Turns out that EU deal is better than no deal

SO Britain has blinked. As this paper has predicted for four months, gone is the pretence that in our negotiations with the EU “no deal is better than a bad deal”. Today, in Florence, the Prime Minister’s whole speech is an admission that Britain has no option but to deal.

Gone is the claim still made by ministers that in 2019 we are leaving the single market and customs union. Whatever the semantics, we now seek a transition for at least two years where we in effect remain inside that single market and the customs union. Gone is the claim that we can tell the EU to “go whistle” when they ask us to pay up. The Cabinet has made it known that it will cough up at least

£20 billion for the privilege of leaving.

Gone is the assertion that freedom of movement will end when we leave. When this paper pointed out earlier this week that we would have to accept free movement as the condition of a transition, this was described as “completely delusional” by a Downing Street source. Today it is the official position of Downing Street’s occupants.

All of this might beg the question of how exactly we are supposed to be “taking back control”. We’ve ended up in a position where for a period of time we are going to accept all the regulations and directives of the EU, pay money, accept the obligations of free movement and then abide by the jurisdiction of the ECJ — or, as the Chancellor put it, stick with the “status quo”.

More than that, we will also accept any new rules and judgments made over the next couple of years by these institutions. The only difference is that British ministers, British MEPs, British officials and British ECJ judges won’t be taking part in devising, voting on, scrutinising or adjudicating on them. Far from taking back control, it looks a lot like giving up what control we had.

Nevertheless, given where we are with Brexit, this victory by “sensibles” in the Cabinet over the “creationists” is welcome because it gives business the prospect of certainty instead of disorder — provided the Europeans accept our offer. We suspect the Europeans will take the cash-foraccess deal. After all, from their point of view, what’s not to like about keeping British money while losing British influence?

They will demand a little more. The £20 billion only covers the on-going membership costs rather than the bill for past liabilities, as we know and will eventually concede. Whatever the Prime Minister claims, the transition will not be a bespoke one but largely off-the-shelf — a form of EEA membership.

But this is the easy bit. We are just kicking the ball down the road. What remains to be seen is whether, on top of this, the Europeans are interested in having the real negotiation with Britain about what the relationship looks like once the transition comes to an end.

The Government wants at the very least a broad “heads-of-terms” agreement on a timetable for a future comprehensive free trade deal before we leave in March 2019. Ministers fear that once we are out we will be stuck in a frozen-state transition, unable to leave it without facing exactly the same “cliff-edge” we now face in 2019, and unable to conclude free trade negotiations without the agreement of the other side. As Sir Martin Donnelly, the senior civil servant at the Trade department until recently, writes on this page: “If we leave without continued market access guaranteed beyond a transition period a new deal will be much harder to achieve from outside. And many British jobs will be lost in the meantime.”

That guarantee is what the Prime Minister wants in return for her Florentine offer. But why should the Europeans reciprocate? They have the luxury of playing this long, waiting to see who replaces Mrs May. Just because we have started revealing our cards doesn’t mean they have to.