Brexit and the waning days of the United Kingdom

[Richard Hakluyt]

My secret is out  !!!

Perhaps we are seeing more of Carrie Symonds' influence at work here? Behind every twit is a sensible woman or something.....

[Sheilbh]

Yeah - I think there's obviously a lot of misogynistic nonsense in the tabloids about her. But I saw a piece today and I hadn't quite realised the extent to which she was a Westminster player in her own right - before she dated Johnson - she would probably have ended up in a safe seat before long.

She'd been a press officer in Conservative HQ, was then their head of broadcast, a special advisor to two ministers (John Whittingdale and Sajid Javid - who is rumoured to be heading for a comeback) and then the Tories director of communications. And she's basically of a similar generation to lots of senior advisors/junior ministers already.

She's apparently a pretty centrist Tory and played a big part behind the scenes in getting liberal (often Remainer) Tory MPs to back Johnson's leadership bid.

I don't think we've ever had a partner of the PM who has their own political base in a way like that before.

I think part of it as well is that Johnson's weaker and the cabinet and Tory MPs hate Cummings (the feeling is mutual) so needed to change. Plus I think on a personal level he likes being liked and wants to go back to being like he was as mayor. I think that's probably impossible - you can't go back to being a broadly popular liberal Tory or whatever else if you were one of the leaders of either side of the Brexit campaign, half the country will just dislike you. But I feel like it's driving part of this shift.

[Sheilbh]

On Brexit RTE reporting that Barnier has requested an urgent call with fisheries ministers.

The fisheries point always felt like one that would be dealt with at the very end as part of good old fashioned haggling (just like all EU fisheries negotiations ). Apparently the latest was that both sides had agreed to setting quotas for multiple years with a follow up review. The UK wanted an agreement for 3-5 years, the EU wanted 10 years. There was also a debate about the scope of the review - the UK wanted it to only be about fisheries, the EU wanted to review the entire agreement (obviously this is basically both sides wanting the option that gives them most leverage).

So given Barnier's request it feels like the sides have reached a compromise on that but it requires member state sign off.

Edit: Reminded of the comment from a Brussels correspondent last month  that if the talks succeed or fail now will be a political call. The sides are close enough that there are no technical issues standing in the way of a deal/the technical points can be dealt with in the drafting.

[Zanza]

The main obstacle is that the UK wants unparalleled market access (much more than Canada despite constant lies by the British government) including some services but does not accept that this necessitates a level playing field and some amount of dynamic alignment.

Fisheries is a side show.

[Sheilbh]

The main obstacle is that the UK wants unparalleled market access (much more than Canada despite constant lies by the British government) including some services but does not accept that this necessitates a level playing field and some amount of dynamic alignment.

Fisheries is a side show.

Again according to RTE member states have been told 95% of the FTA is agreed but lots are in square brackets so depend on other points.

On LPF (which is fundamental for both sides) the issue seems to be around retaliation. From my understanding the EU wants autonomous retaliation, while the UK wants it through a dispute resolution mechanism - of course ultimately the retaliation would be tariffs so it's a choice of definite tariffs now and the risk/mechanism for tariffs on the future.

On state aid the sides are apparently quite close to common principles.

I think you underestimate the importance of fisheries though. The EU has said since day one that no deal is better than a bad deal on fisheries and it's crucial for some member states (not because it particularly matter but because they're powerful political constituencies domestically).

Edit: Also I'd just note that CETA covers services unless explicitly excluded (the exclusions include healthcare, social care, culture) but it covers financial services and the model being negotiated is very, very similar to CETA. One think tank put it this way:

As it currently stands, the future arrangements on trade in services will therefore be neither ambitious nor comprehensive in respect of the UK's vital services sector.

It's one of the most striking things about Brexit. The services sector is massive here, it's far more important to our economy than goods, but apparently it has very little political leverage. The bankers and the lawyers and the City of London have not managed to push either May or Johnson to a softer Brexit for the benefits to the services sector.

[Zanza]

Just an example: The UK asks for cabotage for road and air transport, but wants to stop applying the working time directive. And if we want to change the rules in the future, e.g. carbon tax or emissions standards, continued market acces necessitates continued alignment. Which the UK as a sovereign does not want. Fine, but why should we allow that?

The UK is not a valued partner anymore, despite politicians saying otherwise, but an economic rival that has the ruling party openly stating they want to undercut us. The single market should be protected. No deal is better than a bad deal.

[Sheilbh]

Just an example: The UK asks for cabotage for road and air transport, but wants to stop applying the working time directive. And if we want to change the rules in the future, e.g. carbon tax or emissions standards, continued market acces necessitates continued alignment. Which the UK as a sovereign does not want. Fine, but why should we allow that?

Sure and that's why this issue is fundamental for both sides. For the EU it's a fundamental issue related to the single market (primarily because of the UK's size and geography); for the UK it's fundamental that the UK is able to write its own rules in the future (especially for Brexiters, that was the point of Brexit).

The job of the politicians and negotiators is to find a solution within that, if they can. From what I've read there's the shape of that on all the really outstanding issues of level playing field, fisheries and state aid. It's about the details and if, politically, the parties decide the compromise is worth it. Although RTE have pulled back on the urgent briefing. It is apparently not "urgent" and both sides were non-plussed at report

I think the biggest factor for both sides (it's sort of linked to level of disruption on your table at the top) is that the difference between deal and no deal is pretty small compared to the difference between today and two months from now because the UK has gone for a very hard form of Brexit. The upside is quite small and the political cost of compromise could be quite big. It'd be very different if May was still in charge because she was aiming for customs union plus regulatory alignment (because she cared about the union). But because of the election and Johnson's decision we've baked in most of the worst case scenario for Brexit.

As an aside I don't see any movement from the UK on climate issues - I think that area is arguably the one area of real success by UK governments in the last decade. I don't understand why the Tories don't crow about it more. Still a lot to do to get to net zero but there's been a lot of progress.

The UK is not a valued partner anymore, despite politicians saying otherwise, but an economic rival that has the ruling party openly stating they want to undercut us. The single market should be protected. No deal is better than a bad deal.

That feels unlikely. European politicans have resisted calling China a rival. The EU's borderlands are Russia (plus the bits of other countries it's annexing), Turkey and North Africa. Despite the sort of trauma of a member state leaving which will hurt feelings and relations on both sides I don't see the UK really moving into rival territory. Especially given its forces are still helping defend the European border (see the Baltic state reaction to increased defence spending - plus bilateral defence relations and procurment with France are closer than in years) and are part of, for example, a common position on Iran. I think regardless of the trade negotiations the UK and EU will still be pretty important partners for each other - even if they're not the first people we each call. We won't be economic partners for sure, but there's more to EU-UK relations than trade.

Edit: Some further descriptions of the new Chief of Staff. Apparently very "straight and direct", highly rated by all the Chancellors he worked with (Brown, Darling, Osborne) and very blunt. One former colleague described him as a "master of the two-footed challenge"

[Zanza]

We can be important partners on security, climate and other projects, but economic rivals at the same time. Like the EU/US relations.

[Sheilbh]

So this isn't Brexit specific - not sure where I'd put it - but interesting move to set up a new dedicated unit for strategic tech industries in the CMA. I feel like with Biden's election (and Warren's campaign), but also with Macron's push on a tech tax, that regulating and taxing tech is going to be one of the big political issues in Europe and the US in the next few years. I've no idea about solutions but it feels like something to watch:

New UK tech regulator to limit power of Google and Facebook
Alex Hern
@alexhern
Fri 27 Nov 2020 00.53 GMT

A new tech regulator will work to limit the power of Google, Facebook and other tech platforms, the government has announced, in an effort to ensure a level playing field for smaller competitors and a fair market for consumers.

Under the plans, the Competition and Markets Authority (CMA) will gain a dedicated Digital Markets Unit, empowered to write and enforce a new code of practice on technology companies which will set out the limits of acceptable behaviour.

The code will only affect those companies deemed to have "strategic market status", though it has not yet been decided what that means, nor what restrictions will be imposed.

The business secretary, Alok Sharma, said: "Digital platforms like Google and Facebook make a significant contribution to our economy and play a massive role in our day-to-day lives – whether it's helping us stay in touch with our loved ones, share creative content or access the latest news.

"But the dominance of just a few big tech companies is leading to less innovation, higher advertising prices and less choice and control for consumers. Our new, pro-competition regime for digital markets will ensure consumers have choice, and mean smaller firms aren't pushed out."

The government's plans come in response to an investigation from the CMA which began as a narrow look at the digital advertising industry, but was later broadened out to cover Google and Facebook's dominance of the market. The code will seek to mediate between platforms and news publishers, for instance, to try to ensure they are able to monetise their content; it may also require platforms to give consumers a choice over whether to receive personalised advertising, or force them to work harder to improve how they operate with rival platforms.

Andrea Coscelli, the chief executive of the CMA, welcomed the move. "Only through a new pro-competition regulatory regime can we tackle the market power of tech giants like Facebook and Google and ensure that businesses and consumers are protected.

"We will soon be providing advice to government on how this new regime should work, as requested earlier this year, and stand ready to support the setup of the Digital Markets Unit."

Oliver Dowden, the digital secretary, said: "There is growing consensus in the UK and abroad that the concentration of power among a small number of tech companies is curtailing growth of the sector, reducing innovation and having negative impacts on the people and businesses that rely on them. It's time to address that and unleash a new age of tech growth."

But in trying to impose strict terms on multinational companies, the UK may have an uphill battle on its hands. In France, for instance, digital tax payments levied on big tech have been seen by the US government as unfair discrimination, leading to threats of retaliatory tariffs on French goods such as handbags and cosmetics.

I also think this is a far better focus than Theresa May's focus on regulating "online harms" which felt very influenced by her time in the Home Office.

[Sheilbh]

Always worth reading David Edgerton:

Cummings has left behind a No 10 deluded that Britain could be the next Silicon Valley
David Edgerton
Talk of 'moonshots' is typical of the belief that the UK is an innovative state – but it's far from it
Wed 18 Nov 2020 10.00 GMT

Though many have speculated on what Dominic Cummings's "legacy" might be, one of the more significant contributions he made to No 10 was his thinking about science and technology. Prime ministerial speeches have been peppered with passé futuristic slogans about how Britain leads the world in quantum computing, genomics and AI, and promises that the country can be a "science superpower" – notions that Cummings made a central part of the Brexit project.

Like many a macho innovation guru, Cummings is an amateur not a professional, an artless nerd and not an expert. That his policies and prescriptions have been taken seriously is a measure of our collective credulity about Britain's place in the world of innovation. But whether this foolishness will leave with the fool is another matter.

We have known for some months that the UK is to have a new research agency. As so often, this government's policies are not set out in a green or white paper but are rather suggested to selected journalists. The basic idea is to replicate something called Darpa (the Defense Advanced Research Projects Agency), which was supposedly at the forefront of successful innovation in the US. The British "Arpa" ("defense" is dropped) is very much Cummings' baby, and it is a measure of his former power that its proposed budget is some £800m. The essence of this idea is that a new non-bureaucratic body with visionary leadership will help launch the UK on its new course as a creator of the industries of the future.

It is easy to make fun of this grandiose plan, but a milder version of the same idea has dominated innovation policy for decades, animated by the belief that British strength in research can be turned into economic growth if it is given sufficient backing. Indeed, at a recent select committee hearing, former science minister Jo Johnson and former chief scientific adviser Sir Mark Walport argued that the recently formed UKRI (UK Research and Innovation) already fulfils many of these responsibilities.

Brexiteers have turbocharged the idea that Britain's innovative genius is a source of national strength. As the prime minister presiding over Brexit negotiations, Theresa May went as far as to say that this country would lead the world into the fourth industrial revolution, as it had led it into the first. Similar references to world-beating British systems have mostly turned out to be braggadocio.

But there is more to this than mere bombast. The argument that no-deal Brexit is a price worth paying for the freedom to violate EU state aid rules relies on the notion that massive subsidies to new technology will yield new firms and groundbreaking innovations. According to this fantastical vision, given the freedom to regulate itself, the UK will set new global standards. Again that is the story dripped out in the press, reinforced by prime ministerial references to digital electrictaxis, zero-carbon aeroplanes and hydrogen-powered trains.

The essential problem with the UK's existing science and innovation policies and the ramped-up Arpa version is that both assume that the UK is a technological frontier whose brilliant innovations could be harnessed to determine the world's technological future. That it has not done so yet is blamed on failures of policy and culture, hence this government's focus on administrative innovations such as Arpa and the reform of the civil service. This is analogous to the idea that the UK will become a global power again, its sails puffed up with entrepreneurial energy.

Yet believing the UK will succeed in innovation if it tries hard enough is like believing the UK will be more powerful after freeing itself from the EU. Both ignore the reality that there are other, better-equipped players in the game. For all its bluster, the UK will continue to be a customer of others' innovations, not an inventor of its own.

Copying administrative models without paying attention to the brute realities of innovation is a poor model for research policy. The United States that created Darpa was at the peak of its relative industrial and military power. It spent huge amounts on research and development, through multiple agencies, not least the Department of Defense. Darpa (then called Arpa) was tasked with finding radical solutions to particular defence problems. And, not surprisingly, since the defence department was the largest purchaser of such innovations anywhere in the world, Arpa made significant contributions to technology; in 1969 it launched Arpanet, the packet-switching network that would become the technical foundation for the modern internet.

By contrast, the UK's total expenditure on research ranks it behind countries such as India, South Korea and Germany. Britain uses many more important technologies made elsewhere than it provides to the world. Its defence budget is a tiny fraction of that of the Pentagon. From a low position in the innovation power ranking, the UK is pursuing a top-dog policy. In an interconnected, nearly free-trading world, it is much less shaping the future than having its future shaped by others.

Listening to the advocates of an entrepreneurial state, you would be forgiven for assuming the UK had never been one in the past. In fact, the country was a significant innovative power in the years after the second world war, and invested massively in jet engines, nuclear power, antibiotics and hydrogen fuel cells. It nurtured not only these innovations, but entire industries and visionary British boffins, who were supported to an extraordinary degree. Yet even though the UK was a greater player than it could hope to be today, these programmes had very mixed results. Great national programmes such as Concorde and the British nuclear reactors hardly conquered the world. This was a difficult lesson that many still refuse to accept, preferring the comforting notion that, in the past, the old timers never really tried.

The delusions of Brexiteer revivalists have helped sustain a fundamentally misconceived innovation policy, now visible in retro-futurist talk of "moonshots". It is a telling indicator of the declining capacities of the British state that while Cummings was lodged at the centre of power, his great antecedent CP Snow, the author of The Two Cultures and the Scientific Revolution (1959), was a mere junior minister of technology in Harold Wilson's 1964 government, as well as being treated with deserved contempt by the experts in his own corridors of power. In the classic British way, both are amateurs complaining about the amateurism of others. The mystery is why their gross misunderstandings were ever taken seriously and allowed to shape public discourse.

It is time to have a grown-up conversation about innovation that fits within a workable national industrial and social strategy. Though Arpa's champion has now left office, our Brexiteer government will likely still continue to pursue this fantasy vision. The first and vitally necessary step towards innovation policies that work, and make our lives better, is to dump these delusions of grandeur.

• David Edgerton is Hans Rausing professor of the history of science and technology and professor of modern British history at King's College London. He is the author of The Rise and Fall of the British Nation: a Twentieth Century History

Also interesting is his interview with Aaron Bastani on Novara:
https://www.youtube.com/watch?v=f7sRMIxYVVk

[Admiral Yi]

"But the dominance of just a few big tech companies is leading to less innovation, higher advertising prices and less choice and control for consumers. Our new, pro-competition regime for digital markets will ensure consumers have choice, and mean smaller firms aren't pushed out."

I get the feeling your guys don't understand network effects.

[Syt]

Sheilbh, that reminds me of the Austrian government's digital efforts.

To wit, the responsible minister, and the head of the Austrian chamber of commerce opened with big fanfare yesterday the "Kaufhaus Österreich" platform, aimed at helping smaller retailers to get traffic to their websites and deal a blow to Amazon. The move was widely ridiculed:

A: There's already several such platforms, with small to little success.
B: Any business can just sign up there, select their categories, and that's it. No moderation. So shops are already selecting all categories, to increase their chances of being found. Think a bike shop, also being listed as grocer, paperware shop, etc. Also, no moderation means defunct shops aren't removed. No keyword search, either (i.e. "teddy bear" yields no results, you'd have to select "toys" as category and hope that there'll be some toy shops.
C: Some small retailers who use Amazon for their online shop redirect to Amazon, when the platform was marketed as the Anti-Amazon.
D: Google search/Google maps already works much better and more reliably.

[Sheilbh]

Interesting and I think any UK attempt would be similar.

I know there's also been stuff in Germany about the intersection of data and anti-competitive practices - because these entities often have so much data that is in itself an impediment to competitors. And there is a right to move personal data around - I think that might be the way to provoke a shift in the market - a bit like open banking.

Also I would just like them to pay their taxes

I'd also note that they have a lot of people working and doing important stuff in Ireland and Luxembourg - it's not just a shop front. But those are the EU jursidictions that are responsible for regulating how Google, Apple, Amazon and Facebook use EU citizens' data. Even with the best intentions in the world, I don't think those regulators have the capacity or depth to usefully regulate them. With Brexit they will also have to deal with the UK regulator which in data is (from my understanding) the best resourced regulator in Europe - so we might see some action here.

[Tamas]

You guys fall for the obviously silly proclaimed ideas named for cresting a 800 million pounds purse to pay loyal chums from.

[Richard Hakluyt]

Give them enough rope.

I think Starmer and the Labour party can safely work on policies for closing tax loopholes and higher taxation for the wealthy over the next three years; there will be an appetite for it by the next general election. Of course they will probably just spend the time arguing about anti-semitic grandpa