Henry Newman is Director of Open Europe.
It’s half a year since the Prime Minister laid out her Government’s plan for leaving the European Union at Lancaster House. That speech – which Open Europe described as a “masterclass in common sense” – moved the UK’s position beyond the “Brexit means Brexit” mantra and proved that Theresa May meant just what she said. She outlined her commitment to delivering the referendum result, eschewing half-way houses and ruling out “a model already enjoyed by other countries”. The UK would, she promised, be leaving not just the EU, but also the Single Market, and the substantive elements of the Customs Union. So far, so good. But now, six months on, we need more flesh on the bones.
Despite the political setback of the General Election, and the rather strained collective unity which ministers have displayed since, the Government has broadly stuck to the policy positions outlined at Lancaster House. But the programme now needs expanding. The Article 50 clock is ticking, and business and the public need to see that the Government is gripping the complexities of Brexit. Meanwhile, we have what seems to be a co-ordinated attempt by revanchists to re-open the referendum and re-run the arguments of the last 18 months. A major speech updating the Government’s Brexit position is overdue.
This weekend the Chancellor told Andrew Marr that “the great majority” of his colleagues backed a transition arrangement to take us out of the EU. He also acknowledged the need for “as much clarity as possible as early as possible” about the Government’s Brexit plans. It’s imperative that the Cabinet agrees the next stage of these plans and outlines it to the public. That’s not to say that the Prime Minister ought to reveal all her negotiating cards, or be overly prescriptive. But it is crucial that ministers can point to a single document outlining the Government’s programme for Brexit.
Although the Prime Minister’s Brexit position is often caricatured as inflexible absolutism, she has actually left herself substantial wiggle room between her three red lines – ruling out “vast contributions” to the EU (without defining vast), suggesting that new arrangements could have a “phased process of implementation” (rather than an overnight cliff-edge), and noting that negotiations require “compromise” and trade-offs. She may need to use some of this flexibility, and to show compromise, to address fault-lines that have opened in recent weeks, including on Euratom membership, and on the question of how the UK should transition out of the EU.
This weekend Nick Boles suggested that the Government agree to a Norway-style transitional arrangement via temporary membership of the EEA/EFTA. Francis Maude, a former Trade Minister, has backed a similar proposal while arguing that we need to be freed quickly from the constraints of the Customs Union so we can determine our own trade policy. Some, such as Legatum’s Shanker Singham, have rejected these more formal interim options, suggesting only looser transitional arrangements. Steve Baker, a Brexit minister, suggested that even talking about a temporary Norway option was “blood in the water”. On the other end of the scale, the CBI have suggested a permanent transition in both the Customs Union and Single Market until a UK-EU Free Trade Arrangement is signed.
My view is that we should not obsess too much about finding the Goldilocks transitional arrangement. There are advantages and disadvantages to all the options, and the perfect should not be the enemy of the good. The point is: some sort of transition is required. A transition, or “phasing” could help assuage the concerns of business and others, while also affording Whitehall time for preparations, such as to upgrade IT systems at ports and borders.
The sooner the Government outlines its preferred transition, the more energy can be focused on the most important aspect of Brexit discussions – our future long-term relationship with Europe. And the longer it delays, the less useful the transition. A transition outlined in early 2019 will do little to boost investor confidence.
They key test for any transitional deal must be that it is just that: a transitional arrangement which takes out of the EU. On the basis of my test, we can rule out a CBI-style indefinite transition, which would anyway hand power to Brussels by making leaving the Single Market and Customs Union dependent on when the EU signs a trade deal. We will also need to ensure that any transitional arrangement definitively takes us out of the EU, rather than parking us in what some will inevitably fear is a holding pattern for eventual re-accession.
This weekend, the Chancellor seemed to rule out the Norway option of an EEA/EFTA transition by saying that we will “leave the single market when we [have] left the European Union on the 29th of March, 2019. That is fixed”. He has also previously said that we will leave the Customs Union at the same point. Is Hammond therefore proposing a parallel arrangement which mirrors both the Single Market and Customs Union, or a looser option? He said the transition could last a couple of years, not the “few months” which a Cabinet colleague had suggested. The Government must speak with one voice.
Lord Wolfson, Open Europe’s Chairman, who backed Leave, has called for the Government to lay out a “clear vision” for Brexit. He has backed “an open, outward looking, tolerant, liberal, Brexit that recognises that we need to control immigration, but also recognises the enormous value that hard working, tax-paying people make to our economy when they come to our country”.
That sort of vision, alongside a detailed programme for the forthcoming months, would find widespread support in the Conservative Party, and in Parliament. It would reassure business, consumers, and the country that the Government is getting on with the job of delivering Brexit. And it will provide Europe with more clarity about what Britain wants, helping us gain the initiative for the next phase of discussions, assuming the EU agrees after the summer, to switch to discussing our future arrangements in parallel with our exit talks.