Henry Newman is Director of Open Europe.
Later this week, EU heads of government and state will meet at the European Council. A breakthrough on Brexit seems a distant prospect, partly because the agenda will be dominated by other arguments, but more importantly because Brussels seems more interested in spinning the talks out than making progress, and the UK is too distracted by its own divisions to turn its energy towards its negotiating partners.
The Commission is playing for time on Brexit, showing remarkable intransigence and a refusal to consider reasonable compromises. The British Government has rightly been criticised for taking too long to make important decisions. But who can say what the Commission actually wants? When it comes to trade, Michel Barnier’s team are pushing the UK towards remaining in the full Single Market and a Customs Union. But such an arrangement is obviously unsustainable in the long-term, a fact recognised by my contacts in the Élysée. And it would be unacceptable to both the Government and Opposition, who are committed to ending free movement.
Brussels’ approach to security is, if anything, even more alarming than on trade. The Commission’s obduracy risks a major reduction in European operational cooperation. British officials are deeply worried. Obviously civil servants recognise that post-Brexit the UK cannot have a decision making role in the way EU members have, but the Commission’s current position will mean a significant drop-off in capabilities, putting lives at risk.
Because the UK is so distracted by its own internal issues, it’s not focusing on exposing the flawed arguments and irresponsible strategy taken by Brussels on either security or trade. This needs urgently to change. At the moment Brussels is offering two post-Brexit options: either a narrow free trade agreement like Canada’s or a full Single Market and Customs Union arrangement that would put us closer to the EU than Norway. Neither are really plausible, as President Macron himself acknowledged. Given the Commission doesn’t have a proper plan, the UK side could actually shape the debate – even at this late stage – if it got its act together. Former prime ministers Tony Blair and John Major could be important in helping achieve this. Sadly, they seem more interested in re-running referendum battles.
It’s welcome that the Cabinet are scheduled to meet at Chequers to thrash out a Brexit position. Too many basic decisions are painfully overdue. Why has the Brexit Cabinet still not reached a view on the Northern Irish backstop? It’s nearly July. We signed up to the policy in December. Some ministers, including the Brexit Secretary himself, obviously have fundamental concerns. Why weren’t these resolved months back?
Brexit was always going to produce uncertainties for business. But uncertainty is compounded by the Government’s delays in offering clarity about its preferred options and reassurance that it is planning for all eventualities. Recent interventions by companies including Airbus and BMW no doubt reflect serious concerns. They should not be glibly dismissed. But at the same time it’s shocking to hear from a City contact that the Treasury itself – including Government advisers – is actively persuading businesses to go public with their concerns. It’s truly topsy-turvy politics when 11 Downing Street is trying to ramp up criticism of Government policy rather than assuage concerns. All of this has consequences: for economic confidence but also for the strength of the Government in negotiations.
A view is taking hold in SW1 that a ‘no deal’ Brexit is off the table, given the parliamentary arithmetic. Yet Lord Finkelstein’s counter-intuitive article in last week’s Times argued persuasively that while there was a strong Commons majority for Brexit overall there was no clear majority for any particular Brexit model. Equally it remains possible, even if not probable, that the talks simply fail to make significant progress and there’s what James Forsyth terms an “accidental ‘no deal’”, or only a very minimal agreement in place by March 2019.
Whitehall should therefore accelerate planning for all eventualities. Making preparations for a deal as well as ‘no deal’ should actually be more, not less, reassuring for business. The EU Withdrawal Bill will soon receive Royal Assent, giving the UK the domestic legal architecture to leave the EU. It’s past time for the Treasury to unlock spending to make sure we are prepared whatever happens.
The Government also needs a more pragmatic negotiating approach. As Open Europe has argued, a compromise position on trade is within reach. Our Striking a Balance report set out a plan for the UK to stay aligned with the EU’s rules on goods, allowing us essentially to participate in the Single Market for goods. At the same time we argued that the UK is too big to be a rule-taker on services and will need to manage its divergence from Brussels. This approach should form the centre of the Government white paper on Brexit.
Our plan has crossed the desk of senior figures in the Commission and in Government. Since we published it, Franklin Dehousse, a former ECJ judge, has written calling for “quick concessions” by all sides. Importantly, he dismisses the EU’s argument that the four ‘freedoms’ are indivisible, saying “every agreement does not necessarily require the respect of the four freedoms” listing both Turkey and Ukraine as examples to prove his point. He goes further than Open Europe in suggesting that the UK should also stay in the customs union, but endorses the idea of Single Market participation for goods alone. Professor Dehousse suggests that this would mean less budget contributions and something less than free movement of people for the UK.
When the Prime Minister meets the leaders of EU member states leaders this week she needs to urge them to engage more on Brexit. They have so far avoided focusing on the process, leaving it to the Commission to lock down the Brexit bill and the rights of EU nationals. But Theresa May should persuade them to begin to give it more personal attention and to update the negotiating mandate for the Commission. With the EU facing major internal divisions over issues from migration, to its budget, the future of the eurozone, and the rule of law, it’s no wonder that many countries don’t have Brexit at the top of their priority list. But the question of Britain’s future relationship with its nearest neighbours is too important to be left to the Commission to resolve alone.