The drip feed over Brexit strategy is hardly encouraging and requires wholesale review in Northern Ireland

We inch forward in a long struggle for clarity..  The legal  challenge in the English High Court  to triggering  Article 50 without  parliamentary approval drew this  insouciant admission from a barrister in reply to  a sharp  question from the Lord Chief Justice. But  how meaningful would a take –it-or-leave-it vote be?

James Eadie QC, defending the Government over claims Mrs May should seek Parliamentary approval before triggering Article 50, told the high court: “The Government view at the moment it that it is very likely that any such agreement would be subject to ratification.”Almost all treaties are subject to ratification”, he added.

But such a vote would be on the final treaty, not the negotiating process, and is unlikely to happen before 2019 when the deal may already have been done, lawyers said.

The Guardian claims an exclusive on the private meetings of the cabinet’s Brexit committee which heard that leaving the customs union would cause a 4.5% fall in GDP by 2030.

The 4.5% cut is the average prediction made in three studies that were carried out before Britain’s EU referendum, in a move that could anger Brexit supporting MPs who believe that the old estimates are out of date.

The studies, by the Treasury, the thinktank NIESR and the Centre for Economic Performance and London School of Economics, predicted the effect on the British economy if the UK was to opt for a Norway-style model. That would involve remaining inside the single market but outside the customs union, within which countries set common external tariffs and so do not require customs checks.

Although the international trade secretary, Liam Fox, called for the UK’s withdrawal at the meeting, the prime minister was said to repeatedly stress that she was not ready to make any final decisions on the UK’s negotiating position.

The chancellor, Philip Hammond, said – according to one well placed source – that while Brexit would require “political choices”, there would also be economic consequences that had to be considered.

The paper on the customs union also warned that to stand still in trade terms after a withdrawal from the bloc, the UK would need to grow trade with its 10 largest partners outside the EU by 37% by 2030.

It was one of three documents presented to ministers during the cabinet meeting. The second discussed options for the UK’s immigration policy after Brexit while the third examined the consequences of the country becoming directly subject to World Trade Organisation rules.

Ministers were also warned that some ports, including Dover and Holyhead, which handle a lot of road freight, could be seriously clogged up if there were customs checks on vehicles transporting goods.

The document said that extra infrastructure required, likely to include dozens of parking spaces for lorries undergoing checks, could not physically be built in Dover because of its cliffs.

Others highlighted the UK-Irish border, which is effectively invisible, warning that it would be a complex issue to tackle if it had to become a new point for customs checks.

Charles Grant, director of the Centre for European Reform, said that Irish officials feared that the return of customs posts would provoke terrorist attacks. “The British and Irish governments would certainly do everything possible to minimise physical customs checks on the border – perhaps through the use of advanced technology, or simply through checking lorries at towns near the border, rather than at the border itself,” he said.

In a briefing for Mrs May’s EU summit this week, the FT’s analysis (£)  concludes there is almost total incompatibility between  what is known about the British position  however nuanced, and the likely EU response.

In the joint project between the Guardian and the Irish Times, Lisa O’Carroll and Henry McDonald have a piece on the NI economic outlook including the loss of  EU funding of around £350 million a year. No snip indeed,  but dwarfed by the Treasury subvention of £9 billion a year. And PWC’s Esmond Birnie asks the big question of the opportunity cost of reform.

The NI executive is pinning its hopes on safeguarding the subsidies, it’s a mistake, it’s not realistic and it’s fairly important to have a plan B,” said Birnie. Farm subsidies, for instance, have “fossilised a sector in one period of time” with little incentive to innovate – or even leave the sector – meaning missed opportunities to grow the business or make it more dynamic, according to Birnie.

Some 38,000 farmers and rural projects shared nearly £350m from Brussels, accounting for about 70% of the region’s EU money. By output, this amounts to three times the subsidies and grants given to farmers in the rest of the UK…

….Forecasters predict that in 2017, the year when article 50 must be triggered, Northern Ireland will be the UK’s weakest performing region, with growth of just 0.2%.

There is also a report of the impact of Brexit on Britishness and  an  powerfully pessimistic  piece by Eimear McBride on what she sees as  Britain’s “wholesale  purge of values”  in deciding  to leave the EU.

..,if history has taught British politicians nothing, they should at least remember that the people of Northern Ireland, on all sides, have no tradition of lying down and taking whatever scraps Westminster doles out. The Brexiteers’ reliance on hazy, emotive grandstanding won’t solve the problems facing Northern Ireland, and the gravity of what it may unleash means there can be little relish in pointing out that fact.

Instead, I wonder how many ways there are to describe heartbreak? The Britain I’ve known is disfiguring itself, and soon it will not even remember what it looked like – while both Irelands of my youth, having struggled for so long to make a mirror in which all citizens may recognise themselves, are left waiting for the hammer to fall.

 

 

 

 

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  • Reader

    Eimear McBride complains about “…hazy, emotive grandstanding…” but actually offers nothing else throughout the entire article.

  • hgreen

    I found it interesting that Dover and Holyhead won’t be able to cope with the huge increase in customs checks required by Brexit. Brexit is turning out to be both a political and logistical impossibility.

    May-hem must be praying that the courts force her to refer article 50 to parliament.

  • murdockp

    I think the debate has to move on to what a united Ireland would look like. not flags or culture, but practical stuff like health care, education etc.

    part of this debate has to be how 800,000 unionists are represented in this new state.

    the United Ireland agenda needs to taken away from SF as thier view of life not something that fits with most people who live on this island.

  • john millar

    Dover and Holyhead coped before the UK joined the EC I dare say they will learn to cope again

  • Katyusha

    Farm subsidies, for instance, have “fossilised a sector in one period of time” with little incentive to innovate – or even leave the sector – meaning missed opportunities to grow the business or make it more dynamic, according to Birnie.

    I would suggest “leave the country” might be a more appropriate way of putting this. Although, it would seem there is ample incentive for people to do that at present.

  • hgreen

    Did you even read the article? Dover couldn’t physically cope with the extra infrastructure requirements.

  • Kevin Breslin

    There’s 2 years at least to sort this out … it’s going to be a drip feed.

  • Kevin Breslin

    Well I think Irish nationalists should push the fact that farm subsidies would be protected, if that’s what the people of Northern Ireland want.

    Wouldn’t want the British government to simply destroy a way of life, simply because it’s been “fossilized” by the EU and now they’re in charge.

  • MalcolmRedfellow

    Yeah. I remember those days. Holyhead customs didn’t give a damn.

    My mate arrived at Dun Laoghaire after vacation job on Isle of Wight buses (he was proud of his National Union of Railwaymen union card).

    The Customs man went through his rucksack with great care over his reading matter. Well, he did have Lenin, “State and Revolution” and other incriminating evidence.

    What got him through was “The Little World of Don Camillo”. Smiles all round.

    Far tougher was the knicker-ruffling that went on at Amiens Street (that’s Ur-Connolly Station for the young fellas). Just in case one was bringing in … rubber goods.

    At least a match for the unbeatable banana-sniffer dog at Newark Airport.

  • Kevin Breslin

    They’d cope with being clogged up, just cope with difficulties.

  • murdockp

    There is one guarantee if Ireland was united, agriculture would be protected. The ROI will protect farmers at all costs so unionist farmers have nothing to fear at a macro level for their industry.

    However at a micro level farming in NI is inefficient and needs reform, it does need subsidies to be withdrawn so financially unviable farms are absorbed into larger landholdings. In the UK a 1000 acre farm can be run by three people due to mechanisation. In NI it is 3 people running a fifty acre farm.

    This has to change.

  • Roger

    Quantums have changed a tad in 43 years. Memories have faded.

  • Oriel27

    sure the abandoning of milk quotas are the beginning of that. I’m from a farming back ground myself in rural North Monaghan, were the average farm size would be about 50 acres. In 1983 when the quota came in we could keep about 60 cows on our farm. now since the quota went, we have to milk 120 cows to make it pay, but we dont have the land. Farm sizes too small. The same in the north. Irish farming is following the New Zealand model were they milk a 1000 cows average, but they have the land for it.

  • Kevin Breslin

    Would the UK abandon milk quotas?

    I’m not an economist, but apart from obvious famine regions and disaster zones, the major problem with the global milk market is oversupply and low demand.

    That means prices lower than what covers production costs.

    UK has additional problems with inflation and currency having a bigger impact on production cost than retail cost, it becomes the case that mass production of milk is an economic bubble waiting to burst. NI does benefit short term in the ability to export milk, but abandoning quotas may cause the bubble to burst and hit it particularly hard. An additional blow to WTO tariffs or other barriers.

    The market at that state may be better suited to overpriced organic farmed milk and other dairy products with a sniffy white collar middle class market.

    Russian sanctions and Indian preference for goat milk don’t help either.

    I’m sure Norway and Switzerland and indeed many non-EU first world countries have the same issues as the EU does and some farmers were oblivious that no Brexit policy in the short term would lead to anything but a placebo effect here.

  • AndyB

    My concern is that either WTO tariffs or the loss of agricultural subsidy will be enough to push our dairy industry to the wall.

    Losing agricultural subsidies on their own would push the price of milk up considerably, or more accurately, what Dale Farm passes on from the supermarkets after it’s covered its costs would put a lot of farmers out of business as it would be so far short of break even.

    Because we produce a great deal more milk than we require, any import duties for milk products in other countries – including Ireland – under WTO rules will make us severely uncompetitive, and that would get rid of even more – I reckon it would be even more damaging than the loss of subsidies.

    We would end up with a lot fewer farmers, and a rather longer unemployment queue with very few jobs to go to (because regardless of what they say, the UK is not going to be a prime destination for FDI unless there is easy and free access to geographically local markets)

  • chrisjones2

    “Irish nationalists should push the fact that farm subsidies would be protected”

    So do you recognise that the interests of Irish and Northern Irish farmers in the negotiations may be diametrically opposed, depending on Brussels stance on tariffs?

  • chrisjones2

    …and if perpetual motion were invented we would all have free power

  • chrisjones2

    Build a large shed?

  • chrisjones2

    You ignore the impact on milk supply into the UK…that will price out foreign competition to NI milk.

    Furthermore the logical Irish response to WTO tariffs on diary is to ship raw milk to NI or the UK, process it here and pay the tariff on the raw milk with the value added in the UK. Many major Irish diary firms already have plant in NI and the rest of the UK.

    Thats just a starter

  • chrisjones2

    You know the reality is that we will change adapt and manage it. Look at the positive effect on UK employment too

  • chrisjones2

    Not in the Irish Republican / Remainder Universe

  • Kevin Breslin

    Newton has pretty much given a good disection of the issue nearly a year ago, when it seemed the UK would remain inside the Single Market.

    Pretty much came to the same conclusion. Brexit does nothing about this global issue.

    http://www.thedetail.tv/articles/the-milk-crisis-a-quick-skim

  • Kevin Breslin

    Except there is speculation that the initial UK WTO tariff post-Brexit will be Nothing, either because of the unilateral Free Trade Bill going down the easier import/harder export balance it gives, or because the WTO has no recognized UK tariff on its books.

    The EU would still have an external tariff on imports from the UK, so NI would be forced into a crowded UK market where EU goods alongside other global goods could in theory flood anyway.

    So good for Irish farmers, bad for Northern Irish milk exporters.

    I cannot imagine that situation lasting too long though because wages will suffer from deflation and devaluation and there would be UK supplier job losses, and it’d have all the profit incentive of aiding a third world country.

  • Kevin Breslin

    I recognized that the interests of Northern Irish farmers and the UK government have been diametrically opposed and Irish MEPs, Governments and Commissioners in league with the French have prevented the UK from lowering subsidies even further than they have had.

    John McCallister and Jim Nicholson have even said so.

    All three main UK parties want to lower state intervention in agriculture, EU or UK.

    That’s a bit more of a danger to farmers in Northern Ireland than between inter-Ireland competition.

    Sure there will be Northern Ireland-England competition, Northern Ireland-Wales competition and Northern Ireland – Scotland competition … do you really think Northern Ireland was the main bread basket for Britain.

    And that’s assuming no Free Trade Bill
    http://www.independent.co.uk/voices/this-is-what-would-actually-happen-if-we-implemented-the-brexit-economic-plans-suggested-by-a7236816.html

  • Kevin Breslin

    Specifically this issue from removing tariff barriers. Ultra-cheap imports.

    https://uploads.disquscdn.com/images/2c82d01c331a760b11f00c7591f6fec363402dd366f314855b24bde1d74badbd.png

  • Reader

    Kevin, I don’t think that UK based car manufacturers are harmed by ultra cheap subsidised steel. Just the opposite, in fact.

  • AndyB

    That ignores the crux of the problem: NI farmers are exporting milk because there is an oversupply in the UK.

  • chrisjones2

    “The 4.5% cut is the average prediction made in three studies that were carried out before Britain’s EU referendum”

    As part of Project Fear?

  • chrisjones2

    “All three main UK parties want to lower state intervention in agriculture, EU or UK.”

    Which is sensible. Indeed to be fair the Eu had been doing the same

    But you have avoided the question …… do you accept that the nature of Brexit automatically means that the interests of northern and Southern Farmers are opposed? Why are you afraid to answer?

  • Jollyraj

    “In the UK a 1000 acre farm can be run by three people due to mechanisation. In NI it is 3 people running a fifty acre farm.

    This has to change.”

    Beyond the rather obvious glaring error here (NI is of course in the UK), there is some truth in the need to become more efficient. Though we need to be honest in what that means in your model. Consolidating farms cuts out some farmers obviously, since if you quadruple the size of your farm, that means several other farmers going out of business and finding employment elsewhere. It’s important to be honest about what you’re suggesting – essentially protecting the large farmers while smaller outfits get pushed off the land. ‘Protecting farmers’ across the board cannot be about consolidating small farms into huge ones.

  • Kevin Breslin

    Would you buy a car made from “cheap steel” these days?

    Given that UK car manufacturing doesn’t rely on cheap steel, but specific steel alloys. This basic engineering requirement has been mentioned before.

    http://www.telegraph.co.uk/finance/newsbysector/industry/11944254/Steel-crisis-strikes-to-heart-of-UK-manufacturing.html

    “A lot of high specification steel goes into cars which is bought from UK producers. If the UK steel industry downsizes, car makers would have to buy high quality – rather than cheap Chinese – steel elsewhere, and that would certainly push up costs.”

    Steel dumping would kill the domestic industry, and even though it would be tariff free they would likely have to pay the EU countries to get quality steel while their own industry goes. At the same time UK cars would be more expensive in their EU market than their own.

    Another issue is that EU manufacturing source part of their manufacturing base in the UK, and there will be a disincentive to stay if there are costs in exporting UK assembled cars to other markets.

    Which validates the Milford point I’ve mentioned before.

    http://www.chroniclelive.co.uk/news/north-east-news/mps-react-after-vote-leave-11269819

    So bad news for people who wanted heavy industrial manual labour within the UK.

    Very few of this Conservative government have any experience with manufacturing or engineering anyway, and their political dogmas and doctrines seem to prove as much.

  • Kevin Breslin

    Indeed a solution would actually mean a trade border with R.O.I and closing the UK market down for agriculture.

    There’s an oversupply globally, unless it can be used in other purposes … I don’t know say as a raw material for chemical industries such as pharmaceuticals as a diversification strategy.

    I’ve in the past suggested cow urine might be useful in this sector.

  • chrisjones2

    Dream on …..

  • chrisjones2

    The issue isnt cheapness its quality band value. Are you suggesting Chinese steel is defective in some way?

    Why do you assume that Chinese means poor quality

  • chrisjones2

    The reality is that the land cannot give them a living

    For example how many chimney sweeps are left today?

    Robotics will further increase the rate of movement of people out of farming. Tractors will soon be ploughing fields or havesting crops on their own

  • chrisjones2

    “Except there is speculation ”

    Fevered specuilation – espeiclaly here and all of it negative and almost drooling

  • Kevin Breslin

    I do not accept the nature of Brexit that the interests of Northern Irish farmers and Southern Irish farmers are opposed … any more than the interests of Northern Irish farmers and Scottish farmers would be opposed.

    You pretty much failed to elaborate here.

    The currency changes some Leavers were evangelizing about are raising inflation and production costs, so I think swings and roundabouts with no marginal gains from being on either side of the border.

    Farming last time I checked was privately owned, and Farmers if they find one market difficult they could find another.

    If Dale Farm identifies markets in Brazil and Avanmore identifies markets in South Africa, what the heck would that have to do with Brexit?

    They’re not the ones who are dealing with the trade deals.

    It all depends on what option the UK actually does with Brexit. I’m going to go all Football Manager now and highlight 3 potential scenarios.

    1. Unilateral Free Trade – ROI free to sell in UK/ NI not “free” to sell in EU

    ROI competes in NI and UK domestic markets, without reciprocation.

    – Advantage ROI farmer … two markets vs. one.

    2. Leave Single Market/Customs Union with Tarifs – ROI not “free” to sell in UK/ NI not “free” to sell in EU.

    Both consolidate their own domestic markets.- Probable Stalemate.

    (Arguably though ROI has a bigger domestic market in EU, but around proportionate competition to NI UK)

    3. EU like FTA/Single Market with EU – Much the same as now. Level playing field for both.

    Both compete transcontinental. – Stalemate
    ———————————————————————–

    Only trade advantage Northern Ireland can get over Republic of Ireland is from as yet non-negotiated deals from the rest of the world. Deals they have even less say (1/33 UK) in than the ROI has in the EU (1/16th in EU sans UK).

    The bigger issue here is that Northern Ireland farmers are afraid of going under with the removal of subsidies, Southern Irish farmers are not.

  • Ciaran74

    10k rise in August in unemployment. Scotland’s unemployment dropped 25k June- August. NI flat.

  • billypilgrim1

    “Why do you assume that Chinese means poor quality”

    It’s not necessary to assume it. It’s just widely-accepted as a fact. It’s not the useless junk of the Mao era, but it’s generally regarded as inferior to, for example, British steel.

  • billypilgrim1

    “…the interests of northern and Southern Farmers are opposed?”

    You’re confusing immediate commercial interests (where they are notionally in competition) with medium- and long-term economic interests, which are in close alignment.

  • Kevin Breslin

    The quote I gave is from Prof David Bailey, an automotive industry expert at Aston University in Birmingham from the Daily Telegraph … because I believe they are more of an expert in this than I am.

    My assumption would be “cheap steel” which is only in our European markets because the Chinese themselves don’t want it themselves does not do the purpose of tailor made steel for the car industry.

    Now in case you feel an academic is too detached from the coal face.

    In the same article Paul Forrest from West Midlands Economic Forum elaborates this problem with “cheap steel” better.

    “Our precision components manufacturers rely on very high quality steel from the UK,” said Paul Forrest, the forum’s head of research. “You need quality material coming in to get quality coming out.

    “These businesses get that steel quickly from UK steel plants but if they can’t get that steel reliably here they have to look abroad. That pushes up costs and cuts their competitive advantage because they can’t react so quickly to customer demand,” he said, with delivery times of up to three months.

    It might not be possible to even recycle the used Chinese steel for purposes with current conventional technology at an economic rate.

  • Kevin Breslin

    A Unilateral Free Trade Arrangement means No World Trade Organisation Tariffs on any European Union goods, and the hell if they do the same.

    Were not the Tories the ones banging on about leaving the EU to end import tariffs on non-EU goods?

    It’s their policies at the end of the day.

  • Kevin Breslin

    Show me project Assurance … I don’t see it yet.

    These academics are basing their heuristics on some sort of basis.

  • chrisjones2

    ” does not do the purpose of tailor made steel for the car industry”

    Errrr thats just a matter of specifciation!!

  • chrisjones2

    …so its just a racist assumptrion like the view of Japanese products in the 1950s?

  • chrisjones2

    And Brexit means WE CHOOSE

    Intoxicating thought isnt it.

  • chrisjones2

    You are very selective in your use of figures. The full ONS data is here

    https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/uklabourmarket/october2016

    Higthlights include:

    1 There were 31.81 million people in work, 106,000 more than for March to May 2016 and 560,000 more than for a year earlier.

    2 The employment rate (the proportion of people aged from 16 to 64 who were in work) was 74.5%, the joint highest since comparable records began in 1971

    3 There were 1.66 million unemployed people (people not in work but seeking and available to work), 10,000 more than for March to May 2016 but 118,000 fewer than for a year earlier.

    So yes unemployment is up by 10000 but againsta huge increase in population and the Governmnet has created over 500,000 extra jobs in the last year!

    The NI figure was not flat. There were 400 fewer unemployed last month and the unemployment rate is now the lwoest since 2008

    http://www.bbc.co.uk/news/uk-northern-ireland-37701891

    What a terrible crisis…..all those new jobs and all those people in work I blame Brexit

  • Ciaran74

    Govt creates jobs? Hmm, said like a true Civil Servant. 400 you say? Sorry for not getting carried away by another Nando’s or an Applegreen opening.

    If wage inflation is running at 2.4% and the target was less than 2%, with a shortage in the system now, and imported input resource costs are rising due to currency, what will be the output?

  • Kevin Breslin

    Just a matter of specification?

    It’s a matter of mechanical and chemical engineering. Stop being ignorant.

    You honestly think the UK should manufacture lower quality cars just to protect a political pantheon of gombeens. The types of cars that could be manufactured in Tata plants in India at a much cheaper rate?

    Precision Engineering and ergo Precision materials is what makes a million pound Aston Martin different from a cheap £200 Aston Martin rip-off imitation.

    No whatever Brexit deal is on the cards, people cannot perform alchemy and turn lead into gold.

    It requires a black hole and nucleosythesis. Maybe hold the cheap Chinese steel within the Schwartzchild radius of the post Brexit Stormont budget for a few thousand years and you might get lucky.

  • Kevin Breslin

    Actually the UK would be bound by WTO rules legally to determine what its external tariffs are, so in a nutshell if it chooses to break WTO rules, it faces penalties.

    Until it agrees a tariff structure based on WTO regulations it’d be impossible to otherwise do trade on its own terms and expect WTO protections from the anti-WTO behaviour of other nations against the UK that will inevitably follow such mala fides.

    Intoxicated logic to think otherwise.

    Secondly if the United Kingdom government does create a trade arrangement which Northern Ireland puts Northern Ireland and strategic disadvantage then it is quite clear that “We” is merely “Them” and not “Us”.

    Such was the case when people became Irish nationalists to break away from the United Kingdom.

  • Reader

    Kevin Breslin: If the UK steel industry downsizes, car makers would have to buy high quality – rather than cheap Chinese – steel elsewhere, and that would certainly push up costs.”Steel dumping would kill the domestic industry…
    Pretty much a contradiction there in successive paragraphs.

    The market need is for steel of a certain quality (for each sector of the market) at the best price. If the Chinese steel is not good enough for any sector then it won’t sell. Wherever it is good enough; it is the best buy.
    What can’t happen is that it isn’t good for anything *and* also floods the market.
    As for the UK steel production, it already specialises in high quality steel. It can’t be undercut by low quality steel unless someone is telling porkies.

  • billypilgrim1

    Racist? Seriously?

    (Shakes head.)

  • Kevin Breslin

    Car manufacturers would be hurt by importing high grade steel if the steel producer’s diversified market is hurt by steel dumping.

    The other matter is regulatory, if raw materials for high precision steel is left in a flooded steel market, the probability of vendors selling knockoffs in raw materials increases.

  • Reader

    Kevin Breslin: Actually the UK would be bound by WTO rules legally to determine what its external tariffs are, so in a nutshell if it chooses to break WTO rules, it faces penalties.
    But WTO rules do allow the UK to put up tariff barriers to unfairly traded goods. Hypothetically; Chinese steel and EU food.

  • Kevin Breslin

    Do they really? In what time frame?
    If the UK put up tariff barriers it might do nothing to stop black market dumping anyway.

  • lizmcneill

    Intoxication would explain a lot about Brexit, this is true.

  • Jollyraj

    Stole? I bought my farm, lad.

  • Reader

    Kevin, you have previously pointed out that the UK blocked EU restrictions on Chinese steel. The EU doesn’t have a trade deal with China, so is trading using WTO rules. So you *already* know that WTO rules allow traders to penalise subsidised sectors. You also know that the EU both subsidises and protects its agricultural sector. You only needed to join the dots.
    (If the EU wants to subsidise food exports, a smart, non protectionist UK might prefer to take full advantage rather than try to choke off the trade to the UK. Since Ireland is on the verge of becoming a net contributor to the EU, it will be subsidising the UK consumer)