Bicker all you want about a customs partnership – it’s impossible either way

Ian Dunt at

There are basically three choices for Britain’s customs arrangements. The first is a bog-standard customs union. The second is a customs partnership, otherwise known as the ‘hybrid model’. The third is frictionless trade using technology, otherwise known as ‘maximum facilitation’, shortened to ‘max fac’. You’d be forgiven for giving up now, but stick with it.

The first shows that Brexit is pointless, the second is insane and the third is impossible.



All the nonsense Hannan, Redwood And Mogg have spoken about the customs union this week

Ian Dunt at

What Rees-Mogg forgot to mention was that this would have very severe consequences for the UK. Under the WTO’s Most Favoured Nation rules, countries are not allowed to discriminate on their tariffs. If you charge one country 70% on beef, then you must charge all countries 70% tariff on beef. So while Britain could impose such a poisonous tariff on its closest neighbour, it would be forced to live with that tariff on all beef imports.

This clashes rather messily with Rees-Mogg’s repeated insistence that leaving the customs union would bring in lots of cheap food from outside Europe to help poorer Brits.

Every time there is movement on the Brexit debate, the same culprits emerge with the same disinformation techniques. They are mostly given a free pass by their interviewers, who do not seem to understand how gravely they are misleading viewers.

There are only two explanations for their behaviour. Either they know they are misleading the public and do it for cynical political advantage. Or they do not, and they do it out of ignorance. Either way, it is intolerable.


Britain’s fishy role in the quota-hopping scandal

From 1996, the Independent on the UK’s fishing industry:

Everyone agrees that too many European boats are chasing too few fish. Britain, along with other EU states, has agreed three Europe-wide programmes to pay off fishermen and scrap their boats. But the British Government refused at first to fund its share (30 per cent) of the compensation, so for many years the scheme was not available to British fishermen.

Why not? The Treasury blocked the scheme because it would have reduced the annual UK budget rebate from Brussels. Whatever the EU spent on paying off British boats would be deducted from the celebrated Thatcher cash- back scheme, which reduces Britain’s net budget deficit with the EU. The Government preferred to spend both its money, and the EU money, in other ways. Fisheries were not a priority.

This is complex but it is vital to an understanding of quota-hoppers. In the early Eighties, there were a couple of dozen. Their numbers exploded during the decade. Why? Because British trawler owners sold their boats to the Spanish and Dutch. Or in some cases they sold them to British brokers, who sold them to the Spanish and Dutch. Why? Because they were offering the best price.

The main alternative – EU scrapping grants – were not on offer in Britain. Why were the foreign skippers so keen to buy British boats? Because under British, not EU, regulations, if you bought the boat, you also got the licence to fish and a guaranteed share of the national quota.

It is a purely British government policy to break down the national quota boat by boat, and allow the sale of quotas, in this way. Other EU governments have other ways of enforcing (or in some cases failing to enforce) the Common Fisheries Policy.

There are quota-hoppers in other EU countries, a few dozen in Ireland, some in France and Denmark. But the greatest concentration is in Britain.

Spanish and Dutch “plunderers” bought their share of the British quota in good faith, exploiting, according to your viewpoint, EU single market law, the British Government’s belief that everything has a price, or a loophole in the Common Fisheries Policy. They now, reasonably enough, claim that they have an inalienable right to carry on fishing.

EU officials say that there are several ways in which Britain could make life difficult for quota-hoppers and stay within EU law. Britain could, for instance, insist that all British fishing boats must land a proportion of their annual catch (say, 30 per cent) for sale or processing at a British port. Until now, the Government has declined to do this. Why? Because many Scottish boats, in particular, like to sell their catches directly to Spain or France, where prices for some species are much higher.

Alternatively, EU officials say, the Government could introduce a law insisting that the crews of “British” fishing boats be covered by British social security and health insurance. This would drill several holes below the waterline of the economics of quota-hopping.

The Government has been reluctant to follow this up. Why? Because it would impose a new burden of regulation on British fishermen, as well as quota-hoppers. Many British fishing crews, who operate on a casual basis, would have to come fully into the social security system.

And so it goes on.

Is a solution possible? With good will, yes. But little good will exists between Britain and the EU at present. The Government appears to be changing its mind about introducing a British-boats-must-sell-some-fish-in-Britain rule. But it says that the rule should be enshrined in the EU constitution as part of the reforms of the treaties now under discussion.

This is silly, say Brussels officials. Such a law could be introduced in Britain within existing EU rules – as long as it applied to all boats, without discrimination. No treaty change is needed.

The suspicion is that the Government is no longer in the fish market for the kind of practical solutions that might help British fishermen. It is locked in a self-consciously Euro-sceptic posture, pandering to Euro-sceptic press and Tory backbenchers. The Government is right to fight for the interests of British fishermen. But, in this dispute, it has long since overfished its quota of red herring.

My emphasis.

Why one rule for De La Rue?

Robert Strauss in a letter to the Financial Times:

Sir, After it was announced that the French company Gemalto would get the contract to print the new blue UK passports, De La Rue’s boss said on the BBC: “I’d like to ask Theresa May or Amber Rudd to come to my factory and explain to our dedicated workforce why this is a sensible decision to offshore the manufacture of a British icon.”

But his own website proudly states: “De La Rue’s products and services help countries to trade, companies to sell, economies to grow and people to move securely around the world.”

Why is it OK for De La Rue to produce passports, money and so on for other countries but unreasonable for another company when it is for the UK?

James O’Brien on Twitter:

Metropolitan Police admits role in blacklisting construction workers


Scotland Yard has admitted Special Branch officers passed information to a controversial network that blacklisted construction workers.  It follows a six-year battle to find out if the Metropolitan Police supplied the intelligence on trade unionists.

The force says its investigation had “proven” the allegation, which will be investigated by a public inquiry.

Workers who say they were unfairly barred from jobs have already received millions of pounds in compensation.  In 2016, the union Unite reached a settlement with construction firms that resulted in 256 workers sharing more than £10m in compensation.

At the heart of the claims, which were made by hundreds of workers, was evidence that firms accessed a “blacklist” that logged workers’ trade union activities.  The list was used by dozens of construction firms to vet those applying for work on building sites.

When the files were found to contain details of individual’s political activities, the workers demanded that Scotland Yard disclose whether undercover police had colluded in supplying intelligence.



Same family income, same street, but the black boy still grows up to earn less

Washington Post:

Virtually nowhere in the United States do black boys grow up to earn incomes equivalent to white boys raised in the same neighborhoods by parents with comparable wealth and education levels, according to a study released Monday that followed millions of children now in their late 30s or turning 40.

The disparity holds true even for black boys raised in the wealthiest of families, who grew up on the same block in the same affluent community and attended the same school as their white counterparts. The findings shows that race — not just parental income or neighborhood opportunities — factors into the yawning wealth gap between blacks and whites in America.

In addition to income, black boys were more likely to be incarcerated and less likely to attend college than their white counterparts from families of similar income level.

“Race matters,” said Nathaniel Hendren, a Harvard economist who co-authored the paper with Raj Chetty at Stanford and two researchers with the U.S. Census Bureau. “Parent income and neighborhoods cannot explain the entirety of the black-white gap. Even when your parents get rich, the gaps don’t go away.”

 The New York Times covers the study with some outstanding animations and graphics.

Brexit transition: The can is kicked further down the road

Ian Dunt on

So now we will have another few months of Brexiters pretending the problem can be solved. They will talk about technological solutions, about the US-Canada border and the Norway-Sweden border. But the truth is that even the most high-tech, untested, super-futuristic border will only minimise infrastructure, it will not eradicate it. And even that will take longer to install than December 2020, which is when transition supposedly ends. What they have promised cannot be delivered. And the backstop solution which activates if they fail to deliver is considered politically unacceptable. This is a riddle with no answer. It is a dog trying to catch its own tail.

Plenty of people on both sides of the debate will speak very confidently about what will happen now. They should be more modest. It is very hard to see how this will go. Despite the smiles on display today, Michel Barnier and David Davis are now engaged in a game of chicken. Either the UK will buckle. This means agreeing to stay in the single market and custom union or that Northern Ireland should do so. Or the EU will buckle and allow a deal to pass that creates a hard border in Ireland.

Overall, it is more likely that Davis buckles. As Barnier said today, “nothing is agreed until everything is agreed”. That means that in autumn this year the UK would face the whole deal collapsing if it doesn’t sign up to the backstop: no transition, no customs infrastructure, no regulatory infrastructure, no trade deal with the EU or roll-over of third party deals. Disaster. This dynamic suggests Davis will panic first.

But that isn’t necessarily the case. The Brexiters are quite delusional enough to demand political and economic suicide. The political temperature is sufficiently high that anything is possible. And the EU, faced with the horrific reality of no-deal and a UK which has seemingly lost its mind, might still authorise some fudged nonsense into transition.

Today bought some more time, but the pressure continues to ratchet up. Ireland still sits there, like a black hole, in the centre of the talks. It is a spasm of chaos waiting to happen.