db Brexit Interview: Miles Beale, WSTA

Just over a year after the Brexit vote, db catches up with Miles Beale, chief executive of the Wine and Spirit Trade Association (WSTA),  to find out the latest developments in the aftermath of a chaotic General Election.

Miles Beale, speaking at last year’s WSTA conference on Brexit

As the old adage goes, a week is a long time in politics. So given we’re now just over a year on from the momentous Brexit vote on 24 June 2016, it’s fair to say that the land has shifted considerably during that time, not least in the last few weeks.

Speaking to Miles Beale, chief executive of the Wine and Spirit Trade (WSTA) shortly before the General Election, he seemed more optimistic than at any time since we’d discussed the vote the evening before the results came through. But as he pointed out, if anything was likely to scupper a good, rational deal that would benefit of all parties across the UK and Europe, it was politics – meaning primarily Europe’s national heads of state need to give the UK “a bloody nose” to protect the wider integrity of the EU. And though it might have been politics that set a proverbial cat among the pigeons, it is perhaps not quite in the way that Beale – as well as the polls and indeed the country – expected.

Fast-forward a couple of weeks of unexpected upheaval and the emerging picture has been somewhat less clear.

“Am I more optimistic than when we last spoke? I don’t think I am, no, am I more pessimistic? Possibly a little bit,” Beale tells db. “My rationale is that the previous May government’s line on Brexit had moderated its stance over time, talking about divorce after the Article 50 period, trying to get a trade agreement asap and exiting thereafter. They talked about transitional arrangements just before the election in a way that they weren’t a year ago, so that was an improvement.”

There has also been a softening stance from EU heads in recent weeks, but Beale says this is likely to only be temporary.

“I think ‘laughing stock’ is a bit strong, but it’s not far off,” he notes, ruefully. “You are less inclined to want to give a defenceless opponent a bloody nose than you were before, but over time our position will harden and we will have to go in there and fight for what we want – so the argument for a bloody nose will return.”

Miles Beale, chief exec of the WSTA [picture credit: www.sarahlondonphotography.co.uk, via WSTA]Currently, there is “nothing certain” coming out from Whitehall, Beale says.

“From government there is not very much because it all too new and people are still working out what the political ramifications are. But in a strange way, it’s rather simple – the Tory government will have to take more than its own party with it in order to get anything thorough the House of Commons – so everyone is more tentative, everyone is less certain, and everyone is more influential,” he explained.

Whereas before the election, Beale argued that the government had ‘clicked into gear’, post-election, the lack of a steer from government in the two weeks running up to talks between David Davies and Michel Barnier, progress had slowed a little due to the turmoil and confusion.

“But I don’t think they were ready before, so it’s not real difference,” he adds.

And given that the negotiations had been unlikely to get going in earnest until October – after the German elections – Beale doesn’t see this as too much of a problem.

“Michel Barnier and the EU institutions can do their thing, but ultimately that is a precursor, as it is the heads of state who will sit around a big table and thrash it out in the end.”

Meanwhile businesses are even less happy with the lack of clarity than they were before the election, although as Beale points out. “That will improve, but not quickly.”

But while the government may have changed and their position may be in flux, the position of the WSTA clearly has not, and is not.

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WSTA unchanged 

But while the government may have changed and their position may be in flux, the position of the WSTA clearly has not, and is not. Beale explains that the aim of the WSTA’s ‘white-paper’ in the autumn (“I would have loved it to have had that official status!”) was deliberately outcome-focussed rather than navel-gazing, and he’s happy that, as a result, it still has “currency”.

“A lot of things have changed, but what we’re asking for hasn’t.” he adds. “The change of government does not make one iota of difference to our point of view. But what’s changed is that Theresa May’s new government cannot be as ideologically-driven as before. I’m not sure we were ever very clear what they were asking for in negotiations, but now they will have to ensure wider constituencies in the UK and wider support.”

The rumours of the Cabinet jostling for prominence and disagreeing over the stance going forward gives Beale hope that not only will there be “a bit less talk of ‘no deal is better than a bad deal’”, but also greater consultation.

“What we are pushing is a sensibly negotiated deal with a transitional period and I suspect they will stop talking about ‘no deal’ as they need to,” he said.

“It’s not going to be about ideology, but about persuading enough people in the House of Commons to agree with their position. If they are sensible, they’ll be talking to a broacher constituency, not just across the Conservative party but also the opposition parties as well, particularly Labour. They’ll need support from outside the conservative ruling elite.”

As a result, there has been a softening in the rhetoric from the UK-side, driven by people who were not involved in positions of power before the election but who might now take a hand in reformulating the position now.

“I’m not sure anyone knows where they are, but the fact that they’re making noises means that people think they can influence them in that direct. And if they do, that’s probably good,” he says. “But the original proposition was that we would be out of the single market and customs union, and personally, I don’t’ think that has changed.”

This, he argues is nothing to do with the so-called ‘hard’ or ‘soft’ Brexit, (“I hate that terminology”) – but simply the reality of what is possible in the face of the UK’s obvious rejection of the free-movement of people and its desire to control immigration.

“What is up for grabs is the slight ambiguity between the Labour and Tory position of how much access do you have to the single market, and how much we are prepared to pay for it,” he adds.

The hard/soft aspect is therefore about the timescale, he argues, rather than what is or what isn’t on the table – falling out of the customs union in two years’ time would be “pretty disastrous compared to a divorce, trade settlement and exit of the custom union in five years”.

The sunny uplands of free-trade

This he noted, is also one of the ‘sunny uplands’ of the arrangement – the potential to do free trade deals with third party countries that could improve on the current status quo. The WSTA has been progressing this with its work with the World Wine Trade Group (WWTG), a “unique” organisation with sees both government and commercial interests sitting around the same table, which is rare”.

“If we could have an agreement on principles for Free Trade Agreements (FTA) on wine, and although those would have to be specified to each country, you could get a long way on just what a new third country free-trade agreement would look like, just through that one group,” he explains.

Although the UK being granted observer status on the WWTG puts it in a “delicate place” that may not be “a comfortable position” for either the UK or the EU representatives at the table, the advantage is that everyone “knows the score and how to proceed” – working on the basis that the UK would adopt the same position as the EU as it currently stands, and then see how far that could be stretched.

“I think it is likely that there would be some gains for third country winemaking industries in our new arrangements and we can see a few of those already,” he adds.

Contact with Australia, New Zealand and South African ministers and officials shows there is support for the idea of a wine standard.

“I’m not sure when we will have a draft to look at and talk about, some of this is some way of, but we are prepared for the possibility that still exists that we would fall out of the EU in two years’ time – or less, as the clock is running.”

Establishing a standard that could be tweaked according to country would go a long way towards contingency planning for the worst case scenario, Beale concludes.

See next week for the second part of our exclusive interview with Miles Beale.