George Trefgarne is CEO of Boscobel & Partners and the author of Norway then Canada, a new strategy for avoiding a Brexit smash.
Nick Boles, the MP for Grantham, launched his campaign for a Better Brexit at the weekend, based on Britain falling back on membership of the European Economic Area (EEA), the so-called ‘Norway option’, and using that as a platform for then negotiating a proper Canada-style free trade agreement.
The EEA, to remind you, is a commercial treaty, signed in 1992, which promotes free trade between the European Union and the European Free Trade Association, made up of Norway, Switzerland, Iceland and Lichtenstein. It enables participation in the Single Market, but from outside of the EU.
Boles is a former Remainer, but he rejects the Chequers proposals as a humiliation and he is working with pragmatic Leavers, such as Lord Owen (and myself), to try and persuade his colleagues of the merits of the EEA as an alternative.
So far, the reaction to Better Brexit has been as expected, and much of it hinges on the legal position and whether the Government has been as candid as it should have been about the attractiveness of the EEA and how easy it is for us to fall back on it. Number 10 says the treaty will “no longer operate” from March next year because we are leaving the European Union. The implication is that this option is off the table already. It is Chequers or bust.
However, this is disingenuous, to put it mildly. And it is on this disingenuity that the scepticism of many Brexiteers towards the EEA hinges.
According to senior lawyers, notably Sir Richard Aikens, a recently retired Lord Justice of Appeal, the United Kingdom does remain a contracting party of the European Economic Area, having signed it in its own right. While we are leaving the so-called EU governance pillar, all we need to do is to apply to join the EFTA Pillar to make it operative. On top of this pillar sits the EFTA Court.
The EEA Treaty would have to be amended to make this happen. But if the EU tried to exercise a veto, it would be in breach of its good faith obligations to make the Treaty work, and we could appeal to international arbitration.
Contrary to another legal myth, the EFTA Court does not always do as the European Court of Justice (ECJ) says. The two courts do work together to create a homogenous area of law, but there are numerous times when the EFTA Court has disagreed with the ECJ. If we joined EFTA, we would probably have two of the five judges on the court.
The EEA not only delivers Brexit by being outside the jurisdiction of the ECJ and, for that matter, the Common Fisheries Policy and the Common Agricultural Policy. Norway and co also have input to single market legislation via the decision shaping process. They have rights of adaptation. And, in extremis, right of veto.
When he appeared on the Andrew Marr programme at the weekend, Liam Fox, the International Trade Secretary, said that he could not support Boles’s proposals because he wants “to make sure we have control of our money and our borders.” He appears to have been misled on important details.
The EEA does give us control over our borders. British passports would return. And while we would have to sign up to free movement of workers (my emphasis) we can effectively opt out of or limit it by invoking Articles 28 (3) or 112. Lichtenstein has already done so successfully since 1997 and restricts annual immigration from the EU to between two and three per cent of its population. The Home Affairs Select Committee also made this point in a report in July.
Nor is it correct that membership of the EEA does not give us control over our money. There is no obligation to join the euro. Nor are there compulsory contributions to the EU budget. Instead, EFTA members make agreed contributions to participate in specific EU programmes. Norway also provides grants direct to Eastern European nations to support their development. George Yarrow, an Oxford University economist (and intellectual father of Better Brexit), estimates Britain’s net payments to the EU would fall from £9 billion to around £1.5 billion.
How have we got into a situation where this important Brexit option, which is more attractive than the two-year ‘Implementation Period’, the Chequers proposals (even before they have been watered down by the EU), and the potential economic disruption of No Deal, has been neglected?
Here the plot gets murky. The Article 50 letter, sent in March last year, and which was only shown to the Ministers from the Department for Exiting the European Union with a few hours’ notice, conspicuously lacked giving 12 months’ notice to leave the EEA under Article 127 of the EEA Treaty. It has been suggested to me by a variety of sources that the Cabinet Office ministers who actually wrote the letter deliberately left out departing the EEA, intending to keep it as an option for the future.
Even if such a conspiracy theory is untrue and it was just a cock-up caused by the Prime Minister falling for the myths about the EEA (first circulated, ironically, by Remainers during the referendum), the fact remains that the Government has got itself into a position where it is trying to remove us from an important international treaty – and a vital Brexit option – either by subterfuge or by mistake. And Brexiteers have, for the most part, been taken in.
Assuming the No Deal/WTO rules outcome the hardcore Parliamentary Brexiteers favour is blocked by the Commons, as seems likely, and the only remaining options are Chequers or delaying Article 50, the true legal position in relation to the EEA and its provisions could suddenly become a serious controversy. The EEA may not be perfect, but is off-the-shelf, delivers Brexit, it works and gives us options. That is a start, is it not?