Bad winner syndrome

Bad winners

SPITEFUL: EU set to scrap free healthcare for Brits abroad. https://t.co/vYuodpRj9U

— Westmonster (@WestmonsterUK) July 20, 2017

I try to avoid too many visits to Arron Banks's Westmonster "news" site.  It's not the subject matter, or the standard of writing, or the fact they can't really get beyond an opening paragraph.  It's the fact he tries to sell me insurance every time, with one of the worst-looking adverts I've ever cut off after three seconds.  This story, however, made me (and many others) chuckle.

Let's take it apart.

Free healthcare for British citizens in EU countries could be scrapped by Brussels after Brexit.

European Commission officials reportedly told the Government today that Brits will no longer be included in the European Health Insurance Card scheme after March 2019.

This comes from a Telegraph piece (hence the "reportedly") which tells us the "hardline proposals" were made in the second negotiating session in Brussels last week.  The UK will be "thrown out of the European Health Insurance Card (EHIC) system" on exit day.

Currently, the EHIC sees foreign hospitals treat Brits and then claim costs back from the NHS afterwards – we do the same with EU nationals in the UK.

Note, EHIC covers Brits arriving in another EU country and all other EU citizens coming here (if they have applied for the card), not people resident there or here, who were the subject of the discussions.  They have more permanent arrangements. 

But in what appears to be a wholly spiteful move, this agreement is set to be scrapped.

David Davis said the government would carry on paying the £155m-a-year-bill, which makes the EU’s actions look even worse – it’s nothing more than a token two fingers up to Britain.

I thought these people wanted to be out of the EU and its filthy "reciprocal agreements" and I wasn't aware that EHIC was on the agenda.  Davis seems to be offering to fund... what?  Only what it costs to support Brits abroad?  Only what it costs EU visitors to use the NHS?  Both?  What?

It’s especially bad considering Theresa May has already made a “fair and serious offer” to EU citizens living in Britain, allowing them to apply for settled status. But that was on the condition that British citizens living abroad would maintain their rights. So has the EU just kiboshed its own citizens getting a good deal too?

Here we get a bit confused.  May's "fair and serious offer" (which was made three days late, to the wrong meeting, and was received as a "good start" but far short of what the EU27 had proposed weeks earlier) covers resident expats, not visitors.  Page 5 does suggest in addition:

But this is "in the expectation that these rights will be reciprocated by EU member states", so it's a negotiating pitch.  We'll "seek to" achieve a system like the one we have now, but Davis seems to have turned it into a vow, and with an unclear promise of money.

Remainers need to a look at this and realise what we’re going up against here – a spiteful, vengeful dictatorship that’s more concerned with political point scoring than doing what’s right for unwell human beings.

Say what you mean Westmonster!

This is actually quite a useful model.  There's a scheme we rather like which is available to EEA members and Switzerland, we'd like to stay in it, and we'll pay for our membership.  There are dozens of other valuable schemes, organisations and relationships we will lose unless we make specific arrangements to retain them.  And pay for them.  Will Davis propose the same solution for Euratom, the medicines agency, Europol and the rest?

Before he starts going into all that good stuff, though, Davis and his team of 98 should look at the work that's actually in front of them after two months of talks.  Looking at the note the negotiating teams produced jointly on Wednesday, I find it hard to see anywhere they've done more than agree what the two sets of proposals are and where they differ.

Westmonster's new source of irritation might be represented by a yellow box on the last page: "UK seeks clarity as regards the entitlement and possible broader scope for those who exercised free movement in the past".  But the issue of who can send child benefits to children living abroad, to which children, for how long will have to be dealt with as well.

Three things that just popped up

Sometimes these pieces are stimulated by an event in the outside world, and sometimes by something I read.  This is one of the latter.  Three stories struck me this week and I found them illustrative of the kind of problems that whingeing Remainers are always identifying only to have them dismissed but not always debated.  Here are three things which can't be happening because they're Project Fear.  Or something.

Who needs to fly?

I've been told not to be ridiculous more than once when arguing that No Brexit Deal means that there would be no flights into or out of the UK.  It's easily labelled Project Fear, but there's plenty of supporting evidence.  And it's a perfect illustration of the stupidity, the unacceptability, the sheer absurdity of the proposition that No Deal could seriously be countenanced.

Bernard Jenkin (Tory UDI Brexiter) exploded in disbelief in a Commons question to Labour's Keir Starmer on 26 June.  Starmer was  arguing that No Deal means no agreement on "aviation, the Northern Ireland border or EU citizens" and no "arrangements for passing across security, intelligence, counter-terrorism and counter-crime information".  Jenkin protested: "We would have to believe the EU was seriously insane if it wanted to ground all flights between the UK and the EU".

To which my answer is, Exactly.  It would be mad for them to threaten it, just as it's mad for us to consider triggering it.  It would immediately damage every country and economy involved.  So there would be a deal.  There would have to be a deal.  It would be a stupid thing to suggest from either side, but if we're left with no agreement on exit day we'd be left with no flights.

The other attack is that this wouldn't happen anyway, that I'm misrepresenting the rules, but I've seen story after story which backs me up.  EasyJet was reported last week to have started a new company in Austria.  The BBC said "The airline must have an air operator certificate in an EU member country to allow it to continue flying between member states after Brexit" and "nothing will change from the perspective of passengers... all the staff and planes that would fly for EasyJet Europe [are] already employed and based in the other 27 EU countries".

This kind of precaution might eventually be unnecessary if the UK's withdrawal agreement covers this topic in a particularly open way, but companies can't know that now.  If EasyJet worked on the assumption that it would all be hunky-dory, and it turned out not to be, there would be no legal basis for a UK-based company to operate between countries within the European Economic Area.  The EEA allows carriers from any member country to fly within and between any others.  Airlines based outside the area can only fly in and out.  Looking at the EU, which in this way is treated as a single unit, some Americans are envious -  flying within the US is still the prerogative of American (and perhaps Canadian) carriers only.

The reason I'm writing this at all is a comprehensive piece from Sky News.  It begins "America's leading airlines are warning that flights could be grounded if the UK leaves the EU's Open Skies agreement without negotiating a new deal" and quotes Nicholas Calio, president and chief executive of Airlines for America (the trade body representing major US airlines) as saying "Without that legal framework, we can't fly".

As with every other sector, airlines have their own special interests and their own worst case.  "The industry is warning that without a new legal agreement between the UK and the EU flights will be suspended and people's holidays for summer 2019 will be cancelled."  You can argue that they wouldn't do it, that it's not in anybody's interests, and I agree.  The fact remains that "some 85% of flights leaving the UK go to areas covered by treaties negotiated by the European Union" and if somebody is stupid enough to come out in March 2019 without a deal, there will be no legal basis for any of these flights.

That's not the EU being unreasonable.  It's just a matter of law.  If you have no treaty backing you can't get insurance, you have no valid slot for a flight. The staff would probably refuse to fly.  Whether the answer is for Davis & co to try to separate air travel out into a separate deal, as Calio requests, is another matter.  Everybody would want one.  Because everybody would prefer to shield their business from this mess.

The city of London sheds a few operations

Another thing that really isn't going to happen, and certainly isn't happening now is "banks moving out of London".  Except that it is, and they are.  I know it's not whole banks (though who knows, with some of the smaller ones?).  It's functions, operations, departments, but it's also focus.  London isn't going to stop being a major financial centre any time soon, but if all the trading of particular sorts, and all the business within EU27 countries has to be run from a subsidiary within the EU27, the balance will have shifted.

Remember, the European Banking Authority is moving from Canary Wharf and pressure to move euroclearing business inside the EU or the euro area isn't going away.

Deutsche Bank is a good example.  CEO John Cryan (a Brit, and therefore an Enemy of the People no doubt) has told the bank's staff that "the bank can't afford to postpone decisions on Brexit pending the outcome of negotiations on Britain’s future relationship with the EU" and that the "vast majority" of trades will be booked in Frankfurt rather than London in future.

This move "squares with Cryan's new goal of reorganizing the investment bank to emphasize its corporate business in its home market", reports Bloomberg.  The London and New York offices will still take orders, but "the jobs of several hundred traders and as many as 20,000 client accounts will likely be shifted".  Depending on the outcome of the Brexit negotiations (if Davis & co ever get off the starting blocks) the London operation might have to become a subsidiary of that in Germany.

Dublin on the other hand, is looking forward to welcoming Bank of America Merrill Lynch's "EU hub".  The group CEO Brian Moynihan can't say yet how many staff will be needed because "the question of what gets located everywhere is a long-term question based on a set of rules which no one has negotiated yet" reports the Irish Times, going on to quote the group's EMEA operations president:  “Until the final outcome of the political negotiations has been reached, none of us will know how we will operate in the future. We do know that we’re going to have to have entities in place within the single market. But a hub starts attracting other things into it… creating a magnetic influence on the business.”

The Irish Times might be a little less than impartial in listing the financial operations being attracted their way - "Barclays, Morgan Stanley and Citigroup have revealed in the past week that they plan to expand their Irish operations as they prepare for the UK to leave the European Union in March 2019" - but they do note that "Citigroup and Morgan Stanley both plan to establish their EU trading hubs in Frankfurt".  Which fits in with Bloomberg's observation:

"Frankfurt has emerged as a winner of the Brexit vote, with Standard Chartered Plc, Nomura Holdings Inc., Sumitomo Mitsui Financial Group Inc. and Daiwa Securities Group Inc. all choosing the city as their EU hub in recent weeks. Morgan Stanley and Citigroup Inc. also have settled on Frankfurt for their European trading headquarters, people with knowledge of their plans have said."

I called it focus, the Bank of America guy talks about magnetic influence, but whatever it is it's shifting from London.  Nobody's dropping everything and getting out - why spend more than you have to? - and we still have no idea how attractive or otherwise the UK will be as an (unpassported?) environment for the money business.  But the attention is certainly elsewhere.
   

Regulatory changes to attract Saudi Aramco to the London Stock Exchange might be only the start of new moves to bolster the City of London.  Labour would signal that the government might go for a race to the bottom, and a pretty conservative German - Wolfgang Schäuble - has warned against the same thing:  "I have heard Prime Minister May saying the UK will be a truly global economy. A truly global economy has got to stick to what has been agreed globally" (by G20 countries).

May had told the Davos gathering that a lone UK would become a "world leader" in trade but Schäuble was remembering her Lancaster House speech two days before, in which she warned that the UK might adopt a low-tax model if she failed to reach a good deal with the EU:  "We would have the freedom to set the competitive tax rates and embrace the policies that would attract the world's best companies and biggest investors to Britain".

A good time to invest?

When a big multinational announces an investment in the UK, Brexiters crow "Where's Project Fear now?".  They particularly liked Nissan's decision last October  to build new models at Sunderland, even though it only happened after hard talking and a still undisclosed letter of assurances from government (a contact with information direct from the industry talks of "documentary evidence of absolute guarantee against any Brexit damage to Nissan profits") .  After all, May was able to say she expected the post-Brexit environment to be perfectly friendly.

Colin Lawther, Nissan's senior vice-president of manufacturing supply chain told the Commons international trade committee that the investment decision was made according to circumstances at the time, and “as those circumstances change, and we wouldn’t wait until the end of the process, we will continually review the decisions that we take, based on anything that materially changes”.  He also put in a hefty bid for government financial support in building a UK-based supply chain and told them that Nissan was strongly in favour of the UK staying in the customs union (WTO dealing would be a financial “disaster” with a 10% tariff on exports costing Nissan up to £500m a year).

Then in March Toyota made a similar decision - £240 million for its Burnaston plant in Derbyshire - and it turned out that there had been another letter.  Which we're not going to see.  Japan Today reported "One source, who is familiar with the letter, said that Toyota delayed the decision due by the end of December while it weighed up a number of factors including Brexit" and "They received a similar set of warm words as Nissan on electric vehicles, commitment to further training and to ensure the competitiveness of the UK automotive industry".

Assurances have also been made to Volkswagen in an attempt to keep Bentley production in the UK, but the company has spare capacity within the EU, so anything but the right Brexit deal could still see the once-iconic British cars turned out from a plant in Germany.  Or the Czech Republic.

Figures from the Society of Motor Manufacturers and Traders (SMMT) show that investment in the British automotive industry was delayed in the run up to the 2016 referendum and has fallen in the first half of 2017.  Total investment this year could be around a quarter of that in 2015.  SMMT CEO Mike Hawes is quoted as saying  "It is very difficult to cost investment if you don’t know what your output price is going to be. The industry wants a lot more certainty".  It seems that automotive investment is being delayed generally, and multinationals need lots of assurances.

Moving on from cars, the item which popped up this week is in the pharmaceuticals sector, another of the supposed jewels in the British industrial strategy crown.  In a review of all its operations GlaxoSmithKline has pulled a new £350 million biopharmaceutical facility in Ulverston, Cumbria.  We are assured that the decision has nothing to do with the Brexit vote.

My interest in this one is twofold - in a part of the country which is also supposed to host the Moorside power station, whose fate has been unclear since Toshiba (a partner in the project) announced a review of all its overseas nuclear activities due to a financial meltdown.  And we'll all be keeping an eye on pharma decisions with the loss of the European Medicines Agency.

****

Brexit is the enemy of business confidence and certainty and big companies are spending money on insulating themselves from the damage it could do them.  Smaller enterprises, and not just those which actually do have dealings with the EU, might just hold back on investment and watch the Brussels pantomime.

biopharmaceutical facility in Ulverston HealthcareMenu http://healthcaremenu.net/2017/07/20/gsk-backs-out-of-350m-investment-at-ulverston-site/

A very dry one - money and real estate

Back in Brussels so soon Mr Davis?

As the Barnier-Davis show gets back on the road (there's one born every minute you know) I keep looking at my little pie chart of the time gone since the Article 50 process began, and the time remaining.

Photograph: Thierry Charlier/AFP/Getty Images

We're going to cost each of the EU28 a lot of money with our Brexit antics, but most of all ourselves.


What do people think "all that money" we "send to Brussels" is for?  Buying wine and slap up meals for "unelected bureaucrats"?  Helping other countries to become competitors?  Helping other countries to become customers?  Running the European Court of Justice which among other things sorts out trade disputes which happen even within a single market and a customs union?

A chunk of that money is currently running the EU27's side of the Brexit negotiations, and a chunk of the money we (including all our expat taxpayers in the UK) "send to London" is funding 450 civil servants in the Department for Exiting the European Union, which is soon to grow further, and 400 extra staff at Defra.  There are also 3,200 staff at the new Department for International Trade, and we're paying for Laim Fox and his teams to jet around the world not signing trade deals, because they can't.

A lot of these staff are transferred from elsewhere within the civil service, already shrunk by "austerity", and a lot of them are finding it very stimulating work, but hundreds have been recruited at an extra cost so far of £400 million.  And what are they not doing now that was obviously vital or they wouldn't still have been doing it after all the Osborne cutbacks?  The EU27 are paying as well for work within their own governments to react to every move the UK makes (not many in public) and the many questions and initiatives from Barnier's team.

But the big question in this country, we're told, is the "Brexit bill", or "final financial settlement" as the EU27 puts it, with hard Brexiters protesting that "they've had enough out of us over the years;  not a penny more", as if it hadn't been spent on anything, and May and Davis maintaining the position that "Britain recognises its obligations".

David Davis, introducing the July negotiating round on 13 July, said: "On the financial settlement, as set out in the Prime Minister’s letter to President Tusk, the Government have been clear that we will work with the EU to determine a fair settlement of the UK’s rights and obligations as a departing member state, in accordance with the law and in the spirit of our continuing partnership. The Government recognise that the UK has obligations to the EU, and the EU obligations to the UK, that will survive the UK’s withdrawal—and that these need to be resolved".

This followed Foreign Office questions in the Commons at which our I-can't-believe-he's-foreign-secretary Boris Johnson raised a cheer and a few headlines by playing along with a planted question.  As the BBC reported, "The foreign secretary was responding to a question from backbench MP Philip Hollobone, who urged him to tell the EU they could 'go whistle' if they wanted 'a penny piece more' than the money the UK had already paid to the EU since 1973".

To which Johnson replied that "go whistle" would be a perfectly sensible response to an "extortionate" demand, thereby dodging the drift of Hollobone's question, setting up and knocking an extortionate straw man, failing to define the word, hardly saying anything at all in fact, but getting the front pages.  Job done!  Though he had a pretty poor review from the FT's legal commentator David Allen Green.

"The day the whistling stopped"

On Boris Johnson, other ministers, and lack of realism about Brexit

By me, at @FThttps://t.co/KOsvMvZfGf pic.twitter.com/1QyCxITtEN

— David Allen Green (@davidallengreen) July 15, 2017

And Barnier, at a press conference, remarked that he could hear no whistling, just a clock ticking.

Real estate news

One of the many effects of the Brexit vote is that two EU agencies will be moving out of London.  Canary Wharf was the obvious location for the European Banking Authority once we'd won it, what with London flagging itself as the financial centre of Europe.  The authority "works to ensure effective and consistent prudential regulation and supervision across the European banking sector... to maintain financial stability in the EU and to safeguard the integrity, efficiency and orderly functioning of the banking sector".

The European Medicines Agency is just down the road.  It's "responsible for the scientific evaluation, supervision and safety monitoring of medicines in the EU".  According to Private Eye 1448 it also has a 30-year rental contract with no early termination clause for its "plush Canary Wharf headquarters".  The UK government might find itself with 20 years of rent to pay, at an annual €25million.  I'm sure they'll think of something to do with it.

Until April the British government seemed to be holding out some hope of keeping the agencies where they are, despite withdrawing from supervision by them (and then of course trying to wheedle, or rather buy, our way back in as close as possible).  But that's not the way the EU works.  It was hard enough for London to get the EBA in the first place, with an initial assumption that it would be placed within the eurozone, but it certainly isn't going to be allowed to stay outside the EU as a whole.

And so, at the EU Council in June, leaders agreed a process for relocating the agencies and a mad scramble began among the other EU capitals to win the glittering prizes.  The deadline for bids is 31 July, and the final decision will come on 14 November.

Paris and Frankfurt look likely frontrunners for the EBA, though several other countries have expressed an interest.  Around 170 people, citizens of many EU countries, might be expected to transfer to the new location, though Private Eye points to the possibility that they might also be attractive to the Bank of England and other financial companies if they would rather not leave London.

Competition for the Medicines Agency looks more open, with the number of bids going into double figures.  Relocating the EMA to Bucharest is a "priority objective" for the Romanian government, and the Netherlands is offering a "tailor-made building in Amsterdam’s business district", to give just two examples.

Elbows will no doubt be tugged and strings pulled, but there are six criteria to govern the selection of the lucky new locations:

1. Assurance that the agency can be set up on site and take up its functions at the date of the United Kingdom’s withdrawal from the Union
2. Accessibility of the location - looking at flights to the city and public transport within it
3. Existence of adequate education facilities for the children of agency staff - keeping their children at established schools might make London attractive to some, but they'll also need new jobs
4. Access to labour market, social security and medical care for children and spouses
5. Business continuity - this ties in closely with the first point and includes acknowledgement that staff might choose not to relocate and therefore need replacing in time to be up and running on "exit day"
6. Geographical spread - attempting to prevent the clustering of EU organisations in too few cities

Read the description of the procedure if you'd like to know the budgets of the organisations, their conference room requirements, the nationalities of the current staff and much more.

What will the effects be for London and the UK of losing these organisations?  It'll be more than the loss of a few customers at Canary Wharf eateries and less than the collapse of the banking sector and medical testing in this country.

In banking we're probably fairly well set, not least because the British regulators have worked closely throughout with the EBA (and a revolving door has operated between them and London private companies) but the UK government has to decide what relationship to try to (re)build with old friends in a new tower block hundreds of miles away.

The EMA is more interesting.  I've seen a select committee quiz legal, scientific and university witnesses on the likely effects, and the response was cautious.  The UK has built up a lot of expertise and personnel in the medical research and certification field.  Indeed, we've contributed greatly to the development of the organisation and the British Medicines and Healthcare Products Regulatory Agency is the most active in any country, contributing 20% of the EMA's work.  The MHRA will have to "launch a huge recruitment drive" though "when it becomes responsible for approving all new drugs aimed at the British market" (Private Eye 1448).

One big unanswered question (among so many) is how well recognised the MHRA would then be in the world.  The EMA is one of the big ones, recognised at the top level.  How would the UK's sizeable but unproved minnow fare when up against the US Food and Drug Administration?

Speaking of the FDA, it looks like a good place to find out what might be going on in this area - the UK government isn't going to tell us.  So, in March, FDA News told us that the Lords select committee "advised the UK government to consider whether it intends to rely on EU agencies — including the EMA — post-Brexit and to decide the extent to which it plans to work with those agencies" and in June that "each pharmaceutical company’s Qualified Person for Pharmacovigilance ... will have to relocate if they are based in the UK. Pharmacovigilance master files also must be located within the Union".  That last bit looks like something of a threat to the continuing research and certification structures in the UK, and a possible motive for companies to shift their focus to the new EMA location.

All that money

There is much talk of a "divorce bill" of €30 billion, €40 billion, €60 billion and the daddy of them all €100 billion, which is often blamed on the EU Commission but really came from the Financial Times.  No number has actually been announced, or at least not in the run-up to negotiations.  According to the EU27's negotiating guidelines (and they're making the running, it's their Article 50) the aim is to agree a "methodology" or formula for calculating any settlement before moving on to other areas of the withdrawal talks, and eventually the future UK-EU relationship.

Barnier published a position paper on the financial settlement in preparation for the July negotiation round.  In the annexes to that document are various lists to inform the calculation.  I constructed the list below from Annex 1 - bodies and funds to be considered when looking at assets and liabilities.  It was all I could fit onto one page, reproduced here.

If you look very closely you'll see the two agencies we looked at earlier, for banking and medicines.  There are others we have to work out a relationship with - Europol (run by Rob Wainwright, a Brit) and the Aviation Safety Agency for example.  Easy, will come the line, it's in everybody's interests to keep the good relationships running.  But all of these run under EU law, overseen by the dreaded European Court of Justice, and associate membership just isn't going to be as good.

Until the press conference on Thursday

Here is the agenda for the July talks.  Apparently no real work was done during June (clocks ticking) so the priorities for this month are exactly the same as those for last month:

• citizens' rights - setting the UK's "generous" proposal which takes rights away from everybody against the EU's earlier proposal, which doesn't, but might involve the ECJ
• financial settlement
• "other separation issues" which I wait to see in detail
• and Ireland (as the EU says) or Northern Ireland (as Davis says) - if they can sort out a solution for the north-south border a lot of other Brexity things might fall into place, but that's a big if.

Saboteurs department

Dominic Cummings, eminence grise of Vote Leave, has been at it again.  Reported in the Sunday Herald, and all points south, he reports that "DD is manufactured exactly to specification as the perfect stooge for Heywood: thick as mince, lazy as a toad, & vain as Narcissus"

Key: DD is David Davis, Heywood is Jeremy Heywood the cabinet secretary, who Cummings believes to be plotting with Davis and Spreadsheet Phil Hammond to spring a long transition period on us.

The Great Copy And Paste Bill™

Farewell Great Repeal Bill

The Great Repeal Bill, which was trumpeted in #MrMe's Lancaster House speech in January, and survived in many a committed Brexiter's imagination long before that word was coined, is an easy enough thing as a headline - repeal the European Communities Act, which implements EU law in the UK, but keep all the old law, up to and including the moment of withdrawal, so that everybody knows where they are.

And on Thursday it made its entrance. Twice, or possibly three times.  Wednesday evening saw a complaint in the Commons that the government intended to brief the media on the bill before it was seen by MPs.  Speaker Bercow "hoped" ministers would do something about that, though the way commentators were talking next morning they'd obviously seen some of it.

Then just after midday it was there, but without the normal pages on the parliamentary web site, and the FT's legal commentator David Allen Green had given it a going over.

Right.

Read through the Bill.  Only 19 clauses over 14 pages.  The rest of the 60 odd pages are schedules.

— David Allen Green (@davidallengreen) July 13, 2017

It all appeared in the right place following a complaint about this early release and its presentation to the Commons, when no debate was allowed - all as creaky as usual in our Ruritanian parliament.  It was now called the European Union (Withdrawal) Bill - a boast like "Great" isn't allowed in the name of a bill - and I was glad I hadn't actually put any money on my prediction of European Communities (Withdrawal) Bill.

It's quite a short bill considering the ambition of what it's intended to achieve, mostly because it hardly bothers to identify which EU laws are to be copied and pasted into British law.  Essentially it looks at any law which applies "immediately before exit day" and "exit day" is not defined.  A minister has to remember to put a measure through parliament to bring this thing to life.

Drawing back a little, here's Adam Bienkov in Business Insider:  "Huge parts of EU law are already embodied in both primary and secondary UK legislation, while other parts are not really laws at all but judgments made by the Court of Justice, or rulings by EU regulators. Deciding which parts of this will need to be adopted or amended is a bureaucratic nightmare that would take many years to do properly. Britain will have about 18 months."

Long live the European Union (Withdrawal) Bill

A few bits of this great collection of laws can be discarded immediately but most will be copied over.  The hard bit is to change important things before that elusive exit day, which can't all be done in the usual way, with MPs having a few bites at the cherry to identify and resolve problems, then into the Lords for more of the same.  Apart from the scale of the thing, and the limited time available, there's the small problem that many potential changes depend on what is finally agreed by the Article 50 negotiations (and then any trade deal negotiations after that).

(I'm discounting the ridiculous notion of "no deal", though this bill doesn't, entirely.)

To achieve this the bill proposes to allow ministers to make changes with far less scrutiny than usual, using things called regulations (or statutory instruments, or secondary legislation) which parliament can do little more than accept or reject, and in many cases ministers are to be given "Henry VIII powers", so called because of their draconian scope.  Here's a relevant chunk of the bill, and sorry about the page break.

Essentially any minister (because these laws might come under any part of government) can make a change he or she considers appropriate, any change which can be made by an Act of Parliament (a full, proper law), with certain limitations in scope, and with a time limit (different limitations and time limits apply to different parts of the bill).  But notice the last four words of (2) above.  A minister can do anything, including modifying this act, including modifying this part of this act, including removing the restrictions or the time limit.  That would be extreme...

MPs don't like too much secondary legislation and the Lords have made a lot of noise about it, but it's hard to see how this project could possibly work without a least some of it.  David Allen Green says "Other lawyers may have seen discretionary powers wider than clause 7 of this Bill. I have not."  Clause 7 is far more complex than the the one I've selected, but clause 9 is a good enough illustration.

Opposition parties definitely don't like these proposals.  Labour's shadow Brexit secretary Keir Starmer says Labour will demand concessions in six areas, including:

• ensuring that workers’ rights in Britain do not fall behind those in the EU (which seems to be a matter entirely for future British law, unless Starmer is proposing that the UK-EU withdrawal agreement should contain such a undertaking)
• incorporating the European Charter of Fundamental Rights into UK law (this will be unpopular with Brexiters - the European Convention on Human Rights is bad enough - and the government's opening position is that it doesn't actually impart much that we don't already have in other ways)
• limiting the scope of the so-called “Henry VIII powers” (I've also seen a demand to remove any time limits, which might be seen as contradicting that demand)

We'll see what is said in the days up to actual debate on the bill, which won't be until after the long parliamentary holidays, when there will be little more than twelve months left of the time available before the date pencilled in for ratification of any treaties and agreements which come out of the Article 50 negotiations.

 The Article 50 process as of 14 July 2017

Saboteurs department 1

There are rather a lot of saboteurs today, starting with comments on the bill itself

Liberty and Amnesty International want the law to include a commitment not to reduce rights and freedoms, and government to conduct an audit of EU-derived human rights law and ensure these rights and freedoms are protected after Brexit.

In a joint statement, Global Justice Now and Another Europe Is Possible say "EU law incorporates some of our most cherished protections and rights, as well as rules that, for instance, prevent our government from selling products that can be used in torture overseas.  Giving Theresa May the powers of a renaissance monarch to translate these rights and protections into British law is terrifying, as it enables her government to change the way these laws work in fundamental ways, without parliamentary scrutiny".

The Scottish and Welsh governments have threatened to withhold legislative approval (and there will be arguments about how often that will be necessary in the months to come), calling the bill a "naked power grab".  This is due to the fact that any powers "taken back from Brussels" which relate to devolved areas of competence will initially be held by Westminster, to be (re-)devolved at a later date.

Needless to say David Mundell, the Scottish secretary, disagrees.  "This is not a power grab, it is a power bonanza for the Scottish parliament because after this bill has been implemented the Scottish parliament will have more powers and responsibilities than it has today."  Glass half empty v glass half full.

The London Evening Standard has an editorial which exhibits a bit of George Osborne's characteristic hyperbole:  "This is the single greatest act of regulation in UK history. Thousands of EU rules are being imported wholesale into our law. Not one is being watered down, and none of the rules are being abolished".

A careful reading of the explanatory notes which accompany the bill caused a stir among EU expats.  Dr. Paul Daly, Senior Lecturer in Public Law at the University of Cambridge, discusses it here.  The complex clause 7 noted above appears to give ministers extraordinary powers: "The power to deal with deficiencies can therefore modify, limit or remove the rights which domestic law presently grants to EU nationals, in circumstances where there has been no agreement and EU member states are providing no such rights to UK nationals".  It's hard not to read it without sometimes seeing EU citizens living in the UK themselves as "deficiencies".

Saboteurs department 2

Problems were raised in areas quite separate from the star bill of the day.  Osborne's creation, the Office for Budget Responsibility produced a Fiscal Risk Report which warned that recession is inevitable and that a minority government has less power to intervene:  "Governments should expect nasty fiscal surprises from time to time... and plan accordingly. And they have to do so in the context of ongoing pressures that are likely to weigh on receipts and drive up spending and a variety of risks that governments choose to expose themselves to for policy reasons.  This is true for any government, but this one also has to manage the uncertainties posed by Brexit, which could influence the likelihood or impact of other risks".

Amyas Morse, head of the National Audit Office, came up with the image of the day in discussing the current situation:  "What we don't want to find is that at the first tap, this falls apart like a chocolate orange. It needs to be coming through as uniform, a little bit more like a cricket ball".  Claiming that "Brexit was the biggest peacetime challenge to government" but that it was "only just beginning to click into people's awareness" the report cast doubt among other things on the completion of new customs processes just two months before what is currently the established date for Brexit. Government IT projects have a well deserved reputation for coming in late, and contingency is not available for this one since the date is set in stone.

Those two august bodies do these reports all the time but the question of nuclear regulation, discussed on Wednesday,  is (we hope) a one-off.  In response to the government's belated publication of a paper on the subject (which failed to say anything on the live issue of medical radioisotopes).  The chairman of the UK Atomic Energy Authority, Roger Cashmore, hoped that associate membership of Euratom could be negotiated at a "similar cost, if not more than, what we're paying in via the EU at the moment".  The Nuclear Industry Association also remained to be convinced:

"While containing very little detail, the UK Government’s position paper demonstrates the complexity of replicating Euratom arrangements in UK regulation and co-operation agreements with third countries which the industry has warned of. Government must therefore make the need for transitional arrangements its starting point in negotiations. Failure to do so will risk precisely the disruption the government state they want to avoid.

"It remains the UK nuclear industry’s view that retaining Euratom membership will best serve the national interest. It may also be the most straightforward, seamless and sensible way to achieve the government’s stated preferred outcome is through the associated membership the Euratom treaty enables. Exploring that should be a priority in discussions with European institutions.

"The government has also said it wishes to provide 'certainty and clarity' to industry. Given the lack of clarity to date, it is imperative now that the government ensures there is regular and ongoing dialogue with industry so there is a full appreciation of the practical, logistical and administrative consequences of these negotiations."
And finally...  This Twitter thread, reviewed as "All about how UK voted Brexit out of objection to all the EU policies that the UK proudly drove" had been retweeted 11,240 times at the last count.

1. Hello, United Kingdom, it’s the United States of America here, and we need to talk.

— Steve Analyst (@EmporersNewC) July 10, 2017

Nobody thinks it's a good idea to leave Euratom, but apparently we have to

Hard on the heels of January's Supreme Court judgement which told the government an act of parliament was required to kick off the Article 50 process came a bill to do just that.  In the explanatory notes which accompanied it was a small bombshell - according to the government, leaving the EU also meant leaving the European Atomic Energy Community (Euratom), which governs and enables cooperation in peaceful nuclear power and research.

Euratom did not feature in the referendum campaign last June, and government had not previously said anything about it.  The announcement drew criticism from politicians - "This 'Brexatom' will be legally and politically complicated and costly" - and the nuclear industry - "It’s bad news for the industry, bad news for opponents and critics of the industry as well.  It’s a lose-lose situation, whereby the industry becomes less competitive and less safe" - and later - "Legislating for it doesn’t make it happen...  We have to have the people to be able to do it, the equipment, the training in place”.  A legal view came from the always helpful EU Law Analysis project.

When the queen's speech was published in June and included a Nuclear Safeguards Bill to replace European safeguards with a British system of oversight, further doubt was expressed.  The Times told us "experts say that this would not match the regime provided by the EU body, meaning that plants, research facilities and hospitals may be unable to import radioactive material after Brexit.  Officials from the Department for Business, Enterprise and Industrial Strategy have warned that it will take seven years to replace the current set of agreements".

And in the week that Theresa May is calling for cross-party working on shared policy priorities, Ed Vaizey (Conservative) and Rachel Reeves (Labour) did indeed get together to publish a piece in the Sunday Telegraph (reproduced here) which she might not be too keen on:  "We believe there is an opportunity for a rethink. Both our parties are committed to implementing the result of the referendum on EU membership, even though we both campaigned to remain.  But this is not about EU membership.  Our co-operation on nuclear issues predates the EU".

Tom Chivers, recipient today of an award from the Royal Statistical Society, spoke to some scientists.

So this happened #RSSAwards pic.twitter.com/lMCbnaLkY3

— Tom Chivers (@TomChivers) July 12, 2017

****

People who voted for the Article 50 bill are suddenly having second thoughts.

This needs sorting quickly. It's an absurd situation. pic.twitter.com/85m82LXyFf

— Tom Watson (@tom_watson) July 10, 2017

And the editorial in that edition of the Standard claims (on the inside information of its new editor no doubt) that "the Royal College of Radiologists fears withdrawing from Euratom would endanger the import of the radioisotopes from Europe used in cancer scans and the treatment of 10,000 patients here.  It was Mrs May who overruled Mr Davis and others in the Cabinet, such as Greg Clarke, to insist that we sacrifice those sensible international arrangements on the altar of the dogmatic purity of Brexit.  That rigid approach now faces humiliating defeat in Parliament, as a growing number of Conservative MPs make clear they will rebel".

There's just one problem.  An amendment which would have excluded Euratom from the Article 50 notification was defeated before Conservative and Labour MPs were whipped to pass the clean, unamended bill which May demanded.  And the letter notifying the EU Council of the UK's decision to leave the Union therefore included the words "in accordance with the same Article 50(2) as applied by Article 106a of the Treaty Establishing the European Atomic Energy Community, I hereby notify the European Council of the United Kingdom's intention to withdraw from the European Atomic Energy Community.  References in this letter to the European Union should therefore be taken to include a reference to the European Atomic Energy Community".

Dominic Cummings, one of the evil back room twins in the Vote Leave campaign, has been telling us about the risks of Brexit (no, really) and he isn't at all happy with this proposal (sorry about the language).

1/ Govt MORONS say they're withdrawing from EURATOM. Near-retarded on every dimension: policy/politics/science/bureaucratic

— odysseanproject (@odysseanproject) July 10, 2017

Accordingly, the queen's speech in June (page 24) included an outline of a Nuclear Safeguards Bill to "establish a UK nuclear safeguards regime as we leave the European Union and Euratom".  The benefits (objectives would be a more honest word) are "to ensure that the UK continues to meet our international obligations for nuclear safeguards, as applies to civil nuclear material through the International Atomic Energy Agency" and "to continue the UK’s reputation as a responsible nuclear state, to support international nuclear non-proliferation, and to protect UK electricity supplied by nuclear power".

How is all this to be achieved?  By giving the Office for Nuclear Regulation (which already exists, but only as the safety regulator for the civil nuclear industry) "powers to take on the role and responsibilities required to meet our international safeguards, and nuclear non-proliferation obligations".  Easy.

In response the EU published a position paper on nuclear materials and safeguard equipment, setting out their negotiating position as:

"The United Kingdom is a member of the International Atomic Energy Agency ("IAEA") and bound by international conventions to which it is a party in its own right.  From the withdrawal date, the United Kingdom will have sole responsibility for ensuring its compliance with international obligations arising therefrom.

"Given that the Treaty will cease to apply in the United Kingdom, it appears appropriate that the Withdrawal Agreement set out arrangements for the transfer of the ownership of special fissile materials and Community property located in the United Kingdom used for the purposes of providing safeguards to the United Kingdom, respecting the Community's obligations under international agreements.

"The Withdrawal Agreement should also provide that the United Kingdom assume all rights and obligations associated with the ownership of materials or property transferred and should regulate other questions related to material and property under the Treaty, in particular safeguards obligations."

With political opposition to leaving Euratom growing (despite the facts above, that MPs have already explicitly voted for it) lawyers are looking at the possibilities.  My usual reference David Allen Green says it wouldn't be easy and it couldn't be done by the UK acting unilaterally.  The Times, quoted in this same thread, disagrees but with less legal authority.

Brexit: what happens to A50 in a U-turn on Euratom?

By me, at @FThttps://t.co/vRoH4De5L0

(With picture of a stable door being closed.) pic.twitter.com/PzQvARY3mL

— David Allen Green (@davidallengreen) July 11, 2017

Interested MPs gathered this morning to debate Euratom membership.  Almost all of them expressed concern at the possibility of a cliff edge - leaving on 29 March 2019 whether or not we have replacement arrangements - and even the hardened Brexiter David Jones accepted that a continuing relationship during the fabled transition/implementation period would probably be required.

Many MPs have constituency interests - Copeland for Sellafield, Henley for the fusion research plant at Culham, Barrow for the proposed (but shaky) new power plant at Moorfield, and others - and extra complications came up, such as the need to reconstruct a number of agreements with Japan, the United States and Canada among others.  Several proposed associate membership of the treaty like Ukraine or Switzerland.

Bernard Jenkin, MP for Harwich and North Essex stll maintains the childlike belief in the simplicity of Brexit:  "why should the case for staying in Euratom not apply to every other agency that we will leave when we leave the European Union? As we leave those other agencies and regulatory bodies, we will set up our own, under international standards. Why can that not also be done with Euratom?"

To which my response is, exactly.  Reproducing arrangements, bodies and processes we currently have, trying not to lose too much of the "exact same benefits" due to an arms length relationship, and paying for it all is a major part of what Brexit is all about, and why any Brexit premium is illusory.  Paul Blomfield, summing up for Labour picked up on Jenkin's point and also quoted ex-DExEU chief of staff James Chapman's view, that if the prime minister doesn't shift her position on Euratom, "parliament will shift it for her".

Richard Harrington, a junior minister in the Department of Business, Energy and Industrial Strategy, presented the government view:

• "The Government are determined that the nuclear industry in this country should continue to flourish in trade, regulation and innovative nuclear research. We are determined to have a constructive, collaborative relationship with Euratom."
• Medical radioisotopes are not subject to nuclear safeguards.  They are covered by the Euratom treaty, but there are no restrictions on export outside the EU - "our ability to access medical isotopes produced in Europe will not be affected".  (This needs pursuing further.  These materials are not covered by the same safeguards as nuclear fuels, but the supply chain is regulated, and a relationship with the Euratom Supply Agency and Nuclear Observatory would be required).
• "Our primary aim will be to maintain our mutually successful civil nuclear co-operation with Euratom and the rest of the world."
• "We are preparing the domestic Nuclear Safeguards Bill, we are opening negotiations with the EU, we are talking to third countries about bilateral agreements, and we are talking to the International Atomic Energy Agency."  Which should allay the fears of those who fear a long, sequential project (though it appears to oversimplify the work involved more than somewhat).

Harrington finished with "our own position paper will be published imminently" and then, on enquiry, "imminently means imminently" (he was rather proud of that line).  Please note, the EU27's position paper was placed in the public repository on 23 June.

****

When May delivered a statement on her attendance of the G20 summit over the weekend, Euratom was suddenly a popular topic for questions.  Her basic answer was "We have to leave, but we hope to re-establish exactly the same relationship with Euratom".  Hilary Benn (re-elected today to chair the DExEU select committee) asked it simply:  "What does the UK gain from leaving Euratom?", to which she replied that the two treaties are inextricably linked, that we therefore have to do it, and that we should wait for the bill.  Standard Maybot fobbing off basically.

"Freeing ourselves from the shackles of Euratom" seems the perfect microcosm (and a bloody big microcosm at that) for Brexit.  Time, effort, money, the opportunity cost of what all the DExEU civil servants might be doing instead...  But at present the sickly juggernaut staggers on.