Wednesday, 1 November 2017

Brexit: the time for flippancy is over


There is only so much I can take of John Redwood. I don't know what it is about him I dislike more: his flippant disregard for complexity, his unwillingness to even try to grasp difficult concepts or his incessant and regular lying. I took him to pieces a couple of weeks ago in what eventually turned into a viral and quite well-received Twitter thread. I don't have an issue with him for being a Tory. I'm not ultra-partisan on the question of party identification, and if he were a Labour backbencher spewing his nonsense I would have an equal measure of contempt for him. With Redwood, the problem is either profound ignorance or a determination to soldier on in a futile battle with reality. 

As I have written before, there oughtn't be any shame in simultaneously supporting Brexit and admitting to difficulty. In fact, this should be encouraged. It doesn't undermine the Leave cause because the referendum is over and challenges have to be met head on. We cannot bury our heads in the sand and pretend that reality will just pass us by to no damaging effect. That is the mentality of a frivolous lunatic. Mr Redwood's passing comment today about queuing lorries at Dover has given me exactly this impression of him. He is doing everything he can to avoid seriousness when he said in the House of Commons today [on the potential for long queues of lorries at the port of Dover]:


"Then there is another one that they are constantly telling us about, which is that there will be lorries queuing all the way back from Dover. I am not quite sure how that would work because it would mean that they were queuing in the sea. But of course, given modern, electronic frontiers, there is absolutely no reason why there should be huge queues." 

I will return to the point he makes about the electronic nature of customs cooperation in a later blog post. This is a separate beast in and of itself, with the implication being made that with modernised computer systems we will be able to slash delays as a third country and retain seamless borders. This is a misguided notion which ignores important detail about Britain's place on databases and software referred to by electronic devices. 

I do, though, want to respond to the glib attitude he fronts when discussing the (extremely important) issue of queuing lorries. If it appears funny now, I promise Mr Redwood that it will not be so come April 2019. He won't be laughing when he is hurried in front of television cameras and asked about the lies he told about queues in the autumn of 2017. It is better that he examines why he is wrong now, instead of leaving it until it is too late. 

Long queues at Dover are a serious and inevitable problem of becoming a third country to the European Union and leaving the Single Market. This we do to ourselves, simply by virtue of leaving, but there is scope for confusion here. When I was learning about enforcement strategy (inspection of goods), I was not entirely sure whether third country status was meant in relation to EU membership or membership of the EEA (Single Market). I will simply outline the facts as a way of helping others to overcome this problem. 

EU membership entails Commission oversight of a member's internal legal affairs. In the context of enforcing trading standards, checks and inspections take place at the point of production in order to maximise efficiency. These checks are carried out by a widespread market surveillance program, comprising of a large network of agencies. Manufacturers are also required to carry out their checks independently, following a step-by-step procedure. The enforcement strategy is upheld by Brussels and aimed at production so as to remove unnecessary barriers between member states at borders. So far, so good. Initially I did not realise that this precedent also applies to Norway, Liechtenstein and Iceland, who replicate the same enforcement strategy - almost completely - and so do not encounter heavy resistance at borders. Goods entering and leaving these countries are largely unimpeded by bureaucracy. 

For a third country things are very different. The European Union has no legal jurisdiction in the internal affairs of a third country and so cannot command the competence of carrying out checks at the point of production within that country. So the enforcement strategy changes. Checks move from the aegis of production to the border, where goods enter the European Union. This is a reality that has thus far escaped John Redwood, and the ignorance here is emphasised by a failure to understand that regulatory harmonisation does not mean goods do not encounter checks at the border. Shout this to the skies because it needs to be heard. 

A third country must comply with EU standards but must also prove it at the border. This is because, as I have outlined, the EU has not carried out inspections at the point of production and so must confirm conformity assessment later on. If goods coming from third countries were not checked at the border, and Brussels simply believed they met standards, this would spark a wave of organised crime and, as human beings or businesses cut corners and occasionally bend rules, sub-standard products would enter the EU and Single Market. Principles must therefore be established in order to determine the level of trust a third country enjoys. A 'risk profile' for exporters is constructed. Trust and track record go a long way in international trade. They help to determine the volume of inspection at borders. 

Since the UK has not been a third country to the EU before, it has no track record. There exist no presumptions about our behaviour and the rigidity with which we stick to European product standards, so checks are likely to be quite punitive - certainly initially. Some consignments may face inspection rates of up to 50%, though this is a worst case scenario and will not be a uniform policy. I cannot proclaim to know what percentage of consignments will face rigorous inspection, but there will be checks. Of this there is no question. And checks mean delays, and delays mean overheads. Traffic as we know is non-discriminatory, everything on the roads and at the ports is likely to be affected. Trucks carrying perishable or fragile goods will be especially worried about the value of cargo being transported. If goods need to be stored in facilities to be checked more thoroughly, they will face storage costs - which can be extortionate. 

Serious delays, which are likely, could mean an end to some supply chains, with European importers of our goods giving up on the waiting and limited supply (some goods may be rejected outright at the French border) and may decide to source alternatives from other countries. If we lose supply chains, recovering them will be extremely difficult. For some idea of scale here, let's cast our minds back to July 2016, when temporary measures introduced by the French to check passports at the height of their woes with terrorism caused a 10-mile backlog this side of Dover. Picture that, but on a much larger scale. Remember: these problems dissipate if we remain within the Single Market. This is because, as I said earlier, the EFTA/EEA countries adopt the same strategies for enforcement. 

It is here where warnings about job losses and hits to growth are most appropriate. I am painting a bleak picture, but I believe it is at least an honest and realistic one. John Redwood, himself a man with an agenda, does not care for intellectual honesty. This is why he bats off concerns about trade flow as if they are baseless and do not require serious attention. If I am wrong, then I am wrong. I know John Redwood is wrong and I know there is always the possibility that I am wrong. But what if I'm right?

4 comments:

  1. With respect to Redwoods insistence that we trade with the rest of the world (outside the EU) purely on WTO terms I think we can safely say that he is wrong and should by now know he is wrong. Given that as far back as March this year Matt Ridley (the well-known trade expert) was saying pretty much the same thing and was also called out there seems little doubt that he knows he is lying.

    https://behindthepaywallblog.wordpress.com/2017/03/13/deal-or-no-eu-deal-britain-has-little-to-fear/

    Given that he, and all the rest of the ERG/Spectator bunch are still pushing this line, in the face of all the available evidence to the contrary, indicates that there is an ideological agenda at play. It's also why the telling of the lie in question has, if anything, increased in frequency lately. They know that crunch time is approaching, come December a decision needs to be made about whether or not the UK is going to progress the A50 talks, leading to a deal that includes some sort of transition to whatever final relationship UK Gov. wants to have with the EU (deep and special relationship) or the UK walks away and falls back on those WTO terms. It seems pretty clear to me that Redwood and the rest would much prefer the latter to the former.

    Everything they say needs to be placed in this context, it’s not about what is best for the country as a whole, for them it’s about ideology. For those pulling the strings (and I think we know who they are) it’s about something else entirely.

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    1. Enlighten me. Who are pulling the strings? And what is this about? I have a basic understanding of psychology, such as Confirmation Bias and Backfire, but the attitude of Redwood et al appear to show wilful blindness. Cui Bono?

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  2. https://www.opendemocracy.net/uk/brexitinc/james-cusick-adam-ramsay-crina-boros/revealed-tory-mps-using-taxpayers-cash-to-fund-sec

    http://www.eureferendum.com/blogview.aspx?blogno=86599

    http://www.open-britain.co.uk/labour_mps_write_to_ipsa_about_use_of_public_funds_by_european_research_group

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  3. It’s hard to be sure why Redwood behaves like this, or why the whole government seems to be completely blind to the realities of the Brexit process and the risks of a “no deal” outcome. My guess is that the root problem is that they have approached the whole issue almost entirely in terms of domestic politics. They take positions on the basis of what will be momentarily popular with the median voter or get them good headlines in tomorrow’s papers. They act as though there is no deadline and no cliff edge because in domestic politics it’s nearly always possible to put off the difficult decisions for another few years or split the difference between opposing positions and call it pragmatism. It may be that they simply don’t know how to handle negotiating with a rules-based organisation on a strict timetable because they’ve never had to do anything like that before.

    That in turn is the result of what I call the 40/20 problem. We’ve had 40 years of outsourcing the functions of government to the EU, so there are now huge gaps in knowledge and experience among both the political class and the civil service. Brexit is forcing them to learn how to do all the things that they’ve been accustomed to leaving to the EU, which includes the now critical issue of negotiating trade agreements, in a ridiculously short amount of time.

    But we’ve also had 20 years of Blair-style media politics in which controlling public perceptions by controlling the media narrative becomes the primary goal of all political activity. It worked so well for Blair that it was copied by all the other parties, but it results in directionless governments that are focussed purely on the short-term and which try to avoid hard choices whenever possible. These habits become so ingrained that when they are confronted with a difficult decision that can’t be fudged or avoided they simply don’t know what to do. So, they retreat into magical thinking and keep promoting their preferred narrative in the hope that it will somehow become reality if only they repeat it often enough.

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