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Bill, which is about to go to the House of Lords for consideration, says "The European Communities Act 1972 is repealed on exit day".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?