By MARCUS STEAD
HOW LIKELY is a so-called ‘No Deal’ Brexit at the moment? The deadline for extending transition period talks expired on 30 June, and, in theory, if no agreement is in place by 31 December, the United Kingdom will not have a trade deal in place with the European Union, so will trade on World Trade Organisation (WTO) terms in future.
The Prime Minister has hinted that he wants to step up the intensity of talks and that he wants the outline of a deal to be agreed by the end of July. That seems highly unlikely to happen. The EU has said that October 31 is a more realistic deadline, but that would leave businesses with just two months to prepare for the changes that follow.
These deadlines were already very tight indeed even without the added complication of the COVID-19 pandemic. Although an extension to the transition phase is no longer possible, it does seem very likely that we’ll end up with an extension, but that it’ll be called something else.
The most obvious way of doing this would be to amend the end date of the transition period in the Withdrawal Agreement, but this would almost certainly require the European Court of Justice to give its legal opinion first.
An alternative option is to create a new transition period to begin on 1 January 2021. A third possibility is to create an implementation phase as part of the future relationship treaty. A fourth option is to create an implementation phase to prepare for a potential no-deal exit.
Since the referendum of June 2016, a huge amount of time has been wasted. Theresa May became Prime Minister not long afterwards, and she was a Remain supporter during the referendum campaign, albeit a low-key one. She had a reputation throughout her political career as being dithery and indecisive, these were hardly qualities we needed when entering into tough negotiations with the EU. Furthermore, she had the mindset of treating Brexit as a damage limitation exercise rather than an opportunity to reshape the British economy and restore parliamentary democracy and accountability in a world that has changed enormously since Britain entered what was then called the EEC in 1973.
As for Boris Johnson, it’s worth remembering that he hedged his bets – he had no real track record as a Eurosceptic until the time the referendum was called. The then-Prime Minister David Cameron was taken by surprise when Mr Johnson backed Leave rather than Remain. I suspect, as is so often the case with Mr Johnson, he was calculating what was the best option in terms of his political career. I see little evidence that it was based on principle.
The most concerning aspect of both Theresa May and Boris Johnson’s handling of Brexit is just how little they, or their inner circle of advisers knows about how the European Union and its institutions work.
So what could have been done differently? First of all, whoever succeeded David Cameron as Prime Minister should have put together a ‘Brexit advisory group’, a sort of ‘mini Cabinet’ consisting of people who actually understood how the EU works, and could therefore prepare a clear strategy for negotiations with Michel Barnier and his team.
Top of the list should have been the academic Richard North, whose understanding of the EU is second-to-none. Next should have been his regular working partner, the late journalist Christopher Booker, founder of Private Eye magazine who for decades had detailed the damaging impact of EU membership upon British life through his books, newspaper columns and public speeches.
Further members of the group should have been Conservative MPs Sir John Redwood and David Davis (the original Brexit Secretary), both of whom have decades of relevant experience. The final member should have been the then-Labour MP Gisela Stuart, who earned the respect of Leave supporters with her displays during the campaign in TV debates and public speeches. Her presence among the group would have not only added a fresh perspective, but would have acknowledged the reality that a very large number of Labour supporters voted Leave in the referendum, that Euroscepticism was by no means confined to the right wing of the political spectrum, and this was a ‘mini Cabinet’ of able people from across the political spectrum.
Instead, both Theresa May and Boris Johnson have lacked people with the relevant expertise needed to understand just how profoundly different in law, interpretation and character the European Union is to the United Kingdom. Their advisers consist largely of people of little relevant experience, and civil service mandarins who regard Brexit as a ‘negative’ and at best, like Mrs May, a damage limitation exercise, rather than an opportunity to be seized.
Earlier this month, the Cabinet Office Minister Michael Gove outlined a new £700 million package for new infrastructure, the hiring of staff and advanced technology at the border, ahead of whatever will follow the transition period deadline. The blueprint also outlined new regulations on trade and it made clear that the UK was leaving both the Single Market and the Customs Union.
These developments were barely reported at all in the mainstream UK media. But are we sleepwalking towards problems? How many people, when they hear the terms ‘Single Market’ and ‘Customs Union’ banded about in the media have a clue what they actually mean and how it affects their lives? Most don’t. Very little effort has been made by the mainstream media to explain the meanings of these terms.
The Single Market has no specific legal definition. It essentially means ‘single regulatory regime’. It aims to break down all barriers to trading across the EU and even to non-EU member states by ensuring the ‘four freedoms’ – goods, services, capital and labour.
Free movement of goods, services and capital means the elimination of tariffs and reduces costs and administrative burdens by applying the same set of rules (ie ‘single regulatory regime’) among all those states which are a member of it.
The free movement of labour is more controversial, for it effectively means accepting unlimited, indefinite levels of immigration from other EU states, regardless of their skill level. It explains why Theresa May failed to get immigration levels down to her target of ‘the tens of thousands’ in every single one of her six years as Home Secretary, and why we needed to build a city the size of Cardiff every single year to keep up with immigration rates.
The Customs Union ensures all member countries charge the same import duties to non-members. For Brexit to be a success, it is essential that the UK is not part of the Customs Union. It will prevent our country from being able to agree free trade deals with the wider world, or even set tariffs on our own terms to countries where no free trade deal exists. The importance of not being part of the Customs Union cannot be understated – if we remained in that, it would be very difficult indeed to form trade deals with the wider world, specifically in relation to goods rather than services.
With that in mind, what would the consequences be of a so-called ‘No Deal’ Brexit? First of all, the ‘apocalypse scenario’ in terms of the supermarket shelves being bare should be treated as an absurdity. There is not single item of food or drink that couldn’t be sourced from outside the EU if we absolutely had to, but it is also right to point out that there would be significant short-term disruption as supply chains were re balanced and sourced elsewhere, though these difficulties would be quickly resolved.
The dangers of a so-called ‘No Deal’ Brexit go well beyond the prospect of queues stretching down the motorway near Dover. The most pressing danger lies with the issue of energy supplies.
Leaving the European Economic Area would severely increase the risk of the lights going out. We’ve had years of needlessly closing down reliable fossil-fuel based sources of electricity, such as the Didcot A power station, an act of dogmatic self-harm in the name of meeting EU ‘climate change’ quotas implemented most enthusiastically by Ed Miliband when he was Energy Secretary in Gordon Brown’s Labour Government. To put this absurdity into context, the UK’s whole electrical generation capacity, in all forms of power, is 85 gigawatts. If we gave up using electricity entirely, it would make no difference to the impact of Chinese coal burning, fuelled by enormous new coal fields in Inner Mongolia.
This flawed dogma has led the UK to depend increasingly on unreliable wind and solar energy, the main problems being that it’s often just not very windy or very sunny. As a result, we rely on importing increasing levels of power from abroad via inter-connector cables.
Let us take just one evening as an example of how vulnerable UK energy supplies now are. On the evening of Wednesday 4 July 2018, roughly the same time of year as we’re in at the moment, only 1% of the UK’s energy needs was coming from wind, and none at all from solar. 60% was coming from gas and 26% from nuclear. As is often the case, to keep our grid functioning, we had to import 11% from France and the Netherlands.
According to the National Grid, over the next decade, we plan to more than quadruple the current 4 gigawatt capacity of our inter-connectors to 18.5 gigawatts via new cables from France, Belgium, Norway and Iceland. This is to keep the grid functioning when it’s planned that 68% of our generating capacity will derive from weather-dependant wind and solar, which can plummet to zero at any time under the wrong weather conditions.
But this system relies on the UK being in the ‘European Energy Market’ which sets complex rules that allow it to operate. As the European Commission’s Notice to Stakeholders on cross-border trade in electricity makes clear, once we become a ‘third country’, the EU could refuse to certify us as continuing participants.
The danger is clear, so what is the solution? Have you ever been sitting in your living room on a summer’s day with your window open, when a bird flew in? The window is wide open, yet despite your best efforts, the bird seems to panic and fly everywhere except through that open window?
That is effectively the situation the UK is in right now with the EU. There is a relatively straightforward, though imperfect solution, and that’s the so-called Norway Option. It’s effectively a ‘take it off the shelf and plug it in’ Brexit, but the UK Government has foolishly ruled it out, both in the aftermath of the 2016 referendum, and again in Michael Gove’s announcement earlier this month.
Here’s how it works: Norway is not, nor never has been, a member of the European Union. It is, however, a member of the European Economic Area (EEA).
If the UK chose to stay in the EEA, we would be able to leave the EU, agree our own trade deals with non-EU countries (since we would NOT be in the Customs Union), and will stay in the Single Market.
Crucially, we would also be able to suspend ‘freedom of movement’ since EEA members are allowed to activate Article 112 of the EEA agreement, known as the ‘emergency brake’. This method has been used by Lichtenstein to suspend ‘freedom of movement’ indefinitely, and implement its own quota system. As a far larger country with much more clout, the UK could do the same with ease.
There are, inevitably, downsides to EEA membership. We would still have to pay some money every year, though nowhere near as much as at present. We’d also have to accept their regulations when we traded with them, but then again, we also have to accept the rules of the USA, China, India or any other country we choose to trade with, which is reasonable.
But on the crucial matters – Parliamentary sovereignty, the supremacy of British courts, immigration controls, the ability to form trade deals with the wider world, and the ability to form a genuinely independent foreign policy, we would be winners on all counts.
The business community has enough to worry about at the moment – it doesn’t need to have the hassle of endless red tape and delays at customs hanging over it.
More importantly still, the last thing UK citizens need in the months and years ahead are worries about power cuts becoming a regular part of life.
Years of foolish obedience to EU and ‘climate change’ dogma have left national energy supplies dangerously vulnerable. That situation was entirely avoidable. Now, before it is too late, our Government and EU negotiators need to appreciate the scale and danger of what is at stake in terms of energy supplies in the event of a ‘No Deal’ Brexit.