Brexiters Are Still Dissembling Over The Brexit Bill

Brexit supporting MP's and pundits are still dissembling over the Brexit Bill. It is isn't helped by the fact that the very highly paid journalists who interview them on TV themselves do not actually appear to understand the basic principles of the issue. So, let me try to clarify.

There are, in fact, three separate bills, or classes of bill in question. Firstly, there is the annual bill that Britain currently pays for its membership of the EU, and thereby of a series of EU institutions and organisations; secondly, there is the Brexit Bill itself, that is the bill for all of those elements of EU spending on capital projects, and other long term spending, which Britain as a member of the EU has voted upon, and committed itself, thereby, to finance into the future; thirdly there is the bill that will have to be paid for any EU institutions – such as the Customs Union, Single Market, Euratom, EASA and so on – that Britain seeks to continue membership of, after it has left the EU.

Taking these in turn; in her Florence Speech, Theresa May clouded the water over the first of these. Under pressure from Labour, and anti-hard Brexit elements within her own party, she adopted Labour's call for a “Transition Period”. This transition period was generally accepted to be one of around two years, which would mean that Britain would actually remain within the Customs Union, Single Market and other EU institutions, though not have political representation, for two years after the Brexit date of March 2019. For all intents and purposes, it means staying in the EU until 2021, and the purpose is two-fold. Firstly, its obvious that there is not enough time to go through the Stage 2 negotiations in time for any deal to be reached and meaningfully considered by parliaments, which would not be completed by next Summer, so the two year extension gives time for such negotiations to be completed. Secondly, because of the first point, it means that business is not faced with a cliff-edge, which would actually arrive in early 2018, because on the assumption that there is insufficient time for a deal, business would have to base its decisions on “no-deal”, and would start shifting business rapidly out of Britain, in the Spring of 2018. In fact, the way things are going, its possible that not even Stage 1 negotiations will be completed by next Summer!

May clouded the water in this speech because she made it look as though she was offering new money, as part of the Brexit bill. She offered up £20 billion. However, looking at the actual situation, all she was offering, was to pay what Britain is, in any case committed to pay, as part of its annual budget contribution. In other words, Britain currently pays £10 billion a year net, rounded up, as part of its membership fees. If Britain, stays effectively in the EU during this transition period, for two years, therefore, all that this £20 billion represents is what Britain owes for its current membership subscriptions. That is completely separate from the other amounts it owes, or might owe, in future.

Back in Parliament, as I pointed out at the time, May was forced by her hard Brexit benches to row back even from this position, just as the DUP are forcing her to row back now on even modest statements on a solution to the Irish border issue. Away went the description of a two year transition period, and in its place came the description of it being an “implementation period”, which means that it requires a deal to already have been agreed before March 2019, and that it is only a question of “implementing it”, by a process of gradual withdrawal. That is clearly delusional, because the original conditions still apply. In other words, there is not a hope in hell of arriving at a finished deal by the Summer of 2018, which is what is required so that the UK parliament can discuss it, and either agree it, or tell them to go back and try again, or for the European Parliament, let alone all of the other 27 national parliaments to discuss it, and add in their amendments etc. But, even were that the case, it still means that the £20 billion cannot be considered an element of the Brexit bill, because even during such an “Implementation Period”, Britain would remain in these various institutions, and thereby liable to continue making its normal annual budget contributions to them. What Britain owes for its Brexit Bill, is on top of any such payments. None of this, of course, was explained to the voters during the EU referendum, and it is still not being explained to them now.

So, on to the next category of Bill, the actual Brexit Bill itself. That bill relates to all of those capital projects that Britain has voted to support as a member of the EU. Those who want Britain to simply walk away from this bill are like a partner in a divorce, who has taken part in a decision to build a house, and to send the kids off to an expensive school, and who now wants to welsh on their maintenance payments. These capital projects extend for decades into the future, and Britain's share of the cost of those projects, it has committed to, likewise extend way into the future. Of a similar nature, are the costs of providing pensions over the next several decades – typically for 40 years – of all those EU civil servants that have been employed, including many who are British. The total cost of this bill, which is the Brexit Bill proper, is thought to be around €100 billion, and after the apportionment of Britain's share of the assets that the EU has thereby also acquired, as part of this process, the net bill for Britain is though to be around €60 billion, or about £50 billion.

In the latest crossing of her red lines, Theresa May now seems to have got a sufficient coalition within the Tory party to pay this bill, so as to move on to the second stage of negotiations, as time quickly runs out on them. Yet, even here, there continues to be dissembling. First, of all, its true that for as long as Britain continues to pay its regular, annual budget contributions of £10 billion a year, a portion of this contribution, will be a portion of these on going capital, and long term spending commitments. But, the amount over two years, compared with a forty year budget horizon, is negligible. In addition, in recent days, a further clouding of these waters has taken place, in terms of talk about money that might be paid, in terms of Britain's continued membership of other EU institutions, for example, those relating to policing and anti-terrorism, or Euratom, and so on. None of these are related in any significant sense with these long-term costs, and any payment for membership of these institutions cannot be seen as in any way to be offset against the Brexit Bill.

So, that brings us to this third category of bill. Theresa May, under pressure from the hard Brexiteers, made clear from the start (I'll avoid a Dave Gorman and his “elk”, reference to any gecko having a part here) tied her hands, by stating that two of her red lines were that Britain must be outside the Customs Union and outside the Single Market; the same thing that has created an irreconcilable conflict for her now over Ireland. Had May not done that, she could have resolved the Ireland question, by pushing it into the second stage negotiations, arguing that inside a customs Union, the problem of the border does not exist. Similarly, negotiations of future trade relations would have followed naturally from a commitment to remain in the Customs Union, in some form.

May resiled from that under pressure from the hard Brexiters, and because any such commitment would have made clear that such a trade arrangement also depends upon Britain continuing to make membership payments to any such Customs Union, or Single Market, as though it were still a member, as well as being bound by the decisions of those organisations, but without any say in the policy making of those organisations. What the Brexiters and May are then left with is trying to square these various circles, and the piecemeal recognition that one red line after another has to be crossed.

The latest example of that is with airlines. Months ago it was pointed out that outside the EU, Britain could find its aircraft grounded. The Brexiters again appeared to deliberately misunderstand the argument. The argument is that in order to fly into different regions, aircraft have to have their safety certified by an appropriate aviation authority. For aircraft to fly and land in the EU, they have to have been certified by the European Aviation Safety Association, or by some other Aviation Authority, such as the US FAA, accepted by the EASA. It means that each of these authorities must have documented and accepted safety and inspection regimes, that each of the other authorities accepts. But, Britain is covered currently by EASA, and when it leaves, it will not be, unless it agrees to retain that membership. For months, we have heard the same refrain from the Brexiters that it will not be a problem – which is what Theresa Villiers the Northern Ireland Secretary said during the referendum about the Irish border, and that talk about British planes being grounded was scaremongering. That won't happen David Davies and the familiar voices told us, because the EU needs Britain more than we need them.

This refrain, is not just a throwback to the delusions of such people that Britain is still some significant colonial power – exposed by Trump's telling May to shut her gob over his support for British fascists – but is typical of the individualist perspective of conservatives. Most trades union activists will, for example, have heard the refrain from conservative workers that they don't need to join a trades union, because they are invaluable to their employer as an individual, that the employer will reward them accordingly, because they are irreplaceable. That is the same refrain the Tories send out now over Brexit. They just can't do without us, the world revolves around us, and will collapse if we are not here!

But, now, after all this posturing, it appears that at the last hour, the Brexiters have had to accept that unless Britain remains in EASA, the planes will indeed be grounded, because Britain will not have its own Aviation Safety Authority in place capable of undertaking the required certification work. So, Britain it appears is now having to say it will seek to remain in EASA. As a result, it will have to negotiate a separate subscription fee for such membership, which previously would have been covered under its membership of the EU, and its annual budget contribution. Moroever, as safety experts have indicated, it does not stop at just being part of EASA and paying the subscription fee. It also requires that the ECJ continues to have jurisdiction ovr it. Still further, because aviation safety is so tied in with so many other areas of safety certification, for example, in relation to engineering safety standards and so on, it would be very complex to be able to conform to the EASA standards without also conforming to these other safety standards, which would mean further areas of production having to remain within the jurisdiction of European Safety standards organisations, and again with the jurisdiction of the ECJ over all these areas, and the need to negotiate membership fees for each of these individual organisations.

The question of Britain complying with the other aviation requirements in terms of flying rights are a laborious but by contrast less controversial area to resolve. Britain will have to negotiate such flying rights with each of the states that the EU currently has rights with, individually. In the meantime, EU airlines, particularly those such as IAG, which is based in Spain, but owns BA, will be able to make hay making Europe the centre for all such flight routes, and thereby supplanting Britain. The same thing is already happening with finance, as Britain loses its European passporting rights.

So, the reality, is that even if Britain does not find that it actually has to apply for membership of the Customs Union, and Single Market, and its hard to see how the question of Ireland gets resolved otherwise, it will end up de facto belonging to those institutions, by having to become a member of a whole series of EU institutions on an individual and ad hoc basis. For example, its hard to see how Britain can avoid being a member of Euratom, in the same way it cannot avoid being a member of EASA. Without the movement of radioactive materials for the NHS and elsewhere basically comes to a stop. Then there is the question of medicines, with the European Medicines Agency already having moved from London to the Netherlands. Britain might stay out of the European Space Agency, but it will then cut itself off from one of the fastest growing, most profitable industries of the 21st century!

Britain would then end up in the Customs Union and Single Market in all but name, it would end up in a whole series of spheres being subject to the jurisdiction of the ECJ. But, in order to continue to have those benefits, it would have top pay individual subscriptions to each of these agencies, which would no doubt be higher than is currently paid to belong to them as an EU member, and would not have the current rebate that Britain enjoys, or its current opt-outs, and in addition it would have no say in determining the rules and standards of any of these organisations, in the way it does now. Far from that being a return of sovereignty and power, it would represent a massive giveaway of sovereignty and power, but it will be a necessary cost of doing business!

But, the Brexiters are telling voters none of this. Rather they are trying to blur the waters by talking about such costs being somehow a part of the Brexit Bill of £50 billion. No, the true cost is something like this. £10 billion per annum for as long as Britain remains in the EU, including the transition/implementation period. So, until 2021, a further £40 billion; then the Brexit Bill of £50 billion, to cover the long term costs that Britain has committed to making a contribution to. That might be spread over, say five years, so £10 billion a year from 2021 until 2026. But, on top of that will come the bill for belonging to the Customs Union and Single Market, or to each of the various EU bodies such as EASA, individually, which could amount to around £6 billion a year. In other words, even into the very long-term, the budget savings will amount to no more than a couple of billion a year, whilst Britain's ability to determine those regulations will be given up, and Britain's role in Europe will be continually diminished, and its economy will be diminished along with it, whilst in all areas that really matter the ECJ will continue to have jurisdiction.

Labour should be spelling this out to the voters, and distancing itself as quickly as possible from this disastrous Brexit folly. As one Irish politician said the other day, its time for British politicians to grow a back bone, or some other part of their anatomy, and tell the truth to the British voters, about the nightmare they are heading into.