Theresa May has a rationale for seeking to extend the transition period. If it could be agreed as part of a grand bargain, whereby we stayed in the Customs Union for longer, but had the right to leave the backstop after it expires, either by way of a pre-2022 set time limit or of a unilteral departure mechanism, the Prime Minister would gain the outline of a good deal. We would be out of the Customs Union and gain the freedom to negotiate meaningful trade deals before the date by which the next election is due.
However, there is no way of knowing, as we write, that such is May’s plan – since Downing Street, on the one hand, wasn’t ruling out an extension yesterday but, on the other, wasn’t setting out why. The Prime Minister was presumably unwilling to spell out her negotiating tactics only a few hours before the EU summit opened, which is understandable. But Number Ten’s reluctance to speak scarcely detracted from an impression of drift. This fits reality.
The hard truth is that the EU rejected Chequers last month at Salzburg and that the Cabinet rejected the backstop last week. There is no sign that the EU has budged on the former, which in its view menaces the coherence of the internal market and threatens to undercut its competitiveness, and no suggestion that it will move on the latter, which would separate Northern Ireland’s economy from Great Britain’s, have serious implications for Scotland, and thus threaten the Union.
Furthermore, an extended transition would have very considerable downsides as well as upside. We would be what Barry Gardiner called a “vassal state” for longer, unable to vote when EU decisions are made, but none the less being bound by them. There is an argument for claiming that the role of voting on this decision-making is over-hyped – see Daniel Hannan here – but being bound by EU laws and regulations for longer than has been agreed would be a very big political problem, particularly over free movement. After all, once a transition period has been extended once, what’s to stop it happening again and again?
Brexiteer MPs fear that the longer transition runs on, the more opportunities there will be for the EU to pass measures antithetical to our interests, such as a financial transaction tax, and add that, if transition spills over into the next round of the EU’s multi-annual framework, there will be nothing to stop us being deprived of our rebate. It is also unclear why the EU needs a longer transition to prepare for a UK-wide customs union – for such seems to be the rationale for the move – when it doesn’t need this to prepare for a Northern Ireland-only one.
In short, there is an impasse. The EU seems to be unwilling to move and May herself is unable to move. She tried floating the acceptance of the backstop without an escape mechanism last week to Cabinet members – as apparently agreed by Olly Robbins in Brussels – and was rebuffed. If she attempts a wriggle too far, she risks Cabinet resignations and a leadership challenge. Until or unless she does, its members are likely to stand with her, hoping too that the EU backs off, together with enough Conservative MPs to ward off a ballot.
The Prime Minister is like a woman on raft, adrift at sea, proclaiming that she commands a ship, sailing with a clear sense of direction. As her fellow-passengers peer through the driving rain, they can see the good (or bad) ship Chequers gently slipping, with the occasional plop and gurgle, beneath the waves. If she is to avoid the turmoil of No Deal, she needs an alternative which has a chance of success, both with the EU and Parliament. The David Owen plan looks like her best shot, of which more soon, but the odds are long.