Tuesday, 7 August 2018

A "no deal" Brexit just won't fly

As eureferendum.com notes, it is quite typical for pundits to treat "no deal" Brexit consequences flippantly. They are considered so extreme that disbelief sets in. The view is taken that because they are so extreme, they cannot be allowed to happen and therefore, that they won't happen. But this is to disregard what we know about modern officialdom.

For an insight it's worth watching the Netflix docu-soap "Ice Pilots". The programme follows the daily grind of an air courier company servicing the Canadian Northwest Territories. The family owned company operates vintage DC3s but provide general aviation services on the side, not least aerial firefighting.

In one episode the company manages to sell two Canadair CL-215s (pictured) to Turkey. This proves to be a lucrative exchange so the family go in search of another one to restore and sell. Eventually, following rumours, they locate an example in South America. They fly down to find the airframe in good order and a viable candidate for restoration to flight.

This is, of course, if the aircraft has its logbook. An aircraft, with the documents, is a valuable property. Without, it's a heap of scrap. There are ways around the bureaucracy but the airframe would be subject to full certification assessment involving a full strip down and ultrasound scanning of the airframe for fatigue - which is an expensive operation. I don't recall if the logbook was found but this serves as a worthy example of the modern regulatory environment. Recall also that, when EASA took over UK aviation safety, aircraft were grounded through paperwork errors. 

I also recall that the operators of Europe's last flying B-17 bomber, Sally B, were forced to cancel joining the VE-Day flypast because of insurance costs. This was due to crippling EU third party liability insurance requirements, based on aircraft weight, which have placed Sally B in the same insurance category as a commercial airliner.

The effect was an increase in liability insurance of almost five hundred per cent, which is the equivalent of a staggering one thousand pounds extra per flying hour, on top of the already incredibly high running costs. But unlike a 737, Sally B operates for only twenty hours a year, is on a Permit to Fly, and can neither fly commercially, carry passengers, fly for hire or fly over built-up areas.

This, I recall was another one of those times, much like when new EU rules forced the closure of a number of small slaughterhouses, when the government claimed it was powerless. The EU certainly made no friends among aviation enthusiasts. The point, though, is aviation is probably the most risk averse sector globally and if paperwork is not in good order then aircraft simply do not fly. Without agreements in place insurances are invalid, certifications are not recognised and permissions are denied. 

Changing the topic somewhat, a more recent example of draconian officialdom was reported in the Farmers Guardian when the European Commission failed to re-authorise the Red Tractor assurance scheme, along with four different schemes from other member states, despite the application for re-approval being lodged six months ago. The unexplained gaffe meant farmers whose grain was destined for the biofuels market have been left in the lurch, with some having to fork out for interim storage.

NFU combinable crops board chairman Mike Hambly said: "This current situation is a good wake-up call to Defra, the Department for International Trade, the end consumer and also farmers. No paperwork or tick in a box equals no trade, and it worries me it could happen in many ways, be that through chemical re-registration being missed or even a change in labelling. The importance of these things needs to be absorbed by us all and we need to be active in pushing for timely action to prevent issues rather than waiting until they become a major financial burden".

There are a number of sectors similarly dependent on authorisations and if the UK becomes a third country overnight then a number of sectors come to a grinding halt. We are told by hard Brexiters that we are exaggerating - and that it's all just a "millennium bug" panic but, categorically, it isn't. From air travel to chemicals registration, if the certification system is not in good legal standing then trade simply does not happen. Now imagine all of these problems hitting simultaneously. Not good is it?

Across the board, the export of many manufactured goods will cease. This will apply where they require third party certification from "notified bodies" and have relied on certificates from UK bodies. These will no longer be valid. Chemicals which lack REACH approval will also be excluded from the European market.

Live animal export will, of course, be prohibited, but this will probably also apply to the movement of pet animals without quarantine, and the transport of racehorses direct to France and Ireland, without veterinary control and supervision.

Being that we are looking at a sudden death Brexit, our domestic regulators will be in no shape to step in to get things working. We need to develop our own systems from scratch. Some ask why we can't just roll back things to how they were before the EU took control - but most of the sector experts will be retired by now and in some cases we are regulating things which didn't exist even ten years ago. 

For sure, special ministerial dispensation can be given to ensure the basics keep running, but not where there are transboundary authorisation issues as there is with aviation and trade in goods. There is nothing in WTO law which obliges the EU to relax its standard third country controls. In restoring order, everything will be treated on a triage basis according to its strategic national importance. That means some sectors will be waiting months before there is any kind of normality. 

The bottom line is that the EU is a creature of rules and will uphold its system of law come what may. Some argue that all this red tape is, of itself, a reason to leave the EU, and in many respects one could not disagree. There are some areas of public life which should never have been signed away - where there was never any utility in harmonisation. But as much as that is an argument for leaving the EU, it is also an argument for not making a monumental pig's ear of the Brexit process. We simply cannot afford to. 

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