Europe

Has Nissan been sold an EU nonsense?

The prospect of shiny new Nissan X-Trails and Qashqais built in Sunderland roaring up the ramps of ships bound for EU ports without tariffs after Brexit came closer this week.

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Has Nissan been sold a false promise? These workers should know.

Business Secretary Greg Clark told Andrew Marr and the House of Commons that the Government’s approach was to secure tariff-free access to the EU for UK-made cars and effectively adopt a sectoral approach for others.

Britain’s car exporters may have taken some comfort from this. They have most to lose if such an agreement is not made. According to a House of Commons Committee, the average 9.7% tariff under WTO rules on cars would amount to an annual cost of £991bn for such EU exports.

The automotive sector would top the tariff league table – costing it six times as much as second-placed aircraft parts (£156m), oil (£155m), clothing and food if no pact is made.

So whilst the carmakers seem reassured, what about the many others sectors whose EU export prospects are threatened?

Stand by for campaigns from trade bodies representing the clothing industry, who face the prospect of 12% tariffs, or even our small but proud wine producers with an intoxicating 32% tariff.

They will be highlighting their importance to the local economy, the employment effect and their reliance on such trade for their overall business.

Others representing pharmaceuticals, agriculture and electronics will insist their plight is as deserving as Nissan’s.

With the sector-by-sector approach now signalled the scramble for sympathy is reinforced by the UK banking sector urging rules that will replicate or maintain the “passporting” arrangements allowing them to operate freely across Europe.

Similarly, bodies representing the construction, care and tourism industries will feel encouraged to press their case for allowing people from the EU free access to work in their sector where seasonal and other shortages frequently arise.

So the Government’s piecemeal approach will now galvanize trade associations. They will be jostling for attention with politicians and the media.

Their task is a tough one. The sector approach is based on a hope that the remaining 27 EU countries will be content to allow a series of exemptions to allow British businesses to operate pretty much as they did whilst in the bloc.

It could be wishful thinking. The incentives for the 27 to do this are not that great. Why would they allow club rules to apply when Britain is no longer a member and not paying its dues?

So that means trade organisations making representations to their EU counterparts to urge them to advocate to their Governments sectoral carve-outs for their industries.

Even for carmakers, including Nissan, the outlook is not especially good. Germany’s car industry federation boss Matthias Wissman told the FT last month that “The UK is an important market for the German car industry, but the cohesion of the EU27 and with it the single market is more important for this industry.”

Pro-Leave campaigners claimed during the referendum campaign the German carmakers need our market as much as we need theirs. But it now looks like they have much wider concerns.

So whilst we celebrate Nissan’s renewed commitment to Sunderland, let’s hope it has not been based purely on a pledge of EU sectoral favour. At the moment, it looks like optimism rather than practical politics.

The mourning after….

Writing this comment after Britain just voted for Brexit feels like an obituary to a dear friend.

Not to the EU. But to my own country.

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Britain as we know it is no longer

A freudian slip by my local authority illustrates this. Referendum polling agents were invited to attend last night’s count at the town hall on a ballot to decide what it described as whether “the UK should leave or remain in the UK”.

How prophetic. Because today the UK is no longer a united kingdom.

It’s not just the 52-48% fracture, the renewed prospect of Scotland leaving or revived pressure for a united Ireland, it’s that in England and Wales the overriding perception is that we are no longer a country comfortable in its own skin.

The divisions between young and old are especially acute and depressing. As a dad I am ashamed my generation let them down. What damage have we done to help our children’s job prospects and other opportunities across our continent?

But we have to acknowledge that millions do feel a real sense of loss of control – even on a day when they have had thousands of pounds uncontrollably wiped off the value of their hard-earned pension funds.

For many that perceived loss of control has given them personally poor or no jobs, inadequate housing and declining public services. It resonated well but it had nothing or little to do with the EU. It was this anger that made the difference.

And Leave campaigners cheerfully rode Farage’s xenophobic wave to exploit these understandable anxieties and tip the vote in favour of Brexit.

And it has left us as a divided nation. It seems it is no longer at ease with itself.

Some will urge “don’t mourn, mobilize!”. Yes, after a period of grieving mobilisation will happen, after which we may have to accept our new constitutional fate and hopefully build a more genuinely united country that is more content with itself and with its continental neighbours.

Brexit: the bad neighbours’ choice

Let’s consider what our country would feel like if we woke up on Friday 24 June with Britain about to exit the EU after more than four decades.

The issue is more than a debate about immigration statistics, economic prospects and budgets for Brussels. It is about who we are as a country. How we define ourselves. How we  behave towards each other and those who visit or settle here. Fundamentally it is about values.

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EUverybody needs good neighbours. Will Brits on 23 June be good?

If you are someone who feels comfortable around and enthused by people who do not share much of your own background, you are likely to feel more relaxed about getting together with them to work on common problems.

But if you feel threatened, inferior or superior to them, you are probably less likely to want such co-operation.

It’s a generalisation of course.

But exit would feel like suddenly changing your character on your typical urban street. It used to be a relatively calm place to live with neighbours mingling, children playing together, morning greetings exchanged, windows left open and nextdoor’s holiday plant-watering promise fulfilled. There might be the odd tiff over irregular parking, gobbling all your BBQ sausages or an extension application, but it is mostly a contented community.

But on 24 June it would be as if the normally cheerful Brits at number 12 decided suddenly to fold their arms tightly, purse their lips, close their windows, keep the kids indoors, stride belligerent and blinkered to the station each day and generally ignore the neighbours. It would then stumble into repairing relations with them ignorant of how it would end up.

It’s like taking an insecurity pill which suddenly transforms a relaxed and friendly household into a charmless, buttoned-up, po-faced family that cancels its annual Christmas drinks party, withdraws its offer to mow Gladys’ lawn at number 14 and stops the kids sharing their toys at playdates with number 11.

It smacks of a fundamental insecurity and suspicion of others. It exploits base values. And that’s why I freely admit my emotions are now driving my referendum choice to remain in the EU on 23 June as much as the facts and my supposed early career policy expertise.

Now, who in my street has an axe I can grind?

Plotting a safe regulatory course

Google has been in the news this week with the EU issuing antitrust charges over alleged abuse of its dominant position with its Android operating system. Luckily it had Microsoft’s earlier tussle with Brussels on similar charges to draw on.

It also has its own superb team to handle such matters. They’ll be busy in the next twelve weeks.

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How close to the regulatory wind can Google sail?

The online giant knows ignoring regulation destroys businesses. If your CEO relegates its management to a remote part of the company, s/he’s going to be moved on pretty sharpish.

I have been a regulatory poacher and gamekeeper. Fishing for a break from competition authorities to reward enterprise when at places like Sky and Millicom, and forcing through changes to help markets work more fairly when working at Ofcom.

It requires a lot of intellectual heavy lifting. I recall one very senior official telling me that part of the regulator’s job was to know more about the companies overseen than the companies knew themselves. That’s why his organisation was stuffed full of PhDs and MBAs (who often then got poached to the poachers’ side) who dug deep and thought hard.

Back inside the company, smart lawyers and economists ran models demonstrating the fairness of its commercial stance and the iniquity of our competitors’.  I’ll never forget the CEO’s 7am call to me from an airborne plane to say we’d been let off, just, by the competition regulator after an inquiry. There was only a cosmetic wrist slap and some grandstanding to endure.

We were a basis point away from further action – showing just how well-tuned the business was. My CEO had made sure that the regulatory team were fully across all the firm’s activities and embedded knowledge and practices there to avoid fines, disposals and public opprobrium. So the company maximised profits by sailing as close to the regulatory wind as allowable without capsizing and drowning it in ruinous anti-trust penalties.

But such scrupulous management is not enough by itself. Demonstrating strict adherence to the rules to investigating authorities is indispensable. But too narrow a legalistic approach can weaken the case. Compliance needs to be matched by smart communications too.

One barbed remark, from a super-smart senior colleague managing such matters at one company, highlighted this for me as a communicator by asking “What value are you adding to the company on this exactly?”.

I was quite offended. But, on reflection, it was fair. He had a very dim view of the press and media. He had supreme confidence in his own intellectual ability and a sneering attitude to his peers at the regulator. He believed only his team’s objective evidence would be admissable and would win the day with them.

I did the autopilot speech about broader strategic reputation management also subjectively influencing such matters. Such soft talk met with derision.

So I took him by a reluctant hand to do some tactical briefings for broadsheet and business media whilst gently turning up the volume on our innovation and others’ competition. It was the classic convert opponent-to-neutral and neutral-to-support operation. The fruits of such labour duly appeared: less hostility and even some signs of support.

That, with many other activities, made the job of the regulator easier when adjudicating our case. They’re not purely po-faced pointy-headed institutions. Even they have a persona and care how they are perceived. The “public” ground had been prepared sufficiently well to enable it to make a reasoned judgement without being accused of bias or incompetence.

Of course we protested at its suggestion of any anti-competitive behaviour just as our rivals complained too. Result: happy regulator, not pleasing anyone and thereby being seen as fair and impartial.

That’s the course Google will be plotting. Stand by for some clever comms from them in the next few weeks as it deploys its considerable firepower. Anchors away!

Cretans not Cretins

Just had a couple of days in Crete. Not been to the Greek island since the 80s and, surprisingly, not much has changed at the stunning Venetian harbour in Chania or the inspiring 1900 BC Minoan palace at Knossos.

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Your author at Knossos, Crete this week

It was a magical place to attempt to think profound thoughts as our guide reacquainted us with the ancient myths beneath the spring sunshine.

But all the time I came back to thinking about Brexit and Grexit, particularly when reminded of the mythical god Europa, the revered mum of Crete’s King Minos. She was not a UEFA creation but born in…. modern-day Lebanon. Now there’s a shock to those Europhiles who celebrate her depiction on € banknotes and as a symbol of Euro-unity.

Those banknotes could have become extinct last year as Greece’s ruined economy teetered on the edge of Grexit.

Well they are still legal tender there as the country’s eurozone membership continues. Despite traditional Hellenic tax-dodging continuing (our hotel suggested we pay in cash!) the economy is stabilising.

And Cretans are not Cretins. They know how to attract trade and tourism to their fabulous island. No wonder Europa was so attracted to it.

Let’s celebrate her legacy with a resounding ✔️ in the Remain box in the June referendum.