The Brexit train rolls on this week with a major and welcome announcement by Jeremy Corbyn committing the Labour Party to the UK’s permanent participation in the European Union’s customs union.
There are the predictable cries of betrayal from the Daily Telegraph, the Daily Mail and Brexit-loving MPs. But so many voted Labour last year – and Theresa May lost her majority – because they wanted an Opposition who would resist in the strongest possible terms the seeming inevitable march towards a hard Brexit.
The polls are clear – even Labour Leave voters back the UK continuing in the customs union. Incidentally, they back staying in the single market, too, which must be the next step the Labour leadership makes, as Yanis Varoufakis, the TUC and others have argued. And this is no betrayal: Labour MPs will tell you it’s what their constituency party members, supporters and voters – especially the newer and younger ones – expect.
It’s not just Labour-voting Brexiteers, either. Former staffers on the Vote Leave campaign from across the political spectrum have written articles arguing we should do this. Even among those who want a hard Brexit, there is a clear consensus that we want to continue to sell into EU markets – yet, if we want to do so, we will have to abide by their rules.
Theresa May will be mapping out her “vision” for our future relationship with the EU towards the end of this week. Her problem is that she is a hostage of the hard-right ERG (European Research Group) cohort of Tory MPs, led by Jacob Rees-Mogg – better described as the “Economic Ruin Group” who will always put ideology before the national interest.
Conservative MPs tell me the reason May moved precipitously to rule out continued membership of the customs union – without regard as to whether she had the numbers to get such a proposition through the House of Commons – was because she was terrified this rump of Brextremists would submit the required number of letters to the chair of the Tory parliamentary party demanding a new leadership contest.
As ever, the entire national interest is being subordinated to the soap opera on Europe in her party.
At the March European Council, the details regarding the Brexit transition period are due to be finalised. It obviously makes sense to have a period during which businesses have time to plan for our exit from the EU. In this sense, it feels like a warm and cuddly place that prevents a hard landing and eases us gently out of the EU club. But don’t believe a word of this comfort speak: transition is no safe harbour at all.
The proposed transition – referred to most consistently as “the implementation period” by the PM – is to an unknown destination and, importantly, will start after we’ve left the European Union. Once we leave, we have nothing like the leverage we have now and we don’t know what the future relationship with the EU will look like because Cabinet cannot agree on it.
It is folly to be leaving the EU without knowing where we are going, and whether the Government really has the ability to deliver a Brexit deal giving us the “exact same benefits” that we enjoy now, as promised.
In the absence of a known destination and an agreement with the EU, all transition does is kick all the difficult decisions on our future relationship, trade, what to do about the border in Ireland and other matters into the long grass. There is, quite simply, no guarantee the Government will be able to sort out our future arrangements with the European Union in less than two years, during a stage that is due to expire at the end of 2020.
The reason the transition will expire in 2020 is because the divorce bill of £39bn or more covers the UK continuing to be regulated by EU agencies – to the extent it wants or needs to do so – and other ongoing costs. 2021 is the start of a new EU budgetary period not covered by that divorce bill, so if it is to be extended, we will have to pay even more.
However, EU Commission officials I have spoken to think it will take at least three to four years to negotiate a new free trade agreement with the EU after we have left, so the transition is highly likely to expire before we reach a full agreement on the future terms of trade. The cliff edge draws nearer.
One of the principal objections to the transition is that we will continue to be subject to the EU rules in order to be able to trade on the same terms during this time, but we will move from being a “rule maker” to a “rule taker” when we finally leave, because we will no longer be part of the EU and so unable to vote at EU Council. In other words, we will have no say or influence over a lot of things that may potentially affect our economy during transition.
So why did people support the idea of a transition period in the first place? Personally, I supported the notion of a transition on the basis that we would know what we were transitioning to before we left the EU, and I envisaged transition period taking place before we left.
But, because the Government has made such a complete mess of the negotiations and Theresa May chose to trigger Article 50 far too early, this is not the case.
If we do leave the EU and stay in the single market as a member of the European Economic Area (EEA), we would have some influence over the rules like other EEA members who sit on the committees that draw them up in the long term.
My judgement was that this was worth putting up with, given the huge economic benefits that the Government’s own assessments show we derive from the single market and customs union, the main economic structures of the EU. But the “rule taker” issue is real, and it’s true that we wouldn’t get a vote around the EU Council table. That’s a challenge not just during transition, but after. I don’t deny this and I never have.
Whatever Theresa May comes back from Brussels with in the autumn, that will be the reality. The ultimate way to have a say on the rules that govern our trading relationship with the UK’s biggest customer is to stay part of the EU club and argue for reform from within.
While Jeremy Corbyn has been giving his speech today, Anna Soubry and I have been leading a small delegation of MPs to Paris, as co-chairs of the All Party Parliamentary Group on EU Relations. We have been meeting with senior ministers in French President Emmanuel Macron’s government.
The French are clear: they are not agitating to maintain the status quo in the EU; instead, they are seeking to radically change it to better protect French people from the impact of globalisation and to ensure all of the French enjoy its benefits. President Macron wants to put the French people in the driving seat as far as their futures are concerned. We should do the same for the British people.
The Brexit that is emerging now is new and quite different to what people thought they had voted for – that is why they must be given a vote on the Brexit deal with the EU, with the option to remain in. That way we put the British people in the driving seat too.