The “Road to Brexit” has yet to be paved

Dharshini David

Parents of small children will know that every long road trip means cries of “when are we going to get there?” By using a set of speeches to map out the “Road to Brexit”, Prime Minister Theresa May and her Cabinet Ministers were meant to answer several questions including “how are we going to get there?” and “what’s at the end of the road?” For everyone – from Brits to businesses, regulators to European policymakers – the journey so far has been akin to driving in the dark with a broken sat nav. With a number of speeches and a key Cabinet committee meeting behind us, and ahead of Mrs May’s final speech later this week, are we any clearer yet, and what remains uncharted?

Road Sign in Snow

The first speech in the series came from Foreign Minister Boris Johnson. He typically hurtled full-throttle ahead, divulging no policy detail, merely presenting a sketchy vision for regulatory divergence (which somehow included a mention of cheap budget airline stag weekend trips abroad).  

At a security conference in Munich, Prime Minister Theresa May offered little more, but stressed that the UK remained “unconditionally committed” to a “deep and special security partnership” with Europe. Participation with the European arrest warrant and Europol, along with data sharing, remains her intention, albeit with the oversight of security cooperation by European courts relaxed. This, she hopes, would set the stage for similar bespoke arrangements in other, even more contentious areas, including financial services. She was, however, ambiguous on the precise scope of the ECJ’s jurisdiction in these areas, saying Britain would “respect [the ECJ’s] role” when it participated in EU agencies while also having its “sovereign legal order”.

Next was Brexit minister David Davis, who merely promised that Britain will not be “plunged into a Mad Max-style world”. The odd 1980s cultural reference was meant to illustrate that the UK wouldn’t try to lead a race to the bottom on regulations. Instead Davis argued the UK would have the opportunity to create “gold standard” rules. His comments were a shock to those who’d voted leave in the belief that “taking back control” meant a bonfire of red tape.  Of course, he also wants a trade deal which would give Britain unrestricted access to European markets without having to obey European rules.

Finally, Trade Minister Liam Fox warned EU leaders that imposing trade barriers on the UK would only hurt their economies. And he argued that leaving the customs union was the only way the UK could secure optimal new trading arrangements, and be free of the EU’s rules. But Sir Martin Donnelly, the official who previously ran Dr Fox’s department, succinctly dismissed this approach by likening it to “giving up a three-course meal… now, for the promise of a packet of crisps in the future”.

So much for the road-building. Beyond the speeches, however, tricky discussions over the transition period have continued amidst sustained hostilities within Conservative party factions. A published government paper at least seemed to acknowledge the government’s failure to prepare for the future, stating “The UK believes the period’s duration should be determined simply by how long it will take to prepare and implement the new processes and new systems that will underpin the future relationship” – implying an indeterminate length. Not least given its budgetary timetable, the Commission, meanwhile, wants a period of 21 months.

Moreover, over 58 pages, the EU Commission last week reminded everyone of its legal framework within which the future relationship with the UK will need to be compatible. In short, the Commission won’t agree anything that might undermine the notion of a single market.

Here’s seven things we’ve learnt, and have yet to learn about the Road to Brexit.

1) It’s littered with diversions, U-turns and sudden swerving: Ministers and officials are contradicting themselves.Shedding the direct jurisdiction of the European Court of Justice  had been one of Theresa May’s Brexit “red lines”, but she is now apparently willing to be more flexible, at least when it is convenient for her. And a spokesperson had to deny the suggestion that the UK government is seeking an indefinite transition period, saying two years was still its intention. The same office was forced to deny that the government would accept that it would not be allowed to sign trade agreements during the transition period.

2) Government ministers aren’t holding the same map: The first few speeches underlined the different visions at the top of government: Boris Johnson wants “economic freedom” while David Davis suggested closer regulatory alignment for the UK. To try to ensure her top team were travelling as one, Mrs May held an eight-hour summit of the eleven-strong Brexit sub-committee of ministers. Rather than a breakthrough, there was supposedly a gradual converging of positions towards an “ambitious managed divergence”, although comments reported afterwards suggest there are differences of interpretation in terms of what this actually means.

3) Different blueprints for uncharted territory. What could such a future look like? Mrs May has suggested a regulatory model of three “baskets”: one containing areas (e.g. autos, aerospace and chemical engineering) where full alignment remains; one for areas like financial services with common goals but different rules – aka managed mutual recognition; and the third for other sectors, e.g. agriculture, where there’s total freedom. The EU says this won’t wash, it’s inconsistent with the principles of a single market. Its own map indicates a different route.  Equally, it disagrees that the deal Mr Davis sets out is “mutual recognition”. That would mean the kind of deal that Switzerland has – which is permissible only as that country closely follows the EU’s rules, including for the free movement of people. 

4) The road (still) less travelled The Commission’s detailed framework shows just how vague and incomplete the UK’s roadmap is so far. Theresa May wants to leave the single market and the customs union – and remain close to Europe. But how will she achieve this? It is likely to mean:

5) The UK will be forced to give way: Given the distance between the EU and UK, compromise (particularly on the UK side) is inevitable. What deals are likely? Will UK autonomy over fisheries be sacrificed in order to get a less inferior deal for financial services, for example? It’s not just with the EU; in pursuing future deals with third countries, such as China, the UK will have to make concessions – grant more visas for example – to get what it wants. Will there be lower immigration or controlled immigration?

6) Failure to look in the rear-view mirror:  None of the speeches to date has addressed the Irish border issue. The ‘first-phase’ agreement in December required a commitment to full regulatory alignment between Northern Ireland and the EU to avoid the need for border checks. Yet, there is no detail of how the government can do this while also leaving the customs union and single market. (Indeed, there was apparently no discussion of this at the government’s summit.) Unless this is fudged once again, this needs to be laid out in full legal form before talks can proceed. 

7) Back-seat drivers: 62 backbench Conservative MPs, under the umbrella of the European Research Group, wrote to the Prime Minister demanding a harder Brexit with “full regulatory autonomy”. They were accused of holding the Prime Minister hostage. Meanwhile, a cross-party group of MPs tabled an amendment to a Bill calling for the UK to remain in a customs union after exiting. Opposition leader, Jeremy Corbyn, is also now calling for “a new, comprehensive UK-EU customs union” in a clarification of Labour’s policy, a move welcomed by business groups. It’s a reminder that, domestically, the road is cluttered with drivers with different ideas of speed and direction – who could push the government off the highway.

Theresa May will spell out more details in her speech on Friday. She has much work to do still in paving the road to Brexit.  So far, the inconsistencies and infighting that have littered the trail have done little to instil confidence in whatever she will unveil – and that’s before she attempts to win the support of Parliament and the EU. The whole project could yet run out of road.

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