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Expert View

A White Paper that is full of holes

by David Hannay | 16.07.2018

David Hannay is a member of the House of Lords and former UK ambassador to the EU and UN.

Amidst all the vicious squabbling in Conservative ranks over the government’s White Paper, it is all too easy to lose sight of the substance of the position the government has, at last, put on the table. Two years after the referendum, sixteen months after the withdrawal negotiations began and a mere three months before they are scheduled to conclude, probably the kindest thing that can be said about it is: “Too little and too late.”

In reality the White Paper is as full of holes as a piece of Swiss cheese. It is as notable for what it does not say as for what it does. Here are seven gaps or missteps which will need to be sorted out if progress is to be made over the next three months: 

1. The proposed Customs Facilitation Arrangement to replace the existing Customs Union is incredibly complex, completely untried and far more likely to collapse like a house of cards than ever to be operational. It provides for us to hand over customs duties on goods destined for the EU 27, while putting no matching obligation on them to hand over duties on goods coming to the UK, for example via Rotterdam. Moreover, the arrangement may not even be compatible with WTO rules: exporting countries and companies are entitled to know which tariff rate they face, not be faced with the choice of two.

2. The Irish backstop is blithely dismissed in a single reference, as something “which will not have to be used”. The form in which last December’s deal on this point is to be put in the Withdrawal Treaty remains contested, with Theresa May saying that the Commission’s proposed text could not be accepted by any British Prime Minister. So what could the government accept? “Don’t know” or “It won’t happen” are scarcely acceptable answers.

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3. Simply hanging the service industries out to dry, as the White Paper does, is an astonishingly irresponsible way to treat what amounts to 80% of the UK economy. Exports are rising steadily as progress is made in freeing up EU trade in services. It is the one area where the UK already boasts a trade surplus with the rest of Europe. This is not just about banks and financial services, but includes culture and the creative industries, architecture, accountancy, legal and many other professional services at which we excel.

4. The dispute settlement procedures proposed are also incredibly complex and are not suited at all to the handling of cases of individuals, such as would arise in respect of the European Arrest Warrant. A much more straightforward solution would be to use an instrument like the EFTA court, which makes clear provision for the European Court of Justice’s role.

5. The government has at last tiptoed up to the sensitive issue of the free movement of people. There is talk of negotiating a mobility framework. But nothing useful for the negotiators is said about the specifics of such a framework; and there is no hope of the negotiations being concluded without those specifics being filled in.

6. The promise that Parliament will be able to reject any change in the common rule book for goods is a sham. Any such rejection would be likely to bring the whole partnership tumbling down, as the Swiss found out when they tried unilaterally to change the rules on free movement. Moreover such an arrangement would be a continuing temptation to Brexiters in Parliament to re-open the partnership agreement.

7. Saying that what is set out in the White Paper would not inhibit our capacity to negotiate trade agreements with third countries has already been given the lie by President Trump. The hard fact is that Liam Fox, as minister responsible for such international trade deals, is likely to find time hanging heavy on his hands.             

Suggesting that the White Paper is the final word on what the government should accept, as the Brexiters are demanding, is simply another way of working for a “no deal” outcome. The Cabinet now knows, although Parliament has not been told, just how damaging that would be.

Edited by Quentin Peel