The In-Betweener Solution Is the Worst of All Worlds: Parliament Should Reject It

The In-Betweener Solution Is the Worst of All Worlds: Parliament Should Reject It

Commentary

9 min read

I fully accept the Prime Minister is putting forward the Government White Paper as a well-intentioned attempt to do Brexit whilst minimising the economic disruption to Britain. But this solution – half in/half out – won't work, won't end the argument and will simply mean a confused outcome in which we continue to abide by Europe’s rules whilst losing our say over them.

Parliament should reject this solution decisively.

There is an essential Dilemma at the heart of the Brexit debate, which has been laid bare by what we have learnt over the course of the last two years since the referendum of June 2016.

The Brexiteers have a long term vision for Britain which may be heavily contested but is nonetheless a genuine new direction for the country. It involves Britain leaving Europe altogether, striking a new economic and political path and is a vision which only makes sense if we market ourselves as ‘not Europe’.

At the core of the Brexit campaign, however, is the exploitation of a myth which is that we are not in charge of our country unless we leave the EU.

The truth is we already have control over the major parts of British political life. Think of the top issues facing the country – the NHS, Education, Housing, Poverty, Crime. We can pass whatever laws we want. We can put our taxes up or down, cut spending or increase it, make peace or war, elect a leftist Labour Government under Corbyn or a right wing Tory Government under Rees-Mogg. Even in respect of immigration, we can do what we wish in respect of non-European immigration; and in respect of European immigration it has already been shown that we need most of those who come here to work and to study.

Therefore, the Brexiteers are driven to focus on the Single Market and Customs Union because that is the one area, for perfectly sensible economic reasons, where we have chosen to pool our sovereignty and so you can plausibly say we are tied to Europe’s laws.

The Single Market and Customs Union have thus been demonised as illustrating Britain’s loss of national sovereignty and they successfully pushed the May Government into announcing they would leave both before the ramifications of this decision were properly thought through.

They may deny this, but there is absolutely no point in Britain leaving Europe unless it is to be more competitive outside the European Single Market. It is the only Brexit which could conceivably work. But, to be attractive in those circumstances, business needs to believe it is offered advantages so overwhelming as to compensate for no longer having the right to enter European markets without friction.

Michael Gove may pretend that we should leave Europe to have tougher Environmental Protection but who seriously believes the problem with Europe is that it’s too weak on regulation of the environment.

Boris Johnson’s one specific grievance in his resignation letter – which in any event turned out to be mistaken – was the effect of European truck regulation on female cyclists, a frankly fatuous basis for altering the entire geo-political and economic future of the nation.

All of this is patently a ruse to conceal their real beef with Europe: its political culture which stresses the social as well as the economic and where regulation interferes with the freedom of the market.

Their ‘Clean Break’ Brexit means not only a new relationship between Britain and Europe but a new relationship between Britain and itself.

It is not anti globalisation or anti immigration. On the contrary, it sees Britain as a global player, but free to make its own decisions without the constraints of the Single Market and Customs Union.

Unlike others, I don't regard this vision as dystopian, cruel or necessarily unworkable. If Britain were prepared to follow the logic of it through to its ultimate realisation, it is at least a version of our future worth debating, though one I would profoundly disagree with as, I suspect, would the majority of British people.

The problem is this vision was sold, in the context of Brexit, as short term painless and with substantial immediate gains like extra money for the NHS, and the most appealing element for many of the Brexit voters especially in the north of England was that Brexit would slash immigration and put a brake on globalisation.

What has now become apparent is that, for sure, short term and this may mean a period of several years, this was a false prospectus. In the near future a ‘Clean Break Brexit’ involves economic disruption, the immediate result is a £40bn bill not a £350m a week NHS boost, we need most of the European migrants, and a Hard Border in Ireland poses risks both to the UK and the peace process.

As this reality has dawned, so the Government has tried to navigate its way through the Dilemma.

The Dilemma is simply expressed: either we stay close to Europe after Brexit to minimise the economic cost, in which case we will be obliged to continue to abide by Europe’s rules; or we do a Clean Break Brexit in which case we will suffer substantial economic pain.

The first is a Brexit which leads to the question: what's the point, since we will abide by rules over which we have lost our say, a somewhat weird way of ‘taking back control’.

The second is a Brexit which leads to the question: what's the price?

For two years the Government has tried to pretend that we could have our cake and eat it: that Europe would somehow change the rules of the Single Market, which we helped shape, and allow us frictionless trade with freedom to diverge where we want to.

This is and always was a non-starter.

The Chequers Cabinet summit and the White Paper were the first serious attempt to choose and resolve the Dilemma.

Both documents are drafted with exquisite disingenuousness. But stripped of their verbal camouflage, they come down effectively on the side of staying close to Europe whilst trying to pretend the opposite.

We are to have a common rule book with Europe for goods and agri-food, including the rules already agreed in the Single Market. This means we abide by Europe’s rules.

Parliament can choose to refuse further rules but this will have ‘consequences’. This is supposed to stress our Parliamentary sovereignty. But the reality is the consequence of refusal would be exit from the common rule book area so it’s never going to happen. And of course, Parliament is sovereign. It always is. We choose to be in the Single Market now. We can choose to exit it now.

But in practice, under this proposal, we are staying in the Single Market for goods, whilst losing our voice in it.

Likewise, with the so-called ‘Customs Partnership’. This is effectively the Customs Union just renamed, with the possibility at some later time of getting agreement to some as yet undiscovered technological facilitation of trade which would allow us to have different tariffs on goods. This is pie in the sky.

In any event until the time the pie miraculously appears on earth, it will be impossible to do trade deals elsewhere, as President Trump has just confirmed. In the meantime, of course, Europe can carry on doing such deals, but we will have no say over them, though we will be bound by them.

As for freedom of movement, this is to be replaced by a new ‘Labour Mobility Framework.’ This will give a special preference for European workers. It is the Government’s recognition that without such workers being able to come easily to Britain, key sectors of the economy will suffer.

The practical reality is that the difference between current freedom of movement and this new framework will be miniscule because for economic reasons it must be. Also, there is no way Europe would ever agree to this partial acceptance of the Single Market, unless freedom of movement was, in essence, retained.

Meanwhile, we will try to negotiate our way back into a slew of European Agencies where we are now as of right.

Going through each section of the White Paper, at every turn the absurdity becomes more manifest. Every page details why it is so important we stay in cooperation with Europe whilst trying to invent new forms of partnership which can be presented as consistent with leaving Europe.

Indeed, the Paper proposes even closer cooperation with Europe in defence and data protection, as if Brexit were necessary for such enhanced partnership.

The one area excluded is that of workers’ rights, with no commitment to retaining the benefits of the European Social Charter.

Finally, we come to what, with delicious irony, is titled ‘Fishing Opportunities’, under which we agree to negotiate a new fishing framework with the EU, which looks a lot like the old one.

The intent behind this, at least on the part of the Prime Minister, may come from a good place, but the result is an ‘Inbetweener’ half in/half out mess.

A genuine ‘soft’ Brexit would obviously be less damaging than a Hard Brexit, though it would highlight the ‘what's the point’ nature of this choice. But this Brexit is just mush.

It is not making the best of a bad job. It is the worst of both worlds. This is where True Remainers and True Leavers make common cause.

I understand completely its attraction for some in business and for many people who just want the agony of Brexit to end. ‘Ok’ so the argument runs, ‘it may be a messy compromise but it’s the only way we can limit the damage, so let's get on with it.’

But I am afraid this argument is fatally flawed.

  1. The practical upshot of this proposal is to tie us to Europe over large parts of economic life, without a say in its rules. This is intrinsically a dismal outcome which reduces British influence for no or negligible gain.
  2. It is not an ‘honouring’ of the Brexit vote. It will disillusion large numbers of Leavers, whilst being dismissed by Remainers, except those in the Conservative Party who see this as a way through their internal schism.
  3. The Europeans will not accept it unless clarified in a way which will expose the Dilemma once again. The likelihood is that they will consider cherry-picking between different parts of the Single Market wrong in principle and hard to do in practice, given the overlap between services and goods. But suppose they do accept distinguishing between the Single Market for goods and services. This will only be on the basis that Britain clearly applies those rules for goods trade, adjudicated by the ECJ, and probably with what are called flanking arrangements for those parts of the services sector intimately bound up with the manufacturing supply chain. This will never be palatable to the Brexiteers who sit in the Cabinet. So the argument will continue.
  4. Even if the Brexiteers or some of them swallow such an agreement with Europe, they will only do so, in order to drag the country the other side of March 2019, and then they will re-ignite the debate when it is then too late to stop Brexit and when our bargaining position will be very weak.
  5. By excluding services, the Government is prepared to do significant and possibly irreparable damage to the UK service sector which is the bulk of our economy, and where unlike the goods sector, we presently have a large surplus in European trade. Particularly for the financial service and tech sectors, where Britain is dominant in Europe, we now know from those active in those sectors that exclusion from the Single Market is going to result in job losses and economic cost which will impact output and revenue considerably.

In other words, this is a bad deal. More important, it will not be accepted as fulfilling the mandate of June 2016 and we know that because many of the leading Brexit proponents are saying it.

And there will be no majority in Parliament for it, or for ‘Clean Break Brexit’ or possibly for any version of Brexit or indeed for staying.

We are stuck.

In any rational world, and I understand that is a big caveat in today’s politics, this would go back to the people for resolution.

It would not be a re-run of the 2016 referendum. Two major things have changed since then. Our quantum of knowledge about the issue and particularly about the consequences of leaving the Single Market and Customs Union is vastly enlarged. And there is fundamental disagreement about what Brexit means between supporters of Brexit.

The question may be complicated because it really involves three choices: Clean Break, ‘soft’ or stay. But the complexity is not insuperable.

For the Conservative Party it avoids owning a botched Brexit.

For the Labour Party it escapes constructive ambiguity becoming destructive indecision.

For Parliament it may be the only way through.

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