A core claim of many Brexiteers is that the EU negotiation should be straightforward, because our trading arrangements with the 27 are already aligned – a consequence of our Single Market and Customs Union membership. This is the place to start when considering the current debate, articulated by Henry Newman on this site this week, and dramatised by Boris Johnson in the Daily Telegraph last weekend, about whether post-Brexit Britain will be more like Switzerland (whose economy tends to shadow the EU27s, with similar tax and regulatory and migration arrangements) or Canada’s (whose set-up is very different). There can be no doubt where we will begin on day one after Brexit. We will be more like Switzerland – that’s to say, more like the European country that in many ways we are, and whose main political arrangement we will only just have left.
All other considerations aside, the year or just over in which the meat of the Brexit negotiation will take place – running from after Germany forms a new government to the run-up to March 2019 – would be very unlikely to provide the time for a more complex negotiation: after all, the EU-Canadian talks began eight years ago, and has yet to enter into full force. Nor will the Foreign Secretary get his way on money. “We would not expect to pay for access to their markets any more than they would expect to pay for access to ours,” he wrote in his Telegraph article. But the pass has already been sold on the matter. The Conservative manifesto on which he fought the election conceded the basic framework of money-for-access, dressed up as “specific European programmes” to which “it will be reasonable that we make a contribution”. He has already had to back down on the principle of an implementation period, and will have to back off on money, too – or resign.
Furthermore, a dash of cold water must be thrown over the face of the low tax, low regulation economic model which Johnson championed so eloquently last weekend. It sets Tory hearts beating faster. And it should be the vision splendid towards which we strive. The Foreign Secretary deserves credit for cheering us all up with it, asserting that Brexit can be a success, and dispersing some of the dark clouds that cluster above the Treasury. But there is simply no way that the present no-majority Commons will vote to turn Britain into a high-tech Singapore. In any event, Ministers have closed off some deregulatory options: “Workers’ rights conferred on British citizens from our membership of the EU will remain”, the manifesto declared. No less combative a minister than Michael Gove is unwilling to countenance the importation of chlorinated chickens from America.
Besides, Conservative MPs have been demoralised by the election result – and nothing before it, either under David Cameron (when they helped to bring down George Osborne’s proposed tax credit savings) or after it (when they saw off Philip Hammond’s NICs proposals) suggested that they are in any shape to impose the kind of fiscal discipline on which economic reform must be founded. Finally, the next election may well return Jeremy Corbyn, who would deliver precisely the reverse. No, Johnson’s ideal is a medium-term project, not a short-term one. The best comparison may with the Thatcher reforms, which took three parliaments to put into effect. She began her leadership of the Conservatives by challenging a status quo which held that Britain must settle for managed decline. That is more or less where we are now. Turning it round will take time.
None the less, where we will be on day one post-Brexit (and after the implementation period) is not the fundamental question that Theresa May and her Government must ask during the course of this negotiation. It is not “where will we begin?” but, rather, “how should we diverge?” Yes, Britain will look more like Switzerland than Canada immediately after Brexit. But there are at least three ways in which a Swiss-type settlement would not be true to the spirit of the biggest vote that the British people have ever cast for anything. First, there is the question of shadowing the EU regulatory regime. For example, suppose the EU27 resolved to lengthen the rest break period for six-hour work shifts. We might want to mimic the change and we might not. But there should not be a presumption that we would. Shadowing the EU’s economic, social and regulatory model would negate one of the main potential benefits of Brexit. Johnson and Gove are right to resist this EEA-light option, which the institutional Treasury and civil service instinctively favour.
Second, there is immigration control (about which the Foreign Secretary’s article had little to say). The Swiss voted in a referendum to limit the free movement of EU workers. The Commission fought back, suspending the country’s participation in the EU research and student programmes, Horizon 2020 and Erasmus Plus. Switzerland backed down. Its story highlights a crucial aspect of the negotiation. For the EU, it is not merely a trade off of “money for access”. It is also one of “immigration for access”. The more insistent May is on limiting EU migration to Britain, the more the EU will strive to reduce easy market entry. But the wish of the British people to reduce EU migration, clearly demonstrated in the election result, should be non-negotiable. Third, there is the matter of ECJ jurisdiction. Ending it is party members’ top negotiating priority if our surveys are accurate. This would render the use of the EFTA court problematic, since its judgements tends to shadow the ECJ – though, as Mark Wallace has written, there are important differences between the two.
It may be that the Prime Minister’s speech in Florence will be a summary of the Government’s negotiating position to date, set out in 100 pages of two White Papers (see here and here), the six thousand word Lancaster House speech, the five pages of the Article 50 letter and a mass of proposals since, including this week’s proposal of a comprehensive security and law enforcement partnership. Perhaps she simply wants to pull together in one speech a demonstration of the reasonableness of her position. Today’s Financial Times suggests there will be more: a €20 billion offer to cover the transition period. This is unlikely to spark a Party revolt – or, we read today, the Foreign Secretary’s resignation either. But there are red lines that must not be crossed. Their purpose should not be to ensure that we begin Brexit looking like Canada (to follow the comparison of the moment), but to guarantee that we can do so later, if that’s what we really want.