The Alleged Benefits of Brexit

Author Les Chatfield Licence CC BY-SA 2.0 Source Wikimedia Commons

 

Jane Lambert

On 31 Jan 2022, the Cabinet Office published a document entitled  The Benefits of Brexit: How the UK is taking advantage of leaving the EU.   It consists of 105 pages including the front cover and back page.  There is a "Foreword by the Prime Minister", an "Introduction", sections headed "Our Achievements so far", "The Best Regulated Economy in the World" and "A World of Future Opportunities", and a "Conclusion."

When governments enter a treaty each of them accepts restrictions. When the treaty comes to an end so do the restrictions.  Whether or not a release from restrictions confers a benefit will depend on how it is to be used.  Even if it does confer a benefit it will come at a cost because the benefits that had been conferred by the treaty will also be lost.  The ending of the treaty will be a net benefit only if the benefits resulting from the release outweighs those costs.

Anyone expecting the above document to quantify the benefits of leaving the EU and weighing them against the costs will be disappointed because it is a polemic and not an analysis.  Its authors are not identified but the "Introduction" states that "many of the benefits" and future work set out in that document build on the work and ideas of Sir Iain Duncan Smith MP, Theresa Villiers MP and George Freeman MP and their Taskforce on Innovation, Growth and Regulatory Reform.  It adds that there have been contributions from numerous business groups and representative organisations who have met the Prime Minister and other Ministers.  

This section headed "Our Achievements So Far" consists of 14 pages divided into the following subsections:

• Taking Back Control (page 5 to 7);
• Our Money and Levelling Up (pages 8 and 9);
• Backing our Business (page 10 to 12);
• Support for People and Families (pages 13 and 14);
• Protecting our Environment (page 15);
• Enhancing Animal Welfare Standards (page 16);  and
• Global Britain (page 17 to 19).

The alleged achievements of "Taking Back Control" include "ending free movement", "making it tougher for EU criminals to enter the UK", reintroducing blue passports and "reviewing the EU ban on imperial markings and sales".  The authors explain that that is because "imperial units like pounds and ounces are widely valued in the UK and are a core part of many people’s British identity." "Our Money and Levelling Up" includes stopping contributions to the EU, spending more money on the NHS, subsidizing British businesses, changing the rules on public procurement to make it easier for British businesses to win public sector contracts and setting up free ports.   "Support for People and Families" includes raising the limit for contactless payments to £100, removing the requirement for vehicle owners to insure against accidents on private land, replacing the Erasmus scheme with the Turing scheme and relaxing the rules on cannabis for medical use.   The rest of the section is in a similar vein. 

"The Best Regulated Economy in the World" section is 13 pages long divided as follows:

• "Our regulatory system is recognised globally. We want to raise the bar even higher as we embrace our new found freedoms outside of the EU and position ourselves as a global hub for innovation and a science and technology superpower" (page 20);
• Making the most of our regulatory freedoms (page 21);
• Our principles for regulation (pages 22 and 23);
• A sovereign approach (pages 24 and 25); 
• Leading from the front (page 26);
• Proportionality (page 27);
• Recognizing what works (page 28);
• Setting high standards at home and globally (page 29);
• Retained EU law (page 30);
• Accelerating and prioritizing refim (page 31); and 
• Amending retained EU law (pages 32 and 33),

Except for the passages on repealing or amending retained EU law for which it appears that primary legislation will be required there is very little detail on how UK regulation will improve on or even diverge from the EU's.

The most sunstantial section is headed "A World of Opportunities".  That runs from page 34 to 100 and cosnsists of the following subsections:

• A world of opportunities (pages 34 and 35);
• Science Data & Technology (pages 36 and 37);
• Quantum Technologies (pages 38 and 39);
• Digital Economy (pages 40 and 41);
• Digital Technology in Trade (pages 42 and 43);
• Online Safety (page 44);
• Cyner Security & Product Safety (page 45);
• Life Sciences (pages 46 and 47);
• Business & Industry (pages 48 and 49);
• Professional Business Services (pages 50 and 51);
• Legal Services (pages 52 and 53);
• Automotive (pages 54 and 55);
• Aerospece (pages 56 and 57);
• Retail and Consumer Goods (pages 58 and 59);
• Hospitality (pages 60 and 61);
• Food & Drink (pages 62 and 63);
• Culture (page 64);
• Infrastructure & Levelling Up (pages 65 and 66);
• Aviation (pages 67 and 68);
• Space (pages 60 and 70);
• Rail (pages 71 and 72);
• Roads (pages 73 and 74);
• Maritime (page 75);
• Nuclear (pages 76 and 77);
• Housing & Construction (page 78);
• Local Government (page 79);
• Education (pages 80 and 81);
• Health (pages 82 and 83);
• Climate, the Environment & Agriculture (pages 84 and 85);
• The Environment (pages 86 and 87);
• Farming (pages 88 and 89);
• Fisheries & Marine Management (pages 90 and 91);
• Animal Welfare (pages 92 and 93);
• Glonal Britain (pages 94 and 95);
• Migration (pages 96 and 97);
• International Trade (page 98); and
• International Relations and Diplomacy (pages 99 and 100). 

Part of this programme would not have been possible without brexit. Changes to data protection law that may not be compatible with the General Data Protection Regulation. Subsidies and investments in various sectors of the economy might have been prohibited as state aid. Member states would not have been able to negotiate free trade agreements with third countries. There is not much else that would have been incompatible with EU membership.  Where there are changes such as the exclusion of English and Welsh lawyers from the Court of Justice, General Court and the Unified Patent Courts and the withdrawal of the UK from the Brussels and Lugano Conventions are hard to spin as benefits. Possible accession to the Singapore Convention on Mediation and the recognition of English legal qualifications in Australia and New Zealand will not begin to make up for the loss of the right to practise in the EU.

The "Conclusion" is made up exclusively of platitudes.   Anyone wishing to discuss this article or the issues arising in it may call me on 020 7404 5252 during office hours or send me a message through my contact form. 

Brexit Briefing - June 2021

White Cliffs of Dover

Photochrom Film Collection  Copyright expired

 

Jane Lambert

The transition or implementation period provided by art 126 of the agreement by which the UK left the EU expired on 31 Dec 2020 and commentators have been taking stock.   The British economy has not collapsed though some industries have reported difficulty,  On the other hand, the economy has not shown any signs of outperforming the economies of its continental neighbours.

Cabinet Office Policy Paper

The Cabinet Office has just updated a policy paper entitled Summary: The UK’s new relationship with the EU which it first published on 8 June 2021.  The policy paper purports to give an overview of what has changed, and what remains the same and refers to a special site at https://www.gov.uk/brexit for the detail.

Influence of EU Law

The first paragraph of that policy paper states that the UK has now left the EU Single Market and Customs Union which is entirely correct. It also claims that EU law no longer applies in the UK.  That is correct only in the sense that the British government no longer participates in EU legislation, courts in this country are not bound by decisions of the Court of Justice of the European Union and judges can no longer refer cases to the court under art 267 of the Treaty on the Functioning of the European Union. However, it ignores the incorporation of EU legislation and case law into the domestic laws of England, Wales, Scotland and Northern Ireland by the European Union (Withdrawal) Act 2018 and the European Union (Withdrawal Agreement) Act 2020 and the continuing right of courts in this country to have regard to judgments of the Court of Justice that have been or may be delivered since the end of the transition period.  Moreover, anyone in the UK who wishes to invest in, trade with or even visit the EU must continue to comply with EU law. 

Travelling to the EU

The right of free movement which was ensured by art 3 (2) of the Treaty of European Union no longer applies to British nationals.  There are now new rules for visiting the EU which are set out in the Passports, Travel and Living Abroad pages of the government website. Travellers are advised to take out comprehensive travel insurance, check that their passports meet new validity rules, and get any documents they may need to take their vehicles with them.  

Existing European Health Insurance Cards ("EHIC") will continue to be recognized until they expire and similar benefits are promised under the Global Health Insurance Card ("GHIC").   Applications for new GHICs or replacements for the EHIC are directed to www.nhs.uk/GHIC but that link is broken.  The correct site is headed Applying for healthcare cover abroad (GHIC and EHIC).   As my EHIC expired on 21 June 2021 I applied for a GHIC through that website while carrying out research for this article.  I received confirmation that my application had been successful almost immediately.

Visitors from the UK are not allowed to bring a ham or cheese sandwich or indeed any other meat or dairy products with them when crossing the channel.  Almost all plants and plant products, including fruits, vegetables, flowers and seeds, require a phytosanitary certificate.  Pet passports can no longer be relied upon.  Although it is not mentioned in the policy paper, roaming charges are to be reintroduced from January 2022 (see Anthony Reuben EE to reintroduce Europe roaming charges in January 24 June 2021 BBC).  Regulation (EU) 2017/1128 on cross-border portability of online content no longer applies to the UK which means that British travellers can no longer access online content in the EU (see IPO Guidance Protecting Copyright in the UK and EU 30 Jan 2020).

Trade in Goods

Businesses now need to comply with new customs procedures, including UK export declarations and import requirements on entry to the EU.   Some industries have found it harder to adapt than others.   The Food and Drink Federation reported a 47% drop in exports in the first quarter of 2021 compared to the same quarter of 2020 (see Exports snapshot: Q1 2021).   On the other hand, sales to Australia, China, Hong Kong, Japan and Saudi Arabia actually increased slightly in that period.  

Difficulties had arisen in sales of certain foodstuffs to Northern Ireland which is now treated as part of the EU for some purposes but the Commission has agreed to extend a grace period for the export of chilled meats for the time being.  Lord Frost, who was one of the UK government's principal negotiators has admitted that he did not anticipate the difficulties that have arisen over Northern Ireland (see Government Didn't Expect Brexit To Be So Disruptive For Northern Ireland, David Frost Admits  Adam Payne 17 May 2021).  If that is really the case it is extraordinary because I warned of them in this blog as did many others in other publications (see Brexit Briefing March 2020 4 April 2020).  

One bit of good news in manufacturing was Nissan's announcement of a substantial investment in battery production in this country (see Nissan to create thousands of UK jobs in battery investment 29 June 2021 BBC website).  It is thought that the British government has invested or promised to invest a substantial sum in the project.  Even with this investment, battery production in the UK will be a fraction of that of Germany.

Trade in Services

The Trade and Cooperation Agreement did not make extensive provision for trade in services.   Talks did take place between Her Majesty's Government and the Commission on recognizing each other's standards as equivalent but these have ended without agreement (see Sunak: Financial services equivalence deal with EU 'has not happened 2 July 2021 The Guardian).   Happily, the Commission has recognized the UK's data protection legislation as broadly equivalent to its own which should ensure that the mutual exchange of personal data shall continue for the time being (see Jane Lambert Commission Adequacy Decisions 29 June 2021 NIPC Data Protection).

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There had been consternation earlier this year when Amsterdam appeared to overtake London in the trading of equities (see Philip Stafford Amsterdam ousts London as Europe’s top share trading hub 10 Feb 2021 FT).  London has recently recovered its position as the leading equity market (see Philip Stafford London reclaims top trading status from Amsterdam 2 July 29021 FT).  According to Stafford, London regained its lead through trading in Swiss stocks.

Free Trade Agreements

The rationale for Brexit is that the world's fastest-growing markets lie outside the EU and that any loss of trade with mainland Europe can be more than offset by increasing trade elsewhere. It is argued that commodity prices are lower ln world markets than in the EU because there are no external tariffs and that British negotiators can obtain more favourable trade deals for the British economy than EU negotiators because British interests no longer have to be weighed against those of other EU member states. So far, most of the agreements that the British government has concluded with countries outside the EU have been based on agreements between those countries and the EU. The agreement with Japan was slightly different (see Jane Lambert Agreement in Principle on a Comprehensive Economic Partnership with Japan of 12 Sept 2020 and An Introduction to and Overview of the Comprehensive Economic Partnership Agreement with Japan of 28 Oct 2020), The prospective agreement with Australia is the first bilateral trade agreement to be negotiated from scratch (see Jane Lambert The Proposed Australia-UK Free Trade Agreement of 17 June 2021).  HM Government also opened negotiations for British accession to The Comprehensive and Progressive Agreement for Trans-Pacific Partnership on 22 June 2021 (see the Department for International Trade's press release Britain launches negotiations with £9 trillion Pacific free trade area 21 June 2021 DfIT website).

Further Information

I shall be monitoring and reporting on those developments over the next few months.   Anyone wishing to discuss this article or the Brexit experiment generally may contact me on +44 (0)20 7404 5252 during normal business hours or by sending me a message through my contact form at all other times. 

Brexit - A Significant Change of Tone

Rt Hon Michael Gove MP

Author Chris McAndrew

Licence: Attribution 3.0 Unported
Source Wikipedia Michael Gove 

Jane Lambert

It is not often that a notice from the Cabinet Office publicizes a newspaper article even when that article has been written by a cabinet minister.  The arrival of the authored article No-deal is a very real prospect. We must ensure we are ready: article by Michael Gove in the mailboxes of subscribers to the "Immediate updates to Brexit" mailing list at 14:35 yesterday is therefore significant.  That article had appeared earlier that day in The Sunday Times.

HM Government has been publishing Guidance on how to prepare for Brexit if there's no Deal since 22 Aug 2018 (see Jane Lambert And if there is no deal .......... 24 Aug 2018). Until now, those guidance notes have emphasized the government's intention to leave the European Union in accordance with a withdrawal agreement negotiated pursuant to art 50 (2) of the Treaty on European Union and that it was planning for withdrawal without such an agreement just in case. Yesterday Mr Gove wrote:

"No deal is now a very real prospect, and we must make sure that we are ready."

The article still pays lip service to the hope of negotiating a withdrawal agreement with the remaining EU member states.  Gove writes:

"It’s our aim to ensure we can leave with a deal. We want to continue with warm and close relations with our friends, allies and neighbours in the EU. We will do everything in our power to conclude a good agreement that honours the referendum result and secures a brighter future for us outside the single market and the customs union." 

But since the government's precondition for recommencing negotiations is abandoning the backstop which would mean sacrificing the interests of one of the remaining 27 member states in favour of those of the governing party of the departing state, it is hard to see that happening. 

As I noted in Irish Preparations for No Deal 20 July 2019, "The rationale for keeping the threat of leaving the EU without a withdrawal agreement is that the prospect of disruption and other negative consequences for the economies of the 27 remaining member states will force the governments of those countries to require the Commission negotiators to make concessions." As Ireland is geographically separated from the other remaining member states by us to the east and north and a longish sea crossing to Britanny to the south the calculation must be that pressure on Ireland even tacitly and gently applied will yield concessions.   As I also said in that article: "It is not a very attractive negotiating position either for us or for our trading partners and it may well do a lot of long term harm, but, for some in the UK, that will not matter if the threat is effective." 

In EU Preparations for a "No Deal Brexit" 2 July 2019, I noted the Commission's press release of 12 June 2019 ‘No-deal' Brexit: European Commission takes stock of preparations ahead of the June European Council (Article 50).  The Commission acknowledged that a withdrawal without an agreement in accordance with art 50 (2) of the Treaty on European Union "will obviously cause significant disruption for citizens and businesses and would have a serious negative economic impact" but such serious negative economic impact will "be proportionally much greater in the United Kingdom than in the EU27 Member States."  In Irish Preparations for a No Deal 20 July 2019 I concluded that no deal is "clearly not an outcome that anyone in Ireland wants (even though there may be some benefits for Ireland such as the transfer of some financial services businesses from the City of London to Dublin) but it is one that the government of the Republic seems at least as able to handle as that of the United Kingdom."

As for British preparedness, the Institute for Government which describes itself as "the leading think tank working to make government more effective" has today published Preparing Brexit: No Deal  by Joe Owen, Maddy Thimont and Jack Jill Rutter.  The report states:

"With huge barriers to agreeing and ratifying a deal by the end of October, the prospect of a no-deal exit is rising. But no deal would not be the end of Brexit. The UK will be out of the European Union, but the all-encompassing job of adapting to the new reality and building a new relationship with the EU will still be incomplete. The biggest questions Brexit will still need to be settled. The difficult choices that have been unresolved for the last three years will not evaporate overnight on the 31 October. And Brexit will remain the key dividing line in a Parliament in which Johnson’s government has a wafer-thin majority, and one that is constantly under threat."

The tasks for the new government in the next few months are herculean. They include putting the whole government on a no-deal footing, introducing new legislation for the government of Northern Ireland and probably an emergency budget.  The report warns that no deal is a step into the unknown, that there is no such thing as "managed no-deal" and peak preparedness for brexit may have passed.

The government has announced a massive advertising campaign to sell no deal to the British public (see Christopher Hope Boris Johnson to unveil biggest ad campaign since Second World War to prepare for 'no deal' 29 July 2019 Daily Telegraph).  If despite that campaign brexit proves to be unpopular with the public the government can always blame the obduracy of its former trading partners.  That has always worked in the past though it may not do so in the future as the EU has less and less to do with our affairs.

Anyone wishing to discuss this article, the Cabinet Office's email, the Institute for Government's report or the legal consequences of brexit generally should call me on 020 7404 5252 during office hours or send me a message through my contact form.