- to leave without a deal, with no legal issue solved and, in economic terms, immediately facing tariffs on trade with the EU under WTO rules and needing to seek rapid agreement with countries around the world to replace the ones we currently have through the EU.
- hard Brexit, leaving the EU, including the single market and the customs union, but securing a free trade deal with the EU for most goods and some services and asking for time to negotiate new trade deals with third countries.
- soft Brexit options (various permutations around staying in single market and/or customs union, possibly through the EEA), keeping the economic advantages of membership, but involving continued acceptance of single market rules.
- to remain, as we can always change our mind.
And here the divisions within the Conservative party, between it and the DUP, and more widely in the House of Commons and the Lords come into play. Those close to industry – or simply with a greater awareness at what is at stake for Britain’s economy, for jobs, prosperity and public finances – want to at least stay in the customs union and often in the single market for the reasons I outlined last week.
But there is a risk that these divisions will be insurmountable. In which case the government may produce a fudge: a minimalist “divorce deal” that settles only the first set of questions mentioned above (citizens rights, borders, liabilities, and the date of departure) and provides for everything else to be settled in a future framework agreement to be negotiated over a three to five year period after Brexit, with the status quo remaining in place during that “transitional ” time as regards the single market, customs union, agencies, etc.
This would not be popular with the extreme europhobes in the Tory party who would hate the continued application of single market rules, with the ECJ still settling any disputes about what they say. But they would be in a weak position to actually block it.
Rather, the problem would be a wider one: parliament would be asked to buy a pig in a poke. It would be asked to vote on a Brexit deal that leaves all the key questions for the future. MPs and Lords would be voting with no knowledge of what the future arrangements will be nor their economic costs. They would have to blindly accept or reject a Brexit deal that settles nothing.
If David Davis, contrary to previous statements, accepts the two phased scheduling put forward by the EU, take it as a sign that that is what the government wants to do.
But even on this, we are still not any clearer.
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