Five years, and who would have imagined?

Five years ago with a wobbly hand I put an X in the ‘Leave’ box, along with millions of others. I did not really believe the stories I told myself of the sunny prospects when we were out, but I knew there was only this opportunity. Now five years on, it has been achieved, and much more.

I could not have imagined it would take the Government so long actually to extricate us from the European Union: David Cameron (remember him?) said he would send the letter at once, and start the two years rolling, but instead he flunked it and walked out, leaving the task to a timid replacement with a backsliding team. Then out she went and the landscape was transformed – all this has been recited endless times and is raw in the memory.

Finally on 31 January 2020 we were out, after almost 4 years: there could not possibly be time by the fifth anniversary to have transformed the trade of the world, but here we are, with a ‘Canada+’ deal with the European Union, and another with Canada, world markets signing up, inward investment (that was meant to be fleeing, remember) pouring in as never before. Boris said during the campaign that we had been yoked to the only declining continent in the world, and now we are becoming linked to the growing ones. It is too short a time for it to have happened, but it has happened.

I was always told when young and wide-eyed that you can achieve whatever you want by putting your mind to it. I never really believed that – but these years have been proof that Governments fail to achieve because they dither and do not believe in what they are doing, but can succeed beyond all expectation if they put a collective mind to it. The night of the long knives after Theresa May departed was cruel, utterly necessary and successful.

It is unfashionable to say what I must, but God bless Dominic Cummings for his role in the transformation. They made a good team, Boris and Dominic, while it lasted.

I recall after the vote, calling out some nonsense from LibDems, when they claimed that the economy would crash 10% after Brexit. The figures were bizarre, Diane-level calculations based on all trade across the Channel ceasing and everyone who so much as sniffs a baguette at work being sacked. Well, they were right, in a way, not because of Brexit, which actually lifted the economy, but because of the lockdown. We did not foresee that. (Even there we are recovering because of Brexit freedoms, while Europe languishes.)

It was not foreseen, where we would be. It is better than I hoped. Now we just have to win the Sausage War.

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Sign the Australia deal

There is a free trade deal with Australia to be had: sign it. No text is available, but the Australian government has published its terms, and they are exactly what the British side would be looking for too. It’s a bonzer deal, mate.

One thing I was told repeatedly when canvassing for Leave in the referendum: when we are out of the EU, we must apologise deeply to the Australians. What was done in 1972 was unforgivable, freezing them out of their main export market as we turned to Europe. Now it is overdue the time to return to normality, which is free trade between Britain and the Old Commonwealth. Australia and New Zealand were settled, established and made equal, independent realms on the basis that we were all one and equal and trading between ourselves: betraying those basic understandings unilaterally, insulting the tie of kinship, for a flawed engagement with Europe, was a scandal that hurt badly in Australia and New Zealand and has never stopped hurting.

Cynical commentators (though we do need cynics), portray Australia as a minor player, an exporter of mutton, wool and beef, but that is a generation out of date. There are indeed more sheep in Australia than people in the British Isles, and it is important sector, but the main game in town these days is mining: Australia is the world’s largest producer of iron and bauxite, and around the top of copper, coal and much else besides.. Cheap iron, steel, copper and aluminium are vital for industry. that is only in one sector: Australia is a wonderland for industry and agriculture.

It is in agriculture that the objections have been raised. Farmers’ representatives are screaming about being unable to compete with the vast economies of scale that Australia has in sheep and cattle. One could combat the worry by pointing to the distances involved that even in our crowded islands we have more than half the number of sheep that whole continent has, and our flocks are closer. However mathematics aside, we must never forget Adam Smith. It is almost two and a half centuries since The Wealth of Nations, and it is still hard to convince people of the truth and logic of its observations. Customs duties are imposed at the demand of local producers who fear competition, and in Smith’s day too these were mainly farmers. However every example he analysed over centuries showed that customs duties do significant harm to those who demanded them. By Adam Smith’s principles, farmers should be welcoming free trade. Even apart from competition on wool, all the equipment around the farm, from heavy machinery down to stock fences, needs steel and aluminium: without free trade these are more expensive. All that ore and bauxite coming out of the ground will, if duties are lifted, reduce the cost of farming and boost profit.

We could look at it another, more philosophical way too:

Imagine Britain is running out of land (as we are) and there appears out of the sea a new, practically empty country ideal for flocks and herds. The land is annexed and farmers are encouraged to cross to this new part of Britain and establish vast farms which our islands’ limited bounds could not fit until the new land appeared. We cheer the pioneers and encourage others to join them, not just farming but providing all the support, infrastructure industry and exchange needed so that the pastoral enterprise can thrive to its best. Then we may find that our mines are exhausted, but his miraculous new land has untapped resources, so we send miners there too. Would farmers in the old islands complain? Well maybe, but only with as much conviction as a hill farmer in Cumberland might grumble that those on the Cotswolds have it too easy: the new land was established to thrive and it has done. Now do we disown it and impose high taxes on those we encouraged to move to the new land? That would be shocking. This really though is the story of the settlement and growth of Australia.

Tony Abbott has observed that while Britain and Australia are juridically separate, we are not foreign to each other. That is at the nub of it. We are one nation, juridically separated, but of the same essential understandings and aiming for the same things. Our twin government can do deals for mutual benefit without trying to put one over on the other – a very different dynamic indeed from the negotiations with the European Union last year.

There is a deal to be done, and both governments have the same aims and criteria. Sign it.

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Eire applies to be America’s 51st State

“In retrospect, it was an easy decision” said the Taoiseach yesterday: “It makes sense for Ireland to join the United States of America”.

Joining the United States, he explained, is the best hope for Ireland’s prosperity. Ireland has more trade with the United States than with any other country except Britain; Americans are keen to be seen as Irish; and the two countries have provided each other with a great deal over the ages – America received labourers, and Ireland received the potato blight fungus. “With the EU, we’d tied our donkey to the wrong post.”

Irish commentators overwhelmingly agreed, observing that the Ireland only joined the European Community in the 1970s because Britain did, and while it was great for a while, the fascination has gone, like any other 1970s makeover.

Richard O’Shea, a senior government adviser, said the move would go forward as soon as possible. The Europeans had used Erin and cast here aside; “It was all very lovey-dovey when they wanted us to stiff the Brits in the negotiation, but now they are not returning our calls, they are ignoring us and humiliating us in front of our friends and neighbours. We thought we were getting cash in had from Brussels, but we find they have gone off with our fish, which is several times more than we ever received. We thought EU loved us, but they were only after cheques.

“The Europeans don’t understand us and their culture is alien. Ireland cannot stand alone: we need to join with another English-speaking country that can be a major trading partner and protector, and we couldn’t think of one except America.”

Joe Biden has often expressed his Irish ancestry. While has has not commented on the Irish government’s approach, he did express deep concern about the number of Republicans in Ireland: the Irish government was quick to reassure him that there is no connection between Irish Republicans and the GOP, and in fact the only similarity is a tendency to carry guns.

Timing for the move is still uncertain but it looks like it’s Irexit for now & howdy partner.

How to fix the Ulster Protocol

The Ulster Protocol (the “Protocol on Ireland/Northern Ireland”) has come to haunt us earlier than expected. It was trouble waiting to erupt, but might have been handled far better, and could still be.

The current problems might arise through idiocy, malice or as part of a political game. I tend to the first explanation, but gaming comes into it.

The scheme of the Protocol has been discussed on this site before in the wider context. It needs revisiting for itself.

In context, some seven times more trade passes between Northern Ireland and Great Britain than between Northern Ireland and the Irish Republic, but that border across the island has more psychological impact as traffic passes back and forth without hindrance, without the need for ships. The Protocol expresses its aim as avoiding any trade border between Ulster and the rest, but still so as to allow the EU to control its own external trade border, which seems like a contradiction, hence the odd provisions to square the circle.

The Protocol is one-way: it looks at goods passing from Great Britain into Northern Ireland, not goods passing the other way, which are not the European Union’s concern.

Northern Ireland therefore remains, and is explicitly stated to be, part of the United Kingdom’s single market and customs area, but people and businesses in Ulster are given privileged access to the European Single Market. The block is that goods travelling from Great Britain must be processed as exports before they reach Northern Ireland if they are “at risk of” entering the Irish Republic and thus the European Union. Therein lies the rub: anything could be deemed to be “at risk of” entering Eire.

Guilty until proven innocent: Article 5 states that no customs duties are payable on goods entering Northern Ireland unless they are at risk of entering the European Union, but that ‘unless’ is turned on its head:

2. For the purposes of the first and second subparagraphs of paragraph 1, a good brought into Northern Ireland from outside the Union shall be considered to be at risk of subsequently being moved into the Union unless it is established that that good:
(a) will not be subject to commercial processing in Northern Ireland; and
(b) fulfils the criteria established by the Joint Committee…

Therefore there is a presumption of the risk.

A moment though: Article 5 refers to customs duties, and there are no customs duties between the United Kingdom and the European Union, so the whole Article is redundant. There is nothing else referring to those goods allegedly at risk of entering the European Union.

The further provisions of the Protocol apply some parts of European Union rules within Northern Ireland. This is a particular bugbear: it is intended to make things easier for goods and services to flow south to north, but imposes foreign law, the escape from which was one of the major benefits of Brexit.

The immediate interference with trade within the United Kingdom is a system of checks being imposed at Stranraer and Cairnryan. It is doubtful whether these are necessary at all under the Protocol. There are no customs duties being demanded nor should customs declarations be demanded as no duty can become payable: the only customs duties payable for goods entering Eire from Great Britain are on goods originating outside the United Kingdom, and that is a tiny proportion of all goods shipped. The applicability of the Protocol in this case is questionable in any case.

The Protocol was for a limited purpose, the vast bulk of which is inapplicable with the EU-UK Trade and Co-operation Agreement in place. However leave it to an officious clerk and he will not just make a meal of it but a nine-course feast.

The customs officials in Rotterdam, one of the most important commercial ports in the world, check a small fraction of the consignments passing under their eyes: main shippers have to be trusted. Could it be that those posted to Stranraer are making work for themselves? If there is no strict need for checks, then they can be withdrawn completely. It is only for goods travelling on into the Irish Republic, and that is not the concern of the British government. To be more concerned for the interests of the EU than the EU itself is would be a familiar trait in the Civil Service, and one we could well do without.

The immediate answer then is just to withdraw all checks and paperwork.

If lawyers descend upon the fine detail of the Protocol and its annexes and read around other implied legislation and demand that border checks be re-imposed, then the Protocol becomes intolerable, going beyond the plain words agreed to. In that case a small amendment to reverse the presumption of risk would serve, which could be a change to the Protocol itself or by a decision of the Joint Committee. It seems excessive though for Articles which are in essence redundant.

The EU should be subdued after their recent misbehaviour, but they might in time cut up rough when they can see that the British government is not going to persecute its on people. If they demand that there be bureaucracy imposed on trade and it is not being imposed in the ports of the North Channel nor of course on the border, then they have an obvious course open to them: reverse the Protocol. Instead of Ulster being given special access in return for a semi-detachment from the rest of the country, give the Republic of Ireland that access to the British internal market with check at the continental ports. It would make more sense given that vastly more trade passes from Eire to the United Kingdom than between Eire and the continent.

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Quiet, smug anniversary

You would hardly notice the great day today: the first anniversary of Brexit Day. We have been so overwhelmed by other concerns in a year that should have been a year for building. Has no one noticed the date?

It has been a very good Brexit, and in the nick of time a good deal was done, better that we expected. It was a game of chicken and played well, resulting in what we might think was a British victory, but what was actually the best result for both sides, even in the Europeans don’t realise it yet. The doomsayers were to be disappointed.

I cannot say that the doomsayers were proven wrong, as they could well have been right in some respects had the sands fallen a different way or the negotiators been less steadfast., but their proclaimed doom was averted. (They have the satisfaction at least that the deal was so close to the time that exporters could not get their paperwork straight so that it looked for a few weeks like a disaster. They’ll be happy with that.)

However, the worst predications, which Brexiteers like me dismissed, have still come to pass: the economy has indeed collapsed, unemployment has soared, the NHS has failed and social problems have multiplied. It is not because of Brexit though: it is because of the lockdown.

A year ago, on Brexit Day itself, COVID-19 was known about but was only just spreading visibly in Britain. Now it has infected even the news cycle. The collapse though in society, economy, the NHS, public credit and much else beside is not because of the disease but because of the measures taken in response to it.

Maybe this is the end of it. I would not count on it. If though the nation can be released to recover again and reap the benefit of Brexit freedom, we are well placed to be the first to come out of it. Then there will be a landscape of bankruptcy across the whole continent, the one where all our business’s customers are meant to be. Maybe there is something to be made by buying all those bankrupt businesses up, with British money and enterprise?

Maybe next year we can have our celebration

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