Tuesday, 23 May 2017

In The Beginning There Was an EU Policy Document

After reading the woeful attempts made by Labour and Tory to plough a clear Brexit furrow, I decided to review a policy document that was clear, concise and logically coherent.  It turns out that the EU is pretty good at this.  In fact, the EU has been publishing its plans for the upcoming Brexit negotiations for some time now.  I recommend that everyone take a gander here to find out what transparent governance looks like.  I suppose it looks transparent, which ... doesn't actually look like anything at all.  Oh dear, I've got myself in a right wordy mix-up again. 


Let's forget my terrible metaphor for the moment and get cracking with a review of the EU's legally binding instructions for Michele Barnier.  These instructions describe the legal parameters of the upcoming UK/EU divorce talks from the perspective of the EU. They also provide an insight into the processes the  EU will employ to ensure that the EU is protected from the UK's bizarre behaviour over the last year or so.  Rather than go through the whole document I thought I'd just flag up some of the issues that will be most contentious for the next Tory government.  Boomshanka and simply enjoy.

 

Citizens' Rights


I've already blogged about the gap between the UK's view on citizens' rights and the position that the EU will likely take.   Neither Tory nor Labour are anywhere near the position demanded by the EU.  Labour, of course, think they can magnanimously grant rights to EU citizens in the UK on a purely unilateral basis without really specifying what those rights will be or laying down any legal foundation for the persistence of those unspecified rights.  The Tories, on the other hand, are extremely tight-lipped about any deal they will offer to EU citizens in the UK.  Neither party has ever gone as far as to publish any detail on how they intend to secure the rights of its own citizens living in the EU.   We can only be thankful that there is a grown-up in the room to take care of this on our behalf.

The EU's policy is centred around the principle of permanent residence rights.  EU law has long dictated that permanent rights of residence are secured after 5 years of legal residence. In the case of Brexit that five year span can be any window of time that starts before the date of withdrawal; that is, 31 March, 2019.   Anyone who qualifies for permanent residence on 31 March, 2019 should automatically be granted the status of permanent residence.  More crucially, anyone partially along the path to permanent residence should also be granted permanent residence after they have completed their 5 years of lawful residence.  That means that an EU national who takes up residence in the UK on 31 March, 2019 and legally stays for five years will be granted exactly the same status of permanent residence in 2024 as someone who qualifies on the date that the UK exits the EU.  This is huge stuff.  Really, this is not going to make the UK happy at all because they have variously briefed that the cut-off date should be either the date of the EU referendum or the date that the Article 50 letter was delivered.  Nobody in the UK has ever contemplated the possibility that permanent rights would be granted to individuals not yet resident in the UK.

What other details did Tory and Labour neglect in their manifesto pledges? Oh yeah, that whole stramash about the rights of EU nationals already resident in the UK to bring over their family.  The rights of family members to join someone already resident in the UK will persist even after the date of departure.  That means that anyone resident in the UK can legally bring over their wife or husband even if the spouse wasn't resident in the UK on or before the date of withdrawal.  David Davis must be having a heart attack at all this.  Keir Starmer is probably still trying to work out if this nugget means that "Brexit is settled" or if there is still room for a tiny bit of contention.

Brexit is definitely settled except for the really hard second part and the first part that is only marginally easier than that.
The EU puts great stress on the permanence of permanent rights.  They really do mean that permanent rights will last for the lifetime of the holder of those rights.  For example, an Italian working in the UK since 2004 will be able to return to Italy for 3 years, then work in France for a bit and then return to the UK with all of their rights in tact.  They will be able to repeat that cycle until they pop their clogs.  Now, the EU hasn't mentioned rights of access to graveyards but I fully expect there to be an addendum somewhere or other.  Permanence also means that rights that hold today cannot be taken away in the future. The right of access to healthcare or a state pension or unemployment benefit or education will persist for the lifetime of anyone who qualifies for permanent rights.  Someone call Liam Fox a doctor. What?  He is a doctor?  Really?  An actual doctor?  Well, I'm just glad he went into politics, then.

Governance of the Agreement


Theresa May has made a huge fuss about the UK withdrawing from all of the EU's governing bodies.   However, she hasn't made any plan for how to resolve disputes that arise from the Brexit agreement that she will eventually strike with the EU.  Let's imagine that a French radiographer applies for a job at a Birmingham hospital but is turned down on the premise that their qualifications are no longer recognised by the UK.   The EU, of course, is demanding that the UK recognises in perpetuity the qualifications of all EU nationals granted the status of permanent residence.  How would that radiographer pursue their case?  If it happened today they would take their case to the European Court of Justice.  What about after Brexit?  Well, the EU is demanding that the Brexit agreement will be governed by European courts and technical agencies.  As a consequence, EU and UK citizens caught up in this unholy mess will be able to take their grievances to European courts exactly as they do now. All they EU is saying here is that rights enjoyed today will be permanently granted.  This is going to lead to the strange situation where EU nationals resident in the UK have more rights of appeal than UK citizens.  It also leads to the conundrum whereby UK citizens resident in the EU have more rights than their contemporaries back in Blighty. This is what taking back control actually looks like.

The EU goes much, much further than anything I stated above.  They also say that EU citizens in the UK should benefit from amendments to EU law that are not yet implemented or even proposed.   If the EU changes the way that claims can be made to the ECJ or modifies a Directive that applies  generally to EU citizens then EU citizens in the UK should also benefit from those changes.  If they hadn't made this provision then EU law as it applies to the UK would be effectively frozen on the date of withdrawal.  In contrast, the whole point of permanent rights from the perspective of the EU is that their citizens can carry on living in the UK as though the UK had never left the EU.   That, after all, was the state they found it in when they arrived.

Transitional Arrangements


I think everyone now knows that the UK cannot achieve a smooth Brexit in the fixed two years allowed by Article 50 but what is to be done?  There's been a lot of talk about transitional phases from both sides but a lot of disagreement about what that means.  The EU is very clear that a transitional phase can only be granted if the UK maintains all of its current EU obligations for its duration.  If the UK agrees to this it will retain all EU Directives and Regulations; it will be bound by decisions from the ECJ; it will remain under the governance of European technical agencies; it will continue paying into the EU budget.  Theresa May's White Paper on Brexit makes clear that the UK will be free of all of its EU obligations on 31 March, 2019.  She has even made this a clear manifesto pledge but I seriously doubt she will be able to keep it because the UK badly needs a transitional phase to avoid regulatory and financial meltdown.

Theresa May finally wins the Political Maths Olympiad, Downing Street, 2017. 
 Why is there an election happening in the UK right now?  The answer is that it is politically easier to break a manifesto pledge at the start of a new government than right before an election.  If Theresa May had completed her term of office and ran for election in 2020 she would represent a government that had just signed the UK up to a further 3 years or more of EU obligations.  To some it might even look as though the UK would never, ever leave the EU.  Holding an election right now means she can break a key manifesto pledge almost immediately but go on to campaign in 2022 as the leader who heroically brought the UK out of the clutches of the dastardly EU.  Somewhere along the line she worked out that transitional arrangements are just as time-consuming and complex to negotiate as the UK's final departure from the EU.  Time limits being what they are, the only offer the EU could feasibly make is for the UK to follow its current legal template of EU membership for the duration of the transitional period.  She worked that out and then immediately called an election.  It's good that she worked it out but it would have been better if it had all made sense to her and her team of mega-brains about 9 months ago.

UK Debt


The EU has thought long and hard about the mechanisms that will be used to compute the UK's debt at the time of departure but have never actually published an estimate.  Meanwhile, all sorts of numbers have been carelessly thrown around by "journalists" and politicians for the last 9 months.  You've probably read that the EU will demand 100 Billion or that the UK can expect to pay 50 Billion.  There's never any detail to these stories so that debt might be euros or dollars or sterling or magic yo-yos.  The truth is that nobody knows the exact figure because it hasn't been calculated yet.

I've always found that my eyes glaze over whenever I start reading about finance so you might want to look elsewhere for detail on this topic.  As I understand it, the UK has short-term obligations and long-term obligations that the EU will expect to be honoured.  I would guess that both of these have a value that can be established reasonably well.  On top of that, there are obligations with uncertain value and specific Brexit costs.  The short-term obligations represent the money that we said we'd contribute to the current EU budget.  EU budgets typically span several years so we'll be expected to pay that even if we leave before the end of the term of the budget.   Long-term obligations are things like pensions for EU workers.  The UK is clearly responsible for a portion of the pension of all EU employees who worked for the EU during the UK's membership.  What about those obligations of uncertain value?  They are basically systems of loans agreed by the EU with money contributed by the member states.  The UK agreed to pay a share of those loans when it was a member so the EU will expect that to be honoured.  Those loans might be paid back in time, meaning that the EU could eventually pay back the UK's contribution to the loan.  Alternately, the loans might eventually be written off.  If you're still awake the specific Brexit costs are the costs of moving EU technical agencies from the UK.  The European Medicines Agency, for example, will need to move from its current headquarters in London.  There will be all sorts of costs involved:  obligations to pay rent and facilities charges under the current rental contract;  the cost of staff relocation; the cost of finding and renting a new office etc etc.

Despite UK bluster and tabloid protestations this is really happening.  It is unstoppable now.
 The final figure is going to be contentious.  The UK will obviously dispute its short-term obligations. I'm sure it will argue that its contribution to the budget should stop when the UK exits the EU.   The long-term obligations seem less contentious, especially as they include the pensions of UK citizens.  Having said that, I'm sure David Davis will find some way because he has a final figure of just 1 Billion (any denomination you like) in mind. Didn't Boris Johnson even say that the EU owes money to the UK instead of the other way round?  The loan contributions are particularly contentious because the UK will probably prefer to honour future losses rather than front the money right now.  We need to remember that the Daily Express will be commenting on the unfolding horror with its typical objectivity so keeping the immediate number as low as possible will be a clear goal  for UK politicians.  Finally, I'm quite sure that the UK will take the view that the EU should pay for its own technical agencies, thank you very much.  Good luck with that.

Wrap This Up Now!


I've only flagged up the areas that I think will be most politically contentious rather than the areas that might turn out to be the most complex to resolve.  For example,  I've not mentioned Northern Ireland or Gibraltar or how the UK intends to honour contracts the EU has with third parties.  Nothing I've seen suggests that the UK is prepared for any of these complicated issues.  All I've seen is the UK giving the vaguest promises possible that EU citizens will be allowed to "remain" in the UK and a one-sided yelling match about the UK's debt obligations followed by petulant sulks about how it's all terribly unfair.  None of this promotes the spirit of cooperation.
Are there concrete plans to walk out of Breixt talks?
 Will the UK really walk out of the talks?  The rhetoric coming from Tory HQ is so inflammatory it seems that agreement with the EU will be almost impossible. In the midst of all this bluster, there are all sorts of rumours flying around that the UK is not planning for meaningful dialogue but instead intends to walk out of the talks immediately after the German election.  The argument here is that the UK isn't prepared for talks because it always intended to storm out and blame the EU for its inflexibility.  David Davis helps fuel these rumours by continually saying that walking out the talks is a tactic he fully intends to employ if things don't go his way. "No deal is better than a bad deal", and all that.  Is this a realistic scenario?  I'd be inclined to believe these rumours if the UK was better prepared for the consequences of walking out of the talks.  The consequences would include an immediate hiring ban of foreign nationals; WTO tariffs; tens of thousands of customs staff; border queues;  immediate price rises;  nuclear plants without nuclear fuel; Channel Tunnel trains without qualified drivers;  planes without qualified pilots; cancelled operations; the cessation of pharmaceutical licenses; hazardous chemicals stuck in transit; tourists with uncertain hospital costs; the striking out of ongoing legal cases; UK data servers declared illegal; the City of London ceasing to function as a Euro clearing house; pensions stuck in limbo.  It is much, much harder to plan for the walk-out option so I really don't think this is a credible threat.  The EU surely know this.

The truth is that exiting the EU is a prescribed legal process and there isn't that much room for negotiation on the main points of the divorce.  Even the order of the talks (divorce before trade) is all written down in a way that follows the various treaties and constitutions of the EU.  Nobody can do anything about this even if they wanted to.  Sure, the structure of the UK's debt can be discussed and I'm sure there is wiggle room in the timing of the payments but the figure itself isn't really something the UK can alter on its own.  I'm sure there is even room for the foundation of a special court  to oversee the Brexit agreement instead of the ECJ.  The problem for the UK is that appointing and agreeing the powers of a new court will take up months and months of organisation.  While all that is going on the UK will not make any progress towards a Free Trade Agreement with the EU.  This is not a credible path.  The ball is in the EU's court and there is nothing that can be done about that.  Nothing at all.

This can all be avoided by voting Yes in a second independence referendum,

Terry

PS It is fascinating to watch the EU publish all of its policy on Brexit.  They have made clear what information will be placed in the public domain (almost everything),  issued legally binding guidelines to its chief negotiator,  and formulated an unambiguous policy of ratification.  The UK, on the other hand, wants everything conducted in secret.  It did issue a Government White Paper on Brexit but if we cast our minds back we'll remember that it read like a school project from an unsuccessful student. To add insult to injury, key statements were reversed within days of publication.  It is not a useful document unless Brexit leads to a shortage of toilet paper. The Government White Paper acts only as a guide for how not to write a Government White Paper. Finally, there is still no formal mechanism for the UK to ratify the Brexit agreement.  Both Labour and Tory have pledged a "meaningful" vote in Parliament but without any detail whatsoever on the choices that will be offered.  What a mess.

PPS Why wait for the German elections to storm out?  If they storm out before the election they leave the door open for a new German government filled with fresh faces to coax the UK back to the table.  Storming out after the formation of a new German government leaves that door firmly shut.  The problem with storming out is that the EU is legally bound by the instructions it has passed to Michele Barnier.  It can only negotiate within those parameters. We cannot expect the EU to come back to the table with a fresh offer because it cannot legally do that.  The UK already knows the EU's boundaries because they published them on a website for idiots like me to read and review.  The point of revealing their guidelines is to prevent the UK from storming out - if the UK does storm out in a strop it means that it entered the discussions in bad faith.  Let's see when the penny drops for  David Davis.

18 comments:

  1. Very interesting and informative.

    I'd not count on Davis (if, indeed, it is still he after the election) catching on any time soon. I just don't think "catch on" is quite his thing.

    I'm not sure if the British cabinet members responsible for this are stupid (a sound possibility when you consider Davis and Fox) or just so ultra "upper-class Brits are always right" (a sound possibility when you consider Boris).

    It may be that they are looking back to previous "divorce" settlements, you know, with their empire, when of course everything was done their way.

    In one respect it is all rather amusing anticipating them running around like headless chickens, mindful always of the Daily Mai/Express/Telegraph headlines that will surely follow their ever word, grateful for them in a way, and yet terrified that following the urging of Dirty Desmond will surely push them further into the hole that they already started digging.

    On the other hand, of course, unless we escape this dreadful place we will have to live with the consequences. So that makes it a little less diverting.

    They will need in all things to be mindful that the Ukippers who deserted their party for the Tories can easily return there (even under Nuttall) if they think that the EU is getting away with too much and the Tories aren't being hard enough on them.

    And at the top on "our" side is stuttering, stumbling, inarticulate, weak and wobbly May.

    You know, Corbyn isn't much cop as a leader, but at least he's a man with some principles, and while he's hardly the orator that Blair was or Sturgeon is, at least he can get a sentence out without it getting mixed up.

    Given the choice of Corbyn and May, May doesn't stand a chance.

    Incidentally, as I'm sure you know, Article 50 was drawn up by an English Lord, one Baron John Kerr. So we have him to thank for all the rules and regulations...although apparently he never thought that Britain would be subject to them.

    http://www.independent.co.uk/news/uk/politics/article-50-design-dictators-not-uk-eu-european-lisbon-treaty-author-lord-kerr-a7655891.html

    ReplyDelete
  2. Given the choice of May or Corbyn I would also choose Corbyn but only because he is so utterly clueless I'm 50% convinced that he would fail to complete Brexit. To be honest, Labour actually have some great policies but the chance of them pulling together to make any of them happen is slim. I didn't vote for them and I'm certain that I never will.

    I've come to the conclusion that our current crop of Ministers and political leaders are willfully stupid. They just don't think that being knowledgeable about their brief is at all important. Their job is just to fly the flag and repeat whatever on-message guff is sent to their smartphone immediately before an interview. The difficulty with Brexit is that it is so complex that the old system of just-in-time briefing by political handlers no longer works. David Davis actually has to get his head around this. At some point in the near future he will be asked to weight the pros and cons of key decisions that will affect the future of the UK for the next generation. He needs to understand the balance of each pro and con in great detail; he needs to understand the complex consequences of his decisions. The moment he revealed that he had no clue about how Brexit would affect the EHIC card was the moment I knew he had blown his chance to understand his ministerial brief. I doubt he has even read the EU's legally binding negotiating guidelines. He probably thinks that brings him some kind of advantage.

    Brexit means that the UK is bossed around by, erm, the UK. I'm sure the irony is lost on Farage.

    ReplyDelete
  3. The UK simply does not have sufficient trained personnel to conduct this negotiation. Even those in the Civil Service who are competent have to work with the worst government ministers I've ever seen. They are clueless, incompetent, can't even talk about their own policies and backtrack on decisions almost as soon as they've been made.

    This looks like a car crash for the UK which doesn't fill me with glee as we'll have to live through the debacle.

    The General Election campaign has been appalling. Yet again the important stuff simply isn't being debated. We'll all suffer as a result.

    ReplyDelete
    Replies
    1. It is incredible that an election called entirely because of Brexit manages to avoid debating Brexit at every opportunity.

      Just comparing the EU's published Brexit documents with the UK Government's White Paper is enough to know which side is organised for this. I should probably dust off that White Paper and see how much is still revelant, how much is formal policy and how much has been quietly put in the bin.

      Delete
  4. Terry,

    Thanks for your insight. This does indeed look like a car crash. I am as mad as hell:

    https://uk.video.search.yahoo.com/yhs/search?p=Dixie+Chicks+Mad+as+Hell&hspart=bt&hsimp=yhs-btyuser#id=1&vid=09726b118e51df8a31ea204a19c74ebb&action=view

    ReplyDelete
    Replies
    1. I'm as mad as hell, and I'm not going to take this anymore!

      https://www.youtube.com/watch?v=ZwMVMbmQBug

      Delete
    2. Brilliant reposté. Never seen that one before...

      Delete
    3. It's a great film with a brilliant performance.

      Delete
  5. What if their plan is simply to walk out with no plan?

    They clearly plan to blame the EU for offering a bad deal. They called a snap election when polling suggested they could win a 150+ majority and made a manifesto committment to repeal the FTPA.

    If May wins substantially more seats in this election, that is where we are headed. The civil service will not be able to object strenously, the monarch won't be able to overrule and the electorate will have had our say.

    Folks... it's time to assume the brace position. We're going to crash out.

    ReplyDelete
    Replies
    1. I don't believe that walking out is a credible plan because that just presents the government with an even bigger headache. If they walk out on the EU then every single agreement with the EU will be void on 1 April,2019. The UK simply isn't prepared for that and I don't believe that any government could deal with the consequences. I'm not saying the UK won't walk out but I don't believe it is their plan A.

      If they do walk out then the government can still be held to account with a parliamentary vote of no confidence. Leaving the EU with no plan at all would surely be enough to trigger this. Labour manifesto is that they would guarantee to deliver a plan. They would need to get behind the vote of no confidence. SNP and Liberals have a pro-EU stance and would also support it. A good number of Tories would also be horrified by the situation. Would there be enough to win the vote? The size of the majority, as you point out, matters here. It would need to be near to Blair's landslide of 1997 for that to happen. The legislative and financial crisis that would follow a walk-out would be surely enough to shake party loyalty. It would be at least on a par with the inflation and debt crisis in the 70s that led the UK to seek bail-outs from the IMF.

      Delete
    2. but, yeah, it could indeed happen inadvertently because the likely political leaders taking the UK into the EU exit talks are not the brightest bulbs in the shop.

      Delete
    3. I never said it was a credible plan. The biggest flaw in it was needing to win a huge majority in the Commons to survive the years ahead.

      If the most recent polls are accurate and indicative, it looks like there could be an upset. Anything between losing enough seats to require a coalition partner and a modest gain of "only" 10-20 seats will derail the so-called plan they had.

      Delete
    4. It looks like they might end up almost exactly where they are today in terms of a working majority. We need to remember that a week is a long time in politics. Maybe UKIP will bounce back. Ha ha ha ha.

      Delete
  6. http://scotgoespop.blogspot.co.uk/2017/05/disaster-for-tories-as-up-to-date.html

    Might be a bit of good news? This election does not appear to have a guaranteed outcome.

    ReplyDelete
  7. It is also a tad ridiculous that the Tories attacked their core voters = older people - with a triple whammy:

    A death tax.

    A freezing tax, and a

    reduction, in the long term, of pension entitlement.

    I can't keep up with politics these days, there are far sadder issues floating about, but I believe the Tories have, as they say, 'walked away' from some of these election 'promises'.

    Frankly, alienating your core vote - I am a mere 'Pensioner for Independence' - appears a ridiculous, ill thought out and, dare I say, deliberately, damaging strategy.

    I hsve no idea where Theresa May is coming from, and I suspect she doesn't either.

    There was an election, long long time ago, where the manifesto was said to be 'the longest suicide note in history' This one might be a tad shorter, but it is just as damning, IMHO, YMVV.

    ReplyDelete
  8. Replies
    1. It is odd to disadvantage your core vote. Labour did it with their Brexit stance and now the Tories are doing it with taxes and cuts that affect older voters. What is going on?

      Was the "longest suicide note in history" the manifesto from Michael Foot's Labour Party? I'm just old enough to remember Michael Foot. The parallels with Corbyn are a bit worrying for the next 13 years.

      Delete

Bark, lark or snark