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NEWMAN Henry

Henry Newman is Director of Open Europe.

Today, Sir Tim Barrow, the UK Permanent Representative to the European Union, will hand Donald Tusk of the European Council a letter. That letter will begin an almost inexorable process to take the UK out of the EU. The next two dozen months will be extremely testing for the Government. We will be in a period of intense negotiations. Every ministerial statement and utterance from governments here and in Europe will be dissected. Newspaper reports, tabloid stories, leaks, and well-sourced comment pieces will be analysed and over-analysed. For those who have had enough of talking Brexit there is likely to be little solace ahead.

We already have the broad outline of what’s going to happen. Today, Tusk is expected merely to acknowledge receipt of the Prime Minister’s letter. The EU’s negotiation positions will be agreed at meetings of the EU27 in late April and then in May. We know a great deal about the UK Government’s ‘Plan for Britain’, from May’s Lancaster House speech and its White Paper. We know far less about what the EU and its member states want in terms of the UK’s future relationship.

So far, Brussels and European capitals have largely held a united front. But each of the 27 will have different priorities for the negotiations. Almost all leaders have said they want to keep the UK close – without giving much detail about what that might entail. The main point of agreement so far seems a rather axiomatic and often repeated point that the UK can’t have exactly the same benefits outside as it currently does inside the EU.

The first crucial question will be the sequencing of discussions. Some in Brussels and in mainland Europe have tried to hold to the position that the UK’s future relationship with the EU can only be considered after the exit process and ‘divorce’ bill is agreed. Unsurprisingly, the UK has demanded these discussions are held in parallel. Both Germany and Spain seem to support parallel discussions. Without this, the chance of a deal seems remote.

Then there’s the money. Despite claiming that there could be no negotiation without notification, the European Commission has already laid a 60 billion euro bill on the table. Indeed, Jean-Claude Juncker insisted at the weekend that the bill must be at least that, although previous briefings suggested it could be as low as 20 billion pounds. Apparently (and somewhat bizarrely), Brussels was rather surprised by the vehemence of the UK’s response to the bill. Some have suggested that it is Juncker’s cabinet in particular which is pushing the question of the bill and amount. If the Commission insist that the money must be resolved first, we should expect the UK to leave with no deal and refusing to pay anything.

It won’t be until late-September, when the German elections are held, that we know the leadership of the EU27’s two most important member states. A working assumption is that an Emmanuel Macron presidency and Martin Schulz as Chancellor would be a bad thing for the UK’s negotiations. But there’s a chance that the defeat of Marine Le Pen, and the selection of a top Eurocrat to run Germany, following on from the under-performance of Geert Wilders, might actually smooth the UK’s negotiations. A stronger, more self-confident EU could feel it was in a better position to cut a deal with the UK, without seeing punishment as its only option. And replacing Hollande might also change an under-recognised factor which has been central to European dynamics over the last few years (and the path of Britain towards Brexit): the weakness of France.

Here in the UK, the SNP have been setting much of the agenda amongst the opposition parties. Labour’s position has so far been rather confused. Above all, they haven’t answered the question of how to respond to Brexit. On Monday, Sir Keir Starmer set out more of Labour’s policy. However, even on his six tests, might the SNP have shown the way? Starmer’s fourth test that the UK must have the “exact same benefits” as it currently has from Single Market and Customs Union membership seems plainly impossible (unless benefits are defined very loosely). If the UK leaves the EU in any meaningful way there is no chance that such a condition could be fulfilled, not least because the EU has ruled it out. Starmer seems to be creating a grievance for the future – is he aping the SNP’s narrative of betrayal?

For the Government, the Prime Minister is playing her hand impressively. The three broad red lines for negotiation – no free movement, Britain outside the ECJ’s jurisdiction, and an end to vast contributions – seem largely deliverable. Despite the deep Conservative divisions over Europe which reached an apogee last June, the Party now appears largely united. Importantly, the Article 50 bill passed without amendment. But the Tories can shift mode from complacency to panic quickly. And the real political challenge will be the Great Repeal Bill. Will the consensus hold that the bill should simply serve as a trapdoor to shift the acquis of EU law onto the domestic statute books, or will MPs grab the chance to scrap one regulation or another?

Will the UK get a deal? It’s too soon to tell. Economically, the case for a comprehensive UK-EU trade deal is overwhelming. Earlier this week, Open Europe published a report showing why the UK should leave the EU Customs Union, and laying out a plan for UK-EU trade outside it. We argued that there will be costs to both sides from leaving, but that those costs can be minimised it UK and EU cooperation is agreed. And alongside the costs there will be opportunities, particularly for the UK but also – potentially – for the EU, which is yet to resolve fundamental questions about its own destiny.

The obstacles to getting a UK-EU deal are political as much as practical. If the negotiations are left to Brussels and the Commission, the UK isn’t likely to get too far. But if, as seems logical, member states decide to take a lead, there’s cause for more optimism.

38 comments for: Henry Newman: Sequencing and money. The first big challenges to the Brexit negotiation.

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