Henry Newman is Director of Open Europe.
We are entering the closing stages of Article 50, and the UK and EU are firmly in the brinkmanship phase of negotiations. Neither side wants to blink on the major outstanding question for the Withdrawal Agreement – how to resolve the Irish backstop. So inevitably things are getting pretty tense. The clock is of course ticking, but there’s time left to find a way through on the backstop. A deal could be signed well into the winter and potentially the New Year, and still have sufficient space to get through Parliament and the European side.
A crescendo of voices are attacking the Government, which is doing far too little to communicate its Brexit policy. A sizeable chunk of the Conservative Party is pretty furious with the Prime Minister for being insufficiently purist on Brexit; another part of the party thinks she is being too much so. Meanwhile, Labour play with the possibility of backing a second referendum (though will probably only do so in circumstances in which the party knows it cannot be delivered). Newspapers and broadcasters delight in the drama of No Deal planning, bombarding us with possible ramifications and predictions – some real and worrying, others far-fetched and fanciful.
Yet one thing remains clear. Although Chequers is far from perfect, it nonetheless offers a realistic plan for leaving the EU and a framework for a close future partnership. For far, far too long the Government dithered and delayed crucial decisions. Having now belatedly agreed a plan, the Government is peculiarly lacklustre about defending it.
Some suggest the Government is not defending Chequers because Downing Street has already abandoned it. That is not the view of senior officials and ministers in Whitehall. They recognise that details may shift. But they also argue that if the solution doesn’t lie somewhere around the territory of Chequers, then the sort of close and deep partnership which both Brussels and the Government claim to want will be impossible, and there will need to be more of a border either with Ireland or between Northern Ireland and Great Britain.
At the core of the Chequers proposal is the idea that the UK could seek to get something close to participation in the Single Market for goods, without services or free movement. Brussels claims that a goods-only Single Market is impossible because the four freedoms are indivisible. That may be true for members of the EU, but no such principle holds for non-members. Switzerland essentially participates in the Single Market for goods and not services. The EU’s association agreement with Ukraine gives that country what the Commission’s own website calls an “unprecedented example” of “integration” in certain aspects of the Single Market – but not all, and without free movement. The Government should be pointing this out, continually.
In his State of the Union speech last week, Jean-Claude Juncker said that the UK could not stay “only in the parts” of the Single Market: “you choose”. The Government should have replied, politely, that according to the Commission’s own plan for the Irish backstop, part of the UK would have to stay in part of the Single Market. The Commission proposal’s is for Great Britain to leave the Single Market but for Northern Ireland to continue following Single Market rules on goods, in a separate regime from the rest of the country.
Michel Barnier claims that part of the reason why a goods-only Single Market arrangement cannot work is that a sizeable proportion of the value of goods is made up from services. Giving the UK regulatory freedom over services would, he argues, allow us to undercut European producers. But as my colleague Aarti Shankar has shown, this argument is far from clear in economic terms. Why is the Government not picking up her argument?
On the other hand, pro-EU campaigners say that Chequers doesn’t work because it prioritises goods over services, and services are 80 per cent of our economy. That argument rests on a confusion. Although our services sector is dominant domestically, goods outweigh services when it comes to our exports. And the profile of our trade in goods and services is different. About half of our goods trade go to the EU while for services the figure is around a third. So it makes particular sense to align the rules on goods with the EU. Again, the Government should be saying this more clearly.
At the same time, Brexiteer anti-Chequers campaigners complain that the plan would mean rule-taking on goods. Fair enough. But those same Brexiteers may well also have argued previously that the UK had little or no ability to shape EU rules as an EU member. Under the Chequers proposal, the UK would be obliged to follow future rules on goods and agrifood (covering roughly 20 per cent of our domestic economy) but we would have greater freedoms (“take back control”, if you like) over the wider economy. And, ultimately if Brussels did come up with a rule we couldn’t live with, we would be able to say “no thank you” (albeit with probable costs to our access to the EU). The process of translating new rules would not be automatic. Parliament would have to consider and agree each new set of rules. In the case of Switzerland, parliamentarians take this power seriously and have been able to resist new EU rules, for example, on chemical regulations.
Part of the reason why the Government is so bad at communicating its Brexit policy is that the Cabinet remains deeply divided over Brexit. When the Prime Minister still cannot say herself that she would vote to leave the EU – the defining policy of her Government – it’s no wonder that there’s a lack of clarity (to put it politely) in the overall communications strategy. But this confusion in communication is weakening the substance of the policy and allowing critics at home and on the continent to dominate the dabte. A new Government video released yesterday explaining Chequers is welcome, but its several weeks overdue. Ministers need to put aside their differences and commit to selling the agreed policy before its too late.