Johnson feels the wrath of May after dismissing her ‘crazy’ plan
PM tells Foreign Secretary to remember his ‘Cabinet responsibilities’ as rift over customs deal deepens
BORIS JOHNSON has been admonished by Theresa May and reminded of his Cabinet responsibilities after he called the Prime Minister’s post-brexit customs plan “crazy”.
Downing Street pointed out that the Foreign Secretary had signed up to Mrs May’s Mansion House speech on Brexit, which included the option of a customs partnership with the EU – an option he now vehemently opposes.
A former Conservative attorney general suggested that Mr Johnson should resign if he disagreed with the policy, but sources close to Mr Johnson insisted he was staying put.
Eurosceptic ministers fear Mrs May is about to bypass her Brexit “war Cabinet” by asking the full Cabinet to back her preferred option of a customs partnership with Brussels.
Mrs May has postponed plans to discuss Britain’s future customs ar- rangements with her Brexit subcommittee tomorrow, having been outnumbered 6-5 last week by those who opposed the partnership idea.
The majority preferred the alternative “Max FAC” option, which uses new technology and trustedtrader schemes to avoid the introduction of a hard border with Europe.
Brexiteers have warned Mrs May that she could face a revolt – and even a leadership contest – if she tries to
‘Mr Johnson’s decision to speak out was regrettable and I don’t think he is, in any way, inhibited by normal propriety in government.’
steamroller opponents of the plan. During a visit to America over the weekend, Mr Johnson claimed Mrs May’s preferred option – which involves Britain collecting tariffs on behalf of the EU – would not amount to taking back control of borders, money or laws.
Dominic Grieve, the Conservative former attorney general, said Mr Johnson’s decision to speak out was “regrettable” and that “I don’t think he is, in any way, inhibited by normal propriety in government”.
He told the BBC: “I have an old fashioned view of what Cabinet responsibility entails, which is that the discussions within government on any given matter are confidential until the time is reached that the government has a collective position.
“And if you don’t like the collective position, you at that stage have to resign. I can well understand that seeing the difficult issues that we are having to confront, which are very divisive, the Prime Minister should accept these rather extraordinary bursts of misbehaviour by Boris.”
The Prime Minister has previously made it clear that the UK must be able to execute an independent trade policy post-brexit. She is right. If Britain is unable to do so, then all the benefits of leaving the EU will be lost and Brexit itself will only be a damage limitation exercise.
The danger, as the Government stumbles along without seeming to make any decisions, is that we will collapse into the arrangement that the EU prefers: inside a customs union, abiding by single market rules while having no say in how they are devised, and paying financial contributions forever. If Brussels were to engineer such an outcome, it would signal that even the UK, with the world’s financial capital, is not able to leave the EU and so no other country should try. We are sliding towards this and any delay in coming up with an alternative itself risks becoming a decision.
We must not lose sight of the purpose of an independent trade policy. It is a means to an end. With it, the UK can improve its own regulatory environment, eliminating anticompetitive restraints; it can negotiate deals that remove barriers to British exports, and it can work with others in international bodies to ensure that the world’s regulatory system moves in a more competitive direction, liberating supply chains and creating wealth.
The question is, how can an independent trade policy be achieved?
Many believe that the preservation of free circulation of goods between the UK and EU is vital. This can only be done if Britain remains in both the customs union the single market (because product regulation comes from the rules of the single market). However, remaining in these means Britain cannot have an independent trade policy as it wouldn’t have control of its tariff schedules or the regulatory autonomy necessary to strike deals.
A free trade agreement which includes customs union pacts for specific goods is also problematic because the UK’S interests in trade agreements are primarily in services, and we would need maximum flexibility over what we can concede in goods to be able to deliver deals.
The New Customs Partnership, the option supported by several Cabinet members, in which we would collect tariffs on behalf of the EU for goods travelling through the UK, and vice versa, would take an independent trade policy off the table because it would require the UK to maintain the EU’S regulatory system to prevent checks at the border. As firms selling into Britain would have to apply for a rebate if British tariffs were lower than EU ones, and given that it is unlikely many of them will understand the rebate mechanism, they are likely to just accept the EU tariff rate. This would make any tariff concessions we might make to other countries when negotiating new trade deals pointless as their firms would not use them.
The best way for the UK to pursue an independent trade policy is to seek a free trade agreement with the EU, along with a technological solution to the Irish border, a solution sometimes described as “maximum facilitation”. The Irish border problem can be solved in ways that do not harden the open border and which preserve the hard-won benefits of the Good Friday Agreement.
More broadly, the UK-EU deal could mitigate the trade costs of regulatory divergence and customs clearance by using a mechanism to recognise each other’s regulations. We could lower customs costs by improving our own processes (self-assessment for customs declarations, for example, to alleviate pressure on HMRC), as well as by agreeing a comprehensive customs and trade facilitation chapter in the trade deal, and continued work between key EU member customs agencies and HMRC to improve trade facilitation. Some say this is impossible, but if there is political will, it would be possible. And there is no viable alternative being considered.
An independent trade policy is not merely an ideological statement. It is a concrete set of policies which allows the private sector to grow the UK economy. If our choices take that off the table, we take real benefits away and we should be clear about that. While many of the UK’S Brexit decisions are not binary, the decision to have a real trade policy is.