House of Lords on Brexit Options

On 13^th December the House of Lords European Union Committee published a Report on “Brexit: The Future Options for Trade” (HL Paper 72)

This helpful 87 page report draws on the extensive expertise for which the House of Lords is well known and is likely to be influential on Government and widely consulted across the EU. The Report looks at the negotiation process and seeks to develop some ideas about the stages of negotiations and internal UK preparation while underlining the central importance of a transitional agreement.

The Report begins by noting that the Government plans to trigger Article 50 by the end of March 2017 and that the UK’s current trading arrangements with the EU will stop at the end of two-years (March or April 2019) unless the other 27 EU member states agree unanimously to extend the period.

It then outlines the main possible frameworks for UK-EU trade from then on:

• joining the European Economic Area (EEA),
• a customs union with the EU,
• a Free Trade Agreement (FTA) or
• trade based on World Trade Organisation (WTO) rules.

The distinction between ‘access to’ and ‘membership of’ the Single Market is forcefully highlighted:

“Many countries have ‘access to’ the EU’s Single Market, either through agreed tariffs at the WTO or via a FTA. However, the only countries which have full membership of the Single Market—which entails the liberalised movement of goods, services, people and capital (the ‘Four Freedoms’), secured through common rules interpreted by the European Court of Justice (CJEU)— are EU Member States.”

The EEA agreement does not include a customs union, while inclusion in a customs union, as in the case of Turkey, does not entail free movement of services, people or capital.

The Report examines the trade-offs involved in negotiations of this kind and notes the pressure on the other 27 EU states to avoid the collapse of the EU by taking a tough line with the UK. The Report concludes that:

“the prospect of fundamental modifications to the ‘off-the-shelf’ models is unlikely. Reform of the EEA Agreement to limit free movement and include voting rights on EU legislation is improbable. Creating a customs union arrangement with the EU would limit the UK’s ability to have an independent trade policy. Even in areas not covered by the customs union, pressure would be put on the UK to shadow the EU’s trade negotiations.”

The Committee argues that an FTA provides the best chance of a bespoke deal combined with wider UK-EU co-operation after Brexit through an Association Agreement, but that trade on terms equivalent to full membership of the Single Market (especially in services) could not be achieved on this basis. That is ominous for financial services businesses.

In the Committee's view it will not be possible to negotiate a comprehensive UK-EU FTA within two-years and that the Government needs to plan for possible transitional arrangements before invoking Article 50 to safeguard current trade and provide adequate time for negotiations.

According to the Report, a temporary extension of participation in the customs union could be “one important element of a transitional arrangement”. Failing that, two years after Article 50 is triggered, UK-EU trade and UK trade with the rest of the world will take place under WTO rules. In that case, the UK would need to have its own schedules of trade concessions, and negotiate its share of tariff rate quotas and subsidies with the EU. Negotiations with the EU and other WTO members at that stage could add further uncertainty.

The Committee recommends that the Government focuses initially on its future trading relationship with the EU and its WTO schedules and makes an early decision on whether the UK should stay in the customs union. It could then sequence trade deals with other countries accordingly. The committee also urges the Government to clarify:

“whether and to what extent the withdrawal negotiations with the EU will encompass negotiations on the future UK-EU trading relationship.”

That is because the Report suggests that a transitional agreement will “almost certainly be necessary” to allow negotiations to be conducted in a less pressured environment, benefiting all concerned.

The Committee notes how tight the timetable is for Government to consult the business community and other stakeholders in the light of these issues. 

We must hope that Government take on board all these points as soon as possible in the interests of safeguarding the business community and ensuring stability over the difficult period that we now face.

Lifestyle Wisdom, Ancient and Modern, Especially for older people....

These passages from my recent reading deserve to be shared and contemplated as sources of practical wisdom:

“Act without doing;

work without effort”.....

“I have just three things to teach:

simplicity, patience, compassion.

These three are your greatest treasures.

Simple in actions and in thoughts,

you return to the source of being.

Patient with both friends and enemies,

you accord with the way things are.

Compassionate toward yourself,

you reconcile all beings in the world.”

Tao Te Ching by Lao-Tzu transated by Stephen Mitchell, Harper Collins, First HarperPerennial Edition, 1991 Chapters 63 verse 1 and 67 verse 2.

“Apart from the rules for a health lifestyle , which I have dealt with elsewhere – sleep, a frugal and balanced diet, exercise, and avoidance of alcohol and tobacco – we must be able to adapt to changing situations, retain confidence in our own resources, accept our limits with good humour, learn how to refuse what we don't want to do, and ensure that our daily routine incorporates time devoted to doing what we enjoy in peace. If, in addition, we can share our worries with those close to us, then we are on the right path.”

“.....optimism prolongs life.....”

The Warmth of the Heart Prevents your Body from Rusting: ageing without growing old by Marie de Hennezel, translated by Sue Dyson, Pan Books, 2012 pp135 & 142-143

Harold Wilson: Historic Role Model

In 2013 we have two examples of people following the excellent example of the old fox Harold Wilson British Prime Minister from 1964 to 1970 and 1974 to 1976.

David Cameron, as others (e.g. Dominic Sandbrook in the Daily Mail) have pointed out, has copied the Wilson approach to the EU to deal with the split in his Party between pro- and anti- EU factions. Essentially:  promise a renegotiation followed by an in-out referendum to keep the Eurosceptics happy, come back with minor concessions which are spun to look bigger than they are, campaign during the referendum for acceptance of the new terms with the support of the political centre, the CBI and the TUC, and hope to win the referendum to stay in.

This is a skillful political approach - if you are a good negotiator and canny political operator and the referendum works out as you hope it will. In Wilson's time, UK membership of the EEC( as it then was) was only three years old. Now we are more closely linked in so a "No" would be much more disruptive.

However, Wilson's example is not followed only in politics. Today's announcement by Pope Benedict XVI that he is resigning at the end of the month due to health issues echoes Wilson's 1976 resignation when he realised he was no longer up to the job of Prime Minister.

As the preacher said:

"The thing that hath been, it is that which shall be; and that which is doneis that which shall be done: and there is no new thing under the sun."

Death: A Buddhist Perspective

Tricycle Daily Dharma  November 11, 2012 A Life Informed by Death "If we really faced our fear of death,  our lives would ultimately be lighter and more joyful.  I don't propose death awareness to depress us.  It enhances our ability to live more fully" Larry Rosenberg http://www.tricycle.com/onpractice/only-practice-dharma-can-help-us-time-death

Fun and Learning at Transition Harborough AGM

A great evening last night at the Transition Harborough AGM. A great vegan dinner at The Greenhouse  with excellent company from the Transition Harborough supporters. We were joined by Ben and Sam from Greenfox Community Energy Co-op with whom we exchanged ideas and information about what they do and the possibilities for the lottery funded Sustainable Harborough Challenge with Transition Harborough's partners.

The highlight was a fascinating presentation by Chris Stoate from the Allerton Project which researches, farms commercially, and influences policy in terms of sustainability and the trade offs between agricultural production, wildlife support, and game management. Chris is also a trustee of the Welland Rivers Trust which means there is a shared interest with Transition Harborough because of the Trust's work in and around Market Harborough which involves a project to the value of £500,000.

After an exciting year for Transition Town Market Harborough, "The best" said Chair/Facilitator Rev Brian Davis quoting US President Barack Obama, "is yet to come".

One Nation..... A Little History

Ed Miliband gave credit to Disraeli for the One Nation theme in his 2012 Labour Conference Speech:

"You know one hundred and forty years ago,... another Leader of the Opposition gave a speech. It was in the Free Trade Hall that used to stand opposite this building..... His name was Benjamin Disraeli. He was a Tory. But don’t let that put you off, just for a minute... let us remember what Disraeli was celebrated for. It was a vision of Britain. A vision of a Britain where patriotism, loyalty, dedication to the common cause courses through the veins of all and nobody feels left out. It was a vision of Britain coming together to overcome the challenges we faced. Disraeli called it “One Nation”. “One Nation”. We heard the phrase again as the country came together to defeat fascism. And we heard it again as Clement Attlee’s Labour government rebuilt Britain after the war."

For whole unedited speech transcript go here

It's an interesting rhetorical flourish to steal this particular bit of Tory clothing. Disraeli who "dished the Whigs" would smile. My current reading includes D.R. Thorpe's excellent biography of Harold Macmillan ("Supermac: The Life of Harold Macmillan", 2010, London, Random House) and today I was reminded that Macmillan, after his First World War experience,

"developed an empathy for those who suffered with him, and for the first time an understanding of those who had not had the advantages of his upbringing and education. This was not a unique experience. Many of his contemporaries, especially Anthony Eden, his predecessor as prime minister, learnt likewise, and resolved after the war to pursue the Disraelian political ideal of 'One Nation'". (p51)

This post WW2 willingness by successive Conservative Governments to keep the NHS, welfare benefits and the nationalised railway and coal industries; to pursue a Keynesian full employment policy; and to accept a progressive tax system between 1951 and 1964 was known at the time as Butskellism. It was a key part of the post-WW2 consensus and was based on growing US, UK and European economies.

How can this trick be repeated by a Labour government in harsh economic times? Such an attempt at consensus and a Social Democratic, Welfarist approach would be a break from the New Labour/Blairite acceptance of Neo-liberal capitalism after the Thatcher/Reagan revolution of the 1980's.

Are enough people ready for that, especially in the South of England and English Midlands? Was Thatcher too successful in embedding individual self interest as the main motivation for many people for this to have electoral appeal? Does the social change that has marginalised trade unions, friendly societies, churches and similar associations since the 1950's matter? Will the "Labour tax bomb" argument be successfully deployed by the Cameron Tories in 2015? How will Labour explain how it pays for improvements while not giving detail on tax that leads to problems (as in 1992)? Will Labour adopt too much of the "patriotism" bit by backing the absurd immigration targets of the Coalition? Tricky issues.

The new Miliband approach is probably worth a try. A welfarist, "One Nation" approach to improve the lot of the poorest and most vulnerable - the victims of the cuts that have barely started - would be great. I just fear that, with the hostile Tory press and the influence of Libertarian and neo-liberal approaches in the new media, it will be an uphill struggle and effectively attacked by the Tories and Libdems. Will five years be long enough to recover from the Brown fiasco and the blame repeatedly heaped on the last Labour Government for the deficit? Only time will tell but at least it's the basis for a "narrative".

And maybe even a "vision"?

Karl Marx for C21st

"...as that brainy beardy Karl Marx said, no person can ever build up a fortune just by his own labour, but in order to become VIP elite rich you must appropriate the labour of others. In pursuit of this dream, many ingenious human solutions have been applied throughout the millennia from slavery, forced labour, transportation, indentured labour, debt bondage, and penal colonies, right through to casualisation, zero-hours contract, flexible working, no-strike clause, compulsory overtime, compulsory self employment, agency working, sub-contracting, illegal immigration, outsourcing and many other maximum flexibility organisational devices." - page 222, Marina Lewycka, Two Caravans (2007, Penguin Books London). Discuss.