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Newsletter 26/02/23

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More rumours about Rishi’s Sunak’s Northern Ireland deal with the EU, though nothing official has emerged as yet. 

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Dear Subscribers,

More rumours about Rishi’s Sunak’s Northern Ireland deal with the EU, though nothing official has emerged as yet.  This weekend will likely see yet more attempts to sell the arrangements to Tory MPs, though success may be limited.  Reportedly Sunak’s government wanted to involve the King, which would be constitutionally unwise if true.

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Going without the royal warrant

Without His Majesty, ministers may focus on (rumoured) gains: like the fact that EU state rules could be disapplied, that some form of red and green lane system could be in the works, and that the province could have a right of consultation before future rules are imposed.

Those are the pluses – but the negatives include the continued jurisdiction of the ECJ (in some form), Ulster’s place in the EU Single Market, and trade barriers between the UK and NI that cripple supplies of goods from steel to medicine.  A deal may even require the UK government to implement large chunks of the Protocol that it has so far refused to, under the excuse of “grace periods”.

It’s worth checking out this list of questions from David Frost as a guide to what the UK needs to achieve on Northern Ireland.  As it is, an attempted murder by a Republican terrorist in Ulster and the opposition of Boris Johnson, many Conservatives and the DUP underlines that the EU needs to make further concessions on Northern Ireland.  Failing that, the British government must grasp the nettle and act unilaterally.

In UK news more broadly, SNP politicians have begun campaigning to replace First Minister Nicola Sturgeon.  The party was seeing a slump in support even before her departure, driven by its controversial transgender policies and its poor record on education, healthcare, spiralling drug deaths and government waste.  The UK generally sees more strikes.  The OBR, however, has been forced to admit significant negative errors in its budget predictions, while some EU nations have been struggling economically.

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Nope

In the wider world, a conference of fifteen EU border states has called for third-country migrant return deals – the same policy as Britain’s Rwanda arrangements.  The EU is intensifying some of its anti-China rhetoric, though like the UK it has yet to translate words into significant economic effect.  China has reportedly signed a deal to sell Russia 100 suicide drones, even as it presents a 12-point plan for peace.  Finally, is Russia purportedly planning a creeping annexation of Belarus.

Media

Briefings contributors have been busy this week.  Catherine McBride has published an extensive report for Global Britain on Brexit and UK Trade.  She finds that the falls in trade in 2020 and 2021 largely resulted from the pandemic and lockdowns and that much of the re-orientation from the EU was caused by changes in how goods are classified.  Beyond that, however, she urges exporters to look to new markets and emphasises the relatively low importance of EU trade to the overall performance of the economy.  Catherine has also written a piece for the website on food standards and Northern Ireland – see below.

Editor Graham Gudgin has written a piece for the site, as we mentioned in last week’s newsletter.  Graham contests a claim by Monetary Policy Committee member Jonathan Haskell that Brexit has cost UK families £1000 each – read more below.

Editor Robert Tombs has written a piece for the Daily Telegraph about the mistakes underling Archbishop Justin Welby’s recent political interventions – the archbishop has encouraged Western leaders not to punish Russia in peace negotiations.

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Versailles Mk. II?

Blogs

‘Brexit has cost every British household £1000’ – Really?, by Graham Gudgin

Last week’s confident reports that reductions in business investment due to Brexit had lowered family incomes by £1000 failed to explain that these were predictions conditional on questionable assumptions. We regard the methodology as flawed and do not view Brexit as having any significant impact on investment.

“[There is] little sign of any sustained negative impact of Brexit when compared with Germany. Investment in the two countries has advanced at a similar long-term rate, albeit with somewhat different cycles.”

A hoo-ha about British bangers, by Catherine McBride

Trade expert Dr Catherine McBride argues that EU fears about non-compliant imports crossing an unprotected EU border between Northern Ireland and the Republic of Ireland are grossly exaggerated.

“There is a mistaken belief that trade happens most intensively between geographically close markets, but needs, wants and taste are much stronger factors determining trade flows. The five million people of Ireland import more UK consumer food products than most of more populous EU markets.”

Key Points

Readers may well have noticed shortages of tomatoes and other fresh produce in supermarkets.  As threads from Ed Conway and Julian Jessop make clear, the cause of this isn’t Brexit.  Instead, the principal culprits are poor harvests in north Africa and Southern Europe, where many UK winter produce is sourced.

The reason, in turn, that the UK is dependant on imports is the high price of energy, which makes running greenhouses and producing fertiliser costly and inefficient.  The UK has some of the highest pre-tax energy prices in the developed world, and gas price spikes in previous months have compounded this issue.

Though some posit Brexit as a nebulous underlying influence, there is little positive evidence for this impact beyond mere anecdote.  Rather, the problem stems precisely from over-reliance on the Mediterranean basin for imports.  Had the government made a more substantial effort to open the economy to Australian and New Zealand produce in its recent trade deal, suppliers could have made up the shortfall.

More broadly, energy prices matter a great deal to industrial production, and may an “X Factor” in the UK’s “productivity crisis”.  There is a concomitant risk that aggressive de-carbonisation will worsen these economic issues.

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Changing the Rules

There has been a great deal of argument in the House of Lords concerning the Retained EU Law (Revocation and Reform) Bill currently before that house, with critics arguing that repealing swathes of regulations without putting exact rules in their place will create uncertainty and undermine standards.

Many of the opponents of this move are primarily motivated by the desire to remain aligned with the EU – to make re-joining easier, and to keep the UK economy from re-orienting to new markets.

Removing regulations, however, will boost growth rather than cripple it.  By embracing an outcomes-based model of regulation, rather the EU’s process-driven framework, businesses can be encouraged to experiment with new processes without standards being compromised.  Such regimes are also less expensive, both to police and to comply with, are more flexible, and remove barriers to entering the market.  The Bill presents an opportunity to alter the UK’s process-driven, EU-derived regulatory model to a more efficient one.Twitter

(@Briefings­_Brit)

We are also on Twitter, posting articles and retweeting the daily events that bring Brexit to the fore in the national news.

Facebook

Discussion also continues over on Facebook.

How you can help

There is much about Britain’s relationship with Europe that remains to be decided.  Our MPs listen to their constituents.  Do continue to send them links to our articles, especially on matters relevant to your constituency.  Alternatively, make an appointment to speak to them at their next surgery.  Let them know what you want post-Brexit Britain to look like.

Yet it is also time for unity and reconciliation.  Keep reading our posts and share links to our quality content to help others understand how leaving the EU has benefited the UK economy and democratic governance.  We aim to educate our critics to think differently and more positively about the long-term impact of Brexit.

You can follow us on Facebook and Twitter.

Yours Sincerely,

Newsletter Editor

An aspiring barrister

Dr Graham Gudgin

Economist, Centre for Business Research, Judge Business School University of Cambridge

Professor Robert Tombs

Emeritus Professor of French History, University of Cambridge

 

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Briefings For Britain