Brexit: now the difficult bit starts….

Theresa May appeared at the dispatch box on Monday afternoon, trying hard to be joyful and triumphant, claiming that she was able to offer a Brexit that would please everyone. It’s “good news for those who voted leave” and “good news for those who voted remain” she proclaimed.

But just a couple of hours after her exhortations of glory to the newborn Brexit, chief EU negotiator Michel Barnier wasn’t singing from the same carol-sheet. In his interview with a group of journalists his comments were more “no chance” than Noel.

A final Christmas present came in the form of Commission’s recommendations for the draft negotiating directives for the next phase. These still have to be signed off by the EU-27 national ministers, but they are unlikely to be changed much as they reflect the discussions the latter have already had.

Several problems for Theresa May stick out like a sore thumb.


Theresa May claimed that during this initial post-Brexit period, “we would not be in the single market or the customs union as we will have left the European Union. But we would propose that our access to one another’s markets would continue as now“. The EU position is that, if Britain wishes to have this level of access to the single market, then it must follow the same rules and regulations as everyone else, and in the event of any legal disputes about them, accept the judgments by the European Court of Justice.

A specific area of confusion, on which thousands of jobs depends, revolves around the Common Fisheries Policy (CFP) and the Common Agricultural Policy (CAP). Theresa May asserted in parliament that, after 29 March 2019 we would have the opportunity to “to introduce [new] arrangements that work for the United Kingdom”. Again, how does this tally with “access to one another’s markets would continue as now? Again, contrast that with Michel Barnier’s insistence that, if it wants a transition period, the UK must accept the EU’s “complete architecture”. And anyway, given the UK has undertaken to maintain its contributions to the EU budget until the end of 2020, shouldn’t the EU correspondingly be paying UK farmers during that period? Not, it would appear, according to May.

Will UK fisheries still have to abide by the EU quotas between 2019 and 2020 with the UK having some (according to the draft EU mandate) say on how these quotas are set? May’s statement would appear to say No, but meanwhile the government gave under-the-radar support, at the meeting of fisheries ministers, for the EU’s Multi-Annual Plan for North Sea Fisheries. Again, the lack of clarity over these and many other issues is terribly worrying for people whose jobs and livelihoods depend on these sectors, and yet who do no know what will be happening in barely fifteen months.

The likelihood is that, despite May’s posturing which is for internal Conservative party consumption, she will agree to the transitional period being the status quo for (almost) everything for a period after Brexit, where all that will change is that Britain will not be represented in the decision taking bodies of the EU.

But beware the “sleeping pill” effect of such a transition deal! It would simply postpone the settling of key issues until after we’re out. The visibility of the problems will, for now, be diminished (“Don’t worry! We’ll solve them later and have plenty of time to do so“). Theresa May would avoid having to settle key disputes within her cabinet until we’ve left. Parliament will be offered a pig in a poke: a divorce deal that leaves all the problems unsettled. But the attraction for ultra Brexiteers is clear: Britain would be out in March 2019.

One fly in the ointment for her strategy is that there is a legal problem regarding British participation in EU agreements with the rest of the world, and this arises from day one, irrespective of any transitional period. As a non-member, the UK will immediately fall out of over 750 agreements covering not just trade but a myriad of other subjects, such as airline flying rights. EU lawyers have not yet found a solution to this (which is a problem for the EU too). It will require emergency agreements with over 160 countries just to keep the status quo.

Another fly in the ointment will be industry, agriculture, universities, finance and others who may well not be content with bland assurances that all will be well right in due course. The future framework is, after all, far more important than the transitional period. A blind date Brexit in 2019 will not be acceptable for them.

The crucial Future Framework

It is astonishing that the cabinet never had a discussion on the future framework — what it wants for Britain’s future relationship with the rest of our continent — until this week, some 18 months after the referendum and 9 months after triggering the start of the negotiations.

Even now, for the reasons described above, it is kicking the can down the road.

But at some point, if it goes ahead with Brexit, Britain faces an unpalatable choice. Either we leave the single market and customs union, and take a massive economic hit (and have a hard border in Northern Ireland), or we stay in (or closely aligned to) them, following rules on which we no longer have much influence when they are changed.

The government says Britain will leave the customs union and the single market but nonetheless negotiate full access to it. It says it will turn the Irish border into a customs border, but not have customs controls there. It has promised to keep much single market legislation “aligned” but wants to be free to vary it. These contradictions cannot survive, but the government wants to settle them only after we’ve left, knowing that whatever it chooses will split the Conservative party.

And it is also starting to talk to third countries about future long-term trade deals, but is trying to keep the discussions secret until after Brexit — because, they too, will be controversial. It was recently revealed that Liam Fox’s Department for International Trade (DIT) has “quietly opened preliminary discussions with a team of American officials. Both sides have agreed that their talks will be classified as either ‘sensitive’ or ‘confidential’, and information will be shared only among approved individuals. Nothing can be released for four years after talks are concluded, unless both sides waive the secrecy rule”. Doesn’t sound like the contents will be popular!

With regard to the EU — still our main trading partner by a long way — David Davis has said that Britain would be seeking a “Canada plus plus plus deal” meaning a Free Trade Agreement similar to the recently agreed EU deal with Canada, but including services, not least financial services. Since services make up 80% of the UK economy, but are largely absent from the Canadian deal, this would indeed be vital. But there is not a single existing EU trade agreement that is open to financial services to the extent Britain wants (indeed Britain, as an EU member, was instrumental in keeping services out of such deals, lest they competed with ours).

As Michel Barnier pointed out:  “In [choosing to leave] the single market they [the UK] lost the financial services passport.” He has underlined that this is British government’s own choice saying “The UK’s own red lines in the negotiations rule out any solution other than a free-trade deal.”  More far-reaching arrangements, such as those the EU has with Norway, are not on the table because of the British government’s own choices, not because the EU would not countenance them.

Barnier suggested that Davis’s three “pluses” might therefore be judicial cooperation, defence & security, and aviation. But given Theresa May’s red lines, the first of these seems unlikely (as she has ruled out using the ECJ to settle legal disputes) and the others will be difficult to reconcile with her insistence in Lancaster House speech that “we do not seek to hold on to bits of membership as we leave.”


It’s still all a fine mess.

That’s why the battle to secure a “meaningful vote” in the House of Commons on the withdrawal agreement was so important. Parliament must be able to evaluate the deal with all options available to it: to approve, to send the government away to negotiate further, or to reject outright.

If the withdrawal agreement does not guarantee that we won’t eventually:

  • face a customs barrier to our main export market
  • remove our universities from European research programmes
  • deny our hospitals access to Euratom’s radioactive isotopes for cancer treatment
  • cut our farmers out of European markets
  • end the ability of our police forces to cooperate across Europe through Europol
  • deny Britain’s financial sector access to the European market
  • have a hard border with Ireland
  • lose rights for consumers and workers enshrined across Europe in EU law
  • generally damage our economy, costs billions and sacrifices jobs

Then we must have the right to pull back from the abyss.


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