There is an immense amount of Brexit work yet to be doneby Peter Kellner / July 11, 2018 / Leave a comment
Let us, just for the moment—I promise not to strain your credulity for too long—assume that the remaining members of the cabinet are serious about the Chequers plan for Brexit. If they are, then they, and Theresa May in particular, face challenges in the next few weeks that are far tougher than finding replacements for David Davis and Boris Johnson.
The reason is that there remains a huge gulf—indeed, a range of huge gulfs—between the government’s new position and the European Union’s. Negotiations on a range of politically fraught and technically complex issues lie ahead. Here are some.
– If the UK is to have preferential access to EU markets, the EU will demand annual payments. Norway and Switzerland pay billions of euros a year; the UK cannot expect access for free.
– The Chequers agreement leaves vague the role of the European Court of Justice. Any deal will have to clarify this. Clarification is likely to lead to greater ECJ jurisdiction over UK trade and regulations than the government has so far acknowledged.
– Freedom of Movement. The EU is unlikely to accept a fundamental change in the principle that the UK must continue to allow anyone from the EU to come to the UK to work or study or join their family. There might be a deal to be done regarding the (currently very small) number of people who come for access to welfare benefits or health care, or who come for work but don’t get a job within, say, three months. Other EU countries, in practice, have such restrictions. But Freedom of Movement of Labouris a principle that the EU won’t change—while accepting that this is not quite the same as Freedom of Movement of People.
– The fiction of regained sovereignty is reflected in the proposal that parliament will retain the right to opt out of new EU rules and regulations. The danger for the EU is obvious: MPs might reject a minor future amendment in single market regulations, in the hope that the EU will not want to disrupt all cross-Channel trade by pulling the plug on preferential UK access to EU markets. If the UK gets away with opting out of a minor change, it might be emboldened to opt out of a bigger change later. To prevent this thin-end-of-the-wedge prospect, the EU might want to enshrine acceptance of EU rules into a new UK-EU treaty, from which parliament would have to take the giant step of withdrawing if it wants different UK regulations.
– Theresa May wants common rules for goods but not for services. This faces two big problems: a) the EU regards the single market as an indivisible whole, and is highly unlikely to allow cherry-picking. b) Many services—banking, insurance, law, technical know-how etc—are integral to the process of manufacturing and exporting. The Chequers agreement does not address this.
– The government’s new customs plan tries to square the circle—frictionless trade with the EU, but with the UK having the right to set its own, lower, tariffs on trade with other countries. We have not been told how importers could be stopped fromevading EU tariffs and simply re-exporting these goods to the EU27 over the Irish border or via Dover.
– The Chequers agreement is silent on rules of origin. Consider the motor industry. Any EU car sold to (say) South Korea can be sold tariff-free provided that at least 55 per cent of the value-added is generated in the EU. The UK motor industry may well collapse unless it continues to be counted within the EU total. (Most cars “made” in the EU have UK-value-added of well under 55 per cent, because of components imported from other EU countries; so a separate UK-Korea agreement wouldn’t solve the problem: “British” cars would not be sufficiently British.) If there is any chance of UK value-added being included in the EU total for exports to the rest of the world, we shall need a more complete customs union deal with the EU than anything that Theresa May has envisaged.
– The government is keen to be a full member, or some kind of associate member, of such EU agencies as Galileo, Erasmus, Europol, Euratom and the European Medicines Agency. We want to maintain security co-operation and participation in the European Arrest Warrant. Our airlines need the UK to continue to sign up to the Open Skies Agreement. If we are to remain full or partial members of these clubs, how much are we prepared to pay? And would we have to sign up to ECJ jurisdiction? Or will the EU continue to say that leaving the EU means leaving these agencies altogether—in other words that Brexit means Brexit?
– If some of the solutions to these problems require technology that is not yet available, then—to keep open the Irish border among other reasons—we may well need a “backstop agreement” that requires all arrangements between the UK and the EU to remain unchanged after the end of the “implementation phase,” due to expire in December 2020. Who will decide when the backstop ends: can the UK decide on its own, or will the EU also have to agree?
To list those issues is to show how much work still needs to be done. They are supposed to be sorted by October; or December at the very latest. With the summer holidays rapidly approaching, this seems implausible. At the very least, the negotiations need to proceed at full pelt through August. And if the negotiators are to keep at work, so should parliament. Theresa May, Dominic Raab and Jeremy Hunt need to be held accountable. Hilary Benn’s excellent Brexit select committee needs to maintain its scrutiny.
Alternatively, maybe the Chequers plan is no more than an implausible wish-list that nobody seriously expects to be implemented. In which case, we can all head off in August, recharge our batteries, and prepare ourselves for the inevitable autumn alternative: the biggest crisis confronting the UK since 1945.