untrue. Johnson wants changes like wrap-round windows and mirrors to eliminate blind spots which have killed cyclists and the new features are likely to be with us soon. As Euractiv reported in 2014, member states held out against a series of changes to lorry design standards under pressure from their own manufacturers (and the Financial Times suggests the UK was one of them). It takes a long time to redesign a lorry, or a new set of standards, so there's constant to-ing and fro-ing between manufacturers, politicians and regulators. In the end the delay was reduced and“We did manage to force EU governments to agree to the introduction of a new and safer lorry-cab design, although only as of 2019,” said Keith Taylor, transport spokesman for the Greens in the European Parliament.

Political nitty-gritty too intruded into Chequers' panelled rooms, with chief whip Julian Smith warning of the "real, real danger" of Tory rebels voting with Labour to keep Britain in the customs union while David Davis pointed to hardliners threatening to force a leadership election if May drops her opposition to a customs union. Rees-Mogg's position at the head of the European Research Group "is a sign that they are militarising and have tanks on our lawn," said one of Shipman's sources.

Karen Bradley

Karen Bradley, the Northern Ireland secretary, told May she could not be sure her DUP allies would "turn up" for key votes. There was even talk of Sinn Fein’s seven MPs taking their seats if the UK fails to prevent a hard border between Northern Ireland and the republic.

Some Eurosceptics outside the cabinet put little faith in May and her team holding their fragile truce together in the face of "intransigence" in Brussels. "Cabinet continues to live in a parallel universe," one is reported to have said. "The DD-May plan is doomed. Barnier will smash DD [David Davis] over the head and No 10 will fold as always." And remember, even after May's next speech, scheduled for Friday 1 May, the full cabinet will never have discussed and approved the approach. They will simply be expected to go along with it.

Chequers away-day -- how to solve Brexit in a country house

Theresa May opens the discussion

Amber Rudd counters a point from Michael Gove

As discussions unfold, unusual alliances begin to form around the cabinet table

Boris Johnson and Philip Hammond engage in close debate

Having met his match in argument, Sajid Javid is helped to the station by long-suffering staff

All of the good bits and none of the bad bits... please

Bernard Jenkin MP, chair of the Public Administration and Constitutional Affairs Select Committee in the Commons, was quoted this morning as saying "It would be utterly perverse for the EU to impose tariffs on trade between the UK and the European Union and I don't think they would be so destructive [as] to do that".

He was interviewed with Ken Clarke (there to play the soft Brexit to Jenkin's hard) on the Radio 4 Today programme about a letter from the British Chamber of Commerce. The BCC's Director General Adam Marshall was warning the prime minister that "patience is wearing thin" - business is exasperated by the lack of a unified government position on a future UK-EU relationship.

The current live issue is customs, with May rejecting future membership of either the current EU customs union or a possible alternative customs union such as the EU has with Turkey or a smaller country like Andorra. She will happily discuss a customs arrangement or a customs partnership of course, as discussed in a paper the government published last August (it was labelled "magical thinking" by EU commentators and seemed to be quietly forgotten, but has been rediscovered with a new year).

Swiss borders with EU countries -
much of regular trade is handled digitally
but there are still checks. 

Jenkin's point is frequently argued - if a barrier to trade follows Brexit it's the EU's fault, because the UK has no intention of doing anything against our joint interests. Two points there:

• None of this would be happening without a decision to leave the EU; it's May's Article 50 letter that started it all.
• What would bring about barriers to trade would be failure to reach an agreement which eliminates them, plus the automatic operation of WTO rules. If there is no UK-EU Free Trade Agreement, the EU is duty bound to apply the same tariffs, quotas etc as it does to any other country with Most Favoured Nation status.

Then there's the Irish border, which Brexiters claim will be exactly as easy and open as it is now unless the Republic or, more likely, "the EU" decide to make it difficult.

But again, we started it, and May intends to take us out of the legal system which makes the border no more than a notional line on a map. All sorts of organisational and technological wheezes could be used to ease the waits, but without an agreement otherwise there will be a border, and EU law and WTO rules will require it to be managed.

Moving beyond tariffs, there are non-tariff barriers (NTBs) - differences in regulation and Rules of Origin. If May's customs arrangement, partnership or wotsit doesn't cover how UK-made and EU-made products are counted for onward export, and if she insists on retaining the right to diverge from EU rules, or fails to reach an agreement at all, there will be barriers. Who will have raised them? The EU won't have changed anything but we'll have become a third country, we'll have put ourselves outside the walls.

Everybody's looking to barriers between the UK and EU, but there are also hundreds of agreements we have with other countries as a member of the EU. Some are full Free Trade Agreements (like the one which guarantees Dan Hannan his tariff-free Chilean wine) and some just harmonisation of testing standards, but many of them are there to ease trade. As Fionna O'Leary points out, there are 142 with our largest single trading partner, the USA, of which around 50 have an impact on trade. If we fail to carry those over, by agreement with the EU and the US as necessary, are we going to blame the US for "erecting barriers to trade"?

We do NOT trade with the rest of the world solely on WTO terms.  That is factually inaccurate and if you do not know that by now you are just plain negligent.  The EU has 759 Treaties with 168 3rd countries that reduce or eliminate some of those far bigger barriers to trade. NTBs pic.twitter.com/IG7hI5hKjX

— Fionna O'Leary #FBPE #BrexitBetraysBritain #ABTV (@fascinatorfun) January 27, 2018

Treaty - Not Treaty

How do you write a quick 'n' easy treaty to define a Brexit transition period during which the UK and the EU act "as if" everything is as it is now?

Article 50 of the Treaty on European Union says "The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification... unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period," which offers a controlled and an uncontrolled way out of the Union.

Clause 1 of the EU Withdrawal Bill, which is about to go to the House of Lords for consideration, says "The European Communities Act 1972 is repealed on exit day". The ECA incorporates EU treaties and thereby EU law into British law. The Bill goes on: "EU-derived domestic legislation, as it has effect in domestic law immediately before exit day, continues to have effect in domestic law on and after exit day". But it now has effect as British law, not EU law effective under the ECA.

Friday's letter to business leaders from the Business, Treasury and DExEU secretaries says "during the implementation period, we are clear that the UK’s and the EU’s access to one another’s markets should continue on current terms... based on the existing structure of EU rules and regulations. And for these common rules and regulations to work effectively, they will need to remain common to both parties".

"Exit day" is pencilled in on both sides as midnight (Central European Time) 29 March 2019. As can be seen from Article 50, it could be earlier if a withdrawal agreement was concluded speedily, or later by unanimous agreement, but whenever it eventually turns out to be things will have been unplugged at both ends. The treaties will have ceased to apply, so what is the legal basis for all those structures, rules and regulations? And the EU Withdrawal Bill is intended to change all the EU legislation it carries over, referring, for example, to UK bodies rather than their EU equivalents. What will make this fundamentally changed jurisdiction behave as if (to coin a phrase) Nothing Has Changed™?

It'll have to be a bit more than a piece of paper saying "You know those treaties and directives and regulations and stuff, that defined the UK-EU relationship until yesterday? Let's pretend they're still there until - say - 2021, and just ignore any problems".

The EU's guidelines for the first part of phase 2 were issued in draft last December, updated since then, and are due to be signed off by the EU General Affairs Council of ministers tomorrow, 29 January. Let's see what kind of beast the negotiations hope to produce when the press conferences finally resume.

The Brexit Buccaneers

As David Davis stands in Teesport, proclaiming a "new global race to the top in quality and standards" I hear the clashing of cutlasses, and curses in the rigging. Bands of Brexiters, all still pretending allegiance to the same unchanged flag, are beating the bejesus out of each other while we watch.

The official line exemplified by Davis's stirring words is that leaving the EU won't lead to attacks on employment rights, environmental standards or the like. Our sunlit uplands will be British sunlit uplands, with a better standard of grass than we're used to, tended by horny handed children of toil (of assorted genders) who have literally never had it so good. Once we are free of the European shackles, the story goes, we can set new standards and show the world how it's done.

Below decks though, a band of scurvy Brexiters have hatched their own plans to slash taxes, standards and regulations, then sail out into the cruel world to make our, their, fortune. They'll still salute the same flag whenever they have to though. For now.

Those at the captain's table maintain the highest of standards, proposing good relationships with our erstwhile Friends and Partners, to make sure that bankers can maintain a foothold in foreign capitals and do what they do. Those below the salt, however, especially those who have recently lost a rank or failed to gain preferment where they believe it to be their right, are mutinous. If they could, they'd weigh anchor and sail this island off into a privateers' ocean.

"You could not insert a fine blade between myself, the captain and the purser," cries the ship's Bulldog, while the dark side of the mess imagines uses to which a fine blade could be put. After the purser has been lost somewhere, and one of their own has taken his place.

The chaplain never ceases telling them of the beautiful life he will provide for their families' animals, how sparkling their little patches will be, but Paterson the farmer's boy has other ideas. His people never looked after him - he ended up on this ship after all. When you're used to hard biscuit with worms in it why would you wish better on those who consider themselves your betters?

The New World once boasted giant tortoises on which, the story goes, a whole ship's company could feast, but now they're gone (or protected by friends of the chaplain) and the Americas now offer a lucrative line in plump capons reared in hell then spruced up like a prize cockerel on a scrubbed deck for the families back home

The captain might be a chaplain herself, or the next worst thing, the vicar's daughter, and assembles them every Sunday to tell them that things will be better below decks, the best, though she doesn't seem to get down there with her ideas.

The Bulldog is the real disappointment! They thought he was one of them, but now he's talking about playing by the Frenchies' rules, keeping close to the moneybags, so that our rich and theirs can mingle and make money together by going out among the people. They tell us there's a thing called a mortgage, which will help us Take Back Control™ over homes for the cubs; and a pension, to keep a man in victuals rather than just watch his peg leg rot while what's left of his family shout at him.

Young Jacob though...

He's not that young in truth, but he hasn't had the spirit beaten out of him yet (more's the pity, spits the Bulldog, passing by) and he has a dream. The landlubbers, even their bankers, have only a small pot of money to spread among so many people. The real gold is out there, across the open sea, to be taken as you find it, with no heed paid to rules. That Jacob lad will go far. And we'll probably have to kill him at some point.

I'll call them the #Buccaneers.

What do we know now? I have no idea

To save time

For a freestyle look at where we are, try "Everything you need to know about the Brexit endgame in five minutes" or for a more formal view (which I quote below) look at "2018: The year of Brexit decisions". But I'll go on.

Officials are talking

We're assured that "officials are talking" about Brexit, so there's no need for the Department for Exiting the European Union to pretend to tell us what's going on at the moment. But there really isn't much time.

The EU parliament held its first plenary session of the year on Tuesday 16 January, with several of the EU's presidents addressing it ("president" is an awkward word in this context, but... some other time).

The Estonian presidency (which would have been the British presidency if not for a certain vote) ended at the New Year, having concentrated on matters digital, in business and governance. Now Bulgaria has taken over, and their emphasis seems to be on security and solidarity.

Speeches about Brexit came from Donald Tusk, who chairs the EU council and facilitates its work when the heads of government and state have other things to do back home, Jean-Claude Juncker, who leads the EU commission (more than a civil service, far less than a government, much to his personal regret) and Guy Verhofstadt, the EU parliament's representative on Brexit (not a negotiator, to his personal regret).

The main point reported from Tusk's speech was that it's still open for the UK to change its mind on Brexit: "If the UK government sticks to its decision to leave, Brexit will become a reality – with all its negative consequences - in March next year. Unless there is a change of heart among our British friends. Wasn’t it David Davis himself who said: 'If a democracy cannot change its mind, it ceases to be a democracy'?" But there was business to be done as well: "what we need today is more clarity on the UK’s vision. Once we have that, the leaders will meet and decide on the way the EU sees its future relationship with the UK as a third country... The hardest work is still ahead of us, and time is limited. We must maintain the unity of the EU27 in every scenario, and personally I have no doubt that we will." Juncker too said "our door still remains open and I hope that will be heard clearly in London".

Verhofstadt's line was that the second phase of talks will be harder than the first (not least because we'll have to finish the things which May & co pretend were signed off after phase 1). He was concerned to translate guarantees on citizens' rights into law as soon as possible and to prevent cherry picking during the transition period. He did ask what Barnier put in Farage's tea to make him come out for a second referendum. Verhoftsadt enjoys goading (some of) the British press:

@guyverhofstadt  says he is very pleased with  latest version of the negotiation directives b/c they make very clear transition means signing up to all EU law. "The only thing that will change is that Britain will not be represented any more in the institutions."

— Jennifer Rankin (@JenniferMerode) January 16, 2018

"Senior backbencher" Bernard Jenkin MP didn't like the idea of the UK changing its mind on Brexit. He told Sky "Nobody serious wants another referendum in this country on this question". When it was put to him that the government could change its mind, Jenkin went on: "You want the government to just ignore the referendum? It’s absurd".

Chart from Lord Ashcroft Polls https://lordashcroftpolls.com/2018/01/parties-stand-second-eu-referendum/

What exactly is absurd? Just ignoring the referendum, he says, but, to coin a phrase, nobody serious is saying that. Millions are, however, saying they would like another vote and, as Lord Ashcroft has discovered, the wording of the question has a noticeable effect on the answers - voters are opposed to a "second referendum" but, when a deal is available, are open to a "referendum on whether to accept the terms or leave without a deal"'. Whether they want to be asked or not however, a majority would like to "stay in the EU after all". I wonder what effect "somebody serious" coming out and suggesting that another vote is a serious possibility would have on these numbers.

Chart from Lord Ashcroft Polls https://lordashcroftpolls.com/2018/01/parties-stand-second-eu-referendum/

To Jenkin then, another vote is absurd, though millions seem to disagree with him. According to May it's "crucial" that there isn't such a vote, which can only mean that it's very  important that such a vote does not happen. But why? If people consistently consider it a reasonable thing to do, how is it absurd? And what could the crucial factor be other than to protect May's fragile commitment to the cause?

When I commented on Twiter that "crucial" is an odd choice of word I was told it was a "Good word, another referendum would mean that you effectively disenfranchise all the leave voters." To which the only response is to ask how you disenfranchise people by including them in the electorate for another vote.

But what next?

The CBI has 190,000 business members of all sizes and sectors, employing nearly 7 million people, about a third of the private sector workforce. In December, not for the first time, its Director General Carolyn Fairbairn  told its members (and of course the media) that "From our politicians we need unity, clarity and certainty, not a different opinion every day. Politics will need to work on business time scales if we are to get the right result for the country... To keep jobs and investment in the UK, binding Brexit transition terms by the end of the first quarter need to be accompanied by progress on a framework for a final deal that delivers barrier free trade with the EU".

The concern is that arrangements for withdrawal, recruitment across borders, new customs processes and many other things will not be known in time to prevent damage to businesses. Companies have made contingency plans and put pressure on government, but they've seen very little progress. Most are holding out as long as they can before incurring cost and suffering the disruption of actual relocation, but some can't wait any longer (the pharmaceutical industry, discussed here, has extra problems because the European Medicines Agency is relocating from London to Amsterdam).

Neil Armstrong, chief executive of medical devices regulatory affairs management company MeddiQuest says "We took the decision to relocate our company out of the UK a year ago – and we were probably a year too late to be able to ensure continuity in all eventualities, in all areas".

Mika Reinikainen, chairman of the European Association of Authorised Representatives reports that his organisation is moving its HQ from the UK to Brussels in 2018: "One of the very simple reasons for that is that some of the feedback has shown that anyone who has got a British address is not going to be very effective in any European organisation. So we are leaving the ship, even if it is a little premature... The UK has more authorised representatives than any other member state and possibly all the other member states put together, so it is a very serious problem for us".

Another representative body for business is the British Chambers of Commerce, also representing millions of employees in companies across the country. They're engaged in developing businesses in their local areas and have well established links to similar bodies internationally.

Writing in the Observer, the BCC director general Adam Marshall says "Businesses have been very patient in waiting for clarity on Brexit in the 18 months since the referendum. That patience is now wearing thin. Businesses want answers, they want clarity and they want results. Chambers of Commerce members – as well as their EU trading partners – want a swift “standstill” transition agreement as soon as possible in 2018. This would give certainty on short-term trading conditions and ensure that businesses face only one set of adjustment costs when the final UK-EU settlement kicks in. The transition must be agreed quickly; a failure to do so would see contingency plans activated, investment flows delayed and a battening down of the hatches in far too many of our firms".

And yet the BCC's head of trade policy isn't apparently interested in transition, just looking forward to the "next phase of negotiations [which] will not formally begin until late March" (the next EU council summit is 22-23 March). She notes that "the UK government has a mere two and a half months to a) internally reach a decision as to what kind of relationship it wants to have with the EU in the future, b) set out credible proposals to make this happen, and c) discuss these with individual member states". And then "The UK has agreed the negotiating timetable as set out by the EU – but it can and must influence the content of what will be discussed over the next two months. This means that if it wishes to achieve all of its ambitions for a future relationship, it must put together a plan for a new model for cooperation between the UK and the EU, and actively promote it before the next EU Council summit in March".

Interlude

Lord David Hannay, who has a long history of negotiating with and on behalf of the EU, was questioned by the Commons international trade committee at the beginning of January. He noted that negotiations on the transitional phase have yet to start. "The Government call it the implementation phase, though nobody else in the world calls it that because it isn't. It is what I prefer to call the standstill. It seems to me very clear that it is a standstill the Government want. When the Prime Minister made a statement on the package that was agreed in Brussels before Christmas, two little words popped up that I welcomed greatly. She said that things will be 'as now'. Well, I can’t read 'as now' as anything other than being in the single market and customs union."

The road ahead

The calendar as seen in the EU (and apparently agreed by the UK government) is presented in 2018: The year of Brexit decisions, which is based on the guidelines agreed at last December's EU council summit:

• Early January to late March
  This might be enough to agree the "post-Brexit transition period requested by Britain". The EU is offering "continuation of the status quo after Brexit until the end of 2020... Britain would still be under all the obligations of an EU member... pay contributions... guarantee freedom of movement... remain a member of the single market. However, the UK would lose its voting rights in the EU... During the transition period Britain would be allowed to negotiate and make agreements, but not implement them."

• London
  May & co have sketched a transition period (they insist on calling it implementation, but see the interlude above) mirroring the status quo to some extent but allowing negotiation of trade agreements outside the EU (though what time there'll be for that with all the existing ones to be carried over...).
  
  "Broadly speaking, the Cabinet is still divided into two opposing camps. The Brexiteers want to leave the single market and the customs union, and to abruptly ditch all EU legislation. They dream of a 'free Britain,' signing international trade agreements and standing up to the EU in economic might... the other camp... want as soft a Brexit as possible. They fear a collapse of the British economy. They want to retain as much EU regulation as possible in order to protect access to Britain’s biggest export market. They only support Brexit out of loyalty to the Conservative party."
  
  "Theresa May has announced that she will make another speech at the beginning of the year... to outline what Britain wants. In principle... a tailor-made solution that would allow the British to retain many of their rights while freeing them of their European Union obligations."

• March 22-23, 2018: EU summit in Brussels
  "This is where the transition phase will be decided, the divorce bill legally drawn up and Michel Barnier given a mandate to negotiate the EU’s future relationship with Britain. What is still not clear is whether or not the British government will have defined a realistic position by then. It is also not a given that EU member states will remain as united as they have so far: Conflicts of interest may arise."

• April to late October 2018
  "The goal for October 2018 is to finalize a withdrawal treaty [and] a political framework agreement covering the future relationship... to achieve this goal in just six months, the British side will have to get involved in much more intensive and frequent negotiations than it has up till now. A joint declaration of principles of this kind would need to define the basis for subsequent trade talks, which would start in 2019.
  
  "The EU heads of government recently said that the aim is to guarantee a level playing field and fair competition. If the EU-UK relationship is seen as a sliding scale, then the more EU regulation the British side retains, the more access it will retain to the single market, and vice versa. However, Brussels has warned that there can be no cherry-picking, i.e. the British will not be able to pick and choose its preferred rules for crucial business sectors.
  
  "To date, Michel Barnier has been describing the EU’s offer as "Canada Dry." ... a simple trade agreement with broad exemption from duty for goods, but with no market access for services."

• London
  "Much depends on whether Theresa May remains head of government... Until now, May’s government... have been seeking 'Canada plus plus plus' - market access for goods and services, including the financial market. The British want to make their own rules, and they want the EU to recognize these rules as equivalent to its own... corresponds to the promise of prominent Brexiteer Boris Johnson, who claimed that the British could have their European cake and eat it too. This possibility is categorically rejected by Brussels. The question is whether there is a line of compromise somewhere between these irreconcilable visions."
  

• EU summit on October 18-19, 2018
  "the final draft of the Brexit withdrawal deal and the plans for a future trade relationship need to... gain approval from the EU Council... after the summit, the EU parliament will need to sign off on the package. The bloc's member countries will also need several months for their national parliaments to consider the proposal for the new EU-UK economic agreement, and the UK parliament will review the terms of the final withdrawal agreement, as well."
  

Keeping it simple

The fact that officials are talking about all this has been mentioned in passing, but I have yet to see any proposals for visible meetings involving the "chief negotiators". I've also heard nothing about another Downing St face-off to produce a single proposal for a future relationship. On past form we can look to May's February(?) speech to define the position, and a subsequent cabinet meeting to be manoeuvred into signing it off. The Deutsche Welle article quoted above includes a useful section headed Grace period: End of October until the EU summit on 13-14 December:

"There may be a great deal of argument towards [the] end of the process, and these two months could serve to bring in last-minute compromises to end disagreements on all sides. Up till now the Brexiteers have firmly suppressed the reality that any new agreement is going to be extraordinarily complex. New rules will have to be written for every field in every sector, from air travel to scientific exchange to financial services and beyond. Even a basic agreement on this will inevitably contain a lot of explosive material, for both the European and the British sides."

The centrist awakes

When Andrew Adonis resigned as chair of the National Infrastructure Commission, much of the attention was focussed on his attack on Brexit as "a dangerous populist and nationalist spasm", much less on his characterisation of Theresa May as a fundamentally decent politician who happened to be wrong on this one, and only a few considered his thoughts on what it was doing to the machinery of government.

Part of his attack on government Brexit policy was a claimed "nervous breakdown that has taken place across Whitehall since Brexit". The senior civil service is "now totally drained physically and psychologically by attempting to deliver the impossible with Brexit, such that it is no longer able to deliver the ordinary business of government".

Adonis is not the first to have sounded this warning. Former Monetary Policy Committee member Andrew Sentance calls it "an all-encompassing project for the UK government and the senior civil service, crowding out consideration of other important issues" and Sir Paul Jenkins, former Treasury Solicitor refers to the "unique complexity of leaving".

Labour MPs have frequently complained that government is paralysed by the chaotic way it is pursuing Brexit, but then they would, wouldn't they? On one of the BBC's reviews of 2017, presenter Jonny Dymond and (pro-Brexit) commentator Iain Martin seemed to agree that the process is "sucking the life out of government", but were they just following Adonis's diagnosis unthinkingly? You'd certainly think that demands for all the billions it takes to prepare for whatever kind of Brexit it turns out to be, in the context of a government which still protests that it must live within its means, would mean that the money can't also be spent elsewhere. But May & co consistently deny that anything is being delayed.

One hint is the Sun's call for civil servants to "end the dilly-dally" (they really do speak the people's language don't they?) as they go back to work after the holidays. All government departments have been drawing up plans for Brexit (which means they must have stopped doing something else) and now it's delivery time.

"The push covers domestic policy on everything from cu­s­toms desks to the type of HGV licences foreign truckers require once we leave the EU," the Sun tells us. (Transport Secretary Chris Grayling announced a consultation on a new road pricing system just before Christmas, so that project will have to wait a bit.) "Critically, the shift in approach is designed so the UK can cope in the event of a 'No Deal' with the EU, leaving with no trading agreement."

In October the Financial Times told us "Whitehall is planning to hire another 2,000 staff to deal specifically with Brexit in a sign of how its resources are being diverted towards the challenges of leaving the EU". A further wave of hiring is expected closer to "exit day" in March 2019, "although the overall civil service headcount is still set to shrink further".

The head of the civil service, Jeremy Heywood, says Brexit "has been called the biggest and most complex [challenge] that government and the Civil Service have faced for generations", but he was writing in the official civil service blog, so it's all a bit rallying-the-troops-ish. A slightly less gung-ho view comes from Civil Service World: "Most of the Brexit department’s staff are on loan from elsewhere in government – with the majority on two-year arrangements – because of the 'time-limited nature of the department', according to the NAO [National Audit Office]."

The NAO tells us that 2,409 new positions have been created in five departments responsible for half of the government's 310 Brexit "work streams", and that about one in eight of these posts is unfilled. If the overall size of the civil service is constrained, and DExEU staff are seconded from other departments, that means their previous work can't carry on unaffected, and work streams in other departments have to be done by staff who would otherwise have been doing something else. A shortage of specialist staff is also looming, as project delivery, commercial and digital skills are required to progress work which is still, necessarily, undefined.

The Home Office has already recognised that it will be recruiting more than a thousand new staff to register and process the three million EU27 citizens resident in this country and immigration lawyers have pointed out that extra Border Force staff will be required if EU27 nationals are required to join the "rest of the world" queues at airports. Recent suggestions that volunteer staff might have to guard the borders at smaller air and sea ports might suggest that the final numbers (and costs) aren't yet known.

Then we have the fact that David Davis's staff are "more over-worked and under-resourced than in any other government department". The civil service's annual People Survey shows that DExEU "has the lowest satisfaction ratings for 'resources and workload' and third lowest for 'pay and benefits' out of 18 government teams". Red lights are flashing at the National Audit Office too, as DExEU's staff turnover is running at 9% per quarter, compared with a civil service average of 9% per year. You can find the survey itself, and a brief discussion of it by someone who was recently an insider, in this Twitter thread:

I see @DExEUgov has published it's "people survey" of staff. It's awful. I feel deeply, deeply sorry for those civil servants who, out of a well founded sense of duty, are subjecting themselves to this. https://t.co/NMMCuQVEXt

— Steve Bullock (@GuitarMoog) December 14, 2017

The very fact that so much time in the Commons chamber (and soon the Lords) is occupied by questions on Brexit, reports on Brexit and debates on Brexit legislation suggests that it is dominating the schedules of ministers and legislators alike, as do the many select committee sessions in Commons and Lords, covering most of the departments of state, eagerly or desperately trying to find out what we are doing to ourselves.

Just before New Year we heard "Boris Johnson is cutting staff in embassies outside the EU to bolster representation within the bloc despite claims of promoting 'global Britain'. The Foreign Office is hiring 50 extra staff to work in embassies across the 27 remaining EU member states" and "hollowing out missions across the world, including in emerging markets in Asia and the Americas". The Foreign Office's Europe director told MPs in November there had been a "big network shift to emerging market economies, including India and China" at the expense of Europe and that the shift back to Europe was "redressing the balance".

This seemed to indicate a desperate rearranging of deckchairs at a time when government rhetoric (in Fox's Department of International Trade at least) is all about new relationships with the "growing parts of the world". It also rang a bell. In August I wrote (look for Anyway... those two articles) about a charm offensive in EU capitals ordered by May. To quote my quoting at the time:

"As we approach the next stage of negotiations - discussing our future relationship with the EU once we've left - we want to ramp up the communications work, campaigns and stakeholder engagement that will enable the government to communicate its messages effectively in EU member states as well as at home," said a DExEU spokesperson.

Robin Niblett, of the foreign policy think tank Chatham House, told us: "During the last big push for 'Global Britain', prior to Brexit, the government raised the number of British diplomats in India, China, the Gulf, while cutting back some of the human capacity in European capitals. Now the government is having to do some re-engineering to bring back that capability to prepare for the pointy end of the Brexit negotiation".

Call me a cynic, but August to November isn't a very long time. Is this just a re-announcement of the same initiative, or didn't it work the first time?

HMRC seems to be working on something

And it's touched a nerve.

Establishment targeted Leave campaign donors after attempting to put UKIP out of business, writes @Nigel_Farage #Premium https://t.co/T8GhFgfNC2 pic.twitter.com/sRJfiy3Ncb

— The Telegraph (@Telegraph) January 1, 2018

Apparently some donations to the Brexit referendum campaigns have attracted requests for additional tax. "These Brexit tax bills look politically motivated," harrumphs the Telegraph, talking about "attempts to tax Leave donors".  "Boris Johnson phones Brexit donors to express anger over tax demands on referendum campaign money" is the headline for Christopher Hope's Telegraph article on the subject, and Nigel Farage and Westmonster have given it both barrels. Unfortunately all the coverage, including Hope's piece, points out that a Remain contributor has suffered the same terrible fate. Could it be that the taxman is merely doing his job?