The Times - UK (2020-09-05)

the times | Saturday September 5 2020 2GM 9

News

talks by seeking UK law veto

Analysis

W

hat is

Britain’s

game? That

is the

question

echoing in European Union

corridors in Brussels (Bruno

Waterfield writes).

The main problem is time.

There are only nine weeks

left to agree a trade and

security deal that will run to

some 700 pages. For the

European side the issue is not

Lord Frost, Boris Johnson’s

chief negotiator, who is

acutely aware of the

timetable. “He understands

the time constraints but not

the rest of Downing Street,”

a senior European diplomatic

source said. “Johnson thinks

the October deadline is pure

tactics. That could be a fatal

misunderstanding.”

The prime minister tends,

according to diplomatic

sources, to believe that at the

11th hour, EU leaders will

hold an emergency summit

and thrash out a deal. In that

world view, the only real

deadline for a deal is

December 31 when the

transition period ends and

Britain leaves the single

market and customs union.

However, EU leaders will

not meet until the main

principles of an agreement

are in place and when it is

only details, even hard ones,

that need resolving. “The

only flexibility is when to get

the highest level involved and

that can’t be done until there

is real convergence,” the

source said.

EU legal services insist that

the real “hard deadline” is

October 31 when MEPs must

start to scrutinise an

agreement (which can be

done with English, French

and German texts) and legal

translation into Europe’s 24

languages must begin.

The EU is baffled over Mr

Frost’s refusal, or inability, to

provide any details of the

government’s future “state

aid” or subsidy policy.

Quietly without a public

statement, Michel Barnier,

the EU’s chief negotiatior,

has given a lot of ground to

Mr Frost, retreating from his

political mandate which

requires full alignment with

EU state aid rules under the

enforcement of the European

Court of Justice. “He would

be crucified if he discussed

the details of what he has

conceded,” the source said.

“He needs to know as a

matter of trust what the UK’s

subsidy principles will be.

Otherwise he is stuck.”

Many on the European side

believe Downing Street is

bluffing on subsidies because

there is so little evidence of a

policy debate to ditch the

present model that, whatever

the view of Dominic

Cummings, would split the

Tories down the middle.

“Surely if he was dropping

such a key tenet of modern

Conservatism then

Westminster would be

ringing to the sound of

battle,” an EU official said.

It is feared that Mr Frost,

at the behest of No 10, is

prepared to take the talks to

the brink, risking a no-deal

exit if the clock runs out.

“Johnson is playing a game

of extreme brinkmanship,”

the source said.

News

Britons make almost 60 million

trips a year into mainland

Europe (Graeme Paton writes).

From January 1 the process is

likely to get considerably more

complicated with little progress

so far between UK and EU

negotiators on frictionless

travel across the Channel. As

things stand visa-free travel is

practically a certainty in 2021,

although British citizens will

need at least six months left on

their passport.

All UK motorists will also

need an international driving

permit — in addition to the UK

licence — to take to the road in

the EU. The documents cost

£5.50 and three different types

are used in the EU depending

on the country. Travelling with

pets is very likely to be more

onerous with a new four-month

process that includes having

cat or dog blood samples

tested at an EU laboratory.

PASSPORTS

As Britain negotiates with the

EU, it is also seeking to

preserve access to a myriad of

the bloc’s agreements with

trading partners around the

world (Callum Jones writes).

Regardless of whether a deal

with Brussels materialises, the

future of trade terms with more

than two dozen countries —

from Canada and Mexico to

Turkey and Vietnam — hangs in

the balance. Liam Fox,

international trade secretary

under Theresa May, notoriously

declared that “up to 40” of

these accords would be ready

at “one second after midnight”

as Brexit took place. The reality

has proved cumbersome.

Whitehall negotiators have

made some progress, reaching

agreement with economies

including South Korea and

Switzerland. For weeks, officials

have said they are about to roll

over the EU deal with Japan.

The UK agreement is expected

to mirror Tokyo’s pact with

Brussels.

TRADE DEALS

Hiring skilled workers from the

EU is going to become much

more bureaucratic for firms

under a new points-based

system that makes citizens of

the bloc seeking to work and

study here abide by rules

existing for non-EEA applicants

(Richard Ford writes).

The Home Office is planning

to open a route for those

wanting to come to work and

study in the autumn in

preparation for the full

introduction of the new

immigration system at the

beginning of January.

People coming to work will

be required to meet a skills and

salary threshold for which they

will be awarded points. They

will also need to have a job

offer from a sponsored

employer. Employers who are

not already a licensed sponsor

and think they will need to hire

overseas have been

encouraged to apply before

January 1. Ministers have yet to

reach any agreement on a

replacement for the Dublin

Regulation, which potentially

enables the UK to return cross-

Channel migrants who arrive

here having previously claimed

asylum in an EU state. EU

negotiators are understood to

have rejected a request for a

new migration pact that would

allow the government to return

migrants after January 1. In the

event of no pact, Britain will be

unable to return migrants until

it negotiates bilateral deals

with EU states after the

transition period ends.

IMMIGRATION

Tariffs are the most immediate

risk to factories but the other

consequences of no deal, such

as a blizzard of red tape and

threats to supply chains, would

present a litany of further

issues (Callum Jones writes).

Major players have quietly

but diligently maintained their

previous no-deal stockpiles to

try to avoid significant

disruption in the event of

border friction. Sourcing

European parts would become

more costly without a deal, due

to the default tariffs the UK will

collect on imports from all

countries with which it has not

struck a trade agreement.

In turn, finished products

shipped to the EU would have

levies of their own. More than

half of the one million cars

Britain exported last year were

bound for EU markets — under

WTO terms, these would face a

duty of 10 per cent. “What

we’re trying to do now is about

damage limitation,” one

executive said earlier this year.

MANUFACTURING

Even if there is a deal with the

European Union the 10,

lorries that cross the Channel

every day will still face new

customs, security and

veterinary checks that could

cause some disruption to trade

(Oliver Wright writes).

If drivers do not have the

right paperwork these goods

could be turned back at the

Calais border causing chaos

and long tailbacks. The Road

Haulage Association, which

represents freight companies,

has been particularly critical of

the government’s “slow

progress” on measures to keep

goods moving across the

border. If there is no deal this

situation will be exacerbated.

This is because there will be

restrictions put in place on the

number of UK lorries that are

allowed to enter the EU

altogether. The government

will have a limited number of

permits to award to UK

haulage firms, and about two

thirds of firms will not be able

to operate in the EU at all. This

would have a severe impact on

both the haulage industry and

all the companies that rely

upon it to deliver UK exports to

Europe.

FREIGHT

The hospitality industry is in a

very different state than it was

this time last year, when

contingency planning was

underway for a no-deal

Brexit (Dominic Walsh

writes). The social

and economic

impact of

Covid-19 means

that businesses

are far less

resilient and less

able to withstand

further economic

disruption.

Kate Nicholls, chief

executive of the trade body UK

Hospitality, said: “Billions have

been wiped off the sector’s

value, cash reserves have run

dry, and most hospitality

businesses will be operating at

no better than break-even for

the foreseeable future.”

With most businesses still in

survival mode, contingency

planning is unlikely to be a

priority, especially as many

head office personnel who

would usually deal with such

issues have been furloughed.

One of the biggest threats

from no deal is food supply

and prices, raising the

spectre of food

inflation. The other

critical factor

facing the

industry, which

before Covid-

generated an

annual

turnover of

£130 billion, is

consumer

confidence. “This

remains fragile and will be

critical to the hospitality

recovery,” Ms Nicholls said.

Another big issue is

immigration, with worries that

the long-term impact of the

pandemic will be a loss of

talent and skills. No deal will

make it more difficult for UK

businesses to plug their gaps

with European workers.

HOSPITALITY

£££

Is Britain ready?

As concern about a lack of trade deal

heightens, Times writers examine how

different sectors could be affected

ANDREW PARSONS/NO 10 DOWNING STREET; ALAMY; SCOTT BARBOUR; TIM GRAHAM; SIMON DAWSON; MATTHEW LLOYD/GETTY IMAGES