BRITAIN READY FOR EU NO DEAL
May shows Brussels she means business
THERESA May last night sent her starkest warning yet that Britain is poised to be an “independent trading nation” immediately if talks on an EU deal fail.
In a Commons statement, the Prime Minister confirmed that preparations were accelerating to get the country set for a new role outside the bloc.
Two Government “white paper” documents yesterday laid out proposals for a UK customs regime and trade policy that can be swiftly put in place in the event of a failure to agree a new deal with the EU. “While I believe it’s profoundly
‘We are seeking the best deal for us and our European friends’
in all our interests for the negotiation to succeed, it is also our responsibility to prepare for every eventuality and that is exactly what we are doing,” Mrs May told MPs.
Brexit discussions between British and EU officials – currently deadlocked over the size of a multi-billion divorce bill and other preliminary issues – resumed in Brussels yesterday ahead of a crunch EU summit next week that will decide whether enough progress has been made to move on to the issue of the future trade relationship.
At Westminster, the Prime Minister insisted that “real and tangible progress” was being made in the discussions with the EU’s chief Brexit negotiator Michel Barnier. She said “leadership and flexibility” were needed in the negotiations but was hopeful the UK and the EU could agree a “deep and special partnership” that would benefit both sides.
“I am optimistic we will receive a positive response because what we are seeking is not just the best possible deal for us, but also the best possible deal for our European friends too,” she said.
The Whitehall policy papers set out plans for a Customs Bill that will give the Government powers to charge duty on goods, amend VAT and excise regimes and vary rates of customs duty and any quotas.
“It is only prudent the Government prepares for every eventuality,” the Whitehall policy document on future customs arrangements said. It stated the Government “intends to introduce legislation that would allow the UK to operate stand-alone customs and indirect tax regimes as we withdraw from the EU.
“This will include the power to set customs duties, tariff rate quotas and preferences, as well as wider tariff-related provisions,” it added.
A series of “contingency” options set out in the document sketched out a customs regime that could be swiftly put in place in the event of no EU deal. “The Government will work to ensure trade flows through the ports as seamlessly as possible,” the customs document said.
“Vehicles and their occupants travelling from continental Europe currently undergo immigration checks but are not subject to routine customs controls. In a contingency scenario where an interim period cannot be agreed, customs declarations would be required for UK-EU trade once the UK leaves the EU.”
The other document set out the principles of the UK’s future trade policy, promising to work within the international rules set by the World Trade Organisation, forecasting a new role for the country as “an independent trading nation”.
International Trade Secretary Dr Liam Fox said: “This paper is the first exciting step and sets out the principles behind an approach which will help British businesses to make the most of trade opportunities, contribute to a growing economy and create prosperity for communities up and down the UK.”
Chancellor Philip Hammond, welcoming the plans for a new independent customs system, said: “This White Paper sets out our plan to keep trade with the EU as frictionless as possible.”
Foreign Secretary Boris Johnson, who said the UK must refuse to accept new EU or European Court of Justice (ECJ) rulings during transition when he set out his Brexit red lines, backed Mrs May. He said: “Great statement by the PM. Yes, we will have a transition period but as she rightly says the chances of new EU regulations in that period are very small.”
However, in the Commons last night, Labour leader Jeremy Corbyn complained: “Sixteen months on from the referendum [to quit the EU], no real progress has been made. The Prime Minister delivered yet another definitive speech, designed to herald a breakthrough, which instead only confirmed the confusion at the heart of government.”
Meanwhile, Tory backbencher Jacob-Rees Mogg challenged Mrs May to confirm “unequivocally” the ECJ’s writ “will no longer run in any way in this country” after the expected date of Brexit on March 29 2019. She said the need to ensure a smooth and orderly withdrawal, with the minimum of disruption “may mean that we will start off with the ECJ still governing the rules we’re part of for that period”.
PREPARING for the possibility of not reaching a trade deal with the EU is of vital importance. The first and most valid reason is that the Government owes it to the country to have a contingency plan in place if trade negotiations fail. It is simply good governance to be prepared for all eventualities, especially when the Brussels negotiators are so stubborn we may have to abandon the talks.
This would be far from a disaster because tariffs on trade would be limited by World Trade Organisation rules and, having taken back control from Brussels, we would be able to take more steps to boost our economy.
Nevertheless advance preparations on policy areas such as our ports and borders do need to be made if this is to happen smoothly.
But as well as the obligation to prepare for whatever may happen in the future, planning for no deal is also a good negotiating tactic.
Before the referendum David Cameron tried to renegotiate the terms of our membership of the EU. Other leaders knew he was desperate to keep Britain in and would never abandon the talks. As a result he had to accept whatever they offered and ended up with next to nothing.
If Theresa May is not in a position to walk out of the Brexit talks then the same thing could happen to her.
Only by making a comprehensive plan for leaving without a deal can she show Brussels that it has to offer us reasonable terms.