Monday, 25 July 2016

Brexit - now let the legal arguments commence

As readers will by now be aware Article 50 is a notification to the European Council that a member state intends to withdraw from the EU.  However, there are two pieces of legislation that deal with this:  first the European Communities Act, 1972 which means that any legislation created by the EU automatically becomes part of UK Law.  As an Act of Parliament, it can only be reversed by Parliament.  Article 50 of the Lisbon Treaty is the statement of the process of withdrawal and, because it is a treaty obligation controlled by international law it can be exercised by the Government under its legal prerogative without recourse to Parliament.  Given this 'constutional arrangement, we now have a wonderful opportunity for legal chaos.  Here is why:  legal Advice sought and received by the House of Lords is firm in its opinion that Article 50 is reversible.  Given that, any state declaring under Article 50, has two years to negotiate a deal and at that point would be deemed to have withdrawn.  Here is the text of Article 50:

A member state that decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be negotiated in accordance with Article 218(3) of the Treaty on the Functioning of the European Union. It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.

The key point to note here is that a declaration under Article 50 is only a statement of intent to withdraw - it is not the act of withdrawal.  The advice given to the House of Lords was provided by:  Sir David Edward KCMG, QC, PC, FRSE, a former Judge of the Court of Justice of the European Union and Professor Emeritus at the School of Law, University of Edinburgh; and Professor Derrick Wyatt QC, Emeritus Professor of Law, Oxford University, and also of Brick Court Chambers.  This is what their advice said (taken from Busines Insider, July 21, 2016): 

We asked our witnesses whether it was possible to reverse a decision to withdraw. Both agreed that a Member State could legally reverse a decision to withdraw from the EU at any point before the date on which the withdrawal agreement took effect. Once the withdrawal agreement had taken effect, however, withdrawal was final. Sir David told us: “It is absolutely clear that you cannot be forced to go through with it if you do not want to: for example, if there is a change of Government.” Professor Wyatt supported this view with the following legal analysis:
“There is nothing in the wording to say that you cannot. It is in accord with the general aims of the Treaties that people stay in rather than rush out of the exit door. There is also the specific provision in Article 50 to the effect that, if a State withdraws, it has to apply to rejoin de novo. That only applies once you have left. If you could not change your mind after a year of thinking about it, but before you had withdrawn, you would then have to wait another year, withdraw and then apply to join again. That just does not make sense. Analysis of the text suggests that you are entitled to change your mind.”
... There is nothing in Article 50 formally to prevent a Member State from reversing its decision to withdraw in the course of the withdrawal negotiations. The political consequences of such a change of mind would, though, be substantial.

Given this, any state could serve notice of intention to withdraw under the Royal Prerogative but would only be able to actually withdraw at the end of two years if, and only if, Parliament agreed to repeal the 1972 Act.  If Parliament refused to do that, then presumably the Government would be forced to reverse its decision under Article 50, otherwise, we would be in the ridiculous position of not being a member of the EU whilst still being bound by EU law under the continuing 72 Act.   It is bizarre but entirely feasible that the UK government declared under Article 50 and entered into a lengthy negotiation resulting in an agreement (say) to stay within the single market with a 7-year emergency break on EU migration into the UK.  The Tory 25 MP's who will only accept 'hard-Brexit' (a state of affairs where the UK - or at least England and Wales - is unmoored from Europe and dragged into the middle of the Atlantic Ocean), side with the opposition parties and Parliament refuses to repeal the 72 Act.  The Government, then in a legal bind, is forced to reverse its position and announce that the UK no longer wishes to withdraw under Article 50.

There is no doubt that Article 50 was a hastily constructed and ill-thought-out addition to the Lisbon Treaty.  As it will be the first time it will be tested there is bound to be a long and difficult legal process to sort out how a state can actually withdraw from the EU.  What fun, popcorn futures might be a great investment at the moment.

Monday, 11 July 2016

I have had another brilliant idea - lets not have a government

As I walk the streets of this small market town 80 miles from London I marvel at the absence of police or indeed any form of civil control.  Maybe the odd traffic warden admiring the arrays of expensive motors in the car parks.  But, surprise - virtually no crime, no disorder, the sun rises and the sun sets and this little part of England carries on in its own way.  As the summer wears on there is, as I write this, at least two months possibly three before Government, such as it is these days, returns and continues trying to run the Country.  The admin staff in the civil service still do their job, the police and emergency services still do theirs and the whole place carries on as normal.  So, and here is the big idea, let's send our politicians on a five-year sabbatical.  Let's not have politicians tinkering with the ship of state.  HMQ can carry on doing her bit and the rest of us can lie soundly asleep at nights knowing that all is right with the world.

A Constitutional Outrage

The Leaver's in the referendum won the vote but the margin was very small - so small that given the known variability of public opinion on the EU a result of 52:48 is not statistically different from 50:50.  That means that the result could be down to purely random factors.  On the 22nd or the 24th the result could just as easily have gone the other way.

Given the balance of the vote, we cannot infer that the public wants a radical version of Brexit with complete abandonment of our involvement in the single market, or abandonment of our security arrangements with the EU.  We cannot infer that the result gives carte-blanche to a radical deregulation of the economy, wholesale cutting of taxes and the concomitant onslaught upon public spending that the ultra-right of the Tory party dream of.  Nor can we assume that the British public wants a repeal of the ban on fox-hunting or a reversal of the policy on single sex marriage.

All we can read into it was that on the margin, on the day, a small majority wanted to leave the EU.   So, the 'leavers' have to listen to and take account of the concerns of those who voted to Remain in forming a strategy about how to proceed.  In my view the only body in a position to make the judgment about how to proceed is Parliament.  That should be done by a review of the strategic options and the publication of a Green Paper laying out the case for and against each option.  It also relies upon the Governing party's MP's choice for leader being elected.

In my view, it is a constitutional outrage that the Tory MP's vote for the next PM can be overturned by any extra-parliamentary body.  Fair enough, each party selects its leader and then on the basis of that selection the leaders fight an election and gain a mandate to govern.  If May wins the election then in a sense she is the choice of the Tory MP's who have 11,300,109   votes supporting their right to make the choice.  If Leadsom wins and the will of the Governing party's MP's are overturned there must be a general election.  We cannot have a situation where some 150000 Tory activists can overturn the will of the representatives who won their seats with 11m+ votes.

In the end, this whole debacle has been brought about by the erosion of the sovereign rights of Parliament.  We need to get back to the position where that is constitutionally reaffirmed - the issues that confront us now are far too complex to be left to plebiscites or to the prejudices of party members, on the Left, on the Right or indeed, in the Middle. 

Saturday, 2 July 2016

Why I hate referenda

By and large I do trust politicians,  By and large, they do well the job we send them to do - they work long hours, take their job very seriously, research issues, use their judgement and help ordinary people solve problems.  But, over and above that they are the representatives we vote into the legislature.  Parliamentary democracy lies at the heart of Britain's unwritten constitution, and referenda cut across and undermine the role of MP's in the commons.   Referenda are a favourite tool of dictators and demagogues - they reduce complex issues to simple 'in-out', 'yes-no' type questions, they foster extremism and they undermine the rights of minorities.   As Attlee said: I could not consent to the introduction into our national life of a device so alien to all our traditions as the referendum.  

All of these criticisms of referenda have been more than borne out by our most recent example.  Like Wilson's 1975 EC referendum this one was proposed to try and gain party advantage.   The questions were so simple to be meaningless:  Remain or Leave.   One can assume that Remain meant to retain membership of the EU under the February agreement with the Council of Ministers and that was formally notified to the UN.  But Gove threw doubt on the validity of that agreement creating confusion as to what 'Remain' might imply.  Leave was even more ambiguous:  we could have passed an Act of Parliament that made UK law supreme in all matters to do with the EU - that would be a form of 'leave', we could accede from the Union but remain in the Single Market with all that implies - that would be 'leave'.  The permutations are innumerable.  

We are now assured by many on the 'leave' side that accession from the EU but remaining in the Single Market with freedom of movement and contributing to the EU would not be acceptable.  Where did that come from?  Where was that position on the ballot paper?   I have been assured on these fora that 'leave means leave' so often that I have given up complaining about the logical nonsense of such a comment.   But when asked ' what does 'leave' mean' we discover that there is no answer and if there is no answer there is no meaningful question.   The referendum was an unmitigated disaster not because it gave the wrong answer  but because it gave no answer.

Friday, 24 June 2016

My forecasts for the aftermath of Brexit

Eight days ago, seven before the Brexit vote I made the following prediction as a response to an article ‘Budget threat ‘ends Osborne’s hopes to be PM’’ by Francis Elliot, the Political Editor of the Times (15 June 2016) http://www.thetimes.co.uk/article/57041972-32e0-11e6-9b23-427ef0ad42ff.  
 This prediction was based upon my study of turning points and the lead indicators of a sudden and locally irreversible collapse in the economy if there was a vote to leave the EU.
 I quote directly:
 Here to be specific is what I think will happen:
1.  There will be an immediate run on the pound with parity against the Euro within the next three months.
2.  The stock market will decline to below 5500 rapidly.
3.  The UK will enter negative growth by Spring of next year for two quarters i.e., a recession will commence.
4.  The government will be forced to remedy an expansion of the deficit by either tax increases and or spending cuts.
That will do for a start - I haven't touched unemployment, capital flight, inward investment and the current account deficit but you can guess what my views might be. 
 My views were roundly rubbished by Brexiteer’s and by one commenter who believed that any form of modelling in the social sciences was nonsense, particularly when it used models that worked in the hard sciences and engineering.  My view was nonsense:  all systems – physical and social, that have drivers forcing them to equilibrium where there are two or more control variables in play will exhibit instability.  My forecast of a catastrophic realignment of the economy was not given with any gleeful anticipation that it might come to pass.   I hope I am wrong but I doubt it.

Saturday, 11 June 2016

Brexit and the precautionary principle.

As the campaign has gathered pace towards Britain's referendum on membership of the European Union, I have begun to reflect more and more on the horrid lack of any post-Brexit plan.    I know the Bank of England and the Treasury have been hard at work with their contingency planning and that liquidity will start flowing into the banking sector from 14 June in case, following a leave vote, capital outflows start in earnest. What bothers me, is that those two towering  members of the intellectual right – Boris  Johnson and Michael Gove -  have not come up with a convincing strategy, never mind a plan  for what follows.   Given the absence of either,  two inexorable laws are almost certain to follow: sod's law and  the law of unintended consequences.

Sod's law states  that your bread always falls butter side down or, if something can go wrong it will. Many, on the exit side, are pinning their hopes on the fact that given balance of trade in favour of the EU that Brussels will be gagging to do a deal with us and to let us have all of the benefits of membership of the single market with none of what we might perceive to be costs.    Angela might be wildly excited by Boris  but could she persuade her own legislature to do a deal on such favourable terms? Indeed, all the members of the European Council be confident likewise? I doubt it very much no matter what pressure VW and BMW bring to bear on their political leaders.    The lack of any coherent strategy or plan for taking the British economy forward in the post-Brexit era  convinces me that the law of unintended consequences is just waiting to make its mighty presence felt. People might call me a pessimist but I have discovered over many years that absence of forethought exposes you to getting stuffed in ways that you never expected!

Ten Possible Reasons for Staying in the EU

(i)  It gives us access to that very British invention - the Single Market - with 500m consumers, no tariffs, no border checks - in other words a complete freedom of movement of goods and services.
(ii)  It allows anyone to travel anywhere, buy a home, set up business freely and without fear.
(iii)  Its educational and training policies, combined with free movement allows huge numbers of EU young people to travel here and to study contributing £15bn to the UK economy.
(iv)  It sets minimum standards for treating employees eg: working hours, health and safety, educational awards etc.
(v)  It uses its bargaining power to engage in free trade agreements across the world on terms no single country - even the UK - would be able to achieve.
(vi)  The willingness of many young EU nationals to leave their homes and come and work here has helped up fill the demographic time bomb caused by an expanding pensioner population and a very low reproduction rate in the UK (1.89 compared with the 2.1 needed).
(vii) It diverts a proportion of its budget each year to the support of science on a scale that no single country could afford and we are huge beneficiaries of that.
(viii) It is an information exchange whereby member countries and their agencies can share ideas and expertise from security through to space exploration.
(ix)  It and the EEC has been the primary force for the rebuilding of Europe following WW2 and, it has opened its doors to the states of Eastern Europe helping them achieve their potential.
(x)  Unlike the UK it tries to run itself through consensus and agreement rather than through the adversarial, yah-booh politics that we find so appealing.  It's about inclusion rather than exclusion.