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.

Multilateral relations, rules-based systems and international frameworks. Of a sort

May going into No 10 - from @PoliticalPics (I would have used his actual tweet if he let ordinary people access them)

Theresa May is in a cabinet meeting as I begin this, her aim to achieve unanimous agreement on the speech she will give in Florence tomorrow.  The story is that she practically stepped off the plane and into No 10, which means last night's supposed mini-summit with Boris Johnson over the Atlantic came to very little.  Adam Boulton on Sky reports that she told him she needed some sleep.

The speech is billed as an "open and generous offer" to "break the deadlock" in the Brexit negotiations, but it seems to be the wrong time - the September round of talks has had to be postponed until next week - and possibly the wrong place.

May took her "fair and serious" offer on EU citizens' rights to the EU Council in June, three days after the first round of talks had done little more than set up a few working groups and agree the timetable which May & co had refused to countenance until they screwed up an election.  Some EU leaders greeted it politely as "insufficient" and others as "at least it's something" but they basically told her it would have to wait until the July talks because when they told us the negotiations would be done by Barnier, not heads of state and government, they meant it.

Will choosing her own time and place be seen as a sign of strength or of not taking things seriously?

HR News

The Department for Exiting the EU has announced the renomination of the British judge to the Court of Justice of the EU (CJEU or ECJ, according to taste).  Christopher Vajda QC, who has done the job since 2012 after 30 years of practice in European Law, should encounter no difficulties as he goes through a scrutiny panel and approval of his appointment by the Member States.

That first nomination in 2012 was announced by the Foreign Office, but all relationships with the EU seem now to be handled by the bunch responsible for getting us out of it.  As the new announcement says, "While we continue to be a Member State, we will honour our rights and obligations, this includes nominating a judge to the Court of Justice".

Saboteurs department

Before she addressed the United Nations General Assembly (or at least a few of them) on her ideas of multilateral cooperation Theresa May spent a day in Canada, emerging with an agreement that "Canada's free trade deal with the European Union will form the basis for a swift transition to a post-Brexit trading relationship between Canada and the U.K."

A UK-Canada working group will be established to work on a "seamless" transition to a new trading relationship when the UK is legally able to agree one.

Note, as Justin Trudeau did, that the word "basis" means "starting point", not the "copy and paste" reported by some of the media.  In Trudeau's words:  "We will be able to move forward in a smooth transition that keeps the essence of CETA applicable to the U.K. in ways that respect the EU's requirements and rules".  Other CBC comment says this is "a shrunken ambition for those who campaigned for Brexit.  After all, breaking free of the EU was supposed to restore a golden age of free trade as countries rushed to renegotiate deals with a Britain free of Eurocratic interference.  The best now on offer, it seems, is to try to hang on to the deals Britain already has under the EU".

This is one of thousands of things we will have to keep an eye open for.

Stop press!

The cabinet meeting hasn't finished yet.

The rule of law, British style

[This was first posted on Monday 18 September.  Between us, Google and I then managed to lose it and revert to an earlier edit.  I've reconstructed it as far as possible, but some of it might feel a bit out of date.]


Some campaigners to leave the EU liked to reel off a list of things the British have given to the world, which would stand us in good stead when we set out on the great global journey on our own - things like the English language, the BBC and the rule of law.  And yet...

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"German politician Elmar Brok has ridiculed Theresa May's offer to protect the rights of EU nationals living in the UK" reports the Daily Express, whereas the government position is that "The commitment we will make will be enshrined in UK law, and enforceable through our highly respected courts".

If it comes to it I'd generally back UK courts (which is more than the Daily Mail sometimes does) but they can only work with the law they're given and, it appears, the government they work under.

Why would Elmar Brok be so concerned?  There might be some detail to sort out but surely a British court is up to the job of guaranteeing people's rights.  Yes, but what will be the law they're given to do it with?  And will the government take any notice?

On Thursday the British government expelled an Afghan in contravention of a court order. The young man, who had worked for the Afghan government and US companies, and feared for his life, sought refuge in the UK to join his father who had already been granted asylum.  He is his father's main carer.

Amber Rudd, Home Secretary

The Guardian reports that the Home Office "decided not to abide" by a court order intended to prevent him being put on a plane to Kabul, so there he ended up.  At that point a second order was granted which described the home secretary’s breach of the first court order as “prima facie contempt of court”.  The Independent reports he is "expected to be returned to London on Sunday morning after the Court of Appeal threw out the Government’s attempt to keep him in Afghanistan".

Latest update, 18 September:  Mr Bigzad has been brought back to the UK overnight, as reported by the BBC.

This follows many stories about Afghans who worked as interpreters for coalition forces during the occupation of their country but found it difficult to seek refuge with their erstwhile employers when the Taliban identified them as collaborators and threatened them with execution.

Those "highly respected courts" have done their jobs here, but the government has gone against their orders.  The same government which declares that the rights of EU expats will be "enshrined in UK law".  Could the UK's intentions, declared to the EU withdrawal negotiations, come into question?

The UK has always made it more difficult than other countries for EU expats who make a home here to apply for permanent residence, which they have the right to do after five years.  Until recently our form has been 85 pages long, compared with half a dozen in some other countries, original documents have been required, and sometimes kept for months, and people have sometimes found it necessary to pay for legal representation to navigate the process.

One of the common reasons permanent residence has been refused is that applicants have no health insurance. They might have been in the UK for a decade, using the NHS as is their right under EU arrangements, but suddenly they were required to have separate insurance.  The EU Commission has warned the UK government that this is not legal: "Under the Free Movement Directive, EU citizens who settle in another EU country but do not work there may be required to have sufficient resources and sickness insurance. The United Kingdom, however, does not consider entitlement to treatment by the UK public healthcare scheme (NHS) as sufficient. This breaches EU law".

That was until recently.  Now, if you go to the government website to the page headed Status of EU citizens in the UK: what you need to know you're told "There is no need for EU citizens living in the UK to do anything now. There will be no change to the status of EU citizens living in the UK while the UK remains in the EU. If you would like to find out the latest information you can sign up for email updates".

Until there is an agreed system, they admit, there's no point in doing anything.  Not least because "People who have been continuously living here for 5 years will be able to apply to stay indefinitely by getting ‘settled status'".  This means that people who already hold a permanent residence card, who've filled in the 85 pages and run the gauntlet of the process, who've eventually got all their documents back, will have to do it all again.  We're promised it will be a simpler system, which I, EU expats and our EU partners will believe when we see it.

This shouldn't be treated as a postscript, but finally there are the 100 deportation letters sent "in error" to EU expats in the UK.  When the alarm was raised across social media apologies came thick and fast, with Theresa May called it an "unfortunate error", adding:  "I want to assure EU nationals here in the UK that their rights and status in the UK have not changed".  To which an appropriate response might be "Yeah, right".

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Customs is one of dozens of areas requiring detailed negotiation and comprehensive system design to have any hope of working after Brexit.  The UK government put out a discussion paper on customs for the Brussels negotiations which David Davis quickly dismissed as blue sky thinking.  It calls for "flexible and imaginative" solutions, not least to the question of Northern Ireland's border with the Republic.

All the suggestions seem to be based on the twin ideas that:

1. The UK should keep its regulations and customs areas aligned with the EU's - oh, and we'll collect each other's customs duties (which should annoy the Brexiters)
2. Everything should work much as it does now, but outside the customs union and without the ECJ to underpin the legal framework (which should annoy the EU which would have to foot the bill for a new and more complex system with no advantage to them)

But everyone should get a laugh from "We acknowledge this is an innovative and untested approach that would take time to develop and implement".

Back in the real world, HMRC envisages a new unified system to draw together 26 organisations which deal with various aspects of cross-border dealings, but significant work is required even to complete an upgrade of the existing system to handle 130,000 UK companies which import from and export to other EU countries but currently have no need to come into contact with customs due to single market membership.

The number of customs declarations is expected to increase up to five-fold to 255 million a year but as Private Eye (issue 1451) and other commentators point out, new government IT systems don't have a good reputation.  The National Audit Office identifies a "risk that HMRC will not have the full functionality and scope of CDS (Customs Declaration Service) in place by March 2019 when the UK plans to leave the UK". Since the future UK-EU customs relationship will not be known for some time, and quite possibly not by the likely withdrawal date of March 2019, HMRC are obviously preparing options for transitional arrangements.

But surely, with good will on all sides and a following wind everything will go all right.  No?  But where would that good will come from?  An inquiry by the EU's anti-fraud office has concluded that the UK should pay a fine of €2bn for customs failures. Other EU member states acted to stop fraud associated with lost customs duties on Chinese-produced textiles and shoes imported into the EU via the UK between 2013 and 2016, but HM Revenue & Customs (HMRC) continued to ignore fraudulent evasion of duties.  Several countries have also reported significant losses of VAT.

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A final example of this government's shaky relationship with the rule of law goes back a couple of years.  The FT's legal commentator wrote in April 2015:  "In a judgment handed down today the High Court held that yet again the Ministry of Justice under Grayling had acted unlawfully".

Chris Grayling was Justice Secretary at the time, which made him the only minister with a responsibility to uphold the rule of law specifically written into statute.  And yet he was determined to ignore his ministry's own statutory rules to force a change of policy about the treatment of prisoners.

He had told his barrister to argue that the rules (called Directions) had been issued by a Justice Secretary, could be changed or removed by a Justice Secretary, and that therefore they were "not directions to him but by him, and he cannot be bound by them".  The judge dismissed this argument, declaring that "so long as [the directions] remain in force they are binding on the Board and also binding on the Secretary of State, in the sense that he cannot lawfully tell the Board to ignore them or his officials to frustrate them".

Saboteurs department

Boris Johnson decided that six days before May makes her speech in Florence was a great day to write 4000 words (maybe 1000 when you remove the waffle) on his "optimistic" vision of Brexit.  The full piece is here, and Christopher Hope's bullet-point style introduction to it is here.  Both are behind a paywall, so here's an even more bullet-point style illustration just in case.

This was prepared by someone who is far from friendly to Johnson's cause but does reproduce Hope's ten headlines faithfully.  To take just one of these "points from a plan", does this look like a point from a plan?

And to take just one passage from Johnson's original article (this is from the section entitled "Our destiny will be in our own hands"):

"But, of course, this country still has chronic problems, and at least some of them have been exacerbated by the rigidities of EU membership - and certainly by the way we have chosen legally to apply those obligations.  Our infrastructure is too expensive - and takes far longer than France or other countries.  Successive governments have failed to build enough homes - though this is now being tackled by Sajid Javid.

"Our vocational training is often superb - but still not inspirational, and we have yet to find a way of persuading middle-class kids that they might be just as well off getting a skill as a degree.  We do not conduct enough basic research in science, and I am afraid we still have too many schools that are content with second-best.  The result of all these failings - over decades - is that we have low productivity: lower than France or Germany."

So according to Johnson, EU membership has exacerbated at least some of this country's problems and the way we've chosen to implement them has certainly exacerbated some of them.  Note that word "chosen".  It's up to each member state to decide how to implement each EU directive, and I'd certainly look at any examples Johnson puts forward.

But what does he put forward?  In infrastructure, house building, vocational training, basic scientific research, school quality, we're just not doing as well as... France and Germany.  What exactly is he blaming on the EU?

Finally, this morning's contribution from Chris Giles, the Financial Times' economics editor, is valuable because it analyses the claim made, seeks out the source and then evaluates the argument.  Importantly, and again, Brexit turns out to be irrelevant.  Read the thread of tweets for yourselves.

While Boris Johnson's lies about £350m got most people's juices flowing, I was intrigued but this claim in his Brexit "essay" pic.twitter.com/Xw5fG9lT0T

— Chris Giles (@ChrisGiles_) September 18, 2017