Post Art 50 – Page 4 – John Vincent

Aviation & Brexit 91

90-days[1] to the next predictable Brexit cliff edge. The UK Government has still got a hell of a lot of work to do to get ready for a Brexit No-Deal scenario. The international currency markets have detected the fragility of the current situation and reacted accordingly. The British pound sterling is at 1.216 to the $ and 1.094 to the EURO as I write this short sentence. That’s an incredibly poor rate, even if you took the view that the pound sterling has been overvalued. British summer holiday makers are going to find this fact painful, but the flipside is tourist coming to the UK are going to have a great time. No doubt, air traffic will continue to grow to carry these welcome visitors from overseas. Unfortunately, in the short-term the threatened strike at British Airways (BA) may put a damper on that prospect.

The bigger issue is: what the state of the national currency says about the level of risk we are taking with Brexit. It’s not a vote of confidence. Currency rates may tumble further.

There’s a list of Brexit downsides and one is that British assets now look cheap to overseas purchasers.

I’m not saying that this is a specific example, but I noted with interest the sale of the British defence and aerospace group, Cobham to a US private equity firm for 4 billion pounds[2]. Today, Cobham employs 10,000 people. They were known for the development of airborne refuelling systems, which was a British innovation. This organisation is part of my aerospace design history. In the 1990s, on a regular basis, I visited what was then called; Flight Refuelling Ltd, just outside Bournemouth. I did numerous approvals of modifications to the Falcon 20 aircraft that they flew[3].

Sadly, the UK’s recent keenness to leave the European Union (EU) without a deal, on 31 October 2019 is like hanging out a big “For Sale” sign. Sound companies with valuable intellectual property look like a good buy. That said, this is not new for the UK. There are desperate periods in our history where selling the family silver was quite the vogue.

My point is that there are valuable British assets that look cheap to foreign investors given the uncertainties of Brexit. Which is ironic because it’s completely the opposite of what Brexit was supposed to be about, namely; take back control.

History always has lessons for us. Even recent history. I’d recommend an offering from the UK TV Channel 5 with Portillo’s series: “The Trouble with The Tories”[4]. He interviews many of the key players who brought the never-ending Brexit calamity upon us. I watched it and thought, just how useless knowledge with hindsight can be. Not only that but how dreadful British politicians are at assessing risk.

One thing I’m sure of, next week is going to another Brexit rollercoaster. It’s as if we have invented perpetual motion. It would be wrong to see No Deal as the end point or finish line.

[1] https://interactive.news.sky.com/2017/brexit-countdown/

[2] https://uk.reuters.com/article/us-cobham-m-a-advent/us-private-equity-group-advent-buys-uks-cobham-for-5-billion-idUKKCN1UK0NA

[3] http://www.aeroflight.co.uk/tag/flight-refuelling-ltd

[4] https://twitter.com/channel5_tv/status/1157040808845094912?s=20

No Mandate

There’s no mandate whatsoever for a No Deal Brexit[1]. None. Having the false assertion out there, and so widespread that this is a great danger to our democracy. Pushing forward with a policy based on a lie, that everyone can see is normally the preserve of dictatorships and communist regimes.

The new British Foreign Secretary Mr Raab has been speaking falsely. The new UK Government has no mandate for a No Deal Brexit. In fact, there would be no need to blame the European Union (EU), as Mr Raab has started to do if there was a true mandate for a No Deal Brexit.

Before the 2016 EU referendum, the lead Leave vote campaigners were saying that the UK would be mad to leave the European Single Market. That European market that Britain had fought so hard to establish. They were explicitly proposing a Norway-type deal and stating that getting such a deal would be quick and easy. Leave vote campaigners sold Brexit on the basis that there was little risk as we held all the cards in any negotiations. It doesn’t take long to survey the archives of British media from 2016 to understand just how far we have drifted from reality. There’s an abundance of recorded evidence. There’s no mandate for a No Deal Brexit.

If we move to the UK General Election of 2017, I don’t recall a No Deal Brexit being part of the last Conservative Party manifesto. Yes, there was a commitment to negotiate a Brexit deal but not to give-up and walk away.

Now, I can hear a Brexiter saying but it’s the “default” position. This word “default” is somehow used to justify what is in truth an active policy choice. The UK Government has the power to stop a No Deal Brexit right up to the moment before it happens. Unfortunately, at the moment, Johnson’s new Government does not have the will or the common sense to do so.

The lie that there is a mandate is likely to be sustained by the Johnson Government because it’s the only way they can justify “turbocharging” the preparation for No Deal Brexit planning. Essentially that means throwing billions of taxpayers’ money at something they can’t define, and most people don’t want.

This morning the British Foreign Secretary told the big fib on BBC Radio 4. It’s recorded and the rest of the world listening knows it’s a fib. So, why would anyone take talk of any future negotiations seriously having heard his radio interview?

Also, let’s remember that the British Foreign Secretary who says the UK will do a No Deal Brexit on 31 October 2019 if the “undemocratic backstop” isn’t scrapped, is the same Mr Raab who was a Brexit Secretary. Whatever happened to the The Ministerial Code?

Our sad state of affairs will leave us wandering in the wilderness for many years to come. There’s an alternative. Stop Brexit by a simple act of revoking Article 50[2]. Eat the humble pie and save Britain. Action now.

[1] #NoDealBrexit

[2] #RevokeA50

Aviation & Brexit 90

Minister Michael Gove says the UK Government is “working on the assumption” that the United Kingdom (UK) will leave the European Union (EU) without a deal on Thursday, 31 October 2019. A huge No-Deal Brexit public information campaign is on the way. This doesn’t much change the facts on the ground, but it does put a bright red flag up to the whole Country and beyond. There are denials that a UK General Election is on the way. At the same time the new UK Government appears to be on an election footing. Now, the architects of the Leave campaign in the 2016 referendum hold power in the UK. It’s reasonable to ask; how on earth did we get to this point?

If you didn’t see the BBC documentary on the Brexit Crisis[1], I can thoroughly recommend it. You can watch it on the BBC iPlayer. It objectively tells the story of the Brexit negotiations, from behind the scenes on both sides. The programme is not about aviation but that subject, just like 101 others is caught up in the incomprehensible political maelstrom that is Brexit.

As I write here, opinion polls give the new UK Government a slight bounce. Those who say; “let’s just get it over with”, do seem to be getting a degree of support. However, this feeling people may have, is very far from reality. Those who think that a No Deal Brexit would at least be a way of moving on are wrong in every possible way. It just means that after the 31 October there will be the beginning of a whole new round of painful negotiation and general frustration.

For a moment then I’ll assume the new British Prime Minister (PM) pushes through all the opposition to deliver a No Deal Brexit. By any international measure this will be an indication of failure that other nations will observer and draw appropriate conclusions. Putting aside domestic considerations, it’s irrelevant who may or may not be to blame for such an outcome. It’s a failure.

In that international context; how long will it take for the UK and EU to come back to a close, cordial and stable relationship? Initially, temporary measures, continuing uncertainty and periodic instability will undoubtedly prevail. Using the past as an indicator, I will estimate at least a decade of competition, division and turmoil are likely. That takes us up to 2030.

Certainly, by that time a great number of the people who voted to Leave the EU in 2016 will no longer be with us. In fact, most people will have forgotten what all the fuss was about. Much as few people can describe Suez, the humble pie and the bill[2]. But there will be humble pie and a bill.

If Brexit happens, in the coming decade, I am sure Scotland will become an independent nation. The future of Ireland is less easy to predict. The pound sterling will decline further as we sell more of the family silver. UK’s ability to act on the global stage will be more dependent upon America.

This week, the new British PM talked of sunny uplands that would make Britain the best place in the world by 2050. That’s an aspiration we can all share but the direction we are going in isn’t the one that will deliver success. How long will it be before the new PM echoes one of his predecessors of 60 years ago and says: “You’ve never has it so good[3]”.

Personally, I hope I’m not writing these blogs in my 90s. Still, you never know.

[1] https://www.bbc.co.uk/iplayer/episode/m0006wj2/panorama-britains-brexit-crisis

[2] 1959 and The Anglo-Egyptian agreement

[3] UK Prime Minister MacMillan in the 1960s

Aviation & Brexit 89

The ancient adage that: “when in a hole, stop digging”, did once have meaning in British politics. No more. The rate at which deep political holes are being dug exceeds decades of measurement. As a strategy, knowing something to be a bad idea and continuing to do it should have a limited lifespan. A difficult reckoning must come. Well, that’s conventional thinking. With Brexit conventional thinking goes way out of the window.

The 2-year period provided for by Article 50(3) of the Treaty on European Union (EU) has been extended until Thursday, 31 October 2019. Including the summer holidays and that’s about 14 weeks away. Can a new UK Prime Minister (PM) secure a Brexit deal and is there time to get it through the UK Parliament by 31 October 31?[1] They’d have to be a miracle worker. There’s little working time left. Little time for deal making and little time to legislate. Given past performance, it’s feasible but it’s extremely unlikely.

The prospective new PM has said that his first task will be to launch a huge No-Deal Brexit public information campaign to help minimise possible disruption[2]. That certainly is going to be interesting in respect of air travel to and from the UK. The question is out there; will the UK Government be generous in providing financial support to businesses adversely impacted by a No-Deal Brexit?

There’s no doubt that UK airlines will be able to fly to the EU provided EU companies are permitted to fly to the UK. That’s the most basic international rules being applied. That said, at the heart of this immense political severance is the impact on people. Brexit will reduce European aviation employment opportunities for UK citizens[3]. However, it may create new domestic opportunities as the UK struggles to construct a credible regime to replace the European system[4].

If the UK is to make a full departure from the European system, it would require a period in which to sign special arrangements with the European Aviation Safety Agency (EASA), the US Federal Aviation Administration (FAA) and other global regulators. This hasn’t happened – yet.

The UK Civil Aviation Authority (CAA) will need to undertake a major investment and recruitment activity if it’s to take over necessary functions, and Bilateral Aviation Safety Agreements (BASAs) with all the mutual recognition agreements needed. Such major changes from start to finish could take a decade to complete in the major global aviation markets.

I wonder what public information campaigns are going to do in the meantime.

[1] https://twitter.com/BBCParliament/status/1152256880246476800?s=20

[2] https://twitter.com/itvpeston/status/1151589697975492608?s=20

[3] https://blog.aviationjobsearch.com/what-does-a-no-deal-brexit-mean-for-aviation-employment-opportunities/

[4] https://www.prospect.org.uk/news/id/2018/July/6/CAA-must-prioritise-skills-pay-Brexit-plans

Aviation & Brexit 88

Tuesday, 23 July draws closer and the naming of a new UK Conservative Party leader and subsequently a new UK Prime Minister (PM). It seems increasingly likely that the Conservative Party is going through the motions with only one outcome on the table: Mr Johnson gets selected and then pushes, in whatever ways possible, to get the UK to leave the European Union (EU) by Halloween this year. Little, if anything is new as repetitious and shallow arguments get thrown around like confetti for the bride of Frankenstein.

In the early months of this year there was a flurry of detailed articles written about how aviation would be affected if the UK left the EU with or without a deal. The common expectation was that the transition would start at the end of March. Since then a few have taken the time to update their positions but most of what was written remains motionlessness. Without a sense of political direction advancing policy positions is a precarious activity. However, a high-level desire to see liberal aviation market access arrangements continue does seem to exit within both UK and EU. To that extent, a No-Deal Brexit outcome represents a big step backwards for all Europeans.

Although it’s not relevant to international air travel, it’s notable that British media interviews continue to focus on The General Agreement on Tariffs and Trade (GATT). The GATT was the precursor to the World Trade Organisation (WTO). Article 24 is being cited as a universal solution to objections to a No-Deal Brexit. However, this proposition has been debunked multiple times and doesn’t stand scrutiny[1].

[1] https://fullfact.org/europe/gatt-nine-lives-article-24-again/

In recent weeks, talk of international companies planning relocate their operations to other parts of Europe[1] has not phased the populist proponents of Brexit. Thus, it’s vital for businesses to plan for a No-Deal Brexit where only temporary provisions will exist between the UK and EU. However, reports show that the UK is still not prepared for a No-Deal Brexit in October.

For aircraft design and maintenance and pilots and cabin crew, there may be no sustained mutual recognition between the EU and the UK for aviation licences, approvals and certificates. In addition, the UK will no longer benefit from EU Bilateral Aviation Safety Agreements (BASAs).

Mounting concerns are being voiced about the prospect of a No-Deal Brexit and the subsequent impact on aviation and the traveling public. To date, Conservative and Labour Party leaders would rather sweep such concerns under the carpet.

The online help from the UK Government, the European Commission (EC) and on the CAA and EASA Brexit microsites remain the best available information.

[1] https://www.chathamhouse.org/expert/comment/japanese-warning-over-fallout-hard-brexit-not-idle-threat

Aviation & Brexit 87

It’s reported that this year’s Paris Air Show was worth £ 8 billion to the UK economy. More than 70 companies were exhibiting at this global marketplace for the aviation industry. Today, the UK’s place as a world leader in aerospace design and manufacturing is built on regulatory alignment, integrated supply chains and top-class research and innovation. All three of these are severely challenged by the Brexit project.

Sadly, the leading candidate to be the next UK Prime Minister seems to have turned a blind eye to the facts. This week he’s quoted as saying that the impact of leaving the European Union (EU) without a deal would be “very, very small”[1]. For those accustomed to evidence-based policy making this glib political assurance is playing well with a narrow party electorate but is very far from true.

The interdependencies within aerospace design and manufacturing businesses across the whole of Europe didn’t arise overnight. Since the 1960s, there’s been one direction set towards more and more working together. This approach has delivered success on the world stage. One leg of this success stands on is the high level of confidence in each other’s institutions, regulatory cooperation and the harmonisation of rules.

Meanwhile, Conservative (and Labour) politicians have played to prejudices by telling their constituents of “faceless Brussels bureaucrats.” Whilst the truth is that there are a great number of civil servants in the UK and Brussels who are exemplary in their work.

The success of European aerospace design and manufacturing gets taken for granted. The strength of cooperation, collaboration and coordination is swept under the carpet. In cahoots, the national media then tends to highlight the stories politicians feed them about discord, mistakes and rivalry.

Since the general populace has had little need for knowledge of how the system works, just that it’s safe, then an unhealthy situation of glib and unsustainable predictions persists. This goes some way to explaining why a candidate for UK PM can get away with saying the impact of leaving the European Union (EU) without a deal would be “very, very small”.

Usually a political campaign has a phase where a candidate needs to create credibility and legitimacy for their campaign so people will take them seriously. This stage is being bypassed in the UK.

[1] https://uk.reuters.com/article/uk-britain-eu-leader-johnson/johnson-says-impact-of-no-deal-brexit-would-be-very-very-small-idUKKCN1TW29S

Aviation & Brexit 86

A new Conservative Party leader should be named on Tuesday, 23 July and then appointed UK Prime Minister (PM) one day later. That’s only if the Government’s majority in the UK Parliament hasn’t crumbled. Then the House of Commons (HoC) summer recess begins one day after[1]. The HoC returns on Tuesday, 3 September just before the political Party conference season gets started. So, the idea that there’s time to apply Article 50 and negotiate a new deal with the European Union (EU) before the 31 October exit day is pure fantasy. If there was unity, harmony and a convergence of positions then a small chance exists. None of those three words can reasonably be used to describe the situation.

A lot of political talk still centres around the World Trade Organisation (WTO) and peculiar notions that it might be easier to get a deal with over 160 Countries than it is to deal with 27 Countries. The WTO framework doesn’t cover key aspects of the UK economy, like: Aviation, Medicine, Export Licencing and Digital Data. Often expressed as a sign of more “Unicorns”, frustration continues to grow amongst those who have gained a smattering of knowledge after 3-years of this merry-go-around. As a result of all the nonsense spoken, there’s little doubt that Brexit is damaging the UK’s reputation as a good place to do business.

If Boris Johnson enters Number 10, Downing Street as PM then he could discard his firm promise to leave the EU, come what may on 31 October only then to see his Government fall. Thus, the strong likelihood of a “No Deal” outcome with no implementation/transition period is looming. Without a formal withdrawal agreement there’s only the temporary contingency measures that both the EU and UK[2] have published so far. I’ve written about this in my Blog 61, 71 and 74.

One area of significance is how this event will impact aerospace Design Organisations (DO) who are primarily based in the UK. Approvals issued by the European Aviation Safety Agency (EASA) to a UK DO, before the exit date will remain valid for 9 months from the day after the 31 October. To provide continuity, UK DO’s are being encouraged to apply to the UK Civil Aviation Authority (CAA)[3] for a national approval in advance of the exit day. One small silver lining is that the UK CAA will not charge an up-front fee for issuing these approvals, provided the scope is the same as the EASA approval and no technical investigation is required. After that a fee is changed for surveillance of the DO approval under a published scheme of charges.

This is one subject area amongst a large number, across many industries. Yes, Brexit is a magnificent way to create extra bureaucracy and we will all end up paying for it in the long run.

[1] https://www.parliament.uk/about/faqs/house-of-commons-faqs/business-faq-page/recess-dates/

[2] https://www.gov.uk/guidance/prepare-to-work-and-operate-in-the-european-aviation-sector-after-brexit

[3] https://info.caa.co.uk/eu-exit/aerospace-design-organisations/

Aviation & Brexit 85

The year’s longest day is almost with us. This week, for the first time in a while, The UK’s Brexit is not a major topic at a European Union (EU) summit[1]. Now, the new European Parliament (EP) is in place there’s much discussion about the big jobs that need filling. In the EU, a new team of European Commissioners is appointed every 5-years. Appointing the President and the College of Commissioners is one of the issues concentrating minds in Brussels and across Europe.

Today’s European Commissioners will be leave office on 31 October 2019. Coincidentally, that’s the date the UK is supposed to be leaving the EU. It’s impossible to say if that will happen, not even with the remaining candidates for UK Prime Minister saying; that they still wish to leave. The words of Donald Tusk, warning the UK to stop wasting time still echo around the room.

It’s worth noting that the Romanian Presidency of the Council of the EU will be replaced by the Finland’s Presidency[2] at the end of the month. This is interesting given that Finland held parliamentary elections in April this year. The new Government of Finland was appointed on 6 June. So, there’s not much time to prepare an agenda for their term but I feel certain Climate Change will be high on the list of issues.

Potentially, that means a lot more talk about EU policies that promote sustainable and “smart” mobility. In one direction, exhibited at the Paris Air Show are a horde of new electric propulsion systems for aircraft. In another direction, policies include the introduction of an aviation tax at EU level and a carbon floor price[3]. No doubt this subject is going to be highly controversial. The call for Net Zero emissions by 2050 is a major strategic shift for Europe.

Today, not all EU Countries have a flight tax, like the UK. It’s a tax on a ticket. Unfortunately, that ticket tax is not used to mitigate the environmental impacts of flying. Aviation taxes, such as fuel taxes or ticket taxes, do have an impact on the economy. If there’s not strong coordination and cooperation in the design of an aviation tax at EU level, then the danger of exporting jobs is real in what’s an international business.

Some studies do suggest that an aviation tax is not effective in reducing CO2 emissions. However, there’s a great deal to be debated and investigated on this key subject. I cannot believe the UK will not have a strong interest in the direction that the EU chooses to take on aviation taxes. Naturally, it would be better if the UK was part of the decision-making process but leaving the EU with “No-Deal” rules that out completely.

[1] https://www.consilium.europa.eu/en/meetings/european-council/2019/06/20-21/

[2] https://eu2019.fi/en/frontpage

[3] https://www.aviatax2019.nl/#home

Aviation & Brexit 83

This week there’s been a strong message in the news. It’s been about the lessons of history, the value of cooperation and the vital role played by international institutions in keeping the peace that we enjoy. That’s no less true in civil aviation as it is in many other walks of life.

Until the 1940s aircraft operation, design and manufacturing activities were mostly conducted at a national level. With the advances in technology brought about in World War II and anticipating a post-war growth in civil aviation far sighted Governments set-up what is the now the International Civil Aviation Organisation (ICAO). This organisation formulates basic standards and practices that can applied by its Member States across the globe.

Back in my Blog; Brexit 67, I mentioned that this year is an important year for ICAO. It’s an Assembly year[1]. Every 3-years an Assembly comprised of the Member States of ICAO meet at its HQ in Montreal, Canada. During the first 75 years of its existence, ICAO has made an indisputable contribution to the development of worldwide civil aviation. This is quite an achievement given the need to get agreement with its 193 Member States and many international organisations.

During the ICAO Assembly sessions, a work programme in the technical, economic, legal and technical cooperation fields is reviewed in detail. Within ICAO, the European Union (EU) its agency, the European Aviation Safety Agency (EASA)[2] are major contributors to its work. The role and recognition of regional organisations is growing. Its accepted that solutions need to be tailored to fit the local circumstances in global regions.

In respect of Brexit, whatever happens to the UK, as an ICAO Member State it will need to continue to apply international Standards and Recommended Practices (SARPs). Today, civil aviation is regulated at European level. To make that work the aviation safety regulations agreed at European level comply with the ICAO SARPs. However, it’s an hierarchical construction so much of the detail needed is in what is often called “soft law” and can be changed independently of the ICAO SARPs.

Even in this Brexit extension period uncertainty remains as to what you may need to do to continue working and operating in the aviation industry if, or after the UK leaves the EU on 31 October 2019. The UK’s lack of clarity and direction are not helpful for anyone in who wishes to plan. It will be interesting to see if the UK makes a meaningful contribution to the ICAO Assembly this year, as it has done in the past.

[1] https://www.icao.int/Meetings/a40/pages/default.aspx

[2] EASA is responsible for the issuance of type certificates and organisation approvals in the EU. After its withdrawal, the UK will resume these tasks under its obligations as ‘State of Design’ under the Chicago Convention on International Civil Aviation.

Aviation & Brexit 82

So, what happened on Sunday when the #EUelections2019 result became public? Professor Sir John Curtice[1] sums it up for me: “Far from providing a clear verdict, the result simply underlined how difficult it is likely to be to find any outcome to the Brexit process that satisfies a clear majority of voters.” Yes, last week most British voters backed political parties that support staying in the European Union (EU) but that’s not enough to bring the whole process to a conclusion. Now, as Brexit, and the disruption of Brexit get caught in an infinite loop, we must remember that the rest of the world continues to advance with every other matter of interest. For example, the competitiveness of the aviation industry depends upon having common agreed rules. Developing and implementing those rules is the way we build the future.

Big on my aviation news last week was the adoption of legislation on Drones in Europe[2]. One of outputs in the European Commission’s Aviation Strategy for Europe is the technical requirements for Drones. These new rules apply to both professionals and those flying Drones for leisure in the EU Member States[3]. By 2020, Drone operators will need to be registered with national authorities. That will be simple for mass-produced Drones and proportionally more detailed for larger Drones.

Currently, the UK Civil Aviation Authority (CAA) is running a consultation on a proposed charge for a new drone registration scheme that it is intended will become UK law at the end of November 2019. The EU rules will replace existing national rules in EU Member States, but in a “No-Deal” post-Brexit UK the national rules will continue to be applicable. I expect these rules to, for the most part, remain similar in their aims and objectives but there’s no doubt they are set in a different context and use different legal language. Next, the European Commission and the European Aviation Safety Agency (EASA) will publish further guidelines. It will be thought-provoking if those operating guidelines are not adopted by the UK.

In fact, the UK will be under pressure to adopt the rules on Drones. Mainly because any Drone operators that has their principal place of business, are established, or reside in a Third Country, will need to apply the EU Regulations if they wish to operate within the Single European Sky airspace.

The US FAA is serious about the business of Drones. A major conference is coming up and the aganda includes EASA. This is a postive message for US- EU cooperation. The successful certification and implementation of what’s being called “urban air mobility” is going to need a great deal of international working.

Key to operating safely and making a commercial success of a business using Drones will be having products and processes that can operate in a wide spectrum of environments and interoperate with others. Innovators across Europe will be looking use Drones for more and more applications as the technology develops. In time complex drone operations with a high degree of automation may become as day-to-day as mobile phones are to our lives. Now, the EU has achieved this initial aviation milestone where we go next is up to the imagination.

[1] https://en.m.wikipedia.org/wiki/John_Curtice

[2] European Commission adopted EU rules (Implementing Act Drones & Annex to Implementing Act Drones) to ensure increasing Drone traffic across Europe is safe and secure for people on the ground and in the air.

[3] https://ec.europa.eu/info/law/better-regulation/initiatives/2018drones_en