James Arnell is a partner at Charterhouse. He writes in a personal capacity.
So, has all the posturing about the Brexit bill been in vain?
The Prime Minister’s Florence speech was a horrible, corpse-like stumble into the waiting arms of Michel Barnier. He won’t be giving her a helping hand, though; he’ll be reaching into her pocket to grab her purse and then giving her a bit of a shove to help her on her fall.
Our Government is shockingly naive and has proven to be woefully ill-prepared. Is this an indication of how our national capability has withered in the smothering embrace of Brussels over the years?
It seems that our civil service has the remnants of a body, but the nervous system has slowed almost to a stop and the muscles are pathetically withered. We seem to have forgotten how to run a country on our own.
The belief that we need transitional arrangements between the UK and the EU from March 2019 has taken hold because no one has pulled their finger out to be ready for Brexit on time. Paying for transitional arrangements has come to be seen as the most palatable way to pay the Brexit bill. At least, the thinking goes, we will be paying for something rather than paying for nothing.
Business leaders have been happily assuming that such arrangements will be put in place and therefore they have placed Brexit planning on hold: why waste money when there may be years to sort things out?
No doubt civil servants are breathing a collective sigh of relief as their political masters cave in to Brussels. They can work at their usual pedestrian pace rather than hustling towards a deadline of March 2019.
A return to normality is the order of the day: a somnolent sitting on of hands, writing of papers, sending of memos, kicking of cans down roads.
Brussels now knows that we have bottled it. Theresa May will be seen as begging for transitional arrangements with her “open and generous offer”. The EU must be delighted. They know that they have no need whatsoever to take this first offer seriously, and certainly no need to respond with similar openness and generosity.
Whatever numbers are bandied around now, whatever the deal on citizens’ rights, whatever the proposals for Northern Ireland, Brussels knows it can make itself comfortable and keep asking for more, because our government’s and civil servants’ obvious lack of preparation for the “no deal” scenario makes us price takers.
They may offer transitional arrangements, later, at a much higher cost than we now say we are willing to pay, but I have no doubt that the deal to which we are supposed to be in transition will be kept completely vague. There will be hollow promises of further negotiations to design a new relationship, and these will be heralded by our Government as great progress, when they will in fact be worthless.
And, during the so-called transitional period, the EU will have plenty of time to begin the process of preparing for the shift of financial services out of the City, for the reorganisation of supply chains, for the substitution of the UK’s financial contributions by other member states.
It is a dream scenario for the EU. And a nightmare for the UK.
As our transitional period comes to an end, we will find ourselves in a much weaker negotiating position than we would have had in the lead up to March 2019. The EU’s negotiating position will have become immeasurably stronger, ours weaker, because they will have had time to prepare to cherry pick what they want out of the UK’s financial services sector and supply chains.
Meanwhile, our economy will face not a further 18 months of uncertainty but 42 months, during which nobody sane will invest because they will have no idea what the final deal will look like.
Holding the line on the Brexit bill, which David Davis has so far done with some determination, was only ever going to work if we also held the line on the need for the final deal to be struck before March 2019. And that line was only ever going to be credible if we were actually ready to go it alone from March 2019.
This weak, disorganised government has made little or no progress towards being ready to go it alone in 2019, because it lacks the confidence and the execution capabilities and, most importantly, the will to be properly prepared. We risk paying so much more for so much less than we would have had to pay if our government were not so spineless.
So it really is now time for the harder heads to deliver an ultimatum to the Government. They need to insist on three very important provisos to the agreement of any Brexit bill in return for transitional arrangements.
First, the bill should be paid over time and only if conditions are met, such conditions to include the respect of the letter and spirit of the transitional deal by the EU and all EU member states.
Second, the bill and transitional terms should only be agreed if the final shape of the arrangements to be put in place after the transition period have been determined before March 2019.
Third, because the first two provisos can only be delivered if the EU knows we are ready to go it alone in March 2019, they must insist that the government publishes a detailed “no deal” plan for March 2019.
The true Brexiteers need to make it clear: the Government simply has to be ready for “no deal”, or they will bring down the Government.
I have no doubt that the British people would rather have the security that comes with proper unilateral planning for a hard Brexit in March 2019 than the alternative, which will be a hard Brexit two years and tens of billions of pounds later, when Brussels is better prepared and our negotiating position has been dithered away by the current government.
The Brexiteers have a huge advantage: the way Article 50 works means that, if the Government does not give them what they (and the majority of the country’s voters) want, then they can impose a hard Brexit by bringing it down.
But they need to make that stand now. It would be irresponsible to do it any closer to March 2019, as there would be no time for the civil service to pull its socks up and do the work that needs to be done.
So, Brexiteer MPs, if you’re reading this, it is now or never. Demand a proper Brexit plan which Is deliverable with or without the cooperation of Brussels, and demand that the transitional period is just that: a transition to something that has been negotiated and agreed.
Don’t just assume it will happen that way. It won’t. The EU will only agree a deal on our future relationship by March 2019 if it knows that the UK is fully prepared for the alternative. If this government has to fall to achieve that, so be it.
Will enough MPs stand up and give Mrs May that clear ultimatum? I hope so.