Bar an unlikely upset, Britain is on its way out of the European Union. But while Brexit looks near-certain, the nature of our future relationship with Europe, not to mention the timings of the exit process, remain up in the air. The fierce debate on transitional arrangements over recent days has driven this home. These arrangements would last beyond the Article 50 deadline of March 2019 and—in theory at least—facilitate a smoother exit from Europe than we would otherwise have.
Discussion with senior political figures confirmed the extent of the disagreement. Nigel Lawson, Chancellor in Margaret Thatcher’s government and giant of the “Leave” campaign, told me that when it comes to the length of transition, “one year is enough.” This remark stands in stark contrast to recent comments by Philip Hammond, who is pushing for a transitional deal of up to three years.
Lawson’s reasoning? “What we should be focusing on is the policies we intend to pursue after Brexit, when we are free to choose.” The thinking seems to be that messing around too much with fiddly interim agreements is silly given Britain’s exciting independent future.
Peter Lilley, Shadow Chancellor under William Hague, former Cabinet Minister and, like Lawson, a tiger of the Brexit cause, was similarly bullish in his deviation from the government line. “Transition deals are a solution looking for a problem,” he told me.
“If we get a free trade deal with the EU there is no need to transition between zero tariffs and zero tariffs nor identical regulations and identical regulations.” On the other hand, “if the EU refuses a free trade deal it will be to show that leaving creates problems—so they won’t agree to mitigate those problems with a transition deal.”
“Transition deals are a solution looking for a problem”
The argument is that in effect a transition deal would be purposeless: either the EU will work with us in good faith, rendering one unnecessary, or penalise us for leaving, in which case there is not much to be done.
This is far from the consensus in the Tory party. Nicky Morgan, former Education Minister, stressed to me the vital importance of an interim deal: the government must negotiate one with Europe “to avoid the uncertainty of a cliff edge leaving date.”…