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“There will be areas which do affect our economic relations where we and our European friends may have different goals; or where we share the same goals but want to achieve them through different means. And there will be areas where we want to achieve the same goals in the same ways, because it makes sense for our economies.”

These words from Theresa May’s Florence speech last year are almost as much as we know about the Government’s approach to regulatory divergence from the EU.  To use the jargon for a moment, those three divisions are “baskets”.  We read that Ollie Robbins put a proposal to last week’s Brexit strategy Cabinet committee by which at least some manufactures, such as cars, would be placed in that last basket (the same goal by the same means), and a big chunk of services, presumably including financial ones, would be in the second (the same goal by different means).

It says much about the state of play within the Government that a civil servant, Robbins, put the proposal to the committee rather than the Prime Minister herself or the department responsible, DexEU.  The committee members did not endorse the proposal.  One of those resisting it was Boris Johnson.  He will take aim at it again in a speech today.

Downing Street has decided that the best means of dealing with the Foreign Secretary is to make his speech one of many.  David Davis, David Lidington, Liam Fox and the Prime Minister herself are all to pitch in.  And next week, during this long Commons recess, the Cabinet will reportedly meet at Chequers to resolve the regulatory question that was not settled a fortnight before.  A decision is long overdue.  The Brexit Secretary and Philip Hammond (who is not making one of those setpiece speeches) are set to tour Europe.  How can they attempt to win allies to the Government’s programme if it hasn’t been agreed?

At any rate, the main point of Johnson’s speech doesn’t seem to be what some are painting it as – an attempt to woo former Remain voters.  This is just as well.  The Foreign Secretary is as convinced a believer in a liberal Brexit – pro-free trade, relatively relaxed about immigration, pro-commitment abroad – as any other member of that Cabinet committee, and this is the case he will make today.

But he is associated with the inevitably divisive referendum campaign, and is no more likely to persuade many Remain voters that they were wrong than George Osborne, say, is likely to convince many Leave voters that they themselves were mistaken.  Johnson will have to wait to deliver that £18 billion or so extra to the NHS, or something like it, to get back on the front foot with those voters – a point he recognises himself.  He is smart enough to know that this part of his case, doubtless negotiated in some detail with Number Ten, is unlikely to make much difference one way or the other.

No, his real game is elsewhere – and trailed in the Sun this morning. He writes that “it is only by taking back control of our laws that UK firms and entrepreneurs will have the freedom to innovate, without the risk of having to comply with some directive devised by Brussels, at the urgings of some lobby group, with the aim of holding back a UK competitor. That would be intolerable, undemocratic and would make it all but impossible for us to do serious free trade deals.”

In other words, the Foreign Secretary is still fighting the fight against the halfway house plan that was rejected in Cabinet committee last week – or against any development of it that would see the house as an EEA-type construction, by which we would be drawn back post-Brexit into the ambit of the European Court of Justice.  Britain is certainly unlikely to shake itself as free of international regulation after we leave the Union as he and others would like.  Much of it is now undertaken at a level above the EU, as it were, applying at a global one through other bodies and agreements.

None the less, that is not the main question Johnson is addressing.  He is trying to establish how we should deal with divergence and realignment.  And it follows from his take that the baskets idea, so painstakingly set out in Florence by May, is cumbersome, unworkable and best dispensed with.  At least one other Cabinet member is of that view.  But Downing Street likes sectoral approaches, which it has been pushing since the Prime Minister set out her basic Brexit framework in at the Conservative conference in 2016.

We can become so consumed with the British perspective on this dispute that we can fail to think about the EU one.  As Lee Rotherham established in detail on this site this week, the EU itself is not quite the “rules-based organisation” that its admirers claim – almost as if by repeating the mantra they can somehow make it true.  But like the rest of us it tends to cling to the familiar and established.  It is important to add that this category does not include the Swiss model, with its mass of bilateral agreements. And perhaps the Commission and the EU27 will settle for some form of the basket proposal.  There is no way of knowing.

But the Commission is certainly at ease with “Norway” (under which a third party is effectively part of the Single Market) or “Canada” (under which that third party is not such a part).  It thus turns out that the view of the Cabinet’s Brexiteer members and that of the Commission is strangely aligned.  If Britain is to leave the Single Market and the Customs Union, part of that vision which May set out two years ago, and on which the Government’s Brexit policy is founded, a Canadian-type settlement is the natural end-point.

That seems to be the Commission’s take and that of the EU27 too.  They just wish the Government would get on with it.  Instead of the European Court, or a tangle of bilteral committees, or those baskets, there would be an arbitration body to rule on disputes between the two parties – or so practise and precedent suggests.  It is impossible to know whether the eventual deal will be Canada plus plus plus or Canada questionmark plus or something in between – if any deal is clinched at all.  But that is the logic of the position which the Foreign Secretary will set out later today.

251 comments for: Why our European neighbours think we’re a basket case

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