You May Ask Yourself: How did we get here? (Today's announcement on EU citizens in the UK)

On 2017 May 29, the EU Commission published detailed proposals concerning the continuing rights of UK citizens currently living in the EU and EU citizens living in the UK.

Today (2017-06-26) the UK will finally publish its response.

Almost everything else you may have read concerning the positions and moves of the two sides was misreported hand-waving or, in some cases, outright lies.

Exhibit A:

Fair and serious offer from UK to EU nationals - let's hope it reassures and let's hope it is reciprocated

— Boris Johnson (@BorisJohnson) June 23, 2017

Even the anti-Brexit newspapers have tended to report this issue badly. It is all rather more complicated than many realized and the lacuna in understanding has often allowed politicians to get statements published that really should have been subjected to a bit more scrutiny.

So how did we get here?

It has been reported (and not actually denied by May if you listen to her "rebuttal") that in summer 2016 Theresa May "single-handedly blocked a plan to immediately guarantee the future rights of the 3m EU citizens". Every other member of the cabinet seemingly opposed this move.

So why did she do this?

As Peter Grant, an official in the free movement policy team of the immigration and border policy directorate of the Home Office, put it: “Agreeing a unilateral position in advance of these negotiations would lose negotiating capital with respect to British citizens in EU member states and place the UK at an immediate disadvantage”. Whether EU citizens were to be negotiating capital against what the EU might do to UK citizens living in the EU or negotiating capital in our discussions over our future trading arrangements was never made clear. But neither interpretation makes any sense in the light of subsequent developments.

The problem with the first interpretation is that the EU has consistently said that it wanted full continuing rights. The Vote Leave campaign said they wanted this too and On 2016 June 1, they issued the following statement signed by Boris Johnson, Michael Gove, Gisela Stuart and Priti Patel:

There will be no change for EU citizens already lawfully resident in the UK. These EU citizens will automatically be granted indefinite leave to remain in the UK and will be treated no less favourably than they are at present.[ref]

But Theresa May and the current cabinet never accepted this line and when the EU Commission published its call for EU and UK citizens to be granted indefinite leave to remain in the UK or EU and for them to be treated no less favourably than they are at present, David Davis described these demands as "ridiculously high".

In other words, the UK was (on this interpretation) using EU citizens as bargaining chips in a dispute where the other side wanted to give more rights to UK citizens in the EU than we are prepared to allow them to have (assuming symmetry with EU citizens here). It was a kind of looking-glass version of going to buy a second hand car and threatening to offer more than the asking price.

So what about the second interpretation: EU citizens were to be negotiating capital in our discussions over our future trading arrangements?

This makes no sense either. May has at least consistently said that she wanted to discuss citizens rights at the earliest opportunity. Agreement on new trading arrangements with the EU is probably years away. Moreover May, having first insisted that citizens rights had to be part of the overall negotiations, then tried to separate this issue out from the other issues and have "pre-negotiations" (before submitting Article 50) with Angela Merkel. (Nearly all the reports of this event were misleading; this is probably one of the slightly less misleading reports by the Independent.) But this was always going to be a non-starter:

1. The remaining 27 countries in the EU were anxious - given the referendum result - for Article 50 to be submitted as soon as possible and refused to take Brexit seriously or start preparing for it until Article 50 was submitted. Any "pre-negotiations" might have been a waste of time and might have delayed the start of real negotiations still further.
2. How individual EU countries deal with non-EU citizens (as UK citizens will become) has largely been a matter for each individual EU country - think of how we deal with (say) Australians. So any kind of sensible post-Brexit outcome required that the EU27 reach a new agreement among themselves about what they were all going to do before they could even begin to talk to the UK. The idea that Angela Merkel could somehow negotiate on behalf of the EU27 prior to Article 50 was simply fanciful.

In the event, the entire EU27 (not Angela Merkel somehow acting alone) stood firm and refused to discuss anything until the UK legally committed itself to Brexit.

Then on 2017-06-22, the pro-Brexit press (and even some of the anti-Brexit press) announced that "No EU national currently living lawfully in the UK will be made to leave on the day of Brexit under proposals outlined by Theresa May".

Of course May had announced no such thing.

First of all, May was simply describing the UK's negotiating stance. If negotiations fail, EU citizens in the UK will still have no guarantees at all.

Secondly, May was not saying she would grant residency to EU citizens, she was merely saying they would be able to apply for residency. EU citizens can apply for permanent residency now, but about one third are being refused by the Home Office.

Thirdly, we should note that May said that citizens here "lawfully" will be able to apply. The UK Home Office has its own (let us be polite and call it "eccentric") interpretation of "lawful" in this context. I explain this issue (and others) here.

And fourthly, this is just an announcement. We should only take it seriously when the White Paper is published and provided to the EU.

So EU citizens are still a long way from knowing what their fate will be. The Government have made some suggestions - relevant to people who have been living here for less than five years - which are broadly reassuring but has so far said little about how it will define "living here". The government keep hopelessly inadequate records of when people enter and leave the country; people living here have often thrown away their own records - there was no requirement to keep them until now; and because the UK has no official system of registering people at their addresses there is no single criterion of residency that the Home Office can use. The current system is simply unfit for purpose and it would be quite impossible for the Home Office to process 3.2 million people in time for Brexit using this system; even if there were good will on the part of the Home Office - which there isn't.

It will be interesting to see whether (and how) the UK Government addresses these issues in the White Paper to be published this afternoon.

Watch this space!

Breaking

May has announced the the "requirement" for EU many citizens to have Comprehensive Sickness Insurance has been axed - though see "point 22" below.

May repeated the nonsense that her offer is somehow contingent on the EU "reciprocating" even though she knows full well that the EU have already offered more generous terms.

White Paper published.

from point 6)

Furthermore, we are also ready to make commitments in the Withdrawal Agreement which will have the status of international law. The Court of Justice of the European Union (CJEU) will not have jurisdiction in the UK;
[the battle lines are drawn, but I think the UK will have to accept some kind of supranational arbitration "court" - and seems to acknowledge this.]

qualifying EU citizens will have to apply for their residence status. The administrative procedures which they will need to comply with in order to obtain these new rights will be modernised and kept as smooth and simple as possible;
[promising but vague]

the application process will be a separate legal scheme, in UK law, rather than the current one for certifying the exercise of rights under EU law. Accordingly we will tailor the eligibility criteria so that, for example, we will no longer require evidence that economically inactive EU citizens have previously held ‘comprehensive sickness insurance’ in order to be considered continuously resident;
[This is the most welcome proposal in the entire White Paper presented within the most mendacious paragraph in the entire White Paper - possibly the most mendacious paragraph in any paper ever. To clarify, not only is ‘comprehensive sickness insurance’ not required by EU law, the UK is in breach of EU law in insisting on ‘comprehensive sickness insurance’ for some categories of EU citizen who apply for residency - people who perfectly legally use the NHS]

family dependants who join a qualifying EU citizen in the UK [...] after our exit will be subject to the same rules as those joining British citizens or alternatively to the post-exit immigration arrangements for EU citizens who arrive after the specified date;
[this represents a clear loss of rights and will be opposed by the EU]

EU citizens with settled status will continue to have access to UK benefits on the same basis as a comparable UK national under domestic law;
[some good news]

the UK will continue to export and uprate the UK State Pension within the EU;
[more good news]

the UK will continue to aggregate periods of relevant insurance, work or residence within the EU accrued before exit to help meet the entitlement conditions for UK contributory benefits and State Pension, even where entitlement to these rights may be exercised after exit;
[I assume this means people (UK or EU) who leave (or who have already left) won't have to abandon their accrued pension contributions in the UK.]

The UK will seek an ongoing arrangement akin to the EHIC scheme as part of negotiations on our future arrangements with the EU;
[I suppose this is good news but it sounds as though we may lose the EHIC system for a few years before a new one is in place]

we are planning to set up an application process before we leave the EU to enable those who wish to do so to get their new status at their earliest convenience. For those who have already obtained a certificate of their permanent residence, we will seek to make sure that the application process for settled status is as streamlined as possible.
[In other words, people who have already obtained permanent residence will have to start doing battle with the Home Office all over again]

from point 12)

After the UK leaves the EU, free movement will end but migration between the UK and the EU will continue. We will continue to welcome the contribution EU citizens bring to our economy and society; the UK will remain a hub for international talent. The Government is carefully considering a range of options as to how EU migration will work for new arrivals post-exit and will publish proposals as soon as possible, allowing businesses and individuals enough time to plan and prepare.
[I think this means they haven't got a clue yet what they are going to do to "control" EU citizens, but I'm sure highly skilled people will want to come here in droves to take up our offer of being deprived of the right to a family life]

from point 15)

The Government will not discriminate between citizens from different EU member states in providing continuity for the rights and entitlements of existing EU residents and their families in the UK.
[I think this means: we all know nobody really minds French and German people and are really only bothered about getting rid of all those dreadful Eastern Europeans but if we did that it would seem a bit racist so I'm afraid we'll have to treat them all the same for now.]

from point 16)

The UK fully expects that the EU and its member states will ensure, in a reciprocal way*, that the rights set out above are similarly protected for UK nationals living across the EU before the specified date. Firstly, UK nationals in the EU must be able to attain a right equivalent to settled status in the country in which they reside. Secondly, they must be able to continue to access benefits and services across the member states akin to the way in which they do now.
[*Gosh. If they expect that, maybe they've finally read the document the EU published on May 29? Though to be truly "reciprocal" the EU would have to reduce the scope of the rights it is suggesting for EU citizens in the UK and UK citizens in the EU.]

from point 17)

All EU citizens (and their families) in the UK, regardless of when they arrived, will, on the UK’s exit, need to obtain an immigration status in UK law. They will need to apply to the Home Office for permission to stay, which will be evidenced through a residence document. This will be a legal requirement but there is also an important practical reason for this. The residence document will enable EU citizens (and their families) living in the UK to demonstrate to third parties (such as employers or providers of public services) that they have permission to continue to live and work legally in the UK. Following the UK’s exit from the EU, the Government may wish to introduce controls which limit the ability of EU citizens (and their families) who arrive in the UK after exit to live and work here. As such, without a residence document, current residents may find it difficult to access the labour market and services.
[This means: if you have a foreign accent you'll have to carry an id card in the UK from now on just in case.]

from point 22)

The scheme we establish for applications from EU residents (and their families) for permission to stay will not be legally the same as the one which is currently available for those wishing to obtain confirmation of their residence status under the Free Movement Directive. The UK will no longer be bound by this Directive and will tailor the eligibility criteria, subject to any provisions contained in the agreement with the EU, to suit the demands of this unique situation. For example, we will no longer require evidence that economically inactive EU citizens have previously held ‘comprehensive sickness insurance’ in order to be considered continuously resident. This will apply only for the purpose of determining their residence status: we will seek to protect the current healthcare arrangements for EU citizens, for example, to allow a tourist or student who presents a valid European Health Insurance Card (EHIC) to be able to get treatment on the NHS.
[I have no idea what this means but it sounds very ominous. Perhaps they've not done away with the "comprehensive sickness insurance requirement" after all?]

from point 23)

it will be impractical to issue a very high volume of residence documents immediately when the UK leaves. We need to avoid a legal gap between the end of free movement rights and the point at which individuals apply for and obtain UK immigration status. The Government will bridge this gap so that EU citizens (and their families) already living in the UK will be able to continue their residence despite not yet having obtained their longer-term permission to stay, and accompanying residence documents, from the Home Office.
[= yeah we're finally beginning to realize that this Brexit malarkey is quite difficult and we won't be able to do it all in time so well give everyone a couple of years to do battle with our Home Office to get all the bits of paper before we actually start throwing people out.]

from point 37)

There is no need for EU citizens to seek residence documentation now under the current free movement rules. These documents confirm that EU citizens are exercising their free movement rights in another member state. As free movement rights will end on the UK’s exit, we intend to introduce a replacement scheme under UK law. EU documents certifying permanent residence will not be automatically replaced with a grant of settled status, but we will seek to make the application process for settled status as streamlined as possible for those who already hold such documents.
[= Those of you who spent 100s of hours applying for permanent residency under our current system will have to start all over again and pay us even more fees. It's your fault for being foreign and believing the assurances we gave you :-P]

Conclusion

I give them 6/10 for this. On the one hand there is some kind of recognition of the complexities of the situation and some recognition that foreigners - even foreigners from the dreadful EU - are people too. The procedures for all these people to obtain the required bits of paper will be simplified and not made prohibitively expensive and most EU citizens will - if their applications to the Home Office are successful - keep most of their existing rights.

On the other hand (contrary to what Vote Leave promised) there will be huge changes for EU citizens already lawfully resident in the UK; those citizens will not be granted anything automatically; and they will be treated far less favourably than they are at present. Let us take a specific example:

My parents are both dead. My mother in law, in Germany, is however fit and well - though not getting any younger. She may eventually need her family to look after her. Who knows what the future may bring? Suppose the task of taking care of my mother in law falls to my wife and I. My government is about to strip me of my EU citizenship and thus of my right to go and live in Germany whenever I please. At the same time, our government will strip my wife of her right to bring her mother to live out her remaining years here in the UK. Of course we could apply for my mother in law to come here or we could apply for the right for me to go there; but there is no guarantee our applications would be successful and this is not the same of being able to choose to go there tomorrow.

May has kindly said that she is not intending to split up families; so what does she suggest someone in the situation I describe should do?

However, May's indifference to the plight of people in the situation described is not matched by the EU. I hope and expect they will tell May to implement exactly what was promised by the Vote Leave campaign and give resident EU citizens rights equivalent to what they had before the Brexit vote. It will be interesting to see how she reacts.

Good Times, Bad Times, Brexit Times

We may, we are told, get a good deal or a bad deal with the EU or may walk away with no deal at all. Walking away with no deal, many claim, may be better than a bad deal.

And it is not just staunch Brexiters who make such claims. Even sober remainers like John Rentoul bandy them about:

Fellow Remainers beginning to realise "No deal is better than a bad deal" is not as daft as it sounds.

— John Rentoul (@JohnRentoul) May 30, 2017

But before we can even begin to discuss such claims we require some kind of shared understanding of what is we are going to “deal” about and what might constitute a “good” or “bad” outcome. I see little evidence that any such shared understanding exists.

Our opening gambit

Theresa May (who I presume will win the election) has already announced that we wish to leave the Single Market (SM), the Customs Union (CU) and end Freedom of Movement (FoM). We shall presumably get everything May wants here since the EU sees these as the main advantages of the EU rather than as penalties for being in the EU.

Will this be good or bad?

• Leaving the CU will result in more red-tape, delays, and expense for exporters and importers thereby making trade more difficult and, in some areas, infeasible. It will result in less trade with the EU which will, all other things being equal, make us poorer.

• Leaving the SM will prevent us trading in some goods and, especially, services altogether and will result in more red-tape. This too will result in less trade with the EU and will, all other things being equal, make us poorer. Probably a lot poorer.

• EU students contribute massively to our economy and EU workers are, on average, more likely to be working and less likely to be old, sick, disabled, or claiming benefits. EU migrants are a net benefit to our economy. Stopping them coming will, all other things being equal, make us poorer. We are also abolishing our own rights to work, study, and retire in 27 other countries.

I assume we all agree that poorer and fewer rights are bad? So are there any good things here?

• Leaving the CU will allow us to make new trade agreements with other non EU countries. Many Brexiters think that the UK, though much smaller than the EU, will eventually be able to forge new trade deals that are better than the EU has ever been able to negotiate. Such new deals might eventually, they argue, compensate for some of our loss of trade with the EU. More trade (whoever it is with) will, all other things being equal, make us a bit richer. I assume we all agree that richer is good.

• Leaving the SM will allow us to reduce the number of EU migrants coming here. To find that good, your dislike of EU citizens has to be sufficiently strong that you are happy to significantly lower your living standards in order to stop them coming here.

• Ending freedom of movement will reduce the number of EU migrants coming here. See above.

As has been noted, we shall get everything “we” want on these issues and how good or bad you find this depends on your optimism about our ability to forge trade deals and how strongly you dislike foreigners.

There is, then, no difference thus far between a good deal, a bad deal, or no deal.

So what will we actually be arguing about when we do start to deal with the EU?

Item one: The rights of EU citizens in the UK and UK citizens in the EU. 

The EU has said:

Safeguarding the status and rights of the EU27 citizens and their families in the United Kingdom and of the citizens of the United Kingdom and their families in the EU27 Member States is the first priority for the negotiations because of the number of people directly affected and of the seriousness of the consequences of the withdrawal for them. The Agreement should provide the necessary effective, enforceable, non-discriminatory and comprehensive guarantees for those citizens' rights, including the right to acquire permanent residence after a continuous period of five years of legal residence.

David Davis has described these “demands” (detailed here) as 'ridiculously high' . “Ridiculously high” means, I suppose, “bad” but Davis has not really said what would be good. Perhaps, the ultimate good deal here would be zero rights for EU citizens and 100% rights for UK citizens and Davis hopes for a compromise somewhere between these extremes? Except that millions of EU citizens here have families and children and spouses who are UK citizens and whose rights will also be hit by any diminution of the rights of those citizens. And I am not even sure that there is a majority in the UK (even in its current mood) who would find it good to expel any EU citizens currently here legally or (more likely) make it practically impossible for them to continue living here. There is also little sign of the EU giving any ground at all on continuing rights for existing citizens in the “wrong” countries.

No deal would be disastrously bad for the three million EU citizens living here (and their families). They would, by default, instantly lose their legal rights to continue living here. On the other hand, I suppose the more xenophobic elements of UK society would be overjoyed - ie think this to be good. But I have little idea how good and bad deals on this issue would differ in the minds of the UK government or the majority of UK voters.

Item two: Our balance of assets and obligations – the “divorce settlement”

As the EU puts it, rather blandly:

An orderly withdrawal of the United Kingdom from the Union requires settling the financial obligations resulting from the whole period of the UK membership in the Union. Hence, the methodology for the financial settlement based on the principles laid down in section III.2 has to be established in the first phase of the negotiations.

This is an easy one. It really is a “zero sum game” ...... well unless, I suppose, you are a retired British EU civil servant whose pension comes from the EU or a scientist who has just secured several years’ research funding from the EU ……

But all that aside, a good deal would have us pay very little, a bad deal would have us pay lots, and no deal would have us pay nothing.

The problem is: what would happen then? After all, the sums involved pale into insignificance beside the sums we make from trading with the EU.

Item three: Goods placed on the market before the withdrawal date 

I have no idea. Have you? Has our Government?

Item four: Ireland

In line with the European Council guidelines, the Union is committed to continuing to support peace, stability and reconciliation on the island of Ireland. Nothing in the Agreement should undermine the objectives and commitments set out in the Good Friday Agreement and its related implementing agreements; the unique circumstances and challenges on the island of Ireland will require flexible and imaginative solutions. 

Basically the UK Government wishes to close our border to the free movement of people, goods, and services at Dover but keep our border open to the free movement of people, goods, and services in Ireland.

I suppose a good deal would be any solution that worked. I am buggered if I can think of one. Every deal I can imagine – even using the full flexibility of my imagination - will be bad. Walking out of the negotiations would inevitably result in border controls – which would be really really bad – and enforcing those controls would be the responsibility of the UK under WTO rules and of Ireland under EU and WTO rules.

Item five: Cyprus 

Again I have no idea.

Item six: Union's interests in the United Kingdom 

No idea

Item seven: Overall governance of the Agreement 

Tricky. Any deals we make will have to have some kind of enforcement mechanisms. Even the WTO has dispute resolution “courts” to settle disputes between nations. Bad (for us it seems) = European Court of Justice arbitrates disputes. Good = ? – we have not said. No deal avoids this problem I suppose, but again, what then?

Item eight: A common approach towards third country partners, international organisations and conventions in relation to the international commitments contracted before the withdrawal date, by which the United Kingdom remains bound. 

It gives me a headache even thinking about this so I am not going to.

Item nine: Our future relationship with the EU

I assume this is the item most people have in mind when they talk of good or bad “deals” with the EU.

The EU puts it thus:

As soon as the European Council decides that sufficient progress has been achieved to allow negotiations to proceed to the next phase, there will be new sets of negotiating directives. In this context, matters that could be subject to transitional arrangements (i.e. bridges towards the foreseeable framework for the future relationship) will be included in future sets of negotiating directives in the light of the progress made. This approach will allow an efficient allocation of the limited time that Article 50 of the Treaty on European Union imposes for the conclusion of the Agreement by avoiding the need to address the same matter several times at different phases of the negotiations.

In other words, once we have sorted out all the other stuff, we can start discussing a new Free Trade Agreement (FTA) with the EU – something along the lines that Canada has just negotiated (after many fraught years). Such an FTA would allow us lower or abolish tariffs on both sides (without contravening WTO rules) and to agree a new regulatory regime.

Many people seem to fondly imagine that the EU will, at this stage, offer all sorts of special favours to us that will allow us to carry on as though we were still part of the CU and SM for certain purposes. I may be proved wrong, but this seems vanishingly unlikely. They have repeatedly said "no cherry-picking" and May accepted this in her Article 50 submission.

Since it will be impossible to conclude an FTA in the months left before we Brexit, it would seem to be prudent that we agree transitional arrangements that continue the status quo until the new trade agreement is in place. But is anyone being prudent?

Any deal on mutually reducing tariffs would be better for us (and the EU) than no deal. But no possible deal will be anything like as good (for trade) as what we have now.

Even if we storm out of the talks in a fit of pique, I expect we should eventually come back to the table and forge a deal on tariffs with the EU. Any such deal will help to mitigate our exit from the CU and the SM. But since tariffs are among the very least of our worries, the mitigation will be rather slight.

#######

So given the UK’s stance, walking away or staying in the negotiations will (details aside) yield almost exactly the same eventual outcome: loss of the advantages of Free Movement, the Single Market, and the Customs Union and perhaps, in their place, some kind of free trade deal for some goods and services. The best possible free trade deal will allow far less trade with the EU than we enjoy now and provide scant compensation for what we are losing.

Whether you regard this a as good or a bad arrangement would seem to depend entirely on how much you value your prosperity versus how much you value not having as many European foreigners as neighbours; and the notion that Theresa May can make a significant difference to this longer-term outcome by getting a good or bad FTA deal in the coming negotiations is fanciful.

In the meantime, and returning to the details, we do, however, have the opportunity to seriously fuck up the lives of millions of people, UK agriculture, the supply of perishable goods, our international standing, the situation in Ireland, and our short-to-medium term economic prospects if we simply walk out of the talks.

It is simply not within the EU’s power to punish us any harder than we are punishing ourselves by leaving the CU and SM and ending FoM so we have nothing to lose by pursuing an FTA with them. Our overall new deal with the EU will inevitably be a bad deal but no matter how bad any new FTA deal is, it will be slightly better than no deal at all.