Diary Day 303: a wake-up call on the “awesome” realities of food Brexit; David “No Notes” Davis fails to impress in Brussels; two Select Committee chairs call for publication of Government’s assurances to Toyota

My #Remainer’s Diary Day 303: the day began with media reports about a new briefing paper called “A Food Brexit: time to get real” published by the Science Policy Research Unit at Sussex University, and downloadable for free from its website. The SPRU said in a press release that this is the first major review of the ways leaving the EU will have an impact on UK food and farming.The 88-page paper, authored by three professors on food policy: Erik Millstone (University of Sussex), Tim Lang (City, University of London) and Terry Marsden (Cardiff University). Experts.

This is how the trio conclude their summary: “The realities of a Food Brexit are awesome. The British public has not been informed about its implications. Many people who voted for Brexit will be hardest hit by a ‘hard’ Brexit – people on low incomes, the elderly, farmers, people in the North of England. This paper urges politicians, civil society and academics who understand the food system to speak up and speak out. Brexit is a political construct. It should not be a recipe for food insecurity.” 
The trio conclude that leaving the European Union poses serious risks to consumer interests, public health, businesses and workers in the food sector, because there is no Government vision for UK food or agriculture. There will be a vacuum where previously there were the policies and organisations of the EU. Prices, quality, supply and the environment will all be adversely affected by Brexit.

The report highlights 16 key issues that must be urgently addressed by the Government. They include

* Filling the policy void on UK food

* Clarification on food crossing borders, particularly the Irish land border

* Replacing the large body of EU law relating to food

* Food security – the sector already lacks resilience

* Replacing at least 30 EU-based scientific and regulatory bodies that keep our food fit to eat

* Replacing the CAP and CFP which keep UK farmers and fishermen going

* Migrant labour – a third of the UK’s food sector depends on it

* Sourcing – where UK food will come from in future, as we are a long way from self sufficiency

* Tariffs – they could raise imported food prices by 22%

* Prices rises and volatility hitting the poorest the hardest

* Quality standards may well decline abruptly.

And more. The report examines available industry and government data, policies and literature as well as interviews with “senior figures in the food chain” on production, farming, employment, quality, safety standards and the environment among other issues.

It warns that a “Food Brexit” is of unprecedented importance and is happening at a time when the UK food system is already vulnerable, with self-sufficiency also in decline.

The three professors say their report is a wake-up call to the public and Government.

Professor Millstone said: “In the EU, UK consumers and public health have benefited from EU-wide safety standards, without which there will be a risk of the UK having less safe and nutritious products…

“Since the Brexit referendum UK food and agricultural policy has been in chaos. Not only have ministers yet to develop a strategy or make decisions, they have not even grasped the issues about which urgent decisions are needed. Unless things change rapidly, and in line with our recommendations, the UK will not only have policy chaos, the food system itself will become increasingly chaotic.”

Professor Marsden said:

“The UK’s food system already faces unprecedented challenges on environment and jobs – we see real dangers that these are already being dislocated by Brexit uncertainties.”

Professor Lang said: “UK food security and sustainability are now at stake. A food system which has an estimated three to five days of stocks cannot just walk away from the EU, which provides us with 31 per cent of our food…

“At least the UK entered World War Two with emergency plans. No-one has warned the public that a Food Brexit carries real risks of disruption to sources, prices and quality…

“Food is the biggest slice of EU-related regulations and laws, yet so far the Government has only sketchily flagged a new Agriculture Act and Fisheries Act in the Queen’s Speech…

“The Government has provided next to no details on agriculture and fisheries, and there has been total silence on the rest of the food chain where most employment, value adding and consumer choice are made. With the Brexit deadline in 20 months, this is a serious policy failure on an unprecedented scale.”

Food prices in Britain are already rising in response to the collapse in the pound last year. Food producer output price inflation rose by 5.6% in May. Pantheon Economics says it is likely that food CPI inflation “will continue to rise over the coming months, reaching 5% in Q4.”

The SPRU report follows a similar warning from Justin King, the former CEO of Sainsbury’s, recently that Brexit will mean higher prices, less choice and poorer quality food and that consumers are “completely in the dark” about this.

In Brussels, David Davis, the UK’s poorly-regarded Brexit minister, and his aides sat down opposite Michel Barnier and his aides to start negotiations. Pictures immediately flashed round the social media world as people digested with incredulity that Barnier and Team came well prepared with thick piles of briefing papers but Davis’s team had no papers at all in front of them. A photograph of Davis looking up at the camera with a cheeky grin made the impression worse.

The first day’s talks did not last long.

In London two Parliamentary Select Committee chairs called for the Government’s assurances to Toyota to be published.

Nicky Morgan, new Treasury Select Committee chair, said in an emailed statement: “To provide clarity to the public, as the assurances may cost the taxpayer money, and to other businesses, who are craving certainty to plan for Brexit, the letters should be published immediately.”

Rachel Reeves, new chair of the Select Committee on Business, Energy and Industrial Strategy, said it was unacceptable that the government had refused to disclose its private reassurances to Toyota. “It is vital that the government is not seen to be cutting sweetheart deals or granting special favours that could undermine our negotiating position.”

It’s painful, this saga of stupidity – more, of duplicity.

Diary Day 302: former head of Civil Service says listen and don’t over-promise. Polemic editorial dubs Tory hard Brexiters “Lords of misrule”. Cabinet infighting is confirmed.

My #Remainer’s Diary Day 302: Gus O’Donnell, former head of the UK civil service and now a peer, wrote ostensibly on how the civil service should respond to the challenges ahead from the “massive venture” that is Brexit. But actually he was addressing the Government. 

“First, you bring in more resources…” by which he meant staff. He wrote that the civil service is “gearing up” but will only be effective if there is “clear political leadership from above”.

“Second, you clear the decks”: he approved of the absence of much other manifesto content from the Queen’s speech. 

“Third, you minimise the number of votes”, treating legislation as the last resort.

And most importantly “start being honest about the complexity of the challenge”. 

He called for a “long transition phase”, and for the National Audit Office to concentrate on “the implementation issues”, meaning what was needed for “practical solutions” in the areas of immigration, customs and trade. He warned politicians to “listen to officials and not over-promise on timings”. 

This is written from the viewpoint of an administrator tasked with carrying out instructions, not questioning them. But he also called for politicians to be honest and listen. 

The Observer editorial was a polemic against the “Tory hard Brexiters” whom it dubbed the “lords of misrule” who were “playing party political games with our futures”, deaf, blind and stumbling. It referred to reports and warnings from official bodies and listed adverse impacts already on universities, the NHS, the City, wages and skills. 

“Still, those responsible for these alternative facts of a year ago continue to treat the British public, and the European body politic, as fools.”

It contrasted their “arrogance (Davis), weakness (May), buffoonery (Johnson) and irrelevance (Fox)” with the EU team “led by the resolute and impressive Michel Barnier…” whose “unflappable, intensely well-briefed, logical approach presents an uncomfortable contrast…” 

Acknowledging that political uncertainty was also a factor causing worry over Britain’s future, it said that hard Brexiters must “take the lion’s share of blame” for that, too, by going to the country seeking a mandate for May’s agenda which they failed to get. 

In its view “the broader, consensual approach… is the only sensible way to go.” 

Brexit “has turned into a self-examination and learning process…” for Britain’s electorate and establishment. 

“What is crystal clear is… there is no workable plan, no realistic, realisable vision and no way to deliver on the false dawns and fantasies conjured by the hard Brexiters.” 

They needed to understand that the country would not tolerate its interests being jeopardised by “absurdly unrealistic negotiating positions”, party infighting and “blind incompetence.” 

The unrealistic positions and infighting were substantiated on BBC morning TV, when Chancellor of the Exchequer Philip Hammond responded to questioning from Andrew Marr about adverse headlines originating from leaks of things said in Cabinet. He said: “If you want my opinion, some of the noise is generated by people who are not happy with the agenda that I have, over the last few weeks, tried to advance, of ensuring that we achieve a Brexit which is focused on protecting our economy, protecting our jobs and making sure that we can have continued rising living standards in the future.” 

But hang on. Didn’t Mr Hammond, too, say we are to leave the Single Market and Customs Union? He did, on the BBC Marr Show, 18th June. So he has already ruled out the very things Britain needs in order to ensure the things he aims for. He must be deluded too. 

And remember what they said before. “But, to repeat, absolutely nobody is talking about threatening our place in the Single Market” – Brexit cheerleader and Vote Leave campaigner Dan Hannan MEP. 

It’s an omnishambles. 

Diary Day 301: Merkel says something changed. What Tony Blair said. Toyota.

My #Remainer’s Diary Day 301: German Chancellor Angela Merkel, addressing voters at a campaign rally in Zingst on the Baltic coast, said: “For many people, including myself, something changed when we saw the Britons want to leave, when we were worried about the outcome of the elections in France and the Netherlands.” 

She said the EU was far from perfect and that Brussels sometimes was too bureaucratic, but continued: “But we have realized in the past few months that Europe is more than just bureaucracy and economic regulation, that Europe and living together in the European Union have something to do with war and peace, that the decades of peace after World War Two would have been completely unthinkable without the European Union.” 

She also said that many people had taken the EU’s freedoms of speech, religion and travel for granted. “You don’t have all this in many parts of the world. And that’s why it is worth fighting for this Europe. 

“That’s why one of our election placards is saying: If Europe is stronger, then Germany will be stronger. This is directly related.”

Mrs Merkel is absolutely right about taking EU freedoms for granted. For more and more EU citizens it is all they have ever known. I am fond of saying that the state of Europe is abnormal – abnormally peaceful and prosperous.

This forgetting and taking for granted leads to entropy. Organisations are hard to keep going. They descend into randomness and disorder as people move on and are replaced by ones who forget or never knew what the organisation was originally for. An organisation’s purposes have to be continually reaffirmed, and it takes energy. 

Former Prime Minister Tony Blair said in an interview on TV: “I think it’s possible now that Brexit doesn’t happen. I think it’s absolutely necessary that it doesn’t happen because every day is bringing us fresh evidence that it’s doing us damage economically, certainly doing us damage politically. I think public opinion is moving on it. Look, this time last year we were the fastest growing economy in the G7 and now we’re the slowest, our savings ratio is at the lowest for 50 years, the investment community internationally has gone really negative on us, our currency’s down 10, 12%, investment in the motor car industry for example’s down 30%, living standards are stagnating. This is causing us real damage. That’s beyond doubt.” 

I was intrigued to see a Reuters exclusive that two sources had told it that the UK Government had sent Toyota a letter similar to one sent to Nissan last year, to encourage Toyota to go ahead with investing £240m in its car assembly plant at Burnaston, in Derbyshire. One source said: “They received a similar set of warm words as Nissan on electric vehicles, commitment to further training and to ensure the competitiveness of the UK automotive industry.” 

The existence of the letter was known, but not its content. The Government has resisted Reuters’ freedom of information (FOI) request to see it on grounds that the information was “highly commercially sensitive” and “would be likely to cause harm to the company’s commercial interests if disclosed.” 

Reuters’ FOI request did, on appeal, get disclosure of email correspondence written on 9th September after a meeting between Greg Clark, the business minister, and Johan van Zyl, president and CEO of Toyota’s European arm. The correspondence shows that the anonymised official wanted to know more about the forthcoming decision, and whether there were “any ways in which HMG could help”.

It was announced in March that the Government promised to back the project by spending £21.3m on training, research and innovation. 

At the time of the decision Dr van Zyl said: “Continued tariff- and barrier-free market access between the UK and Europe that is predictable and uncomplicated will be vital for future success.” Toyota must be privately very annoyed, to put it mildly, at the Maybot’s obdurate determination to drag the UK out of the Single Market and Customs Union.

My #Remainer’s Diary Day 300: constitutional crisis is coming

My #Remainer’s Diary Day 300: I mull over a joint statement from the First Ministers of Wales and Scotland, Carwyn Jones and Nicola Sturgeon about the repeal bill. It says: “We have… put forward constructive proposals about how we can deliver an outcome which will protect the interests of all the nations in the UK, safeguard our economies and respect devolution. 
“Regrettably, the bill does not do this. Instead, it is a naked power grab, an attack on the founding principles of devolution and could destabilise our economies.” 
So a constitutional crisis that was latent ever since 23rd June 2016 is due to be thrashed out in Westminster debates. 
A spokeswoman for the Maybot said she was not aware of a contingency plan for what might happen if Scotland or Wales refused legislative consent. 
That is apart from the rows there will be about the bill’s Henry VIII clause powers and putting human rights in doubt. 
As the clock ticks, businesses act to protect themselves. 
EasyJet announced that it is establishing a new airline in Austria, with HQ in Vienna, and registering 110 aircraft to fly under the new licence and air operator’s certificate. This accreditation and re-registration process will apparently cost the airline £10m. 
A spokeswoman for the Maybot said the decision was a commercial one for easyJet. 
I don’t think that is true. If the Government’s course of action results in an airline’s existing accreditation being rendered useless for the main part of its business, what choice does the airline have? 
Barclays Bank said in a statement that it is talking to regulators in Dublin about extending the range of activities of its existing licensed banking subsidiary. 

My Remainer’s Diary Day 299

For 298 days I have kept my #Remainer’s Diary on Facebook. Two nights ago my FB account became inaccessible without explanation. So I’m back on Blogger. [Update: this post is migrated from Blogger to WordPress.]
Diary Day 299: the UK’s Office of Budget Responsibility published its first Fiscal Risks Report, a 312-page tome, in accordance with a requirement introduced by Parliament in October 2015 that the OBR must produce a fiscal risks report at least once every two years. It is freely downloadable by anyone.
Fiscal is a fancy word for pertaining to government finances. Derivation: 16th century, from Latin fiscālis concerning the state treasury, from fiscus public money, the public purse. It is about government income and spending.
The Fiscal Risks Report refers to a wide range of “fiscal pressures”, and says that the risks posed by Brexit “do not supplant the possible shocks and likely pressures that we have already discussed, but they could affect the likelihood and impact of many of them.”
It states that implications of agreements reached with the EU and other trading partners for the long-term growth of the UK economy are more important than the Brexit ‘divorce bill’. The OBR calls the latter a “one-off hit” that “would not pose a big threat to fiscal sustainability”.
It refers to a number of Brexit-related uncertainties: – the effect on exports and imports; on productivity; on business investment; on migration; on specific sectors such as the financial sector (affected by rule changes) and the health and social care sectors (affected by changes in net migration). The Brexit process and “post-Brexit policy settings” that affect prospects for potential output growth via productivity or population growth “could have lasting effects on the public finances.”
It states: “If GDP and receipts grew just 0.1 percentage points more slowly than projected over the next 50 years, but spending growth was unchanged, the debt-to-GDP would end up around 50 percentage points higher.”
The Report states later on that 0.1% less productivity growth each year over 50 years would leave the economy 4.8% smaller than would otherwise be the case, equivalent to £97bn in today’s terms, and assuming a tax-to-GDP ratio of 37%, tax receipts £36bn lower in today’s terms.
The Report states: “Brexit is likely to pose a number of public spending challenges, some of which could represent risks to DELs” [departmental expenditure limits]. Such public spending challenges include: – the ‘divorce bill’ or financial settlement as part of the Brexit negotiations; matching funding to groups that currently get EU payments, such as farmers and researchers; setting up and running UK-specific regulators in areas where the UK leaves EU equivalents; preparing and carrying out Brexit negotiations and establishing new bilateral free-trade agreements with other countries; and support or compensation for specific companies or sectors adversely affected by the UK leaving the single market and customs union.
“The Government will also have to decide (and negotiate) whether to continue to make contributions to any EU schemes that it wishes to retain access to…”
The Report says that with the budget deficit at 2% to 3% of GDP (only just back to its pre-financial crisis level), and with net debt above 85% of GDP the fiscal position is more vulnerable to shocks now than it was in 2007. That includes being more sensitive to interest rate rises and inflation.
“The Government is still to some extent cushioned against interest rate movements by the long average maturity of outstanding gilts. But once the APF’s holdings are taken into account – which have swapped around a third of all fixed-coupon conventional gilts for floating rate central bank reserves – the true vulnerability to short-term interest rate movements is much greater. And with index-linked gilts now amounting to nearly 20 per cent of GDP, vulnerability to inflation risk has risen too.”
Opaque stuff.
The APF is the Bank of England Asset Purchase Facility Fund Limited, a subsidiary of the Bank of England set up in 2009 to implement the Government’s “quantitative easing” policy. This new policy has been continued ever since and was stepped up last August with measures the Bank of England put in place after the shock referendum result. The APF’s annual report and accounts were published last week, by the way, and summarise it’s history and what it does.
The sums involved are eye-watering. The BoE website says that as at 12th July the APF held £434.961bn in gilt purchases, £9.991bn in Corporate Bond purchases and £75.489bn in loans made through the Term Funding Scheme.
All transactions have been financed by the creation of central bank reserves. These reserves are electronic money.
I suppose the OBR means the APF company has borrowed from the BoE at floating interest rates in order to buy fixed interest securities. The APF is protected by an indemnity from the Treasury: any financial losses as a result of the APF’s activities are borne by the Treasury and any gains are owed to the Treasury. So if the BoE raises interest rates the APF’s liabilities for interest go up. Hence the Government’s vulnerability.
In Brussels Mr Corbyn had lunch with Mr Barnier and gave him a football shirt.
In Westminster the Government published a bill intended to disentangle the UK from 45 years of EEC/EU law. It is called a repeal bill but is actually a continuity and power grab bill. More, much more, on that anon.
A British hereditary peer was sentenced to a 12-week prison term for racially aggravated threats to Gina Miller, the litigant who defeated the Government in the Supreme Court over Parliamentary sovereignty.

ELDR news from Palermo

Here is my report back to Liberal Democrats who directly elected me (thank you!) to the party’s delegation to the European Liberal, Democratic and Reform Party (ELDR).
The second Council meeting of 2011 (there are two annually) and the annual Congress took place in Palermo, Sicily on 23-25 November at the invitation of the Italia dei Valori (Italy of Principles) Party.
There were resolutions and emergency resolutions proposed by member parties, too many to summarise here, of which the most significant was, I think, one from the UK Liberal Democrats on the prospect of war with Iran. The gist is that it expresses concern at military rhetoric, top-level consultations between military and political leaders and the stationing of military assets off the Iranian coast pointing to the possibility of pre-emptive attacks being launched by Israel and the USA against Iran., and it calls for steps to be taken in Europe to dissuade them. When the US military are still engaged in both Iraq and Afghanistan one might think that they would not contemplate such a thing, but the evidence is worrying. After the Iraq “dodgy dossier” saga we do not need another war based on dubious grounds.
The main theme resolution, emanating from the ELDR leadership, was on the EU budget. As amended and adopted, it is a long resolution but the gist is, I think, that it welcomes the European Commission’s proposals to reduce the Common Agricultural Policy (CAP) support to 36.2% of the total budget for a new 2014-2020 Multiannual Financial Framework (MFF) and affirms that on the expenditure side it must continue to move away from price support and export subsidies for agricultural produce. It calls for inclusion of funding for alternative areas of expenditure with the common feature of being areas where the Union can deliver more than individual countries acting alone (“European added value”). Climate change, renewable energy, water management, biodiversity and innovation are such areas. Research and development co-operation, avoiding wasteful duplication of effort, is a specific example. On the income side, the theme resolution as finally adopted contains a passage welcoming debate on reform of EU revenues but specifically rejects the European Commission’s proposals for new own resources to include a financial transaction tax or an EU-level VAT. Delegates were obviously worried that this might increase the overall tax burden on member states although it would not necessarily do so. Against the background of financial crisis as the world struggles to cope with the near-collapse of the banks by austerity measures meaning hardship for entire populations, Congress was in no mood to approve an increase in taxation nor in the EU budget overall. In failing to include wording from the UK Liberal Democrats referring to a possible EU-level tax on carbon, Congress in my view threw out the baby with the bath water, but I trust that we will bring this back to the next Congress.
The Congress elected British MEP Sir Graham Watson unopposed as its new President. In a speech too meaty to summarise adequately here, Sir Graham made it known that his Presidency would be energetic and ambitious for liberalism in Europe. He expressed a vision of our troubled times in which crisis is opportunity. His analysis was that socialism is in terminal decline and old political élites are reeling from electoral punishment for having contributed to the financial crisis that is bringing hardships to the people, while climate change poses an existential threat. He argued that liberal principles and values had the solutions and retreat into nationalism did not. He announced his intention to welcome more Democratic and Reform parties into our grouping. His aim was so that the ALDE bloc of MEPs in the European Parliament grows while the EPP and Socialist blocs wane. He also intends to press for changes that increase democratic legitimacy including the direct election of MEPs by one European election rather than 27 national elections.
ELDR’s business between congresses is managed by a Bureau, and Congress elected to it five Vice-Presidents, four in normal course and one to fill the seat vacated by Sir Graham Watson on becoming President. I have to mention one of these Vice-Presidents: Leoluca Orlando, of the Italia Dei Valori party. He, while mayor of Palermo from 1985 to 1990 and 1993 to 2000, courageously took steps to decouple public procurement from Mafia-owned businesses by removing their companies from the list of those allowed to tender for new contracts.
At this momentous time for Italians, emerging from the long bad dream of Berlusconi’s premiership, Italy of Principles Party leader Antonio di Pietro MP told us that the Berlusconi era had left deep scars. It was the end of Berlusconi but not of Berlusconism: a nexus of privilege, selfishness and giving precedence to local and family interests. He spoke of the need for cultural restoration of legality, public ethics and civic consciousness, which are the basis of every market economy. He told us that Italy of Principles supported the new Monti government of technocrats. This involved some sacrifice in that, had the scheduled elections taken place, the party would have done well.
Consistently with the theme of European added value, Sir Graham Watson spoke of some big-picture inspiring projects for Europe ELDR activists to campaign for. One example he mentioned is the European electricity supergrid, a means of connecting up and distributing Europe’s renewable energy long-distance for use throughout the region. These ideas were explored at a fringe meeting on the renewables revolution and an electricity supergrid, at which the management of a “smart” grid, fed by sources of renewable energy including solar, wind, hydro, biomass and geothermal energy, was discussed. He acknowledges the science that points to dangerous climate chaos from burning fossil fuels, and he has taken up the cause of the electricity supergrid as part of a solution to that. He also sees it as an answer to the security threat posed by dependency on fossil fuels from outside countries, evidenced by the behaviour of governments who have in recent winters not hesitated to turn off the supply pipe to Europe when it suited them, leaving Europeans shivering without fuel. In addition to these factors there is the relentless rise in the price of oil and in Europe’s energy bill, because world supply is finite while demand is growing. For these reasons even climate change sceptics can scarcely deny that it is in Europe’s interests to invest in the supergrid. And the beauty of the supergrid proposal is that it deals with objections (mainly aimed at wind energy) that renewable energy sources that are intermittent are no good. Even if the wind is not blowing in your area, wind energy from elsewhere in Europe can be brought to you via the supergrid. As for solar energy, the sun doesn’t shine at night, but its heat can be stored for use at night. The fringe meeting speakers explained that energy storage is in practice not difficult, provided that legislative changes permit electricity grid companies to build and be owners of storage facilities (which currently is not allowed). As people across the EU begin to see the Internet-like potential for a diversity of sources to feed energy into the grid, I believe this proposal will be a winner.
The Council accepted a membership application from the Democratic Alliance Party of Greece, a new party led by Dora Bakoyannis who was expelled from the Nia Demokratia party last year for voting with the Socialist-led government in favour of the EU-IMF backed financial stability loan. If the crisis bringing home to Greeks the impossibility of continuing previous high-spending policies is an opportunity for realignment of political forces away from alternating Socialist and Conservative government, it could just be that this new party emerges as a significant player in the liberal centre.
ELDR now offers associate membership applications to individuals for 25 euros per annum. If you are interested in joining, visit http://www.eldr.eu/associate
The next Council will be in May 2012. The next Congress will be in Dublin in November 2012, and its theme will be the transition from fossil fuels to renewable energy. It will be based on an excellent joint paper called “A Liberal Roadmap for Energy Transition” produced with ELDR backing by the UK Liberal Democrats, the Swedish Centerpartiet and the Netherlands D66 party. ELDR is doing good work.
And Palermo is a great place to visit!