WILFRED ASPINALL
The Coach House
Shillington Road, Pirton, Hertfordshire, SG5 3QJ
Tel: +447872953922 Email: wa@wilfredaspinall.eu
BREXIT NEGOTIATIONS
We have to hold the initiative for setting the agenda for the negotiations strategy with the EU since otherwise they will drive their position forward. It is the UK that is Leaving.
My observation of the Brussels scene to continue the creep into a super state remains the objective of the EU political elite and with some 30 years of experience on EU procedures my long lasting objective is taking shape and I wish to make some contribution to the debate.
What follows is, I hope, a contribution to the exit debate including some ideas that you might like to consider in your overall BREXIT strategy. If you need more clarification or a “brain storming session” I would be delighted to attend a meeting with you
House of Commons Scrutiny Committee
Evidence published December 2015
This is the link to my evidence that was published by the HoC European Scrutiny Committee during the run up to the negotiations conducted by Prime Minister David Cameron. Sadly although it was sent to the 10 Downing Street regime and indeed the FCO by supportive MP’s as you know the negotiations conducted by David Cameron were kept under wraps, amounted to asking for nothing and got even less. Even if adopted would have changed nothing regarding the UK relationship with the EU.
1.
INTRODUCTION TO THE BREXIT NEGOTIATIONS
The process is complex unless there is a strategy to bring about BREXIT. The UK government needs to take the initiative with innovative, positive and constructive proposals presented to make this severance from the EU a success. In many ways exiting the EU could be a simple process if handled in the right way.
No other EU member state has taken up the provisions of Article 50 of the Lisbon Treaty. We are in uncharted waters and in effect without rules to follow. [ See later ]
Forgive this bluntness but it appears that if no constructive strategy is adopted those who want to REMAIN in the EU will constantly try to undermine BREXIT and attempt to reverse the decision democratically made in June by the people of this country. In fact some are hoping that the BREXIT process will run out of steam and this will bring about a change in public opinion. Others are open to a compromise to soften the exit process. [ This is a typical EU approach ]. In some cases an excuse to achieve other political objectives.
There appears mixed messages coming from within government.
This must not be allowed to happen and a PR offensive must be adopted, not to counter adverse comment, but to lead public opinion in a positive way for BREXIT setting out the process and being totally transparent. Explaining the process as it moves along and illustrating how the UK by controlling our own policies can make the UK dynamic, prosperous and taking advantages at a global level for all people in the UK. An open democratic process accepting that not all the cards must be displayed.
The EU Institutions with a vested interest to create greater integration to protect the European project, and that includes some people / organisations in the UK, will do anything to frustrate the LEAVE policy
I realise that from statements made that some caution is being exercised but the following are but points for you to consider. I felt I would be negligent if I did not express a view, especially with my long serving experience of how the EU functions and operates.
These I hope you will agree are in a positive vane
2.
GOVERNMENT PATHWAY TO BREXIT
In order to set out a strategy and end this uncertainty for BREXIT the government should:-
Prepare a Pathway Strategy setting out the process for introducing BREXIT and implementing exit from the EU
Indication of draft legislation to be tabled in Parliament
Consideration to set out a list of all EU Regulations and Directives transposed into UK law
International Agreements and other obligations currently held under membership of the EU also to be included.
Negotiation with the EU for a Free Non Tariff Trade Agreement
A strategy to have control of immigration into the UK from the EU
Provision for the WTO Seat and participation to enable the UK to enter into Free Trade Agreements with any country in the world.
Establish and agree the procedure for setting UK standards to allow single market access
In order to quell the uncertainty which is appearing to come through the government needs to set out this Pathway – which can be adapted as time moves on. It would include legislative proposals which would of themselves put us on the BREXIT path.
3.
DRAFT LEGISLATION
3.1
SOVEREIGNTY BILL
Preparation for a Sovereignty Bill to ensure that at a given date the UK Parliament and Supreme Court take precedence on UK law. This Bill to be published and taken through Parliament as soon as possible in order that potential obstructions can be negated. This would present a clear message to the country as a whole, member states of the EU and the EU Institutions that BREXIT is to be implemented.
There is no reason to delay this action and this could be presented at the time Article 50 is triggered. It would demonstrate that the government is leading the BREXIT debate and not being subservient to the manoeuvring of the EU Institutions. Those who say we cannot do this have to show under which clause in both the EU and UK that parliament cannot pass such legislation through Parliament. There may have to be a clause for the implementation date but the intention would be settled
The UK to take its seat at the WTO as a signal that Free non tariff Trade Agreements are to be negotiated and established with any country of the world. We should not have any gap between exiting the EU and taking our seat at the WTO
3.2
It would send a signal
To the people in this country that the referendum decision is being implemented and is not reversible
To those in the UK still trying to frustrate the exit process that the electorate have made a democratic decision, a mandate to the government and Parliament, that we are to exit the EU
To the European Union member states that it is but a matter of the details of the exit not the exit itself that is being negotiated
That the EU Institutions should accept that this decision of the British people was a democratic process and that they have no means to change that. Whatever exit negotiations are to follow they are but a means to an end
That the governance of the UK is sovereign under the control of the UK Parliament
That the laws and their interpretation comes under the influence of the UK Supreme Court and ultimately the UK Parliament
The signal would be there
It is essential that such a Bill is introduced to set out the means to exit from the powers of the ECJ and not to await the result of the technical negotiation that will take place
It should be made clear that BREXIT means BREXIT and this cannot be reversed
3.3
EUROPEAN COURT OF JUSTICE
This is an absolute priority issue for the UK to cease to come under its authority
By immediately introducing a Sovereignty Bill, as mentioned above, into the Houses of Parliament, the government will set an agenda that will finally result in the exit of the UK from the European Union. We should not be timid in our approach to this.
This Bill should be introduced to parliament at the same time as Article 50 of the Lisbon Treaty is triggered
4.
BILL RESCINDING THE ACCESSION TO THE EUROPEAN COMMUNITIES ACT 1972
Prepare a Bill to exit the EU [ Rescinding the Accession to the European Communities Act] giving sufficient time for this to be scrutinised in both the HoC and HoL so that no loop holes exist that can delay the exit process. A date to be set.
To include withdrawal from all the Treaties of the EU and their supporting Protocols
To include a blanket withdrawal clause from individual EU legislation, or certain provisions, where that is necessary and where they have been transposed into UK statute
A clause to enable the UK to withdraw immediately from parts of all current UK legislation where EU monitoring and a potential reference to the ECJ is required.
Include the provision for retaining or rescinding International Agreements established by the European Union under its Treaty competence.
Provision for WTO participation to enable the UK to enter into Free Trade Agreements with any country or region of the world.
5.
CONTINUITY OF LAWS IN THE UK
5.1
Exit from the EU – Unchartered Procedure
No member state of the EU has ever indicated that they are to exit from the European Union and therefore we are all in unchartered legislative and / or Treaty procedures. Never before can anybody point to specific past examples of how this process of exiting the EU can take place.
Perhaps everybody has to accept that there will have to be some flexibility in the process ” learn by best example “. The UK needs to take a positive initiative in setting out how these negotiations will move forward. From past experience my guess is that the EU institutional procedure will propose that they will introduce legal obstacles. That is their way of working in the hope that we will compromise / give in. The interpretation of the law [ both EU and UK will be mixed but as stated above this is a path nobody has gone along ]. It is for that reason the above is suggested
There seems to be an opinion that once we have exited the EU everything will come to a stop but EU legislation has already been transposed into UK law through parliament in one form or another by primary or secondary legislation, and this will remain unamended until changes by deletion or amendment. Business and private individuals using these laws will not be hampered in any way and no doubt will have some say in their future.
This need not be negotiated it will be a decision of the UK government
Once the government have identified all the EU legislation currently operative in the UK it will be a matter of deciding over time which are to be retained, amended or discarded. To do this each government department will have to analyse and come to a policy conclusion. This will not happen overnight and can be undertaken following detailed analysis and consultation.
On the other hand EU monitoring and enforcement rules set out by EU legislation and transposed into UK law will need to be discarded.
5.2
Monitoring and Enforcement Rules affecting transposed / Implemented EU legislation
Once the Act of Parliament to Exit the EU has been taken through Parliament it would be wrong to think that every UK legislative act transposing EU legislation would cease to exist. However where monitoring and enforcement rules are included the UK may not wish to observe compliance.
By one means or another these laws have been adopted / transposed by the UK Parliament and are currently enforced and could in future continue to be enforced in the UK. These EU initiated laws would continue in the UK unless actually rescinded by parliament.
EU compliance within that process would be another issue and therefore within one of the Bills mentioned above a blanket clause should be included to exclude monitoring of these laws by the EU Commission and / or other EU Regulatory Authority and restrict reference to their enforcement by the European Court of Justice
To give an example – to make the point. The Drinking Water Directive has been fully transposed into UK law and can be accepted even after the UK has left the EU. It is unlikely that a new draft Bill will need to be introduced to replace what is currently on the statute. The UK regime includes water testing and a Drinking Water Inspectorate to enforce the levels set out in legislation. [currently set at EU level]. However reports have to be sent to the EU Commission where monitoring and enforcement rules are included involving EU institutional activity. Under exit terms the UK may not wish to observe compliance.
On an overall basis if this was applied to all EU legislation that has been transposed into UK law it would enable priority legislative changes needed to take place on current EU legislation implemented in the UK over a period of time depending on their level of importance. This would be an internal UK action
For instance once EU monitoring and enforcement laws governing Insider Trading and Money Laundering have been deleted these could be examined later in the UK and may take some time to change, if indeed there is a need to change since they have been placed on statute through UK parliamentary procedure. Whilst environmental laws governing climate and emissions may need urgent attention if they affect the competitiveness of UK industry and decisions will have to be taken in the UK
5.3
Principles as Against Technical Details
The BREXIT negotiations need to concentrate on the principles of exit from the EU and set the agenda and timetable for that to happen.
The technical details involving specific legislative detail would come as a follow on consequences
6.
INTERNATIONAL LAW
The EU has competence to enter into agreements through International Treaty Arrangements. Included in the BREXIT Pathway Strategy should be a list of which Treaty have been concluded by the EU in which the UK has to comply.
The Pathway should give an indicative opinion on which International Treaties the UK will continue to observe. Furthermore the BREXIT Team will need to consult with interested bodies whether these international agreements need to continue.
This will require a clear statement within the terms of international law to ensure that the BREXIT terms are met. If for instance by exit from the EU we are immediately forced to exit these international agreements in which case external negotiations with the appropriate international bodies need to be forthcoming on an immediate basis and well before actual exit.
7.
IMMIGRATION STRATEGY
7.1
Control of borders
It is essential that the UK has control of its borders. Adopts policies to scrutinise and control who can enter the UK and what powers the security and border control officers will have and be set by the UK government
7.2
Citizenship Chapter of the Maastricht Treaty
Freedom of Movement of People
There is a clear distinction between freedom of movement of people [ defined in the Citizenship Chapter of EU Maastricht Treaty and freedom of movement of workers [ defined in Article 45 ]. The latter, not the former, being one of the four pillars of the EEC and as such the EU
On leaving the EU as deemed by an Act of Parliament the “Citizenship Chapter” of the Treaty would no longer exist in the UK and the EU Treaties would no longer be operative. No citizen of a member state of the EU would have the right to enter and reside in the UK without being checked at the border to prove their identity since they would be coming from another country.
Citizens of the member states remaining in the EU would continue to be designated “citizens of the EU” [ this is an anomaly because by inference only a “state” can have citizens ].
Nevertheless the clause in that Chapter of the EU Treaty on “freedom of movement of people” would cease in respect of the UK and only apply in the remaining member states of the EU.
This would be a welcome stage to control our borders and would mean that EU citizens would not have unfettered access to enter this country. In future their identity would be checked by border control officers. That does not mean they would be refused but their visit to the UK would be implicitly monitored. Certain rules regarding nationality, reason for the visit, health insurance and means to support themselves. Casual visitors staying for a certain period [on holiday, visiting family and friends] would have temporary access others wanting to reside and work would be obliged to come under a quota system and work permit if they wanted to stay in this country
In effect two levels of access to the UK would happen
Access for EU nationals who are a casual visitor, on holiday, visiting family and friends. Some maximum time limit would have to apply and the visitor would have to declare where they will reside. Some formal access arrangement could be introduced which could be applied for online
Other EU nationals coming to the UK as “workers” would follow the rules set down for their access as set out below
7.3
Freedom of Movement of Labour
Article 45
There could be arrangements under a separate agreement with the EU or even bi-lateral agreements with member states that freedom of movement of labour should not be prohibited. Simply that it will be controlled and access only allowed under certain regulations. It is noted that in certain sectors of employment there are requirements for migrant workers to enter the UK either for professional or casual reasons. It would not be to our advantage to prohibit this type of migration, however it has to be controlled.
A number of options should be investigated to make this objective a reality.
The criteria for access amongst others should be an analysis and setting of a quota for each discipline of activity where migrant workers were needed. By need this would have to have flexibility.
Mutual recognition of qualifications would be one such regulation as would the disclosure of a criminal record of the person entering the UK, their whereabouts and address whilst in the UK, their capability to have or get a job, have medical insurance cover either from their home member state or on a private basis and some form of proof of financial credibility would be needed.
Various methods could be explored including a quota to fill employment opportunity in specific activity
A points related concept covering overall migration
A specific migration policy to ensure that not only does the migrant comply with the above but they actually have a work position available. This would mean issuing a “work permit”
7.4
EU Citizens Residing in the UK
Bi-lateral agreements could be set whereby those citizens from a member state of the EU having currently resided in the UK for a predetermined period would have the right to remain in this country. Some form of legitimate regulation would have to be set out to avoid any misinterpretation. This would require disclosure of work activity and / or retirement, their ability to finance their residency and health coverage. Also either they would be able to apply for UK citizenship or be issued with a permanently work / residency permit.
A reciprocal arrangement would exist for UK nationals to continue to reside in an EU host member state.
This policy should be explained and decreed with immediate effect to avoid a sudden rush of EU citizens coming to live in the UK during the period to actual exit. This immediate effect would require that the provisions of freedom of movement of people would be suspended.
7.5
Border of the Republic of Ireland and Northern Ireland
This is a very difficult and serious issue and needs to be given very special attention.
If borders are open for EU citizens to freely enter the Republic of Ireland based on an open border policy there could be serious implications to our UK security for the Republic of Ireland and Northern Ireland.
Fortunately Ireland is not a member of the Schengen Agreement and therefore border controls exist for all EU citizens entering the country.
Agreement will have to take place between the UK and the Republic of Ireland that external border controls [ the Republic of Ireland border ] will be observed on a mutually established understanding.
Ireland will not participate in the Schengen Agreement for as long as the open border Agreement is valid
This will allow an intergovernmental agreement to exist whereby there remains open borders between the Republic of Ireland and Northern Ireland
Continued cooperation to be maintained between the police and security forces
Passports to be carried by those crossing the border for security checkS
8
FREE TRADE AGREEMENTS
Seat at WTO
8.1
Third Country Tariff Free Trade Agreements
The UK should send out an unequivocal message to all countries of the world that we are open to free trade. Our history of opening up markets, of being innovative and adopting a free trade approach must be our future in a global context
By making our destiny belong in the future of trade of all types we send out a message that our expertise is there to be competitive yet prudent in our relationship with both the EU and third countries. Whereas the EU has failed to explicitly negotiate free trade agreements we can.
8.2
UK Services – A Natural Conduit to both EU trade and for Third Countries
The UK is a natural trading nation and our City of London, and other great cities, can demonstrate trade, insurance, financial services [ trading and monetary activity ], and other universal activities on a world wide basis. We can benefit from this acting as a conduit for trade and these other services. In many respects by being independent of the EU providing services for the rest of the world to call upon our expertise to trade with EU member states.
We should note here that the City of London handles trillions of US dollars every day.
The government needs to go on an offensive mode to push this message both to our own industry sectors but world wide
8.3
EU Non Tariff Trade Agreement
There is a lot of rhetoric from some leaders of EU member states – and the leaders of EU institutions, even International organisations and some in the UK – that barriers will have to be put up to restrict business between EU member states and the UK once BREXIT has concluded. There are others who recognise the need for business as usual in a highly competitive environment.
The last thing anybody should want is to create barriers for trade.
The UK should not be put off by the former rhetoric but should lay out a clear unequivocal strategy that will allow tariff free trade to exist across Europe. Of course some member states and institutional leaders will not want that to happen because it puts into question the survival of the EU as a future unitary state.
Other member states, certainly their population, may like to accept free trade regardless of EU intransigence from the political and institutional elite. The UK must therefore
Enter into a strategy to negotiate a free trade agreement with the EU [ we have to accept that such negotiations will have to be undertaken with the EU as the European Commission has total competence].
Examine whether there is a process where bi-lateral agreements [ at least keep them informed ] can be conducted with any of the 27 member states of the EU
8.4
Free Trade Agreements – Political
Single Market – Technical
The import of goods and services have to comply with the standards and rules set by the host state. Where we have considerable economic muscle is when more is imported to the UK than we export from an individual country or region. The EU Single Market is a technical issue whereas Free Trade Areas are of a political and economic nature. By introducing the argument that the UK will be outside the EU single market and mixing this up with economic trade agreements demonstrates the unreal thinking behind this argument..
The UK outside the EU single market will provide advantages for us to have the best of both worlds, still enabling free trade within the EU yet advance our own agreements globally unfettered by EU political differences.
It will also be to the advantage of EU member states and third countries where the UK, brings a natural trading nation acting as a conduit for trade offering expert services in financial services, including global insurance, investment arrangements.
8.5
World Trade Organisation
Free Trade Agreements
The UK should have a seat and fully participate in the WTO. Being the fifth largest economy in the world with requirements to import and export goods and services this becomes a necessity
Under current EU Treaty obligations the EU has the competence to hold the seat and negotiate trade agreements for the EU however following BREXIT this will cease for the UK but continue for all other member states in the EU. With this in mind legislation will be needed in the Bills mentioned above to ensure that the UK can enter into unfettered free trade arrangements with any country in the world.
There should be a general understanding that the UK will have sole rights to undertake negotiations through the WTO.
Ensure that the government takes its seat at the WTO and participates in all its activities
That the UK being the fifth largest economy in the world will have the absolute right to enter into Free Trade Agreements with any country of the world
Explore with third countries the terms under which Free Trade Agreements can be adopted between them and the UK. [ This will require, in some cases, ignoring the political elite and having dialogue with business and other institutional leaders ] demonstrating to Third countries our ability to perform on the world stage by offering expert professional services in trade, commercial activity and financial services [ including transportation of insurance of goods by Lloyds of London ]. Also, as mentioned above acting as the conduit for trade and finance between all countries.
Giving a clear indication to foreign investors by the passing of specific legislation in the UK to assure them that it is business as usual and that we as a country will continue to honour our business commitments
9.
THE SINGLE MARKET
9.1
The Internal Market
The concept of a Single Market [ an internal market ] in the EU was introduced in the mid 1980’s with the objective of harmonising all standards at that time operating in individual member states into a common structure. The 1985 EU White Paper, presented by Lord [Arthur] Cockfield the EU Commissioner responsible for the Internal Market at that time set out an ambitious programme that was to culminate in 1992.
Two areas were not covered by that White Paper – Financial Services and Energy [Later discussion also centred on the services sector].
Basically the objectives of the WP were upheld by 1992. Further amplification of EU proposals harmonising standards at EU level has continued covering most areas of business and consumer activity, including energy and financial services and the services sector.
At that time there was suggestion for standards to be harmonised on a world wide approach for technical standards which would better serve the aspirations of the European economy. That [ perhaps through the WTO ] would best be operative with global standards.
The EU institutions resisted this approach as they wanted to establish a European identity. In addition they were convinced that the emerging third countries who wanted to have trade with the EU member states would adopt these standards as their own.
[ In many ways this covered the idea / aim of EU institutional dominance and later was based on the principle of establishing the euro as the EU common currency which they believed would become a reserve currency ].
The US standards were established and the EU harmonisation process would represent a strong counter balance case for other regions of the world to have some competitiveness between the EU / US standards.
In my view the principle to have standards set in a specific area is a political decision but the actual determination of those standards is undertaken through technical arrangements involving the regulator, industry [ manufacturers, users and suppliers together with other interested partners including consumers ]. Politicians need not be involved in the establishment process
9.2
Are Product Standards an Issue for the EU / UK Negotiations
On the basis that a manufacturer takes a business decision to market their product external to the UK their commodity will have to comply with the standards set out in that host country where they wish to market their product. The exporting firm cannot export for sale if they do not comply with the host standards. At the moment the case of exporting to the EU is not a problem as EU standards are in place as they also apply in the UK. Equally those exporters from countries who are not in the EU have to comply with EU standards when they import goods and services into the UK
This process will change once the UK exits the EU
9.3
A few questions arise.
It should be noted that EU standards apply in the UK through the transposition of Directives and Decisions in UK parliamentary law
Is there a need to introduce purely UK standards for home state activity which will mean that goods being imported from other third countries will have to comply with those standards. That includes the EU
Is there an argument for setting out a regime whereby the existing EU standards continue to apply for importers of goods into the UK. A hybrid standards regime based on mutual recognition
Can UK identity be enforced by implementing two levels of standards, one for home state consumption and the other complying with standards set by regional [ host state ] standards.
Remember that goods and services exported from the UK to a non EU country will have to comply with the host state standards. It will be up to that exporter to comply with no enforcement by the UK government
A similar situation will apply if the UK adopts its own standards regime
Should there be a determined effort to introduce mutual recognition through WTO arrangements that covers trade on a global basis
It should be recalled that standards harmonised by the EU and the introduction of the CE mark have applied for both home and host state activity in member states of the EU. It would be interesting to investigate whether the UK has a stricter regime of registration and implementation.
The reference to the Single Market as a trade barrier is NOT an issue. If a product is marketable then under WTO rules there should be no restrictions on the opportunity to market those goods and services however the exporter will have to comply with the standards set in the host state, and that may include tariffs.
There is a question whether the UK should set its own standards and on which importers from their home state would have to comply. This would create additional costs for importers and make their goods possibly less competitive especially when they have been exporting from the EU where the standards for the home state were equivalent to the host state.
Agreement could be negotiated for mutual recognition of standards where the Registration bodies followed mutually acceptable registration procedure. This would allow agreement of standards
This could be applied by a new independent European Standards audit committee or as mentioned below an independent EU Standards Institute quite autonomous from the EU institutions. Other non EU states could participate.
Consider a process whereby EU standards [ the CE mark ] can be implemented within the UK to allow free trade for exporters into the EU. This could be provided by mutual recognition as many consumers recognise this mark.
A strategic decision taken whether to introduce British Standards for UK business which can then be based on mutual recognition of those standards with the EU member states..
Determination of import and domestic standards could be a bargaining point in the BREXIT negotiations.
Nobody will want to enter into tariffs introducing a “Trade War”
9.4
UK Standards Were Dropped in favour of the EU Harmonisation
When this EU harmonisation process was introduced there were questions whether a UK manufacturer needed to comply with EU standards if they were only trading in their home state. At first the implied answer was “no”, the BSI standards would apply in the UK but it soon became apparent the UK legislation implemented all standards under the harmonised rules of the EU whether for export to a host state or intended for home state consumption.
Therefore since the introduction of the EU harmonisation of standards, and being a member state of the EU, there has been no issue with exporting goods to another member state if that was the market decision of a firm offering goods and services to a host state in the EU. Indeed this soon applied even for home state consumption.
9.5
Creation of an EU Standards Institute
By taking standards out of the EU political scene and instead introducing a European Standards Institute would allow standards to be harmonised in the wider European context on the basis of agreement. It would provide for a technical process external to the EU political process in which all EU states, the UK and other non EU states could participate
9.6
Explanation on how a Single Market works
The BREXIT Team needs to produce a statement on how the single market works as many UK citizens and particularly some MP’s and corporate leaders who supported REMAIN are still convinced that we cannot exit the single market, still export goods and services, still encourage the import of goods and services – on a competitive basis – and explicitly enter into a free trade agreement with the EU to the mutual benefit of both the UK and the EU [members states]. Also at the same time arrange free tariff trade agreements on a global scale to the advantage of the UK.
The Single Market is a technical process and not to be mistaken as a political process. For that reason the setting of standards and rules of engagement should be divorced from the activities of the European Commission and the European Parliament. [ Stressing however that we do not want to create another layer of unnecessary red tape]
Those EU member states who have a trade relationship with the UK importing goods to this host state that exceed what we export to them are not going to want to have to pay tariffs on those goods just to make a political gesture – or are they?.
If they are then the whole of the EU Treaty concept relative to competitiveness will be put into question.
For non EU countries the single market issue does not apply
The BREXIT Team should be clear in their strategy that free trade [ without any tariffs ] should be a prerequisite position to negotiate. A RED line if you like. In addition the UK will in future have unfettered access to negotiate trade agreements on a global basis
It is essential that as many people with experience of the EU are brought together to make sure that BREXIT is a success
10.
CONTRACT AND COMPANY LAW
Within the terms of a Sovereignty Bill it would be explicit to set out that the laws of the UK continue to follow the rules of “common law” that has existed in our country for hundreds of years. This is essential to identify our differences on all aspects of law.
To that end we have to identify that certain aspects of our legal system can be in conflict with the law used in the EU institutions and most member states.
A major difference in law making is where the UK operates under ” common law ” and the EU under the “Napoleonic Code”. [ with the exception of the Republic of Ireland where common law is exercised ]. There are differences in the way the law is created and interpreted. This should be explicitly understood.
Legal experts covering various disciplines will need to examine all aspects of current [EU legislation] as enacted into UK law to identify differences and ensure that the Sovereignty Bill provides no exceptions.
This could be undertaken by a clause to identify our common law regime
All aspects covered by the Chapters and Articles of the EU Treaties in which it has competence need to be examined
11.
FINANCIAL SERVICES
11.1
Single Market for Financial Services
As was mentioned earlier the 1985 White Paper establishing the Internal Market did not include financial services. Perhaps at that time a step to far for understanding the complexities of this industry. Since then legislation has been introduced at EU level, often prompted by UK instigation, to level the playing field on rules and regulations affecting these services.
The UK is the hub of financial services activity in the EU and will continue to be so after BREXIT.
The Pathway setting out the strategy for BREXIT should itemise all these financial services legislative Acts and identify those that create barriers and those that do not.
It is important that the UK continues to be a leading influence in future development of financial services and sets the rules of engagement not just in the EU but in the wider context of this global market. The objective for competitiveness is essential
We should be reminded that London does not simply trade in the pound sterling but the main currency traded is that of the US dollar. Let us not underestimate this fact in relation to its importance to global and regional activity.
As mentioned earlier some were, and still are, misguided in their belief that the “euro” will become the main reserve currency of the entire world. In that fact lies their determination for control over the standardisation of financial services rules.
Some think that other financial centres in other member states will become the dominant location when the UK exits the EU. Paris and Frankfurt have been mentioned.
11.2
Issues involved to support London and other UK Financial Centres
London and other UK financial centres have the expertise and reputation globally that cannot be filled by alternative locations in the EU
The Eurozone is a failed monetary project with crisis after crisis occurring in some member states. It does not easily demonstrate credibility, nor confidence.
The UK has a long standing experience, credibility and confidence to external investors that it can continue to guarantee and exercise its current function
The UK government is an implied guarantor especially through regulatory propriety
The international financial services language is English
The quality of life for financial services personnel makes London [ as the UK Hub ] an attractive place to live offering quality of life and personal and professional services on a regional basis.
London [ and other financial Centres in the UK ] offer much added value as the appropriate hub for financial services in this region of the world and to compete with other financial services centres throughout the world such as New York and Hong Kong. Nobody should underestimate this claim
The UK has a reputation second to none in its financial services professionalism and therefore the fear rhetoric, although not ignored, should be profoundly countered.
The rhetoric rests with the ability of a financial services entity to be able to operate across borders There is no reason why this should not continue. This EU legislation is working and applies to the application of most products being marketed in this sector. However by setting out London as a world economic centre for providing financial services means it will have to set the scene for legislation, codes of practice and general conduct of these services sectors on a global basis. Its reputation cannot be ignored. The EU Regulatory Authority is based in London.
The other centres of excellence, like New York and Hong Kong do not become stagnant as a result of being outside the EU. Just the opposite. Therefore this will apply to the UK.
There is an argument for standards and working practices to be set by the world financial trading centres on a harmonised basis. Those trading centres could be quite separate from interference by the EU Institutions or by any member state.
The BREXIT Team need to know where the individual professional disciplines in financial services want to place themselves during the process to exit the EU. To do this a well informed strategy has to be adopted involving those practicing in these disciplines. This in itself could give reassurance to the industry and produce ideas of competency for taking forward the BREXIT policy.
In effect the UK would have to guarantee a “Passport” for financial services that would allow [London] to set the rules of engagement
What is not needed is a well thought out plan to demonstrate that the UK financial services sector will not thrive outside the EU
The UK Offering Services on a World Wide Basis
As mentioned above the financial centres in the UK are not there just to service UK activity for our banking, insurance, stocks and shares and investment services. London trades every day in trillions of dollars and offers a world wide market. Its reputation is unquestioned.
Our monetary regime is secure, unlike the euro, and we are compared with other financial centres such as New York and Hong Kong. These latter two centres do not need to be in the EU single market.
The UK has to enter into an offensive mode to demonstrate that all our expertise in financial services [ banking , general insurance and under righting insurance, trading in stocks and shares etc. ] will be an ongoing activity in the UK. We should shout load and clear that we are best to offer these services both to the EU and on a world wide basis.
Outside the EU unfettered by EU legislation and guidelines the UK can maintain, even enhance our business capabilities.
The EU can act as the Hub for these services to be offered between Third countries and the EU
The UK together with other Financial Hubs could set the rules for trading in financial services whereas the EU can only set the rules covering EU activity. Perhaps one reason financial services were not included in the 1985 White Paper. We need to look forward.
A lot to gain
12.
FISCAL POLICY
12.1
Competence over Fiscal Policy
Fiscal policy is not an EU competence yet there is a constant barrage of comment to make it look as if it is. The EU institutions would like control over fiscal policy. Without that control the aspiration to move towards a super state will be restricted.
The UK by exiting the EU will maintain its absolute control of fiscal policy. Taxation of UK citizens, business and our national budget decisions on spending must be made as close to the citizen as possible so that accountability is exercised.
The UK must have the sole right to introduce its taxation and spending powers uninhibited by EU policy or even interference and monitoring. That includes issues like capital gains tax and corporation tax where the EU have tried to exercise their influence. These powers must be vested under the control of the UK parliament and eventually with the UK citizen.
For those reasons the BREXIT vote took place and must be under the sovereign rights of the UK. No compromises should be contemplated.
12.2
Value Added Tax
VAT is a competence of the EU who currently set a band between 15-25% with a lower rate for labour intensive activity of 5%. In addition the UK has an opt out on certain commodities to levy only 5% and on some at a zero rate, like food, printed material, press and children’s clothes. These are called derogations for the UK but can be reversed by EU legislation, perhaps even by executive powers of the EU Commission.
The EU takes a percentage as “own income” from all the VAT take.
In certain sectors VAT is set at zero for all member states in the EU, like financial services. This is called an exemption, this would require EU legislation.
Currently these general VAT rates [ within the band and those under the derogation rules ] can be adjusted by the UK, like all other member states within the 15-25% guidance, but before any change the UK government has to seek permission of the European Commission to implement that rate.
After the UK has exited the EU all VAT decisions will be under the control of the UK government and Parliament vesting ultimate sanction by the electorate of the UK.
This fact will need to be enshrined in any EU exit Legislation. The public should be informed of this fact.
12.3
Inward Investment
It is essential that policies are adopted to encourage inward investment to the UK
The UK must be free to take advantage of our unique position to attract inward investment unfettered by external policies and diktat.
Control of our monetary supply independently governed by the Bank of England
Interest rates set by the Bank of England
A monetary system with the pound sterling as its currency offering stability as against a flawed Euro currency that moves from one crisis to another
The climate in the future unfettered by EU legislation
The UK having Free Trade Agreements throughout the world to enable business covering all disciplines to both export and import good, services and capital to attract that investment. That the UK is open for innovative investment and economic growth. Could act as a conduit for trade.
That the UK supports investment to equip a regime of wealth for both investor and end supply consumer
The UK offering investment services on a world wide basis as explained in the Financial Services chapter above
13.
FOREIGN POLICY, SECURITY, INTELLIGENCE AND DEFENCE POLICY
13.1
Competence over Foreign, Security, Intelligence and Defence Policy
There should be no misunderstanding that Foreign Affairs, security and defence will any longer come under the authority of the Council / Commission High Representative. This Office can no longer speak on behalf of the UK. There will be certain voices that do not support that approach saying that the EU has a better chance of having influence. There is nothing to indicate that the EU has in any way been successful. The UK must exempt itself from any future involvement.
13.2
Defence Policy
European Army
No involvement in any official EU army, or HQ, should be part of these exit negotiations
Coordination principle on a bi-lateral inter governmental basis only should be exercised to participate in scheduled military exercises. Our commitment to NATO should be explicit
13.3
European External Action Service
Diplomatic Service
No involvement in furthering the establishment of the EEAS. We do not wish the EU High Representative speaking on behalf of the UK on foreign and security issues. Nor so called EU Ambassadors in host states believing that they speak on behalf of the UK, many have no diplomatic experience.
The UK should continue with its Embassy programme to service both UK citizens and business delegations in countries of the world.
13.4
Defence, Security and Intelligence
Security of the Realm is a priority for any government and no diminution of this objective should be exercised. Our Armed Forces should remain under the control of the UK government as should that of our nuclear deterrent capacity. We should be able to control all our security and military action on an individual basis and fund its activity.
We should continue our NATO obligations to come to the aid of others.
Our security and intelligence services should continue to offer a second to none approach to provide security for the country.
In addition arrangements should continue for dialogue and inter security and intelligence relationships with those operating in member states of the EU
14.
ENERGY POLICY
Attempts to create a single market in Energy have only had limited success. There are deep rooted differences in how individual member states wish to adopt their energy strategy. It is ignored when a member state finds its competitiveness or culture under threat
Energy is an economic, industrial, social and cultural tool and as such the aims of member states should be in mind. Sovereign member states are basically unwilling to cede all aspects of energy policy over to the Brussels legislative process and for that reason a “single energy market” although politically supported has seen little willingness to implement.
There are serious failures which have to be examined from a UK perspective. Should our energy policy in the UK be set by other member states who may have vested interests to fall in line with an overall EU policy to the detriment of UK interests. The following sources need to be examined.
Security of Supply and demand strategy for all sources of energy
Cultural issues have to be considered
EU demands that there should be a one size fit all to determine energy policy [and related environment policies] is not working to maintain a competitive approach and for that reason alone it will be welcomed for the UK government to adopt its own energy strategy.
The UK should adopt a world energy policy open and transparent involving a competitive edge in the context of the EU
The UK will cease to be involved in this potential energy single market and as such adopt an innovative and futuristic energy policy taking into account security of supply principles
15.
ENVIRONMENTAL, CLIMATE CHANGE AND EMISSIONS POLICY
Environmental, climate change and Emissions policy currently implemented by EU legislation will need to be carefully scrutinised to ensure that it does not in any sense conflict with the UK’s competitive approach. With that in mind it will be necessary to search through all EU policies on environmental, climate change and emission policy to ensure they are comparable with UK aims and objectives.
Already certain manufacturing industries have left the EU as their place of activity. Industries such as cement, aluminium, glass, steel and other sectors [ bricks and sanitary ware are often imported on a competitive edge from third countries] have left or considering leaving because their activity is more competitive outside the EU member states. The policies specifically adopted for the environment, climate change and emissions have all contributed to this exodus.
Other industries have found that their competitiveness is at risk but cannot economically leave the UK and eventually are forced into liquidation resulting in those markets moving to imported goods and services
Many laws have been concluded either by individual legislative proposals or through International agreements over which the EU Commission has competence. These must all be examined to consider whether they should be rescinded.
All environmental, climate change and emission policy could be reviewed and in rescinding the EU Treaties the government Pathway Strategy would set out which policies should remain in operation.
16.
SOCIAL POLICY
The above mentioned Pathway Strategy [ over a period of time ] would set out all the social policies currently set by the EU. It should be stressed that the exit negotiations should not be seeking agreement to uphold or dismiss these legislative rules. They are transposed into UK law and that will continue. The government of the day will have the right following exit from the EU to amend, rescind and at the same time there ” may ” be reasons to continue these policies. These decisions will be made in the UK.
There may be reasons to retain but adapt them. This review will be undertaken over a period of time in the UK
The opportunity for consultation should be taken based on the fact that many of the social and employment EU legislation has been agreed by the UK meeting in the Council of Ministers and supported by industry, professionals, managers and employees and implemented under UK statute law.
Under the control of the UK government, in the future, a decision can be taken whether to amend, repeal or they would remain incorporated into UK legislation
17.
COMMON AGRICULTURAL POLICY
Exit from the EU will involve no further participation in the CAP
All experts take the view that it’s sell by date has been over reached.
Within the terms of a Trade Agreement with the EU negotiations will have to be conducted that allows future trade, on a tariff free basis, between the UK and member states of the EU. This will allow future imports and exports to continue.
Standards set out for agricultural, dairy products and lives stock are already in place under the terms of the single market however the UK has to decide:-
whether the UK should adopt its own standards to which member states of the EU will have to comply when importing to the UK
That these new standards will apply for the import of agricultural, dairy and live stock products coming from third countries where we have negotiated tariff free trade agreements. This has to comply with WTO rules on competitiveness.
Whether the UK will continue to allow EU standards to continue [ perhaps for a period of time X years ] so that EU member states can continue to import their products into the UK. After this period of time an agreement be reached to accept a mutual agreement for standards
Subsidies currently agreed in the EU that UK farmers receive to be guaranteed by the government for at least a set period of time
18.
COMMON FISHERIES POLICY
The CPF is also a policy that some experts have said is out of date and will cease for the UK.
The UK will have to decide whether to claim back that the territorial waters are only for UK fishing fleets. This will need negotiations with the EU under maritime law
That the quota of fishing in these waters is acceptable under current EU rules or whether the UK wishes to set new quota and fishing rules in all our territorial waters
Subsidies under EU rules to continue through agreement between the industry and the UK government
19.
EDUCATIONAL LIAISON
There are schemes which UK students can participate which are run through agencies of the EU. These should continue and agreed funding negotiated
20.
SCIENCE AND RESEARCH
The UK has considerable investment in both science and research and this cooperation should continue. This is to the advantage of those participating in the EU as well from the UK. Our expertise is recognised world wide.
The ability to attract both funding sponsorship and professionals should not be impeded. Currently this comes from different corners of the world and that is not hampered by the single market.
Arrangements should exist under freedom of movement of workers [ with whatever conditions apply ] to allow professionals to move from one research centre to another in both the UK and the EU
Negotiations should take place to explicitly opt into these schemes involving universities, NHS facilities and private concerns
Universities and research centres [ including the NHS ] should continue to cooperate with one another even if their funding comes from separate sources
21.
FUTURE RELATIONSHIP WITH THE EUROPEAN UNION
Following Exit from the European Union Monitoring future EU legislation
Our exit from the EU does not mean cutting ourselves off from continental Europe just the reverse. The UK government will need to maintain strong links with all the EU member states and with the institutions of the EU. However MEP’s and other representations scrutinising EU proposals will no longer have any influence nor will the scrutiny that takes place in the Council of Ministers have any involvement by representatives of the UK government.
The UK will need to have a presence in Brussels [ and Strasbourg ] in the same way as other non EU countries do. An Ambassador and a highly motivated personnel based in Brussels will need to keep abreast of all EU activity.
WILFRED ASPINALL
September 2016
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Wilfred Aspinall
BACKGROUND INFORMATION
Over a period in Brussels from 1986 – 2014
Former Member of European Economic and Social Committee.
EU Strategy Adviser. Providing a Service involving various organisations, [ NatWest, Abbey National, the UK Water Companies Association, the Water Consumers Council, City Solicitors Eversheds, and Schroders ]. This involved monitoring legislation affecting these concerns and offering procedural advice. This was conducted from an office in Brussels incorporating staff members
Established the Forum in the European Parliament for the Construction Industry [ organised for MEP’s ]. [ This body dealing with the revision of construction products standards as the legislation went through the European Parliament ]
Previously on the Westminster scene in the period 1975 – 1994
Represented bank staff in NatWest as Assistant General Secretary to the Staff Association
Represented 93.000 bank staff across the banking sector as General Secretary to the Confederation of Bank Staff Associations
Represented 1.5m managers and professionals in organisations in the UK that were registered as trade unions but not a part of the TUC. This involved making representations to government Ministers and MP’s and by monitoring government legislation in the HoC and the EU
EU STRATEGY 