As published in The Sunday Times:
This is the moment of truth for the government’s Brexit negotiations. We are facing a historic decision: precisely what sort of agreement will govern our relationship with the European Union, and what will be our future as a free nation?
As we approach the October meeting of the European Council on Wednesday, the auguries are not good. Our television screens have been filled with pictures of Downing Street aides scurrying around Whitehall to try to sell the proposals, and of previously quiescent cabinet ministers being summoned to No 10 in an attempt to calm their fears.
At one level this incipient panic is understandable. The government’s strategy has three fundamental flaws, all of which are surfacing as we approach the endgame.
These flaws arise from Downing Street’s unwise decision in December to accept the EU’s language on dealing with the Northern Ireland border. Because of this, it has been led into bad policies on a customs union, the treatment of Northern Ireland itself and the whole future economic partnership.
The government is proposing that the entire United Kingdom should stay within the European customs union until the Northern Ireland border issue is resolved. This has been politicised by both the government of Ireland and the European Commission. As a result, it will be incredibly difficult to come to an agreement that will resolve the matter in a way acceptable to all parties.
The policy is also completely open-ended. It is unlikely that the EU would agree to end this policy before we had an operational customs arrangement with it. As it stands, the government’s proposed customs policy is dismissed by the European Commission as impractical, and even on the government’s own estimates it will not be in place before 2025. So it seems entirely probable that this policy would lead to us being trapped in the customs union for the foreseeable future. It is a bad policy, but it could be rendered tolerable if it were clear that the decision to leave the customs union rested with the UK government alone, that it would be explicitly temporary and that we would leave well before the next election. Dominic Raab is entirely right to insist on this.
If we do not do this, the policy would destroy any chance of striking new trade deals with the rest of the world. Trade deals are by far the biggest economic upside for Brexit. This ill-conceived proposal is already undermining the confidence of prospective trade partners.
As this customs union proposal looks more and more implausible, its architects are beginning to tout the idea of simply extending the two-year Brexit implementation period instead. This has all the drawbacks of staying within the customs union, plus several more. It would cost large amounts of money. It would keep us under the remit of the European Court. It would keep us in the single market. It would deny us control of our own borders and our own immigration policy. In effect, it would renege on every promise that we gave the electorate, and so is completely unacceptable.
The next flaw is the proposed treatment of Northern Ireland. What is being suggested is, in effect, keeping Northern Ireland inside the single market. This would mean having a border in the Irish Sea for both goods and people. Michel Barnier told the Northern Ireland delegation that would involve checking all animal traffic heading into Northern Ireland — 10 times the current level of checks. It would mean we would be forced to have more checks on livestock moving within the UK than New Zealand has to have exporting to the EU.
This is completely unacceptable to the DUP and to most people who believe in preserving the United Kingdom, including most of the Conservative Party. If we allowed it, Northern Ireland would be denied participation in the free-trade deals that the rest of the UK would be seeking after Brexit.
The final flaw in the government’s proposals is the complete absence of certainty on the future economic partnership. All of the negotiation currently focuses on the withdrawal agreement, pushing to one side the most important element, our future economic relationship. Everybody, from the chancellor of the exchequer to the European Commission, seems to dismiss this as something to be resolved after March 2019. By then we will have pledged to give £39bn to the EU. This is by far our biggest bargaining chip. To pay it before getting substantive agreement on the future economic relationship is to pay £39bn for a pig in a poke.
The payment must be conditional on the future economic relationship, but to make that work we will need to have nailed down the main points of the relationship before next March. There is no sign of that happening.
The problem is the Chequers plan. By most normal rules of politics the proposal should be dead. The commission has rejected it. The public does not like it. Parliament will not vote for it. It is time that the prime minister reset the negotiations and went over to a free-trade-plus proposal. We still have time to do so, but that time is ebbing away.
What the government needs to realise is something that has been obvious for two years — namely, that this two-month period is the point of maximum pressure on both sides and therefore the time when we can start to exact concessions from the EU if we hold our nerve.
Last week we suddenly saw signs of German industrial companies beginning to panic over the prospect of no deal and to publicly demand that their government do something to avoid it. They will lose about a third of their car sales and two-thirds of their dairy sales to the UK if we went to standard World Trade Organisation import tariffs.
Even worse hit would be Ireland, whose entire agricultural sector would face enormous risks. Belgium and the Netherlands will each face a hit worth 3%-4% of their GDP. Their political leaders are beginning to realise that the immediate consequence of failure for them would be significantly worse than for us, and they would not have the long-term opportunities that we would. Accordingly, now is the time to toughen our stance, not weaken it.
The existing strategies have led us into cul-de-sacs. As this has become apparent to MPs and the cabinet, the attempts to defend the policy have become more and more strident. Most recently there have been threats that if we do not accept the policy there will be a general election. This is completely bogus.
A general election can happen only with a two-thirds majority of the House of Commons, or if the government passes a vote of no confidence in itself. Since no Conservative MP is likely to risk a Corbyn government, that is hardly going to happen. Decisions about the EU should be taken on the policy merits, not on spurious threats.
Which brings us to the role of the cabinet. The cabinet committee that governs EU negotiations has barely met since July. Instead, the decisions seem to have been taken by an ad hoc group. Other cabinet members have been excluded from the decisions and, in some cases, even the briefings.
This is one of the most fundamental decisions that government has taken in modern times. It is time for cabinet members to exert their collective authority. This week the authority of our constitution is on the line.
The EU has already offered us a Canada-style, zero-tariffs trade agreement, and Donald Tusk, president of the council, reinforced that offer last week. A good deal is clearly within our grasp. We must reset our negotiating strategy immediately and deliver a Brexit that meets the demands of the referendum and the interests of the British people.