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David Gauke is a former Justice Secretary, and was an independent candidate in South-West Hertfordshire at the recent general election.
It is time to talk about Brexit again.
Understandably, the country’s attention has been focused upon the second wave of Covid-19 and the Government’s response to it. And in the past few days, many of us have welcomed the chance to change the subject and follow every twist and turn of the US Presidential election. But it is all too easy to miss the fact that the next week will be one of the most important in the protracted saga of the UK’s departure from the European Union. Just this afternoon, the Prime Minister is speaking to the President of the EU Commission.
We are so used to deadlines whooshing past with little or no practical consequence, there is a temptation to be complacent about the EU’s position that, for a free trade agreement between the UK and the EU to be ratified in time to take effect by the end of the transitional period, such agreement would need to be concluded by 15 November. After all, the Prime Minister has previously said that talks would need to conclude by 15 October in order to reach a deal and – save for a brief and rather unconvincing walk-out – the parties carried on talking.
This time, however, the difficulty is that we are not dealing with a deadline imposed for political reasons in order to focus the minds. We are now at the stage of running out of time to go through all the practical hurdles to ratify any agreement amongst member states and the European Parliament.
The stand-off remains as it has been for months. The two sides remain some way apart of the level playing field provisions, particularly on state aid, and how any agreement is enforced. In addition, the economically irrelevant issue of fish continues to be contentious.
Progress has been made on many of the technical issues, but on these fundamental points the talks have stalled. Both sides have given some ground, but will have to move further. And the side that is going to have to move the furthest will have to be the UK. If Boris Johnson wants a deal, at the very least he will have to accept something which recent leaders of the Conservative Party would consider to be desirable regardless of the EU implications – a robust and independent state aid regime.
I do not know whether the Prime Minister will decide to go for a deal. As far as I can see, it is not clear that he knows himself. Making decisions is not always a strong point for Johnson, and he made one big difficult decision a few days ago by re-imposing a lockdown. Now he has to make another.
At one level, the decision should be straightforward. The right to waste public money by subsidising loss-making businesses has never been a demand of most Eurosceptics, save for a few Bennites, and was a non-issue in the 2016 referendum campaign. (Johnson has praised the EU on this point.) He went to the country in 2019 promising he had a deal: failing to conclude an FTA looks like a failure of competence and a breach of trust. An already fragile economy will suffer a further blow.
However, it has been reported that the Prime Minister is ‘emotionally drawn’ towards a WTO Brexit. Why might that be? It is possible that he believes that any constraint on decision is an unacceptable suppression of sovereignty, but that suggests a purity of view that would make a free trade agreement with anyone impossible.
The politics and the Prime Minister’s perceptions of his own self-interest may tempt him to turn down a deal. Nigel Farage is relaunching himself (again) and is ready to cry betrayal (again) which will panic plenty of Conservative MPs (again). Johnson will also be aware that he has taken on many of his Parliamentary colleagues over the Government’s response to Covid-19 – he might not want to take on many of the same people on a second issue. And – a point I made back in February – even a deal will cause economic disruption. If the Prime Minister agrees to a deal in the next few days, he will have to proclaim a triumph, but also explain to businesses that time is running out to prepare for it being much more difficult to trade with the EU.
The evidence that – even with the thin deal we may get – the end of the transition period will damage the economy is growing. On Thursday, the Bank of England pointed out that the UK’s trade and GDP will be adversely affected in the first half of 2021, even with a deal. On Friday, the National Audit Office published a report expressing concerns that UK business will face widespread disruption in 2021 because of failures to prepare for post-Brexit borders. A deal will help because it might provide an opportunity to ease rules in particular circumstances but the fundamental problems remain the same.
The approach of the Government has been to blame businesses for not being prepared. Some businesses may have been complacent about the consequences of the end of the transition period, but they can hardly be blamed when the Government, until relatively recently, has not been able to provide details of our future relationship and presented this moment as an opportunity. It simply is not. At a practical level, leaving the Single Market and the Customs Union only makes it harder to trade with the EU.
The Prime Minister might be tempted to try to escape responsibility for the predicament that he, more than anyone, has got us in. He could collapse the talks, and blame the EU for the consequences that the country will face in January. We saw how Brexiteers rather enjoyed the prospect of the talks collapsing in mid-October. A bitter dispute with the EU which could last for years would be truly thrilling to some. And quite a lot of the public would swallow mendacious claims for the reasons of the negotiations breaking down. In terms of the next few weeks, walking away from the talks might be the easier path to tread.
It would also be grossly irresponsible. In the medium term, it would not be possible for Boris Johnson to escape responsibility for a decision that will have a major impact on many people’s lives and livelihoods. The timing could not be worse with the economy already shrinking and businesses restricted in what they can do because of Covid restrictions for at least four of last nine weeks until the transition period ends.
If the Prime Minister wants a soft landing for Brexit, he will need to make concessions, but he needs to do more. Time has run out to prepare properly for 31 December. Even at this late stage, he should ensure that his deal has a further implementation period of another 12 months. A combination of Covid and the Government’s failure to prepare the nation for the realities of Brexit means that ending the transition period at the end of the year will cause even greater problems than necessary. A responsible Prime Minister should seek to prevent that from happening. He should get a deal that gives everyone time to implement it.