So, we are two days away from the triggering of Article 50 - the formal start of the Brexit process. Last week, a number of new reports and articles came out in anticipation of this historic event. The first developments came from EU chief Brexit negotiator Michel Barnier, who outlined a few red lines for the EU in the upcoming negotiations. Barnier first of all called out Theresa May on the 'no deal is better than a bad deal' line, saying that a failure to reach a deal would have serious repercussions for the UK - he mentioned lack of certainty for citizens and the imposition of customs checks leading to queues of lorries at Dover, before saying that “A no deal scenario is not what we want". The three broad red lines called out by Barnier were the need for payment of a divorce settlement, the need for swift guarantee of reciprocal rights for citizens, and the demand that no new tensions in Ireland be created.
Next up, we have a duo of reports from the EEF and OpenEurope. The EEF - a manufacturing/engineering membership organisation - state in their report that 'no deal' is “simply unacceptable” and would be a “lose-lose” for both the UK and the EU, pointing particularly of the tariffs the manufacturing sector would face. The OpenEurope report suggests that a half-in half-out customs union arrangement would be the worst of both worlds, and that Britain must be able to strike its own trade deals in order for Brexit to be a success. The terminology here is not particularly helpful, for Britain to be able to do this we must find ourselves outside of the EU’s Common Commercial Policy (CCP) – something technically separate from the customs union. What OpenEurope are suggesting is that a new form of customs cooperation arrangement be struck as part of the UK-EU FTA. In short, the report doesn’t say much we didn’t already know.
An article from the FT over the weekend explained that officials close to the Brexit negotiations have admitted that Theresa May is looking to keep Britain under the remit of some EU agencies after Brexit, as “We simply don’t have the expertise in some areas and wouldn’t have the time to start up new agencies from scratch”. This is something we have covered briefly in Episode 3 of our podcast, and expand upon in Episode 4 which will be published tomorrow. In short, this would be a good idea, as sorting this out under time-restricted negotiations would be a nightmare. This is hopefully a sign that some hard truths are becoming known to people in positions that matter.
On that theme, an article in The Times revealed that secret briefings are going on within HMRC, where one of the discussion points in a leaked document has been the potentially massive cost of new regulatory and customs burdens even under a ‘good deal’ scenario. This is obviously bad, but the news that the focus has finally fallen on the problems of non-tariff barriers (NTBs) is very welcome indeed, as this is something we have been calling for throughout our entire campaign. Unfortunately, a majority of NTB related problems we will face will come as a result of leaving the single market, and as this particularly harrowing blog post from Richard North explains, according to what the government has told us about its strategy, these issues are now looking impossible to avoid. The government has all but ruled out continued single market membership through membership of the EEA, and without this it looks like we have doomed ourselves to a significantly increased level of NTBs through regulatory conformity and customs issues. Unless the EEA forms a part of any short-term transitional arrangement– something I would certainly not rule out despite the government’s insistence, it looks like avoiding these issues is incompatible with the known strategy. Again, we may only find hope in the indication that they are finally waking up to this reality.
Lastly, Keir Starmer this morning made a speech at Chatham house laying out six key tests for the Brexit deal in an attempt to firm up Labour’s wobbly positioning. The key tests are as follows:
alex.davies@gmchamber.co.uk
@GMCC_Alex
Next up, we have a duo of reports from the EEF and OpenEurope. The EEF - a manufacturing/engineering membership organisation - state in their report that 'no deal' is “simply unacceptable” and would be a “lose-lose” for both the UK and the EU, pointing particularly of the tariffs the manufacturing sector would face. The OpenEurope report suggests that a half-in half-out customs union arrangement would be the worst of both worlds, and that Britain must be able to strike its own trade deals in order for Brexit to be a success. The terminology here is not particularly helpful, for Britain to be able to do this we must find ourselves outside of the EU’s Common Commercial Policy (CCP) – something technically separate from the customs union. What OpenEurope are suggesting is that a new form of customs cooperation arrangement be struck as part of the UK-EU FTA. In short, the report doesn’t say much we didn’t already know.
An article from the FT over the weekend explained that officials close to the Brexit negotiations have admitted that Theresa May is looking to keep Britain under the remit of some EU agencies after Brexit, as “We simply don’t have the expertise in some areas and wouldn’t have the time to start up new agencies from scratch”. This is something we have covered briefly in Episode 3 of our podcast, and expand upon in Episode 4 which will be published tomorrow. In short, this would be a good idea, as sorting this out under time-restricted negotiations would be a nightmare. This is hopefully a sign that some hard truths are becoming known to people in positions that matter.
On that theme, an article in The Times revealed that secret briefings are going on within HMRC, where one of the discussion points in a leaked document has been the potentially massive cost of new regulatory and customs burdens even under a ‘good deal’ scenario. This is obviously bad, but the news that the focus has finally fallen on the problems of non-tariff barriers (NTBs) is very welcome indeed, as this is something we have been calling for throughout our entire campaign. Unfortunately, a majority of NTB related problems we will face will come as a result of leaving the single market, and as this particularly harrowing blog post from Richard North explains, according to what the government has told us about its strategy, these issues are now looking impossible to avoid. The government has all but ruled out continued single market membership through membership of the EEA, and without this it looks like we have doomed ourselves to a significantly increased level of NTBs through regulatory conformity and customs issues. Unless the EEA forms a part of any short-term transitional arrangement– something I would certainly not rule out despite the government’s insistence, it looks like avoiding these issues is incompatible with the known strategy. Again, we may only find hope in the indication that they are finally waking up to this reality.
Lastly, Keir Starmer this morning made a speech at Chatham house laying out six key tests for the Brexit deal in an attempt to firm up Labour’s wobbly positioning. The key tests are as follows:
- Fair migration system for UK business and communities
- Retaining strong, collaborative relationship with EU
- Protecting national security and tackling cross-border crime
- Delivering for all nations and regions of the UK
- Protecting workers' rights and employment protections
- Ensuring same benefits currently enjoyed within single market
alex.davies@gmchamber.co.uk
@GMCC_Alex
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