LEADING THE WAY OUT OF THE EU

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Friday 27 April 2018 

For a sign of how desperately weak this government is look no further than yesterday’s PR victory in the Commons – even though the government was defeated. Such was the vastness of the Remainer majority favouring a motion for participation in the Customs Union that it ended up being carried without a vote. Anticipating a defeat, the prime minister had urged her MPs to not attend the session and for the whips to abstain in order to tone down its significance.

Thus, it passed with barely a whimper from the press. Only the Independent, the Guardian and the Express reported on the Commons debate, and even then, the story was confined to blogs and columns, which was partly to do with the fact this hardly counted as news. As soon as the non-binding motion was tabled by MPs late last week, no-one was in any doubt that it would pass, hence the order for Tory MPs to return early to their constituencies, May’s ploy to avoid the motion turning into yet another Leave vs. Remain showdown.

Nevertheless, the Customs Union continues to loom large with the Guardian today reporting Cabinet Brexiteers intend to push the prime minister and the chancellor’s deeply flawed plan for a customs partnership off the agenda.

Next week, the government will finalise its customs proposal to the EU. The customs partnership, which rather than eradicating the need for a border in Ireland, increases it, would keep the UK partially inside the CU.

Goods entering the UK market to be transported onwards into the EU Single Market would be checked at Britain’s external border only. The tariffs collected would then be transferred to Brussels. The primary purpose is to keep Britain’s southern ports, which almost exclusively handle goods bound for or originating from the EU, to remain “frictionless”. The customs partnership arrangement, first outlined in the vaguest detail in a position paper late last summer, would almost certainly mean Britain holding onto the EU’s external tariff, which is why the likes of Boris Johnson, David Davis and Liam Fox are eager to nip this bad idea in the bud. If the customs partnership ends up being implemented it will be very easy for the UK to re-join the Single Market.

However, the Times reports there’s a “clear consensus” against a customs partnership, it is expected to be quietly dropped in time for next week’s discussions in the “Brexit war Cabinet”.

But the consensus does not account for everyone. Yesterday, Amber Rudd revealed her eagerness to keep Britain trapped. Questioned in the Commons over the CU, Rudd replied:

“I am committed to the government’s position, which, to some extent, we are still working on,” she replied.

The government’s position is supposed to be true independence. The Home Secretary is making space for an about turn. She was later forced to make her own reversal (see tweet below).

Over to Brussels, Michel Barnier has made an emphatic addition to the steady trickle of statements indicating Britain will not get an extra special deal for its financial services.

In response to heavy lobbying for some sort of equivalence arrangement whereby British banks, funds and insurers could continue to sell their services into the EU so long as UK regulations remain “equivalent” to the EU’s, Barnier said:

“Some argue that the EU desperately needs the City of London, and that access to financing for EU27 business would be hampered – and economic growth undermined – without giving UK operators the same market access as today.

“This is not what we hear from market participants, and it is not the analysis that we have made ourselves.”

The facts say otherwise, more than £1.1tn was leant to the EU from the UK in 2015 alone. The risk associated with the enormous amounts of capital and loans on City balance sheets is so great, Frankfurt, the number one destination for post-Brexit business, is actively shunning it.

Someone should remind Mr Barnier that EU countries don’t know how to run capital markets. It was a Brit, Lord Hill who was designated the EU commissioner to set up the EU’s first capital markets union, in spite of the fact capital is supposed to be one of the EU’s four fundamental freedoms. Clearly, some freedoms (to move) are more equal than others.

In other news, Bloomberg report David Davis is furious with Michael Gove for saying he shared the “disappointment” of the British fishing industry over the wretched transition deal and saying before the Commons, “We didn’t get everything we wanted.” Davis wants to keep Gove in line as the government approaches what are likely to be horrendous compromises over Britain’s future trade arrangements with the EU.

Davis should instead fix his attention on getting other ministers to get their act together over expanding customs capacity at Britain’s major ports in time for withdrawal. Shockingly, BBC South East revealed last night that not a single member of the government has visited Dover since Brexit planning began.

Finally, the Independent happily reports a pro-Remain or rather pro-second referendum march on the second anniversary of the first referendum. Let’s see how representative the crowd is of our diverse society Remainers love to glorify.