Nicky Morgan is Chair of the Treasury Select Committee, a former Education Secretary, and MP for Loughborough.
Who knows what really happened at the Salzburg summit? Did the Government mis-read the signals sent out by the EU before the meeting? Or did Theresa May’s presentation to EU leaders harden their resolve to reject parts of the Chequers proposals more firmly than had been expected?
Whatever the explanation may be, the consequence was that the Prime Minister gave a dramatic televised statement on Friday which, just before our party conference, played to the gallery of the pro-Brexit press. Unfortunately, it also meant that, yet again, she ruled out the most likely eventual deals – the Norway or Canada options. Continuing to do so is unsustainable.
The EU has said, right from the start, that they have no interest in agreeing a bespoke deal. The UK has been trying for 18 months to change their mind. We haven’t been successful. Compromises to secure both the withdrawal agreement and the outlines of a future trading relationship will be necessary. I do not believe Parliament will approve the former without quite a lot of detail about the latter.
So the question for Downing Street now is how they position themselves after May’s emphatic rejections of the only real alternatives to a no-deal situation.
Today, some European Research Group members will support the Institute of Economic Affairs’ proposals for a Canada-style free trade agreement. This is often talked about with ‘plus, plus, plus’ added. No-one is entirely clear what the ‘pluses’ are, or how they are to be negotiated. No doubt the more pluses there are, the closer this CETA Mark II moves towards a bespoke deal and the longer it takes to agree – if it can be done at all.
My preference, and that of many other MPs, is for the UK to follow the Norway model: to re-join EFTA and, through that pillar, remain in the EEA. There are a number of Leavers who also could accept this model – or would have done had the Prime Minister’s red lines not been set down so hard and fast so early on in the Brexit process, leading them to imagine that a clean break from the EU is both possible (it isn’t: even on WTO terms we would need to continue to cooperate with the EU on security, aviation, borders, etc) and desirable.
If we make a conscious decision to opt for Norway now we would leave the EU – thus honouring the 2016 referendum result – and, more particularly, leave the EU’s political institutions.
As Stephen Hammond made clear over the weekend, EFTA membership “would allow the UK to remain in most parts of the Single Market, but be removed from the more controversial parts of EU membership, such as the pursuit of an ever closer union and the common justice and home affairs policies. It would be a return to the common market principles that Margaret Thatcher advocated when the UK led the creation of the Single Market.” Saying that EFTA/EEA would make us ‘rule takers’ ignores the fact that many of our key business sectors will choose to – or have to if they want to do anything outside the UK – follow the EU’s rules or international rules (which often mirror EU rules or vice versa) anyway.
But the most important calculation for Downing Street now is the parliamentary arithmetic. There is no majority in the Commons for no deal, there is no majority for CETA Mark II, at the moment there is no majority for a second referendum. But there is a majority for EFTA/EEA. It is time for the Government to work out how they get from Friday’s statement to a deal which the Commons will approve. And they don’t have long to do it.