Iain Duncan Smith is a former Secretary of State for Work and Pensions, founded the Centre for Social Justice, and is MP for Chingford and Woodford Green.
As the dust settles on the Prime Minister’s speech in Florence and the media moves on, there remains a need to start to fill in the grey areas of the Government’s Brexit policy – particularly the options on the setting and delivery of the agenda.
Let’s start with the statement that there will be an implementation period of up to two years. This is apparently needed because British business wants to have time to get its systems right, and the civil service has to ensure that all the controls and checks are in place from border control to beef imports. If this is all about the practicalities of implementation, then I understand extra time may be required, (although the need for our officials to do what they are doing must be checked), but this period must be defined and kept tight.
None the less, there is a lack of clarity about what our relationship with the EU would be during this period. Now this is the most critical point.
Under the rules of Article 50, the UK leaves the EU at the very end of March 2019 with – or, just as importantly, without – settled arrangements concerning the UK’s or the EU’s future relationship. The only way to change this timetable is for all 27 EU nations (plus the UK) and the EU Parliament to agree. This means unless there is some new agreement, the UK will outside the jurisdiction of the European Court of Justice (ECJ), and also outside the Single Market and the Customs Union.
Thus any relationship during this period would be between two legally sovereign powers – the UK and the EU. However, Michel Barnier has suggested otherwise, reiterating the demand that the UK subject itself to the suzerainty of the ECJ. I note that following the Florence speech David Davis said that we will not be beholden to the rulings of the ECJ during the implementation phase. If that is so, then it is important that all ministers repeat this, otherwise they risk creating greater confusion.
It is critical domestically that we stick to the Article 50 timetable, or many people will feel they have been misled. After all, Brexit must mean democratic control of policy residing within the UK legal democratic framework, and not within a supranational arrangement which would amount to sovereignty-lite, or sovereignty without meaning.
What worries a number of people in this context is that, at present, the EU Withdrawal Bill still has no commencement date, at which point the new laws and regulations set by Parliament will come into force. Unless it is written into the face of the legislation that this date will not be later than the last day of March 2019, many will wonder if the Government really does intend that the UK leaves the EU at the end of the Article 50 process. Worse, the EU will have noticed this element of the Bill, and may feel emboldened to resist all further progress because they will suspect that the Government is uncertain. We need to put this right at once, so that we have a baseline to focus on.
There was some further scratching of heads after the speech – for, as I understand it, Government briefing said that the UK will now focus during the talks on establishing implementation period arrangements before March 2019. Worryingly, this briefing apparently went on to suggest that this period itself would be used to negotiate a new free trade arrangement (FTA)energ. This I find deeply troubling. Surely the only way to get a proper agreement is to insist that the EU thrashes out our future trade arrangements with us before the end of March 2019. I fully recognise that there may continue to be elements of detail to be completed, but unless there is at least a clearly-settled ‘Heads of Agreement’ between the UK and the EU agreeing the crucial framework of a deal, the two year implementation period will be used by the EU to delay departure.
The Article 50 deadline is a critical component in the discussions. Now that the Prime Minister has made her speech indicating that the UK meet our financial obligations, the EU has to respond. Instead of making mealy-mouthed utterances and threatening statements, they need to start the negotiations on trade. To make this happen, we need to put some pressure on them. To do that, two critical factors need to be engaged.
The first is that we publicly, and through strong cabinet leadership, make it clear that we are going to throw resources at the plans for leaving the EU without an agreement. We need to up the pace dramatically on the process, giving regular public updates on progress.
Alongside this move, we need to say to the EU that we expect it to respond to the Florence speech with a guarantee that we will now discuss a trade agreement. We should say that the EU has to make that decision by December – or we will assume they do not intend to do so, and that we must make the necessary arrangements to leave without a deal. This is important, because we will need all the remaining time to reach such an agreement but, if no FTA is forthcoming, then we must be ready to leave under WTO terms. If the EU does not then accept what would be a reasonable offer from the Government, it will be clear to everyone that it has no real interest in genuine post Brexit co-operation. If that is the case, it is best to establish it early.
All negotiations need to establish the real intent of the other party early on. Setting limits is an important device in establishing intent. However, having indicated in this case that we could be flexible about money, we should not now accept any answer from the EU other than that we will now start discussions on trade. We are not supplicants begging for favours from the EU. As the Prime Minister has said, we are interested in an arrangement that suits us both. The arrogant behaviour of the EU so far, bordering on the deliberately offensive, is a bluff that we need to call. After all, the UK is the fourth largest economy in the world, with the third most potent armed forces and a global reach in terms of trade and cooperation that is second to none. If they want to behave in this manner towards an ally and friend who has been a member of the EU for 40 years, and is the second largest economy in the EU, then it were best that we established this now.
Instead of listening to the bleating of the CBI, we should recognise that further delay is not in our favour. For instead of business holding back investment for 18 months, the risk is that, unless the implementation period starts with a clear agreement on our future trading relationship already in place, firms are unlikely to wait for up to 40 months. Business needs a clear sense of direction, and as early as possible. Better to have a clean break early than a prolonged process with a complicated and disagreeable ending. Furthermore, the Commission hopes that if it can string the UK along for long enough, it will have longer to try and make it advantageous to set up British-based businesses within the the EU.
In conclusion, any agreement must not bind future Governments. While, clearly, any UK Government will wish to cooperate with the EU as an ally, areas of foreign policy, such as defence, border control, judicial authority, agriculture, fisheries, environment, energy, trade policy must be fully returned to the UK. A series of binding side deals would be unacceptable.
We are, I believe, poised at a critical moment. As we wait for a somewhat weakened Angela Merkel to re-enter the negotiations, we must either decide we want decisiveness and clarity and set the agenda, or bend the knee and hope for the best. Ninety per cent of the world’s growth is going to be outside the stultifying protectionism of the EU by the time the next few years pass. If we believe as I do that the UK is ready for a British renaissance, then we need to be bold, determined and clear.