Shapps’ schnapps. The UK cuts off its nose for what purpose?
By: Daire O'Criodain
Tags: Brexit, Grant Shapps, Aviation, Easa, Paul Everitt

Image by Siggy Nowak from Pixabay

The UK left the EU on 31 January. But, the Withdrawal Agreement established a transition period during which the UK would remain in the Customs Union and Single Market and remain bound by EU international agreements. The purpose of the transition period was to allow time for both parties to negotiate a future partnership arrangement. The transition period ends on 31 December unless extended by mutual agreement before 30 June for one or two years.

While the transition period remains in force, the day-to-day life and interaction between the UK and the EU continues much as before Brexit. The UK has signalled clearly and consistently that it will not countenance an extension of the transition period, regardless of whether a future partnership agreement is reached with the EU by the end of the year. Readers can decide for themselves whether that is a statement of irrevocable intent or a negotiating tactic.

During my 25 years in the aircraft leasing industry, I negotiated the details of many leases with airlines around the world. In all that time, I never learned exactly how commercial jet aircraft weighing many tonnes make it up into the air, stay aloft on their journey and bring us safely back to earth. I know very little about the technical aspects of aircraft operation or regulation.

But I do remember once core feature of aircraft leases about which airline lessees rarely argued. This was that the lessee should maintain the aircraft to internationally recognised standards as established by either of two agencies; the Federal Aviation Authority (FAA) in the USA and the European Union Aviation Safety Agency (EASA) and redeliver it at the end of the lease in a condition capable of being certified by either of those two authorities.

The reason for this was to facilitate the easiest possible transition of the aircraft from one lease to the next; from an airline in one country to an entirely different operator in an altogether different jurisdiction, in much the same way that denominating time, weight or distance to standards commanding widespread international acceptance facilitates cross-border engagements of many kinds.

EASA was established in 2002 and is headquartered in Cologne. Although the EU itself now comprises 27 member states, EASA has 32; the non-EU members being Iceland, Norway, Liechtenstein, Switzerland and, for the time being, the UK.

On 6 March, Grant Shapps, the UK Transport Secretary announced that the UK will leave EASA at the end of the Brexit transition period on 31 December. Thereafter, the UK’s own Civil Aviation Authority (CAA) will assume full and exclusive control of all regulatory matters relating to civil aviation in the UK.

In an interview in Washington with the industry publication Aviation Week on 6 March, Mr. Shapps said:

As you would expect from an independent nation, we can’t be subject to the rules and laws made by somebody else, so we can’t accept rules from the EU commission and we can’t accept rulings in terms of court cases from the European court of justice or anybody else, any more than the US would…

Mr. Shapps added these points:

A lot of the expertise they [EASA] have is UK expertise, in fact. A lot of the key leading lights were Brits.

So, the powers will revert to the CAA, who are probably one of the world’s leading regulators and the expertise will need to come home to do that, but we’ll do it in a gradual way.

Once out of EASA, the UK will seek mutual recognition of certifications in bilateral agreements with other countries and blocs, according to Mr. Shapps. This is consistent with what appear to be the overall UK approach to the future relationship negotiations of seeking respect as an equal, sovereign partner.

ADS is the trade organisation representing the aerospace, defence, security and space industries in the UK. It’s Chief Executive, Paul Everitt, responded sharply to Mr. Shapps’ announcement in an article, also in Aviation Week, on 9 March.

These were key points from Mr. Everitt’s article:

- The aerospace industry is worth £36 billion annually to the UK, employing 111,000 people in every part of the country, including Northern Ireland (where a third of the world’s aircraft seats are made).

- The industry generates exports “on a scale that few can match”.

- Participation in EASA has already contributed to ever-improving safety standards in aviation, given the UK influence in one of the two major global regulators and eased UK access to export markets, not just in Europe, but around the world.

- Continued participation in EASA is the industry’s top priority.

- The Government will incur substantial costs to build up the capabilities of the CAA to match the standards required for recognition by both EASA and the FAA. It is gambling that a highly export-oriented industry will be content to absorb the additional costs and complication created by regulatory divergence, that there will be no impact on those companies’ future investment in the UK and that the disruption will have no impact on safety.

Mr. Everitt’s conclusions:

- This is a gamble with much at stake, but without any clear prize on offer.

- For a successful outcome to the future relationship negotiations with the EU, “industry needs arrangements based on evidence, not ideology”.

Mr. Everitt also enquired whether it might be possible to square the circle of the UK retaining participation in EASA without thereby being subject to the European Court of Justice (ECJ). Switzerland has a seat on the EASA management board. It has no vote, but is not subject to ECJ oversight either. Instead, there is a joint committee process for arbitration of disputes. It is not certain that the EU would agree to the UK having a similar arrangement, though neither is it certain that it would not. But the UK position appears to be that any connection at all that would constrain UK freedom of action is a non-starter.

Of course, in the months since then, the headwinds facing the aviation industry in all its aspects almost everywhere have been intensified by COVID-19.

The UK has left the EU, so reruns of or inquests on the referendum campaign of 2016 are as useful as squabbles between bald men over ownership of a comb. But, some points can be made about the past that should not be acrimonious because they are straightforwardly true.

Voters were advised by advocates of Brexit of only one direct financial implication of leaving the EU: the immediate cessation of UK contributions to the EU budget yielding a “dividend”, popularly expressed as £350 million a week.

There was no mention of the “divorce bill” of approximately £33 billion already committed to in the Withdrawal Agreement.

There was no mention of the additional costs of enforcing a trade border; the many thousands of additional customs officials and infrastructure to house them (leaving aside the indirect costs of additional compliance “paperwork” for UK traders). It was presumed that trade in goods (and at least some services, like civil aviation) would remain exactly as before because the EU’s own commercial interests would compel it to agree to mutual recognition of rules and standards with the UK.

Nor was there any mention of the costs of establishing separate regulatory regimes in areas previously covered by EU competence and paid for from the EU budget — of which aviation regulation is only one example among many; food and medicine standards being prominent others.

Aside, crucially, from its being democratically mandated, Mr. Shapps might respond that there are indeed prizes on offer from Brexit of real if intangible economic value.

The first benefit is the freedom that independence confers on a country to establish its own rules without let or hindrance. Mr. Shapps might say also that this does not mean that the UK should become an international “hermit” altogether. Rather, EU membership was a uniquely intrusive and inconvenient constraint on UK independence. The UK will remain a member of, say, the United Nations or the World Trade Organisation because membership of those organisations is apparently compatible with its independence, despite obligations to conform to rules that are not of the UK’s sole making.

But there are counterarguments. The first is one suggested by Mr. Everitt. Transitioning from a common regulatory regime to a proprietary one might make sense if the latter was going to be clearly better than the former. That is not obviously the case in the domain of aviation safety and operations.

The second is that Mr. Shapps’ view of “freedom” is entirely negative and narrow. The absence of interference alone is insufficient to establish complete autonomy. By that criterion, a newborn baby abandoned on the street is “free”, though unlikely to survive long.

Freedom is established by context as much as status. To echo John Donne:

No man is an island entire of itself; every man

is a piece of the continent, a part of the main

The other side of that newborn baby’s “freedom” is the capacity to survive, thrive, develop and exercise its faculties, all of which depend on connection; the support and co-operation of others.

While the geographical status of Britain (though not the UK) is an island, its physical proximity to the rest of its continent is inalienable context. The UK has little choice but to engage with the EU. Being unable to do so effectively reduces its “freedom”. As of now, there is no certainty that the UK will be able to export aircraft parts and equipment to the EU or that its domestically domiciled airlines will be able indefinitely to fly between the UK and the EU or on routes entirely within the EU.

Maybe Mr. Shapps’ thinking is indicated by his perception of EASA itself being largely a UK creation whose principal designers might now largely drift “home” to re-invigorate the CAA? Is it because he imagines Cologne to be such an awful place, that UK staff there are effectively hostages to their profession continuously dreaming of an end to their exile? Or is it because he imagines the vision of post-Brexit Britain to be so compelling that the British contingent in EASA will be drawn home like iron filings to a magnet?

If the general experience of the response to Brexit of UK citizens employed by other EU agencies is a guide, most of those in EASA who haven’t already and can do so, will take out local citizenship to stay where they are.

But, it is maybe easier to imagine Mr. Shapps believing that, just as UK exceptionalism allegedly sculpted EASA into a global force in aviation in the first place, the same superior genes will eventually establish the CAA as a global standards setter, breaking the stranglehold of the European and American duopoly.

This seems an unlikely vision for which to risk so many existing jobs, so much current investment in his country and the travelling convenience of its citizens? If Helen of Troy was the face that launched a thousand ships, Brexit was the dream that launched a thousand dubious conclusions.