Saturday, 22 October 2016

Passport to Pimlico

Have you ever seen Passport To Pimlico?   It's an Ealing comedy from 1949, which tapped into post-war frustration at continuing rationing and the slow rate of reconstruction.  It's a great film but recent events really do make it worth a quick watch on youtube. In the film ancient documentation is unearthed that proclams Pimlico to be a legal part of Burgundy and it follows that the United Kingdom has no juristiction there.  The good citizens of Pimlico immediately abolish rationing and experience an outbreak of much wanted hedonism, very much in the spirit of the sozzled islanders in Whisky Galore.   Eventually, though, there are customs borders, problems with migration, and barbed wire fences.  All of this sprang to mind when I started reading again and again and again that free zones could be a solution to to customs problems caused by Brexit.


There's really has been a lot of talk about creating special zones in the UK to minimise the disruption that Brexit will impose on imports and exports.  There are two types of zone that have been mentioned so far:  1) zones that retain EEA and UK membership and 2) zones that are so-called free trade zones.  The difficulties of achieving the first choice have been addressed in a succinct and thought-provoking article here.  It might be technically possible to achieve it but politically it is way out there with the Andromedans.  The second choice, on the other hand, has significant global precedent.  Could we litter the UK with free trade zones and solve all our problems? The authors of this Brexit bible certainly thought so. Let's find out if they were correct. If you have a busy schedule I recommend that you just get on with your purposeful life because, honestly, you can make a good guess at the answer.

Free trade zones are typically solutions to avoid import tariffs on goods as they transit through an economic area.   In the UK there are already a number of free zones at airports.   Status as a free zone allows the airport to act as a kind of tax-free stop-off point for goods travelling around the globe.  If the goods don't leak out of the airport they are able to avoid paying duties to the UK Customs Authority.  Prestwick airport is one of 5 that have free zone status in the UK.  The others are Liverpool, Sheerness, Southampton, and Tilbury.  Tilbury airport!  Sheerness airport?  You don't see these on the departure board, probably because their main function is to act as a giant warehouse.  China also has a number of free zones dotted around its coast. Components arrive by sea to be assembled in the free zone.  The assembled products are then exported back out to the rest of the world.  Can we solve Brexit problems with free zones?


The flux capacitor is bifurcating on its hysteresis curve.

Let's start our journey at the Nissan factory in Sunderland.  The Nissan supply chain is unbelievably complex with components whizzing around from one place to the next and then back again.  Are we going to make each port of call in the UK a free zone?  This is getting too complicated for my liking.  Moreover, a free zone in Sunderland solves the problem of import duty at the UK border but it doesn't solve the problem if those components make a further crossing to the EEA and back.  The EEA will still impose a duty on the components at their end.  Another issue is that delays and interruptions to the chain break the whole cycle, which is as much about reliability as it is about direct cost.  The only reason the supply chain developed as it did is that  complexity was minimised by open borders. Another issue just occurred to me: how will Nissan stop tariff-free components leaking into the UK car market without operating two production lines?  How will the UK Customs Authority track the components whizzing around the factory?  Hang on, another idea just popped in my head.  Why do we favour Nissan Sunderland over the BMW plant at Cowley, Oxford?   Is it just because Sunderland is on the coast,  thereby reducing the need for a free zone corridor connecting the plant with the outside world?  That does sound unfair.  This idea loses its appeal the more I think about it.

What about Canary Wharf?  Just like Nissan Sunderland it seems a good candidate for special status because it is a self-contained area.  Workers can leave their Canada Water flat in the morning and then travel by tube to the free zone at Canary Wharf where they will carry on selling pensions to Austrians and Hungarians.  Hang on just a second, that isn't right at all.  Giving Canary Wharf free zone status won't make it part of the EU or the EEA.  It will just be a free zone where goods, I suppose, could enter and exit via the Thames without paying any duty.  Yeah, I got confused there just like all the other chatterboxes on this topic.

Imagine for a second a world in which Canary Wharf did have EEA membership.  What would that be like?  Let's start with another question before we really get our thinking caps on.  Do you think that Prestwick was chosen as a rendition transit point because it was a free zone and therefore not strictly policed by the UK government?  I'm not a lawyer but it strikes me that Prestwick was deliberately chosen due to its special status.  So, who exactly will be regulating the fund managers looking after my personal pension?  I would guess the fund managers will be regulated by EU/EEA rules because the whole point is to carry on selling pensions to Austrians and Hungarians.  That's fine, I guess, but I will no longer be a citizen of the EU and my government will no longer be a member of the  EEA.  All control of my most valued financial asset has just been given away to governing bodies over which I have no power at all.  I don't want Canary Wharf to suddenly exist outside the regulations laid down by the UK government.  After all, we've already seen what they can achieve when they are subject to light-touch governance.  Remember, this is all about "taking back control".


This idea is terrible.
It's time to travel up the East Coast to Edinburgh.  Maybe Scotland could be a giant free zone. The border with England is a geographic bottleneck so maybe it could be policed without too much difficulty.  Yay, there is also a ready-made government with its own Parliament. Fantastic, we even know who would govern the zone and that democracy would be protected. What's the catch? Scotland will be the first country in the world to have 0% import tariff on absolutely everything. This creates a huge divergence between Scotland and rUK so that border had better be sturdy.  It also means that Scotland will be the guinea pig for Liam Fox's ultra-libertarian fantasy experiment. Nobody wants that, apart from the Foxmeister, of course.  This one is doomed by association, I'm afraid.

I've only thought about this for about 10 minutes and already this idea is hanging is on a shoogly nail.  What a mess.
 
Over and out,

Terry



4 comments:

  1. The more you analyse this in your easy-to-understand way, the more, I think, we realise just what a complete mess it is... and a mess that was so avoidable.

    For years governments, ably assisted by the Press, have blamed things that went wrong on the EU. Of course, without doubt, sometimes they were right, but I suspect that once they found that it played well with the public, they decided that more and more could be blamed on "foreigners".

    There's nothing like island mentality for blaming foreigners, and when you add in "the empire" and how we "ruled the waves", you are on a winner. When you spice it up with "the Germans" and "the French" you're cruising to victory, no matter how flimsy your arguments.

    But you can only push these things so far before Joe Public starts to want to do something about it. The "well, why are we tolerating these foreigners making our lives so crap?" attitude.

    And so UKIP started gaining popularity, even with dubious characters representing them. People who blamed floods on equal marriage legislation really belong in the fringe "look, us Brits have a sense of humour" parties.

    They got a massive boost though from Nigel Farage's leadership. A millionaire who didn't really behave like a millionaire, liked a pint and a fag, and a pretty face, but was essentially (despite his French name and German wife) an "average" Englishman. Just one of them.

    Once Tory MPs started defecting to the party, it was, in Cameron's view, time to act. Typically of yer man who has had everything handed to him on a gold plate, using a silver spoon, he thought he was right; he knew he would win. He always did. Voting systems? Scotland? OK, he had to fiddle stuff a bit, but people like him can and do. And then they win. Always have, always will.

    But his tame Tory newspapers were against him this time.

    They knew that what REALLY bothered their readers was "foreigners". Foreigners it was that made doctors' appointments rarer than hens' teeth; that kept class sizes over 30; that meant Tyrone couldn't get a job, etc.

    Not under-investment. Not spending on "punching above our weight" or having the forth largest military spend in the world, poking our noses into everything like we still REALLY mattered... No, it was none of that. It was the plumber from Poland, working and paying income taxes and council tax, who was to blame. It was the Austrian doctor, the Portuguese dentist, the French teacher. They were stopping our kids getting education; our old being treated and our youth getting jobs.

    And so the gutter Press sold that narrative. That, along with the migrant hordes coming from war zones which we helped to create, was used to persuade Joe Silly that we should leave the largest trading block in the world and forego the passported benefits of human rights and health a safety, freedom of movement, which they have managed to turn into swear words.

    What have they done...Cameron to save his scrawny backside and the newspapers to stir up sales and advertising revenue?

    The UK is stuffed. And all they, the government and the Press, will be able to do is blame everyone else in the world for being intransigent about finding deals for us.

    Thanks for researching and writing your excellent pieces. Simplifying the complex analyses in more learned newspapers and journals, adding your own brand of humour and making them readable and understandable is a great service.


    ReplyDelete
    Replies
    1. Thank for your kind words once again.

      There are very real problems with the EU, as you point out. The Common Agritultural Policy springs to mind. The weird thing is that CAP has barely ever been mentioned by anyone. It really has descended into a horrible argument entirely about foreigners. Where will this end?

      Farage is an example of the media promoting someone who is very good at being in the media. Put him on the screen and people will tune in either to nod along or yell at him. It doesn't matter that he leads a minority party or has no facts to back up his claims. It only matters that he pulls in viewers and readers. He is utterly someone of the current era, who very cleverly used his entertainment value to propagate his poorly formed ideas. The legacy of this over-exposure is the normalisation of xenophobia. That's what it took to win the referendum. And it all happened because he played a convincing role of charming buffoon.

      It seems that questions or ethnicity and origin are at the very centre of British(English) politics once again. Where is the opposition? Are they still producing those mugs? It's normalised now to sneer at asylum seekers, campaign for them to stay out, inspect their teeth like horses for sale. And what do the Labour Party do? They don't know whether to join in or just stay silent and hope no one notices.

      In the current climate the government have realised they can simply blame immigration rather than use political power to fix real problems in society. You are absolutely correct there. My fear is that the genie is out of the bottle. It will be very hard to get it back in again. Is anyone even trying to do that?

      Delete
    2. To be fair the SNP, the Greens and Paid are trying to do something about it. But they don't have much of a voice outside of Scotland and Wales.

      It's convenient to blame things on "foreigners". If you broaden "foreigners" to be anyone who isn't "us", you see it everywhere. In Scotland Catholic and Protestants; Rangers and Celtic; Hearts and Hibs; East coast and West coast. And even in towns, gangs from rival estates... and sometimes from different parts of the same estate!

      Add in Gay and Straight; Unionist and nationalist; Labour and Tory... We seem to thrive on discord; on blaming someone else.

      When it comes to REAL foreigners, it is then only a bit odd that despite the availability of foreign travel, relatively cheap flights, and easy movement, the fear and hatred of people from other countries is so easy to use on Brits. Many have been abroad. They must know that "foreigners" don't have three heads, but then they know that west coaster or Protestants or gays don't have three heads. It doesn't stop the hate..

      Farage, whilst back yet again leading UKIP, isn't going to be there for long. It looks like, unless someone assaults him (and who would; he's a BIG bloke), Coburn may be the next leader.

      He has none of the "charm", or the "bonhomie" of Farage. May must be hoping for him to succeed.

      I've given up on Labour for everything. I'd hoped that they would sort themselves out and oppose the Tories now that they have, for a second time, elected Corbyn. But it seems that for some of them the only game in town is the pursuit of THEIR personal future, their legacy... and sod everything and everyone else.

      If the EU and foreigners are the perceived problem, how will the government explain that none of that goes away over the next 20 years?

      Delete
  2. Sorry, I should have mentioned the SNP, Plaid and Greens. The First Minister is a welcome voice against Brexit madness. You're absolutely right to point that out.

    I'm guessing UKIP are pretty much finished without Farage. The Tory Party seem to be doing a good job of taking up the slack.

    Coburn? Wow. He's a walking disater.

    There is a lot of hate out there. Time to put on "I hate hate" by Razzy Bailey.









    ReplyDelete

Bark, lark or snark