THE UK Prime Minister announced last week that he is off to Brussels this week, finally, to meet with EU Commission president Ursula von den Leyen. It is part of the much-vaunted (and much needed) “reset” in UK relations with the EU.
Good. I hope the meeting is productive. The way these things work there will already have been a lot of the agenda decided and points agreed, even if they are posts of disagreement or for further work.
But, as I have written before (and I fear, will again) rhetoric and warm fuzzy feelings are important but so is cold hard detail, and Out means Out.
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I would suggest to the PM’s people that expectation management is important on this trip or he’ll risk disappointing everybody.
The EU and member state capitals – particularly Berlin – were genuinely shocked when the offer over the summer of a Youth Mobility Scheme was turned down by the UK – not just because it was turned down, but because it was turned down in a matter of minutes.
Freedom of movement of workers, goods, capital and services is so baked into the DNA of the EU that any rejection of it is a source of deep and genuine angst.
The EU, and most of the mainstream politicians within the member states, are in the business of breaking down barriers, not keeping them up. Erasmus, the EU’s student mobility scheme, or study of some other sort in another EU state is a personal formative experience of most politicians, so the offer of a bespoke UK under 30s exchange is real, genuine and from the heart. It is the sort of thing you do for friends.
And it was poo-pooed by Crazy Island with what looks like barely a thought. To my mind, a crime against the next generation, most of whom were too young to vote in 2016 but have a narrower and more difficult world of opportunities as a result.
But the EU will persist with the idea, with this week – the EU Ambassador to the UK, Pedro Serrano, even downgrading it to a one-year go-visit-your-penpal sort of thing. A glorified gap year which I would confidently predict will be taken up by the type of middle-class kids who would be going anyway.
However, confidence-building measures might need to be small beer to start off with so long as we all recognise just what weak gruel it is and where the problem lies.
But more worryingly was some hints this week that there is a UK strategy and the reason they dismissed the Youth Mobility Scheme was to use it as some sort of bargaining chip. This is nuts. It is treating a massive gift as if it is something to be traded. If a thing is so demonstratively in the mutual interest, why not just say yes and bank the goodwill (as well as the details to be worked out)? Holding it hostage in this way risks alienating everyone.
This is because the PM himself has engineered a straitjacket, so his own rhetoric is hollow. He said himself last week that he is “very serious” about the reset (whatever that actually means) but: “That does not mean going back into the EU, that does not mean going back into the single market, the customs union or freedom of movement. So they are the red lines within that framework.”
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Aye, red lines that render his own spin rather incredible.
Still, I’ll welcome any advance, and where I’m clear I want us to opt back into everything in short order I’ll also admit we’ll need to help them along and mony a mickle maks a muckle.
A strategy does though seem to be emerging, a “three-pillar” strategy around defence and intelligence; a hazier idea of “safety” (immigration and crime), and trade. Defence will involve an (already largely completed) agreement with Germany, based loosely around the parallel existing Lancaster House arrangements with France, and somehow using these agreements as a basis for a wider UK-EU agreement. Aye okay, I can see that, indeed I called for it best part of five years ago.
As the EU evolves into the defence space, the UK should keep as close a relationship as possible. Similarly, on other co-operation around intelligence sharing, immigration and police co-operation, there’s plenty scope for actual nuts and bolts co-operation there, though much of it is already ongoing.
On trade, here I see the biggest rhetoric/reality gap. The EU’s attitude is that the existing Trade and Co-operation Agreement, negotiated by Michel Barnier is the basis for relations, and there’s little scope or appetite for doing much beyond that text.
This will change, but it is the UK that will need to get real. But some more evidence this week emerged that yet another “Brexit benefit” is not what it seems: Freeports.
Remember, harrumphed to the rafters by Boris Johnson’s government, in a freeport, businesses are able to import materials tariff-free, and only pay duty on finished products when they are exported into the domestic economy.
Yet the Financial Times reported last week that only six companies have taken up customs sites across eight English freeports; three in Liverpool and one each in Solent, Thames and Teesside, and interestingly none in the two Scottish sites. This is unsurprising.
Freeports, if based on a customs advantage, are very niche in an economy like ours and there was always doubt as to what advantages the tax status actually brought. They are also incompatible with future EU and single market membership so I’m happy to see they are likely to be phased out.
But what’s in a name? Call it a freeport but actually, outwith any tax arbitrage, make it an investment zone with other planning, infrastructure or grant advantages and that’s an actually interesting model, as I think Grangemouth and Cromarty Firth will turn into.
For all the deeply silly talk of black holes in the UK finances, the one they should get onto is undoing the folly of the last few years and getting us back into the customs union and single market. That’s the real prize, let’s focus on that.
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