The chaotic negotiations both within the Tory party and without means we need to consider an alternative: not leaving
Your correspondent is not as well up on social media as his wife and children, but I could not help noticing a slogan posted beneath a London traffic light the other day. It claimed to be from the Instagram project Notes to Strangers – new to me, I must confess – and confidently proclaimed: “Having a Plan B will make your Plan A unsuccessful”.
This was on yet another day when the press was full of reports about the chaos within Theresa May’s hapless government about the Brexit “negotiations” – negotiations that seem to be taking place mainly within her warring cabinet rather than with the rest of the EU. And – surprise, surprise – neither of the proposals supposedly being discussed is in any case considered remotely viable by most, indeed all, of the experts I have talked to.
As for the Irish border problem, I have yet to meet any serious person who thinks it is soluble
Labour leader presses PM at question time for details of plan for customs deal with EU
Jeremy Corbyn has accused the government of being “in complete disarray” over its Brexit negotiations, using prime minister’s questions to warn that delays and uncertainty caused by cabinet divisions were risking jobs and investment.
Focusing on Brexit for a second consecutive week, the Labour leader lambasted Theresa May for being unable even to unite her ministers around a common plan, leaving her hopelessly exposed when it comes to talks with the EU.
The customs union issue – and the fall in foreign investment to the UK – is consuming ever larger amounts of the party’s energy
Remain voters must wish someone had considered the Irish border question before they voted on 23 June 2016.
It probably would not have changed the outcome. The referendum, as the pollsters remind us, was a cultural phenomenon linked more closely to people’s attitudes to immigration and sovereignty than to economic success – a situation that persists today. Still, it would be satisfying to rewind and show that the reason many now believe Britain must stay connected to the EU for five years or so relates to complex customs rules and how they cannot be reconciled with open borders.
Even the most confident Brexiters have noticed the economy flagging under the weight of the uncertainty
Brexiters must recognise the ‘collateral damage’ leaving the EU will cause in Northern Ireland, says former PM
Sir John Major has warned that a hard border in Ireland will be unavoidable unless Brexiters start to take on board the “collateral damage” that exiting the EU will cause in Northern Ireland.
He said that the words “customs union” had become “toxic” and that efforts to find an alternative solution to the border amounted to “limp promises”.
Counties and customs
A customs union is an agreement by a group of countries, such as the EU, to all apply the same tariffs on imported goods from the rest of the world and, typically, eliminate them entirely for trade within the group. By doing this, they can help avoid the need for costly and time-consuming customs checks during trade between members of the union. Asian shipping containers arriving at Felixstowe or Rotterdam, for example, need only pass through customs once before their contents head to markets all over Europe. Lorries passing between Dover and Calais avoid delay entirely.
The uncertainty facing digital businesses as a result of Brexit was front and center during a committee session in the UK parliament today, with experts including the UK’s information commissioner responding to MPs’ questions about how and even whether data will continue to flow between the UK and the European Union once the country has departed the bloc — in just under a year’s time, per the current schedule.
The risks for UK startups vs tech giants were also flagged, with concerns voiced that larger businesses are better placed to weather Brexit-based uncertainty thanks to greater resources at their disposal to plug data transfer gaps resulting from the political upheaval.
Information commissioner Elizabeth Denham emphasized the overriding importance of the UK data protection bill being passed. Though that’s really just the baby step where the Brexit negotiations are concerned.
Parliamentarians have another vote on the bill this afternoon, during its third reading, and the legislative timetable is tight, given that the pan-EU General Data Protection Act (GDPR) takes direct effect on May 25 — and many provisions in the UK bill are intended to bring domestic law into line with that regulation, and complete implementation ahead of the EU deadline.
Despite the UK referendum vote to pull the country out of the EU, the government has committed to complying with GDPR — which ministers hope will lay a strong foundation for it to secure a future agreement with the EU that allows data to continue flowing, as is critical for business. Although what exactly that future data regime might be remains to be seen — and various scenarios were discussed during today’s hearing — hence there’s further operational uncertainty for businesses in the years ahead.
“Getting the data policy right is of critical importance both on the commercial side but also on the security and law enforcement side,” said Denham. “We need data to continue to flow and if we’re not part of the unified framework in the EU then we have to make sure that we’re focused and we’re robust about putting in place measures to ensure that data continues to flow appropriately, that it’s safeguarded and also that there is business certainty in advance of our exit from the EU.
“Data underpins everything that we do and it’s critically important.”
Another witness to the committee, James Mullock, a partner at law firm Bird & Bird, warned that the Brexit-shaped threat to UK-EU data flows could result in a situation akin to what happened after the long-standing Safe Harbor arrangement between the EU and the US was struck down in 2015 — leaving thousands of companies scrambling to put in place alternative data transfer mechanisms.
“If we have anything like that it would be extremely disruptive,” warned Mullock. “And it will, I think, be extremely off-putting in terms of businesses looking at where they will headquarter themselves in Europe. And therefore the long term prospects of attracting businesses from many of the sectors that this country supports so well.”
“Essentially what you’re doing is you’re putting the burden on business to find a legal agreement or a legal mechanism to agree data protection standards on an overseas recipient so all UK businesses that receive data from Europe will be having to sign these agreements or put in place these mechanisms to receive data from the European Union which is obviously one of our very major senders of data to this country,” he added of the alternative legal mechanisms fall-back scenario.
Another witness, Giles Derrington, head of Brexit policy for UK technology advocacy organization, TechUK, explained how the collapse of Safe Harbor had saddled businesses with major amounts of bureaucracy — and went on to suggest that a similar scenario befalling the UK as a result of Brexit could put domestic startups at a big disadvantage vs tech giants.
“We had a member company who had to put in place two million Standard Contractual Clauses over the space of a month or so [after Safe Harbor was struck down],” he told the committee. “The amount of cost, time, effort that took was very, very significant. That’s for a very large company.
“The other side of this is the alternatives are highly exclusionary — or could be highly exclusionary to smaller businesses. If you look at India for example, who have been trying to get an adequacy agreement with the EU for about ten years, what you’ve actually found now is a gap between those large multinationals, who can put in place binding corporate rules, standard contractual clauses, have the kind of capital to be able to do that — and it gives them an access to the European market which frankly most smaller businesses don’t have from India.
“We obviously wouldn’t want to see that in a UK tech sector which is an awful lot of startups, scale-ups, and is a key part of the ecosystem which makes the UK a tech hub within Europe.”
Denham made a similar point. “Binding corporate rules… might work for multinational companies [as an alternative data transfer mechanism] that have the ability to invest in that process,” she noted. “Codes of conduct and certification are other transfer mechanisms that could be used but there are very few codes of practice and certification mechanisms in place at this time. So, although that could be a future transfer mechanism… we don’t have codes and certifications that have been approved by authorities at this time.”
“I think it would be easier for multinational companies and large companies, rather than small businesses and certainly microbusinesses, that make up the lion’s share of business in the UK, especially in tech,” she added of the fall-back scenarios.
Giving another example of the scale of the potential bureaucracy nightmare, Stephen Hurley, head of Brexit planning and policy for UK ISP British Telecom, told the committee it has more than 18,000 suppliers. “If we were to put in place Standard Contractual Clauses it would be a subset of those suppliers but we’d have to identify where the flows of data would be coming from — in particular from the EU to the UK — and put in place those contractual clauses,” he said.
“The other problem with the contractual clauses is they’re a set form, they’re a precedent form that the Commission issues. And again that isn’t necessarily designed to deal with the modern ways of doing business — the way flows of data occurs in practice. So it’s quite a cumbersome process. And… [there’s] uncertainty as well, given they are currently under challenge before the European courts, a lot of companies now are already doing a sort of ‘belt and braces’ where even if you rely on Privacy Shield you’ll also put in place an alternative transfer mechanism to allow you to have a fall back in case one gets temporarily removed.”
A better post-Brexit scenario than every UK business having to do the bureaucratic and legal leg-work themselves would be the UK government securing a new data flow arrangement with the EU. Not least because, as Hurley mentioned, Standard Contractual Clauses are subject to a legal challenge, with legal question marks now extended to Privacy Shield too.
But what shape any such future UK-EU data transfer arrangement could take remains tbc.
The panel of witnesses agreed that personal data flows would be very unlikely to be housed within any future trade treaty between the UK and the EU. Rather data would need to live within a separate treaty or bespoke agreement, if indeed such a deal can be achieved.
Another possibility is for the UK to receive an adequacy decision from the EC — such as the Commission has granted to other third countries (like the US). But there was consensus on the panel that some form of bespoke data arrangement would be a superior outcome — for legal reasons but also for reciprocity and more.
Mullock’s view is a treaty would be preferable as it would be at lesser risk of a legal challenge. “I’m saying a treaty is preferable to a decision but we should take what we can get,” he said. “But a treaty is the ultimate standard to aim for.”
Denham agreed, underlining how an adequacy decision would be much more limiting. “I would say that a bespoke agreement or a treaty is preferable because that implies mutual recognition of each of our data protection frameworks,” she said. “It contains obligations on both sides, it would contain dispute mechanisms. If we look at an adequacy decision by the Commission that is a one-way decision judging the standard of UK law and the framework of UK law to be adequate according to the Commission and according to the Council. So an agreement would be preferable but it would have to be a standalone treaty or a standalone agreement that’s about data — and not integrate it into a trade agreement because of the fundamental rights element of data protection.”
Such a bespoke arrangement could also offer a route for the UK to negotiate and retain some role for her office within EU data protection regulation after Brexit.
Because as it stands, with the UK set to exit the EU next year — and even if an adequacy decision was secured — the ICO will lose its seat at the table at a time when EU privacy laws are setting the new global standard, thanks to GDPR.
“Unless a role for the ICO was negotiated through a bespoke agreement or a treaty there’s no way in law at present that we could participate in the one-stop shop [element of GDPR, which allows for EU DPAs to co-ordinate regulatory actions] — which would bring huge advantages to both sides and also to British businesses,” said Denham.
“At this time when the GDPR is in its infancy, participating in shaping and interpreting the law I think is really important. And the group of regulators that sit around the table at the EU are the most influential blocs of regulators — and if we’re outside of that group and we’re an observer we’re not going to have the kind of effect that we need to have with big tech companies. Because that’s all going to be decided by that group of regulators.”
“The European Data Protection Board will set the weather when it comes to standards for artificial intelligence, for technologies, for regulating big tech. So we will be a less influential regulator, we will continue to regulate the law and protect UK citizens as we do now, but we won’t be at the leading edge of interpreting the GDPR — and we won’t be bringing British values to that table if we’re not at the table,” she added.
Hurley also made the point that if the ICO is not inside the GDPR one-stop shop mechanism then UK companies will have to choose another data protection agency within the EU to act as their lead regulator — describing this as “again another burden which we want to avoid”.
The panel was asked about opportunities for domestic divergence on elements of GDPR once the UK is outside the EU. But no one saw much advantage to be eked out outside a regulatory regime that is now responsible for the de facto global standard for data protection.
“GDPR is by no means perfect and there are a number of issues that we have with it. Having said that because GDPR has global reach it is now effectively being seen as we have to comply with this at an international level by a number of our largest members, who are rolling it out worldwide — not just Europe-wide — so the opportunities for divergence are quite limited,” said Derrington. “Particularly actually in areas like AI. AI requires massive amounts of data sets. So you can’t do that just from a UK only data-set of 60 million people if you took everyone. You need more data than that.
“If you were to use European data, which most of them would, then that will require you to comply with GDPR. So actually even if you could do things which would make it easier for some of the AI processes to happen by doing so you’d be closing off your access to the data-sets — and so most of the companies I’ve spoken to… see GDPR as that’s what we’re going to have to comply with. We’d much rather it be one rule… and to be able to maintain access to [EU] data-sets rather than just applying dual standards when they’re going to have to meet GDPR anyway.”
He also noted that about two-thirds of TechUK members are small and medium sized businesses, adding: “A small business working in AI still needs massive amounts of data.
“From a tech sector perspective, considering whether data protection sits in the public consciousness now, actually don’t see there being much opportunity to change GDPR. I don’t think that’s necessarily where the centre of gravity amongst the public is — if you look at the data protection bill, as it went through both houses, most of the amendments to the bill were to go further, to strengthen data protection. So actually we don’t necessarily see this is idea that we will significantly walk back GDPR. And bear in mind that any company which are doing any work with the EU would have to comply with GDPR anyway.”
The possibility for legal challenges to any future UK-EU data arrangement were also discussed during the hearing, with Denham saying that scrutiny of the UK’s surveillance regime once it is outside the EU is inevitable — though she suggested the government will be able to win over critics if it can fully articulate its oversight regime.
“Whether the UK proceeds with an adequacy assessment or whether we go down the road of looking at a bespoke agreement or a treaty we know, as we’ve seen with the Privacy Shield, that there will be scrutiny of our intelligence services and the collection, use and retention of data. So we can expect that,” she said, before arguing the UK has a “good story” to tell on that front — having recently reworked its domestic surveillance framework and included accepting the need to make amendments to the law following legal challenges.
“Accountability, transparency and oversight of our intelligence service needs to be explained and discussed to our [EU] colleagues but there is no doubt that it will come under scrutiny — and my office was part of the most recent assessment of the Privacy Shield. And looking at the US regime. So we’re well aware of the kind of questions that are going to be asked — including our arrangement with the Five Eyes, so we have to be ready for that,” she added.
Those who say questioning the referendum would cause disruption should consider the chaos caused to everyday life by a cliff-edge departure
Five of the managers of the top six teams in the Premier League as I write are continental Europeans. I don’t know about the managers of Chelsea, Manchester City, Manchester United or Arsenal, but Jürgen Klopp, hero of Liverpool, has said loud and clear that he cannot understand why this country should be heading for the Brexit cliff.
For the terrible prospect now, as the so called “negotiations” with our European partners proceed nowhere slowly, is that unless someone exercises serious leadership soon, there is quite possibly going to be an almighty political and social crisis.
The geopolitical case for not disrupting Europe at any time – and certainly not at a time like this – is overwhelming
Like many British septuagenarians, David Charles Graves lived alone. The 75-year-old, known by everyone as Charlie, had no close friends or family; it’s perhaps why he became such a fixture at his local pub, the Ivy House in Nunhead, south east London. Ivy House regulars became as familiar with the sight of Charlie sipping a pint of Becks lager at the bar as they did with the pub’s quirky stage and furniture restored from the 1930s.
Charlie’s attachment to his local pub will resonate with many Britons. As far back as Roman times, when roadside inns offered comfort to travelers, pubs have occupied a unique place at the heart of British society. In Shakespeare’s time, there was roughly one pub for every 200 people and they feature in several of his plays— in Henry IV, for instance,Prince Hal, Falstaff and others constantly wander in and out of the Boar’s Head Tavern in Eastcheap, east London. George Orwell’s famous 1946 ‘Moon Under Water’ essay, describing the 10 key points of his ideal pub, notes that alongside draught stout, open fires, cheap meals, a garden and no radio, “the barmaids know most of their customers by name, and take a personal interest in everyone.”
Today, pubs still play a part in alleviating social isolation, particularly among elderly Britons like Charlie. Research by the University of Oxford shows that these watering holes can improve people’s engagement with their community and social network size, ultimately affecting how satisfied they feel in life.
Pubs have also become a high-ranking tourist attraction. According to research by the British tourist board, visiting a pub is the third most popular activity for international visitors to the U.K. Over time, the pub has become a symbol of the national spirit, and themed British pubs can be found in cities around the world.
Imagining Britain without pubs is like thinking of France without its café culture, New York City without yellow taxis or Tokyo without karaoke bars. But this defining national cornerstone is under threat. According to the Morning Advertiser, the U.K.’s leading trade newspaper for the pub sector, two public houses now close their doors for good every day. Is the good old British pub on its way to extinction?
Pubs have been declining in number for decades, but many believe England’s 2007 smoking ban, which put an end to smoking in all enclosed public and work places, exacerbated the trend.
Over the next eight years, the U.K. lost nearly 7,000 pubs, the majority of which were wet-led, meaning they only served drinks. “The smoking ban affected pubs enormously,” says Brigid Simmonds, CEO of the British Beer and Pub Association (BBPA), a major trade association. “A lot of pubs closed and many had to redefine themselves.” Some public houses branched out to offer food and accommodation; pubs now serve a billion meals a year and have 50,000 bedrooms attached to them.
But converting to a gastropub or inn is not an easy fix. Many pubs are located in Victorian, Edwardian or other historic buildings, which bind them to rigorous planning restrictions. These restrictions disincentivize investors who may have otherwise been interested in converting failing drinking dens into more profitable establishments. Climbing real estate prices, particularly in London, make pubs attractive prospects for developers—that is, if they have the permission to knock them down and build apartments instead.
Competition is also getting fiercer. Around 20 years ago, there were roughly 70,000 premises licensed to serve alcohol in the U.K.. Today, around 50,000 pubs and 70,000 other premises, from restaurants to coffee shops, have an alcohol license. “The sheer growth in the eating-out market over recent years means there’s massive competition,” says John Longden, founder of ‘Pub is the Hub,’ a not-for-profit group that offers support to licensees across the country. “You’ve got supermarkets selling beers, wine and spirits at a cheaper price than pubs, so people will drink at home. And now, the younger market is saying ‘actually we’re not drinking.’”
Indeed, government research published in May 2017 demonstrates a generational shift away from alcohol; 26% of the U.K.’s 16-to- 24-year-olds are teetotalers, compared with just 17% of 25-to-44-year-olds and 14% of those aged 45 to 64.
Tastes are changing in other ways too; beer consumption is falling, with more than half of 25-to-34-year-olds now favoring wine instead. A Nielsen poll found that sales of sparkling wine surged by 14.7% in 2016, and an overview by the Wine and Spirit Trade Association that same year found that nearly half of all drinks sold in new pubs, bars and restaurants were wine and spirits and not the more traditional pints of froth-topped ale.
High tax on beer—making up around a third of the cost of a pint—has further contributed to pubs’ woes. The last center-left Labour Party government introduced a now-defunct “duty escalator” policy in 2008, justifying the price hike in the budget with: “as incomes have risen, alcohol has become increasingly more affordable.” The move, which increased the price of a pint by 2% above inflation, had a devastating effect on the sector, with industry experts claiming the policy reduced sales of beer by as much as 16%. The closure of around 5,000 pubs can be linked to the Labour policy, according to Tim Page, chief executive of consumer organization The Campaign for Real Ale (CAMRA). The escalator was axed in 2013 following heavy lobbying, but its effects are still felt by the U.K.’s pubs and brewing industry.
A great disparity between the cost of alcohol in pubs and supermarkets is another major issue; when six 275ml bottles of Beck’s lager cost £5.10 ($7.19) in Tesco, one of Britain’s biggest supermarket chains, spending the same amount if not more on one pint in a pub is not a particularly attractive prospect. “If you want pubs to survive decades down the road, then it’s common sense that you can’t tax them more heavily than what is the market rate,” says Tim Martin, founder and chairman of pub group JD Wetherspoon, which has 900 establishments around the British Isles.
All this is in the shadow of Brexit, the U.K.’s looming March 2019 exit from the European Union, bringing with it uncertainty and division.
Some pub owners believe Brexit could turn things around for them; a poll conducted shortly before the 2016 referendum found that more small-food-service operators said they would vote to leave rather than remain. Martin was a major Brexit backer; he even printed 200,000 coasters calling for the U.K. to “take back control.” He believes that without the E.U.’s high tariffs on food and drink imports, their prices will decrease and pubs will flourish.
However, as with much of the service industry, Brexit is likely to have a considerable impact on pubs’ workforces. In 2016, hospitality-intelligence firm Fourth Analytics estimated that 43% of workers in the hospitality industry come from overseas; in more metropolitan areas, this proportion can be even higher. It is still unclear whether these “soft-skilled” workers will be allowed to remain in Britain after March 2019; the government is in the process of assessing the economic and social contributions of E.U. migrants and isn’t due to report back on its findings until September of this year.
“We need to make sure people who are currently here can stay here,” says Simmonds, whose BBPA did not have an official position during the referendum. “We have to ensure Brexit isn’t only about highly skilled, highly paid workers.”
These varied challenges are forcing pubs to think creatively. Longden’s ‘Pub is the Hub’ advises licensees on providing a wide range of local services and activities, from building shops, libraries and post offices, to providing meals for local schools or the elderly. (One pub in southwestern England even introduced a community playground designed entirely by children, featuring a bar serving mud and a ‘bug hotel’.)
Pub is the Hub claims to have helped nearly 500 pubs across the U.K. offer 27 different services, helping them stay afloat. Longden tells TIME about a recent check-up visit to a pub in Cornwall, southern England, six months after his team of volunteers had helped install a playground there. “The licensee told us his pub had been packed out every Saturday afternoon and joked that it had become known as the ‘pint and play,’” he says.
Communities are increasingly stepping in to save their local drinking establishments. In 2013, Charlie’s local, the Ivy House, narrowly avoided being turned into an apartment block thanks to a group of residents who spent more than a year fighting to bring it under community ownership. In 2013, it became the first cooperatively-owned pub in London, thanks to a policy introduced two years earlier. Under the new policy, communities are able to nominate buildings and land for listing as “an asset of community value.” Once listed, the community may have the opportunity to bid to take control of the asset if it is put up for sale, as residents did with the Ivy House when its future was threatened by a developer.
Initially, 371 individuals purchased shares in the pub for £100 ($132) each, with a minimum investment of two shares per person. Not all of the shareholders were local. “They come from as far and wide as Canada and New Zealand,” says Emily Dresner, co-chair of the Ivy House committee. “Some people revealed to us that they didn’t drink and didn’t have any intention of visiting the pub, but still wanted to get involved in a great community initiative.” The Ivy House is part of a greater trend; there are more than 60 cooperative pubs open and trading in the U.K. and the number is predicted to continue to grow.
Innovations like these have been key to keeping pubs alive in an increasingly competitive marketplace. “Pubs provide a cross between a coffeeshop, a restaurant and a church. It’s hard to define the attraction but you know it when you see it,” says Wetherspoons’ Martin.
Going to the pub no doubt made the Ivy House’s Charlie feel part of his community. When he stopped turning up for his regular pint last summer, locals began asking after him. Eventually, it transpired that he had fallen ill and swiftly passed away. Despite not knowing much about the elderly man other than his drinking habits, the Ivy House managers decided to hold a memorial service for him and were shocked—and moved—when around 150 pub regulars turned up to pay their respects to a gentleman they barely knew.
It’s a testament to the role that the pub has played in British communities for generations, says Matt Soper, secretary of the Ivy House management committee. “I knew how many people knew him but didn’t realize how many would show up,” he told TIME. “It was proof of how successful this place has been— not just in business terms, but in the sense of being true to the spirit of a real community pub.”
Right now, pubs seem in danger of disappearing but if there’s one astonishingly simple way that ordinary Brits can save the good old pub: by going to one. “There’s no point sitting at home and saying pubs are wonderful if you never visit one,” says Simmonds of the BBPA. Instead of mourning the loss of the great British pub, Brits should celebrate their existence in the only way they can…over a pint.