MICHAEL WHITE on the negotiation countdown, the Norway model and why we can’t just muddle through.
Are there really only 413 days left if Britain formally leaves the European Union as scheduled on March 29, 2019, with or without a clear exit map of its future direction and final destination? Actually, it’s fewer than that because the MP who made the point did so a week ago in a scholarly Westminster Hall debate on the ‘Norwegian model’ for trade.
I know, I know. ‘Norway model’ generated a Google search spike after June 23, but is one of those options which ministers currently rule out without yet ruling much in. But Philip Hammond has been in Oslo this week while Tory Anna (‘expel Mogg’) Soubry and Labour’s Chuka (‘Nobody voted in that referendum to jump off a cliff’) Umunna shared Andrew Marr’s sofa to warn they may have the votes to stymie whatever deal May comes up with.
Correction. There are ‘fewer than 300 working days’ in which to sort at least our rough draft of the future, as thoughtful George Bridges, David Cameron’s right-hand man in No 10, put it a few days earlier from his new perch in the Lords. It was the speech in which he made the widely-quoted remark about needing a bridge (no relation) out of the EU – ‘a bridge to somewhere, not a gangplank to nowhere.’
A bit late for one of the hapless architects of the Brexit saga to be fretting about bridges he inadvertently helped to blow up. But it’s not Lord Bridges fault that Theresa (‘We don’t have to decide anything today’) May’s government has been resolute for drift, for indecision and some bad calls, in the 20 months since the referendum. It continues to be so, despite those two highly-publicised cabinet committee meetings last week which appear to have resolved very little.
Actually, the negotiating timetable is even tighter than 300 working days, because they will include the coming summer when what passes for the governing classes of Europe go to the mountains or the beach, not to mention Christmas 2018 when even Jean-Claude Juncker breaks his abstemious regime and has a festive glass of Leffe. Who knows, but by then Angela Merkel may be on permanent gardening leave.
Oh yes, we also need to sew up that transition deal – the one May neatly fudged in December – by the date of the next Brussels summit in late March when the EU 27 is also meant to provide a mandate for negotiating permanent UK/EU terms. Alas, Michel ‘Tick Tock’ Barnier is now saying even the transition is in jeopardy because the Brits are making impossible new demands and the Moggsters are on the warpath.
Scary, isn’t it? But let’s stay cheerful. At least some of the headlines reflect negotiators patter. Despite raised blood pressure at the tax-shy Daily Telegraph over George Soros’s ‘elite conspiracy’ to thwart Brexit – it would be comic if it wasn’t serious – we’re leaving in 2019 and most of us are doing our utmost to make the best of what still looks a painfully unconvincing job. A slow car crash rather than George Osborne’s predicted pile-up, but still plenty of blood on the road ahead.
On freer trade, on immigration controls and those extra NHS billions – the three pillars of the ‘sovereignty’ case for Brexit – the underlying evidence remains as shaky as the case for crypto-currencies. Did you watch Monday night’s BBC Panorama trying to explain the Bitcoin craze? The experts were as boring as Michael Gove finds them, but also convincing. The ‘Bitcoin millionaires’ talked like snake oil salesfolk (Ponzi brand) and money-launderers did well, but distraught punters lost their savings. It felt very déjà vu.
What have we got to show for the red meat of negotiating substance? A series of six ministerial speeches setting out ‘the road to Brexit’ (again). Don’t hold your breath. Advance briefing on Boris Johnson’s opener (Chancellor Hammond has belatedly been granted a right of reply) suggested the Foreign Secretary would remind us all that the original common market of 1957 was always primarily a political project – ‘ever closer union’ to prevent repetition of the carnage of 1914-45.
You don’t say? Boris used to boast about how his Turkish great-grandfather, Ali Kemal, was kidnapped and savagely hacked to death in the Ottoman fallout from that carnage, when briefly the home secretary of the last imperial cabinet in 1922. You might expect him to be more sympathetic to EU founding fathers’ case, especially since the tides of nationalism are surging again.
Instead he attacked the EU as illiberal, an economically protectionist force in the world – lots of Brexits are currently doing that – and warning against the Norwegian model of UK/EU cooperation. It would tie our hands by preventing Liam Fox signing all those trade deals with kindly ‘third country’ states eager to import Pret a Manger sarnies and Adele CDs.
It can’t be said too often – which is why it’s said every week (denied too) – that Brexit Britain will have to do a lot of good trade deals and fast to compensate for the existing patterns of EU trade placed at risk by a hard Brexit. That’s why I increasingly sense that Westminster’s cross-party coalition of MPs and peers for a soft Brexit, not avowed Brexit-reversers like George Soros (pause for hisses) or Andrew Adonis (more hisses), will make its crucial stand on the Norwegian option that the Treasury appears to favour too. The Times ran a supportive leader.
A stand? When and exactly how? It’s impossible to state with any confidence. As critics keep saying it’s hard to plot a course when you don’t know which way your own government is heading. In the weeks ahead the House of Lords engages in 10 days of its committee stage phase of the EU (Withdrawal) Bill. Peers are determined to force MPs to rethink or clarify key issues, however much the Brexit press deplore their legitimate exercise of parliamentary sovereignty.
Amendments imposing a second referendum (unlikely to be passed) or transitional membership of the single market, Norway-style, or even a form of customs union (it’s reported that Jeremy Corbyn privately told Barnier is he open to the customs option), are politically contentious. But the Lords select committee on the constitution has just delivered another sharp critique of the bill, on weighty legal grounds. Their amendments will be harder for more fastidious Brexiteers (No, I don’t mean you, Jake) to shout down.
Such as? Much of the disquiet focuses on the scope and status of the repatriation of EU legislation (repatriation, not ‘the great repeal’) into UK domestic law, thus to provide vital continuity for government, business and citizens on rights and regulations. They are worried, as all sensible people are, that ministers will have too much freedom to modify and amend such ‘retained laws’ via secondary orders – in Henry VIII’s arbitrary fashion – with minimal reference to parliament.
Warning lights should be flashing at this stage. The Guardian reported this week that the ‘secret’ Whitehall assessment of the opportunities which Brexit provides to ‘regulate differently across social, environmental, energy and consumer product standards’ offer only modest gains overall. But most such gains are in politically sensitive areas – affecting jobs, the environment and consumer protection.
This may be why Boris Johnson – who shows as much grasp of economics as he does of Sanskrit – made his pre-emptive ‘liberal Brexit’ speech, supposedly aimed at fair-minded Remainers who share his multicultural, global values and love of cake. Boris does not do detail (he reportedly goes ‘na, na, na, na’ when confronted with it) and Govey has promised to protect the environment.
Others Leavers are made of sterner stuff. They know that only a highly-deregulated entrepreneurial economy can make compensatory gains enough to replace the EU market. Only romantics among them imagine that this is why Sunderland and rural Wales voted for Brexit. For all their talk of ‘freedom’ they are being less than frank about what they have it mind. Freedom for whom? We need fast-track procedures to tweak repatriated laws say peers like George Bridges, but we need safeguards too.
But the peers, elderly and knowledgeable in ways that Daily Express leader writers rarely are, go further in their legal concerns. Why are some EU laws that will no longer be needed or be duplicates of existing UK law be retained? How and in what exact circumstances will UK courts continue to ‘take regard’ of ECJ/CJEU rulings after Brexit? How will powers which should go straight from Brussels to the UK’s devolved parliaments (they did not exist in 1973) be protected? Whitehall has done badly by them so far – and the SNP government is rightly wary.
Most startling of all, the peers highlight the bill’s attempt – ‘unsuccessfully and erroneously’ – to entrench the EU’s ‘supremacy’ doctrine of law which may fit neatly with coded constitutions of the kind we are supposed to be escaping, but not with British uncoded practice whereby sovereignty resides in parliament.
Lots of detailed work for the lawyers then and the modern House of Commons is notoriously short of good lawyers who can’t afford to be MPs anymore. But it will have to be done in the coming months against a noisy background of fights over the single market and customs union, the trade off between sovereignty and market access. Here too the prospects are daunting.
Hence the lively interest, mostly by Remain MPs of the Pragmatic Tendancy, for Tory Stephen Hammond’s Westminster Hall debate on the European Free Trade Area (EFTA) last week. Hammond, a fund manager turned MP for Wimbledon since 2005, briefly (2012-14) a junior transport minister, was sacked as a party vice-chair by May over a Brexit revolt. EFTA is the trade body Britain set up in 1960 before it jumped ship to the then EEC, which now contains four member states: Norway, Switzerland, Iceland and Liechtenstein.
As discussed here before, EFTA matters now because many experts, politicians too, think it offers a better semi-detatched model for Britain to adapt than the lately-touted Canadian trade deal painfully completed with the EU, known as CETA and confined to trade in goods – not financial services which happen to be our forte. In a referendum Swiss voters opted for a bespoke EU deal (the Swiss UKIP wants to ditch that too), but the other three – as diligent TNE readers know – are inside the EU’s European Economic Area (EEA) and the single market, but not the customs union.
As such they are ‘rule takers’ as well as immigrant takers, and they pay for market access, all reasons why May (on special adviser, Nick Timothy’s advice?) rashly ruled it out and hard Brexiteers fear it most: it’s the EU’s Hotel California, they say, you can never leave. But Hammond, Stephen not Phil, listed advantages. To please Boris it’s purely economic, no ‘ever closer’ politics. And to please Fox EFTA already has 27 trade agreements with 38 countries and 900 millon people. It would smooth an EU/UK deal and already has an arbitration process via the EFTA court. EFTA excludes fishing and agriculture – two emotive issues for a few Leavers.
Hammond was frank. He wants the EFTA/Norway model as the end state destination for Brexit UK, not merely for the 2019-21 transition. Not all EFTA fans agree. Flexibility and cross-party consensus are within reach here, he argued, not to mention access to EU research programmes like Horizon 2020 and Erasmus. It could be the Plan B fallback if May fails to get her bespoke Plan A and Lord Lawson’s WTO cliff looms in the fog. What’s not to like except among the Moggsters?
Quite a lot, according to Robin Walker, son of pro-EU evangelist, the late Peter Walker, but now a junior DExEU minister. Though mostly positive, other MPs, Labour’s spokesman, Matthew Pennycook, among them, were wary too. Some questioned whether the Norway option could resolve the Irish border problem, about which Brexiteers remain blithely optimistic, blaming Brussels and Dublin for stirring what they dismiss as a fake controversy. Some wondered if the EFTA Four would even allow us back (anecdotal evidence is mixed) when we have four times their population (14 million) and nearly three times their £710 billion GDP. Could we really leave the EEA on Brexit day and rejoin wearing a new EFTA the next? Stranger things have happened.
I must say that Robin Walker’s four objections sounded pretty feeble, more like a holding position, a finger in the dyke rather than a brick wall. Free movement was one, free movement between EFTA members another, the sheer relative size of the UK a third and the global size of its trading ambition a fourth. We wouldn’t automatically get access to those 27 trade agreements without further negotiations either. Ho, hum. But at least they exist – unlike Fox’s.
The devil would be in the detail, but that is so with all the options. Ministers have not provided voters with a road map they can follow, a model they can hug. Nor have the Brexit ideologues. So EFTA’s Norwegian model feels reassuringly tangible. This is the biggest national decision since 1945, so George Bridges reminded fellow peers. With fewer than 300 days to go we can not carry on clinging to that tried-and-tested, sometimes disastrous, British habit of ‘just muddling through.’