May has delivered a plan that is pragmatic and balanced – the EU should listen and be ready to make a deal
FINALLY, more than two years after Britain voted to leave the EU, the UK government has an actual plan. It’s a compromise designed to assuage the concerns of major British businesses, to resolve the Irish Border question, and to be acceptable to a divided House of Commons. Certainly it isn’t perfect. Neither Brexiteers nor Remainers will have got exactly what they wanted. But it is pragmatic.
“Brexit means Brexit, just” – that’s the phrase that has been whispered around the British negotiating team in Brussels for the past few months. And with this new Chequers plan, Theresa May can claim to have kept within her red lines on Brexit… just. Some will cry betrayal. But as they say in Whitehall, “we are where we are”.
With a hung parliament and the UK chalking up a series of errors in the negotiations, the British government’s policy now seems the best way forward. There are things to quibble about, not least whether the new Facilitated Customs Arrangement can work. But this broad policy has the best chance of delivering a Brexit which respects the referendum result and allows the country to move on.
The options for a postBrexit UK are typically drawn on a spectrum from Canada to Norway, with a UK-EU free trade deal on one end and single market membership at the other. Now Theresa May’s government is putting forward something else.
The big decision is to go for alignment on goods rules, and to manage divergence on services. This was a key recommendation of Open Europe’s ‘Striking a Balance’ paper last month, although the British government has gone further by including a commitment to follow EU rules on “agri-food” as well.
The country voted decisively to leave the EU in 2016 and the UK can’t be 52pc out and 48pc in. But while its economy is dominated by services, and the pattern of its services trade is global, most of its goods trade is closely tied to Europe.
Britain’s fastest growing trade is in the most-heavily regulated areas, where businesses have supply chains crossing the continent. Given the UK’s geography, it is unlikely to replicate such complex supply chains across the Atlantic or with the Far East.
With the Chequers plan Britain is seeking to participate in the single market for goods, recognising that even if it could shape its own rules for goods, many of its manufacturers would follow EU rules anyway so they can continue to sell their products on the continent.
On the other hand, the UK government wants to go its own way on services; the City is too big and too important for Britain to be a rule taker from Brussels.
This proposal means giving up some control – over goods rules in particular – to get a good economic deal that will help protect British jobs and growth. Some Brexiteers wish Britain could go its own way,
but they should accept that relinquishing some control over limited areas of regulation will help secure a good deal with the EU.
Others would want the UK to stay even closer to the EU. But to get much greater economic benefits, the UK would have to relinquish much greater sovereignty over wide-ranging areas of its economy – tax, labour law and environmental standards.
We will know more when we see a published white paper expected later this week. Inevitably the devil will be in the detail and the policy could change further if there’s pressure for more compromises from Brussels.
What will Brussels say? So far they have stuck to the argument that the single market is an all-or-nothing choice – a binary “in” or “out”. But at the same time they have called for the UK to “soften” its red lines, implying there is perhaps more wiggle room than they would like to accept publicly.
Britain has put a sensible and fair proposal on the table. Its failure to do so until now has meant it has been unable to shine a spotlight on Brussels, and to ask the EU clearly what their plan is.
The two options on offer from Michel Barnier’s team are a Canada-style free trade deal with the coda that Northern Ireland will be separated from Great Britain by the EU; or a relationship even closer than Norway’s – with single market and customs union membership – meaning no control over trade policy, broad-spectrum rule taking, and no real ability to end free movement. Neither would be acceptable or sustainable for the UK.
Brussels will claim the single market can never be divided, but their agreements with Switzerland, Norway, and Ukraine show how it can be. Europe will argue the UK wants to “have its cake and eat it” – but this deal would give the UK fewer obligations but also fewer rights.
Goods could be freely traded, but the UK would lose the ability to set the regulations on goods. And the UK would lose some access on services trade and the free movement of capital.
The most likely answer from Brussels will be a call for more concessions. But there’s little further that Britain could reasonably compromise on.
If this doesn’t f ly in Europe, the alternative will have to be a looser deal. EU capitals should take this Chequers plan seriously. And if they don’t, Britain has committed to stepping up preparation for all scenarios. That must include planning to leave without a deal if Brussels remains intransigent. (© Daily Telegraph, London)