There has been plenty of coverage of the government position settled at a meeting of Cabinet last Friday at Chequers. Many think that this is a pragmatic starting point for the final rounds of negotiation with the EU. However most of the negative feedback cries betrayal but doesn’t really explain why the critic is against the deal, just that it is not Brexit. We have had a three page statement from the Prime Minister and now, a round of media articles and interviews but the detail comes next week in the White Paper. So rather than relying on the same journalists that both sides have been arguing are biased against remain/leave (delete where applicable), I rearranged my Saturday morning to go to a briefing in Downing Street to hear from those closest to the PM. On Monday I will attend another briefing with more colleagues and hear from the Prime Minister herself before reading with interest the White Paper when released. What I have heard so far satisfies me that whilst this approach is not where I would have wanted to be as someone who campaigned and voted for Leave, but is the most pragmatic offer that we can give at this stage.
When I was debating during the referendum campaign, the main pillars of the argument to leave were sovereignty – taking control and putting the UK parliament in control of our decisions, pooling sovereignty only when we chose to for our advantage; controlling immigration, so introducing a system that was fairer, allowing people with the skills and experience that we need and want into the UK no matter which country they were from rather than allowing unskilled economic migrants from parts of the EU with high youth unemployment to jump the queue and thirdly, to be able to expand our trade through ambitious free trade agreements with countries whose economies are booming and are predicted to become dominant in decades to come, all the time whilst keeping on friendly terms and continuing to trade with our closest partner, the 27 remaining countries of the EU, albeit their economy had been stagnating for the last decade and decreasing in size of our proportion of global trade. I was often asked what my Brexit looked like, to which I would always reply that I could tell them but that would preclude them from having a say. We were giving the government a mandate to leave and the way that we would leave would be arranged through debate and negotiation. So here is why I believe that this proposal fully meets the terms of the referendum in getting us out of the EU, rather than BRINO (Brexit in Name Only)
1. We will be leaving
Nothing changes in terms of our leaving date. We will still formally leave the EU on March 29th 2019. Assuming we reach a deal, we will have an implementation period, something that has already been agreed. This is simply to allow businesses to ready themselves for the trading arrangements that we agree. It’s not practical to reach a technical customs arrangement for example in April and expect businesses to be able to handle this just two months later. We need customs officers, particular technology in place. It’s complicated but deliverable with political will and a reasonable notice period. The agreement reached is that the implementation period will come to an end no later than December 31st 2020.
2. We will stop paying in large sums of money after we leave
The agreement that was completed last year means that we will be paying a final sum which includes the months of the implementation period and brings us to the end of the EU budgeting period that we were involved in preparing the budget for. However as we will be leaving the political organisations of the EU and will no longer be a member, there will be no huge membership fee to pay. Anything that we do end up paying will be based on our decision to buy into particular projects such as ERASMUS, the student exchange programme that comes with EU membership but is also open to third countries like Turkey and Taiwan. We can pick and choose which of these projects we join, if any. The money that we are then not spending on EU membership can be spent within the UK. Some of this will clearly replace the funding that is redistributed from the EU at present to farmers, universities and regeneration projects for example but again, we will decide where and how this is spent so it can be better targeted and spent more effectively.
3. Freedom of Movement will end
The automatic right of EU citizens to come to the UK to live will come to an end. The proposal talks about a mobility framework so that UK and EU citizens can continue to travel to each other’s territories, and apply for study and work. Travelling to each other’s territories is important so we don’t burden holidaymakers and travelling business people with a complicated visa application system, thus hindering travel. Applying for study and work is very different from having the right to walk in and study or work. There may be a preferential system for EU member states in this regard but only on the same basis as our top tier trading partners pushing for one in a free trade agreement, countries such as India, USA, Australia. So again, this is a visa system agreed as a sovereign government in exchange for preferential access to their markets and is reversable.
4. The European Court of Justice will no longer be the highest court in the UK
Once we leave, the Supreme Court will be the highest court in the UK, so UK courts will not refer cases to the ECJ. Clearly the EU will still have the ECJ as their highest arbiter. Ironically if the EU tried to change this at our request, the ECJ would strike the deal down as illegal under EU law. So in any trade disputes, each party will refer cases to their own court system. Our courts will keep an eye on case law set by the ECJ but will not be bound by it. They will try to ensure that they keep a common interpretation in cases where we are applying a common rulebook, such as disputes relating to the movement of goods. (Note, the European Court of Human Rights is a different body and entirely separate from the EU. It will remain.)
5. We will be leaving the CAP and CFP
We will no longer be subject to the Common Agricultural Policy or the Common Fisheries Policy. This means that although we will have some agreed restrictions on exports of agricultural products to the EU and imports, we will not have the EU micromanaging our farmers telling them which crops to grow and how. In leaving the Common Fisheries Policy we can reclaim our fishing waters.
6. There will be no hard border in Ireland, nor will Northern Ireland be treated differently from the rest of the UK
There are no Free Trade Agreements anywhere in the world that completely get over the need for checks. This proposal avoids the demand from the EU that Northern Ireland be kept within the EU Customs Union. However the proposal would bring us to near-frictionless trade with the UK and EU working together on the phased introduction of a new Facilitated Customs Arrangement that would remove the need for customs checks and controls between the two. The UK would apply our set tariffs on goods coming to stay in the UK and the EU’s tariffs on goods passing through to the EU. In the vast majority of cases businesses would pay the right or no tariff upfront and otherwise through a repayment mechanism. It is estimated that only around 4% of businesses will have to engage in the repayment process.
7. We will be able to do our own independent trade deals
By completing this bespoke customs arrangement, we would be liberated to secure our own trade deals with the rest of the world. Some of the conditions of the proposal will mean that some of the deals may not be able to be comprehensive for all sectors. Common rules on agri-foods for example will mean that we would be unlikely to be able to bring in hormone-treated beef from Australia for example, but that would likely be controversial in itself when Parliament considers any agreement. Australia would be content with increasing the amount of non hormone-treated beef that it sells to the UK. The only area that we are proposing to have ‘dynamic alignment’ with the EU is around State Aid. We are proposing to commit to not reduce environmental standards or workers’ rights and a few key areas. Apart from these, we will be free to diverge away from EU rules on the understanding that this will have a consequence on our future trading arrangement with the EU from that time on. Again it is our sovereign decision. There may come a time when we are more confident as a nation to drift away from dependency on the European markets towards the emerging markets that are predicted to grow significantly. This agreement gives us a soft landing from undoing forty years of a constrained partnership with the EU and the ability to take off again in the future when we are ready and importantly, when we ourselves decide.
8. We are stepping up preparations for No Deal
I’ve always believed that a bespoke deal is by far the best option but that we should be confident enough and prepared to walk away with no deal. This gives some steel in our negotiating position. I am pleased that the government has recognised the need to build on the work that they have already been doing to prepare for a no deal scenario. It is the responsible thing to do in continuing preparations for a range of potential outcomes. There is only a short time before we are due to conclude talks so the government has agreed to step up such preparations.
This is not a perfect deal by any stretch of the imagination and there is much more to examine and to achieve. The common rulebook means that we don’t end up with a clean break from the EU. However in talks with businesses, it is clear that many will continue to keep to the EU rulebook anyway in order to keep their existing trading arrangements in place. We are not restricting ourselves in our services-based economy which represents 80% of our GDP and the vast majority of future opportunities. We will be aiming for arrangements on financial services that preserve the mutual benefits of integrated markets and protect financial stability. Much of the pipeline of regulation of financial services markets is on a global basis. These ties are not ideal but help get formalised access and move us on. We need to keep our eyes on the prize and get this deal done. The next stage will be to see if Michel Barnier can accept this, since we are cracking open a gap on the EU’s four treasured pillars of freedoms, the free movement of goods, capital, services and labour, but he would be well advised to understand the consequences of rejection. Whereas he is the custodian of the EU ideology, the leaders of the 27 member states will have far more of a view of the effect on jobs, prosperity and the political climate in their own countries if the 6th largest economy walks away.
Having campaigned to leave, I take my responsibility for getting through this seriously. So if you are taking a view, take the time to look at the whole picture first. It’s complicated, hence this isn’t a tweet or a Facebook post. People may be distracted (rightly) by the World Cup and getting Brexit fatigue but at this stage it’s about detail. The Prime Minister has done a remarkable job in the most difficult circumstances. There is enough in this proposal for me to back her and I look forward to the White Paper on Thursday.