DD: “There Will Be No Hard Border… It’s That Simple”

David Davis in his Brexit speech in Munich says:

“The border issue is eminently solvable if the political will is there. I do question, therefore, why it has become so intractable. It seems to me this issue has become the proxy for the negotiations as a whole. Why? Perhaps as a way to keep us tied to the single market and the customs union; perhaps to punish us for leaving; or perhaps it has more to do with internal Irish politics.

In any case, the heads of both the British and Irish customs authorities have told us that a hard border is not necessary. Jean-Claude Juncker, Leo Varadkar and Theresa May have all said that they would never enforce one.

There will be no hard border between the Republic of Ireland and Northern Ireland. It’s that simple.”

He’s not wrong…

Full Text of ERG’s Proposal for Northern Ireland Border

Guido brings you the ERG’s comprehensive analysis of the border between Northern Ireland and the Republic of Ireland. At the table presenting the analysis are an ex-First Minister, 2 former Northern Ireland Secretaries and the former Brexit Secretary. ERG trying to show they mean business with their border question fix. Read it in full here:

Brexiteers in the ERG have published their eagerly awaited alternative solution to the vexed issue of the Irish border, after the full house of Boris Johnson, David Davis and Steve Baker turned out to the World Trade Deal launch by Economists For Free Trade yesterday. This is starting to look like a coordinated push…

Brexiteers are emphasising that this proposal is based on existing EU procedures and precedents and claim that it directly addresses the EU’s concerns over the border, rather than simply reheating old ideas.

The proposals include a Common Biosecurity Zone on the island of Ireland with the UK and EU agreeing to maintain equivalence on agricultural regulations to obviate the need for food and animal health (SPS) checks on the border, which account for a major proportion of the physical inspections currently required on non-EU imports. Regulatory compliance on non-agricultural goods would be enforced by pro-active trading standards inspections at the point of sale, assisted by data-sharing and co-operation between authorities on both sides of the border.

Larger companies would use existing technologies including trusted trader schemes to declare goods crossing the border, while for small companies, goods declarations would be incorporated into existing systems for VAT returns, which all companies trading across the border already have to complete. Origin declarations would be simplified through the existing Registered Exporter (REX) scheme.

The Irish border issue has been cited as one of the main justifications for the Chequers plan. Does the Brexiteers’ alternative give them enough ammunition to chuck it?

Raab’s Moses Moment

Dom Raab: “We will do nothing that would draw a customs border down the Red Sea. Irish Sea. Irish Sea.”

Sammy Wilson: “You can draw as many borders down the Red Sea as you want…”

Give him a chance, he’s only been in the job a few days…

Ireland Expects RAF Help in Event of Terrorist Hijack

The sabre-rattling by Irish PM Leo Varadkar that in the event of a no deal Brexit Ireland might block off UK access to Irish airspace is pathetic. Treaties dating back to the beginning of the International Air Services Transit Agreement signed as part of the Chicago Convention in 1944 guarantee the freedom of the skies. This is signed by 133 countries, including the UK and all EU member states. Ireland has been a signatory since 1957.

There is another agreement permitting British aircraft to fly over Ireland which the Irish government chooses not to publicise. The Irish Department of Defence and Department of Foreign Affairs with the Irish Aviation Authority (IAA) have entered into a bilateral agreement with their British counterparts: the RAF, the Civil Aviation Authority, the Ministry of Defence, and the Foreign and Commonwealth Office that in the event of a terrorist hijacking, RAF jets would be scrambled to defend Ireland. Neutral Ireland has no supersonic military aircraft capability.

Presumably this bilateral  agreement permitting the RAF to conduct armed operations in Irish-controlled airspace in the event of a real-time or envisaged threat of a terrorist-related attack over the skies of Ireland, will not be torn up after Brexit. The Irish are Britain’s kith and kin, it is inconceivable that Brexit Britain would not come to their aid in the event of an Aer Lingus transatlantic flight being hijacked mid-Atlantic. Varadkar is bluffing for domestic consumption.

JoCo Quizzes Mogg on His Catholic Beliefs

Extraordinary line of questioning to Jacob Rees-Mogg from JoCo on the Daily Politics, repeatedly questioning if an abiding Catholic can take high office in politics. We had the Catholic emancipation in 1829…

Irish Border Camera Problem Solved

A lot of Remainers are agitating around the issue of cameras on the Irish border. Karen Bradley, one of the Remainers on the Brexit sub-committee, has insisted this morning that there will be no new Automatic Number Plate Recognition cameras. Remainers don’t seem to realise that there already are high definition cameras at the Irish border with a high speed data link to police computers, which can easily be retasked to connect with customs and excise computers. The video above was taken at the border on the A1 motorway, the main route between Dublin and Belfast along which the vast majority of intra-Ireland trade happens. Problem solved!

Irish Foreign Minister Claims “No Infrastructure” Means No Technological Solution

Simon Coveney, the Irish Tánaiste and Minister of Foreign Affairs & Trade, knows there are no votes in an easy Brexit for an Irish politician. He reiterated to Nick Robinson that the British had signed up last year to “no border infrastructure on the island of Ireland and no related checks or controls. That means we are not talking about cameras and scanning systems and drones here.” He wants a purely political solution, e.g. regulatory alignment.

Polly Toynbee: Sinn Fein Can Save Britain

Hot take of the day: Polly wants Sinn Fein MPs to take the oath of allegiance and block Brexit…

Tweet that Sank the No Border Deal… For Now

Above is the tweet that scuppered an historic “no border” deal with Ireland on Monday. Tony Connelly is the widely respected RTE journalist covering Brexit – British journalists have recently discovered his output and it now often underlies a lot of their “reports from Dublin”. At 11:16 he tweeted that he had seen a draft text promising ‘no regulatory divergence’. This spooked the DUP, who had been promised a form of words that would satisfy them that as Downing Street had reiterated that morning: “The UK is leaving the EU as a whole. The territorial and economic integrity of the UK will be protected.”

This tweet ricocheted around the media, Remain-leaning journalists went hyperbolic, some claiming that this meant Northern Ireland was staying behind in the single market, others claiming this meant the whole of the UK was not really leaving the EU’s regulatory regime. With broadcasters starved of developments, because May and Juncker were lunching behind closed doors, they continued to pile up punditry of this kind. All this was despite RTE’s Tony Connelly having tweeted a corrective only four minutes after the first tweet that the phrase, as anathema to Brexiteers as it is to the DUP, had been replaced by “continued regulatory alignment”.

Meanwhile Irish Taoiseach Leo Varadkar, waiting impatiently before the Dublin media at a pre-scheduled press conference, unwisely claimed that the wording was basically the same either way. It isn’t. The DUP – never the most trusting when Westminster is dealing with Dublin – unsurprisingly pulled the plug. Who failed to keep the DUP in the loop…

Tory MEP Swears Loyalty to Foreign Power

As has been widely reported Charles Tannock MEP has successfully applied to become an Irish citizen and obtain an Irish passport in disgust about Brexit, saying he is “ashamed to be British in many ways”. Guido would not be one to quibble with Charles Tannock’s desire to be Irish. However it is an unusual state of affairs for a British Tory MEP, representing London, to swear fidelity to a foreign state. Here is the oath he would have sworn if he were becoming a naturalised citizen:

“I, Charles Tannock, having applied to the Minister for Justice and Equality for a certificate of naturalisation, hereby solemnly declare my fidelity to the Irish nation and my loyalty to the State. I undertake to faithfully observe the laws of the State and to respect its democratic values.”

There is no legal bar to Tannock being a British MEP and an Irish citizen. If as a matter of principle Tannock resigned he would lose his six-figure combined salary and expense allowance, plus the €307 per day attendance allowance. That would be a shame… for him.

Juncker’s Nonsense About Ireland

Jean-Claude Juncker has been chatting even more nonsense than usual this morning. He’s claimed the EU has received “no definitive response” from the UK about the Irish border. This is baffling – the UK has published a position paper on Ireland and the EU hasn’t!

Juncker then said it’s “crystal clear” that we can’t talk about the future relationship before solving divorce issues. It is notable that the Irish Taoiseach, an EU head of state, agrees with the UK and wants to discuss both now in order to make progress on the Irish border. It is Brussels holding that up.

A Commission “official” has meanwhile briefed Politico that Britain is using the peace process as a bargaining chip: “We are a bit concerned by the combination in the U.K. paper between the preservation of the peace process and the future of the EU-U.K. trade relationship. It is very important that the peace process does not become a bargaining chip in these negotiations”. Who is really using Irish issues as a bargaining chip: the UK, which is seeking “swift progress”, published a position paper and has the support of Dublin, or the EU, which hasn’t even published a position paper…

Irish PM Proposes New Customs Union or “Deep Free Trade Agreement” With UK

Taoiseach Leo Varadkar proposes a new UK-EU customs union on the Turkish* model, and suggests as one alternative a “deep free trade agreement” instead of membership of the single market. He is sympathetic to a long transition period. It has been Guido’s view since the referendum that Ireland will be of necessity an advocate for a good deal between the UK and the EU. A punishing deal by the EU for the UK will hurt Ireland even more. Irish politicians are very transactional in their approach, they will want a deal that is in Ireland’s best interests. Ireland’s best interests are served by a prosperous neighbour with whom it trades freely.

The endless gloom from the remainstream media stems partly from the media’s frustration with the government’s understandable unwillingness to show its hand in negotiations. This will abate as negotiations proceed, as openly stated positions become more realistic and rational, as transitional arrangements are agreed and compromises are made. Pressure will increase from corporations in the EU which fear having their business models disrupted if there is a punishment deal. Ireland’s business and political elites are far from being the only ones in Europe with a vested interest in making a good deal. It will become blindingly obvious that the only people in favour of a punishment deal are swivel-eyed europhiles and those seeking to derail Brexit…

*Turkey has 18 other Free Trade Agreements and is negotiating at last count 13 more.

Abandoning Austerity Wouldn’t Increase Wages

Boris, Jeremy Hunt, Justine Greening and other MPs flirting with Torbynism should read today’s Centre for Policy Studies report ‘Abandoning Austerity is No Solution‘.

Ireland’s significantly larger fiscal consolidation has seen it experience a larger fall in its deficit, a larger proportionate fall in unemployment and better wage growth than the UK, counteracting the narrative that a higher level of austerity leads to economically harmful outcomes. If only Osborne had been as radical as his Irish opposite number Michael Noonan. Osborne excused his lack of radicalism on the deficit on the grounds he was in a coalition and “had to get re-elected”. Fine Gael were also in a coalition and got re-elected… 

This is reflected across other OECD countries that had a large budget deficit in 2010. There is a strong correlation between those countries that cut spending by a higher degree, and countries which achieved better economic growth and better wage growth.

As the CPS says:

“Even John Maynard Keynes argued that austerity should be used at the top of the business cycle, and it is vital that the UK’s budget deficit continues on a downward trajectory… In fact, the UK’s budget deficit reduction programme is already very modest and the UK’s tax burden is already set to climb to its highest level in four decades by 2025.”

The report finds that the only responsible ways to increase public sector wages would be to re-gear spending priorities, for example by making savings in the international aid budget or ring-fenced pensioner benefits. It also suggests further extending regional pay structures (apart from London weightings, there are no other areas of England where huge differentials in cost of living are matched by pay). Take note Torbynistas…

Ireland Needs to Consider Leaving EU

Irexit is becoming more of a mainstream idea in Ireland. UK think-tank Policy Exchange has this morning published a paper by Ray Bassett, an experienced Irish diplomat who retired as an ambassador last year. The Irish Diplomatic Service has for decades been in awe of and subservient to the EU. Now the reality of Brexit is making even some diplomats question this fundamental tenet of Irish foreign policy in the face of increased hostility from the European Commission. The financial crisis of 2008 confirmed that a small country on the Western periphery of Europe will never be a priority of the European Central Bank. Membership of the Eurozone has cost Ireland dearly for little benefit, most of Ireland’s external trade is in sterling and dollars…

Bassett warns that whatever the outcome of the Brexit negotiations, “there will be a price to pay. For Ireland, there is really no upside to Brexit,” he says. “The question to be raised is what price is Ireland willing to pay to stand in solidarity with the remaining 26 EU countries?”

The paper argues sitting on the sidelines and allowing the EU to negotiate for Ireland is untenable. The first duty of the EU negotiators is to act on behalf of the EU as an institution. This is prioritised in their European Council approved guidelines. However the type of deal that Ireland’s interests requires, including free trade with the UK, is directly in contradiction with the EU negotiators’ mandate that anything relating to Ireland and her border which emerges from the Brexit negotiations must “maintain the integrity the Union’s Legal Order” – with no exceptions to the customs union. Bassett argues therefore that Ireland must give serious consideration to Irexit.

Irish politicians are by nature transactional, for decades Ireland was a net beneficiary of EU largesse, she is now a new contributor, a situation which will worsen after Brexit takes billions out of the EU budget. It’s like the Eurovision Song Contest – Ireland used to be a regular winner, now Eastern Europe has joined, they rarely win.

The Irish political establishment is extremely wary of Irexit and will want to see signs that Britain has first made a success of Brexit. Once the UK concludes a free-trade deal with the US the pressure on Ireland – which would be geographically in the middle of a North Atlantic Free Trade Area yet not a member – will become immense. The illogical situation of being in a currency and trading bloc when most of your trade is not in the bloc or the currency will make Irexit inevitable… 

Asked About IRA, Corbyn Praises “Bravery” of Irish Republicans

Today is the worst day of the Tory election campaign and Jeremy Corbyn should not be interrupting his opponents while they make a spectacular mistake. Instead, he is equivocating about the IRA. Asked this morning to condemn the IRA, Jez praised the “bravery” of Irish republicans. We know who he means.

Tory Record: More Debt, More Taxes

As is traditional in elections the Tories are warning that Labour will bring more debt and more taxes. That is a given, however what is the Tory record after 7 years?

In 2010 the Tories promised to close the deficit by 2015. They failed to do that, so Osborne shifted the goal posts to aim for 2017/18. Under Hammond the OBR now says the government is unlikely to balance the budget by 2026. If the political will had been there they could have balanced the budget; from a worse position over the same period Ireland managed to balance the budget and cut the debt. Ireland now has a lower debt to GDP ratio than the UK and a higher GDP growth rate. The repeated Tory failure to balance the budget means that the national debt continues to rise and is now 89% of GDP. The Tories have added £500 billion to the national debt in 7 years, Hammond plans to add a billion a week to the national debt under Theresa May...

Taxes have risen under the Tories. The claim by the Tories to be a low tax party has not been true this century. They raised VAT almost immediately upon coming into office. They argue they have cut business taxes, yet they raised dividend taxes on small business owners and tried to raise National Insurance contributions. To be fair it is a mixed bag, some taxes have gone up, others down. According to the OECD the overall tax-to-GDP ratio has risen from 31.5% of GDP under Gordon Brown to 32.5% under George Osborne. Taxes have risen under the Tories…

This is not to say debt and taxes would not rise catastrophically under Labour. If you want to balance the budget you have to cut spending, George Osborne used to say privately that the Tories wouldn’t get re-elected if he slashed spending. Enda Kenny cut Irish government spending by 10% and GDP growth has been much faster than in the UK. He got re-elected and is the longest serving Fine Gael prime minister in Irish history.

“St Patrick was an Immigrant”

In Washington D.C. on St Patrick’s Day the Irish Taoiseach Enda Kenny made his point firmly, politely, with some class.

The Donald didn’t flinch…

Just How Posh is Stella?

stella-family-tree

Yesterday Stella Creasy tweeted at Guido that there was “no Downton Abbey in my family“. This is despite the best efforts of her father, an opera singer, pictured above looking very fetching in his powdered wig. Her mother’s side of the family is a different story – the sort that makes Downton look like Keeping Up Appearances.

Stella’s mum is Corinna Frances Avril Martin, the daughter of Sheelagh Vereker. Vereker was the fifth child of Lt. Colonel John Cayzer Medlicott Vereker. The name “Cayzer” comes from his mother, Mary Agnes Cayzer – a member of the almost incalculably wealthy Cayzer family. The Cayzers hold a Baronetcy, making Stella a cousin of the sixth Baron Cayzer. Mary Agnes was married to John Medlicott Vereker, who was the son of John Prendergast Vereker, who was the son of the third Viscount Gort – a noble lineage that began in the town of Gort, County Galway.  At the end of the seventeenth century the local Ó Seachnasaigh* clan’s lands were confiscated and granted to the English Sir Thomas Prendergast, first Baronet, whose grandson was John Prendergast Smyth, first Viscount Gort. In 1831 the town had a population of 3,627, the famine in Gort of the mid-1840s saw a quarter of them die. Understandably the family moved away from Ireland when it became a free state, and the current Viscount – Stella’s distant cousin – resides in the tax haven of the Isle of Man.

Stella is the fourth parliamentarian in her family. The third Viscount Gort represented the constituency of Limerick, as did his father, and his father before him. Politics is in her posh blue blood…

*O’Shaughnessy

European Commission Hates Tax Competition

apple-jobs x540

Apple has been in Ireland for 36 years, pictured above is Steve Jobs at the opening of Apple’s Cork campus in 1980. The idea that Apple Ireland is some kind of boilerplate operation is nonsense, it employs some 6,000 staff. The Irish Development Agency estimates a further 18,000 jobs depend on Apple, it adds many millions to the Irish treasury every year. When it completes the €850 million Athenry data centre Apple’s investments in Ireland will total over a billion euros. 

Ireland wins foreign investment for three reasons; the highly educated, young, English speaking workforce, the pro-business, low-tax environment and that it is an entrepot to Europe. The European Commission despises the high-growth, low tax competitor on the periphery of the European Union. Ireland knows that it is the trump card played to foreign investors. Instead of competing, the EC wants to snuff out the low tax competitor.

Apple's Cork Campus

Officials in Brussels have long complained about Ireland’s tax competition, that Twitter, Google, Apple and other US tech giants prefer to put their European HQs in Dublin rather than on the continent. Only Luxembourg competes on tax (e.g. Amazon, Guardian Media Group and AOL/Huffington Post). So far Guido has not noticed the Commission going after Juncker’s homeland…

Apple itself argues

The European Commission has launched an effort to rewrite Apple’s history in Europe, ignore Ireland’s tax laws and upend the international tax system in the process. The opinion issued on August 30th alleges that Ireland gave Apple a special deal on our taxes. This claim has no basis in fact or in law. We never asked for, nor did we receive, any special deals. We now find ourselves in the unusual position of being ordered to retroactively pay additional taxes to a government that says we don’t owe them any more than we’ve already paid.

The Commission’s move is unprecedented and it has serious, wide-reaching implications. It is effectively proposing to replace Irish tax laws with a view of what the Commission thinks the law should have been. This would strike a devastating blow to the sovereignty of EU member states over their own tax matters, and to the principle of certainty of law in Europe. Ireland has said they plan to appeal the Commission’s ruling and Apple will do the same. We are confident that the Commission’s order will be reversed.

In 2009 the Commission during the Lisbon II Treaty referendum guaranteed not to interfere in Ireland’s tax affairs. The EU has no tax competency, so it is instead using competition policy to extend its reach and claiming that this is “illegal under EU state aid rules, because it allowed Apple to pay substantially less tax than other businesses. Ireland must now recover the illegal aid.” In fact all businesses in Apples circumstances are treated the same under Irish tax law. This ain’t over…

EU Ruling Against Ireland Will Boost Chances of Irexit

IREXIT-PROSPECTS

The European Commission is expected to levy a judgment against Apple soon that could total in the billions of euros. This is as a result of Apple domiciling in Ireland and benefiting from its competitive tax regime. Essentially the Commission is seeking to undermine Ireland’s low tax policy which attracts multi-nationals to the Western periphery of Europe.[…] Read the rest

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Quote of the Day

Speaking at the Salzburg Summit on the Brexit negotiations, Juncker revealed:

“No decision will be taken here. Whenever the Commission is too flexible things are going wrong.”

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