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The Brexit Magical Mystery tour: time for hard thinking

by David Hannay | 09.09.2016

The government has embarked on a voyage of discovery with several months to run before it reveals what, in its view, Brexit means; and that is before putting its position to the other 27 member states for difficult negotiations.

If you had asked Christopher Columbus in 1492 where he was heading when he sailed off westwards, he would have replied that India means India. In the event he bumped into something quite different. If we are to repeat that experience, it is important for the government to spell the parameters and implications of the various choices before it reaches its decisions on Brexit.

Since Brexit minister David Davis’s statement in the House of Commons on 5 September, no one following the Brexit debate can surely still nurse the illusion the government is following some carefully planned strategy towards opening negotiations with the EU. Particularly since one of Davis’s central assumptions on the crucial issue of the trade relationship – that the chances of the UK remaining in the single market was “highly improbable” – was within days shot down by No. 10 as not being the government’s policy.

Should we be concerned about this policy vacuum that is only just beginning to be filled? Not necessarily. It is certainly better to allow some time rather than making the wrong decisions in haste. Our EU partners should give the prime minister the space till the end of the year that she has indicated she needs, and avoid making an issue of an early triggering of Article 50 negotiations.

In the meantime, the government should refrain from oxymoronic statements on what is achievable, and which obscure the need for hard choices by the government. They include the contradiction that full involvement in the single market is compatible with dismantling free movement or with the UK reasserting complete regulatory freedom. These “have your cake and eat it” aspirations obscure the need to make hard, well-researched choices.

If there is to be an informed debate, particularly on trade, in parliament and in the country, the government must be open about the fundamental differences between remaining part of the single market like Norway and Iceland, and merely having tariff-free access to the rest of the EU while facing a range of non tariff barriers and customs controls implicit in a free trade agreement. These two alternatives are as different as chalk and cheese for both manufacturers, and even more significantly, for the service industries which make up nearly 80% of our economy.

So far, there has been no attempt by the government or Brexiteers to explain those differences.

It would also help if Minister for International Trade Liam Fox would avoid suggesting that post-Brexit the UK could somehow take over the free trade provisions of the EU’s agreements with a range of non-EU countries under so-called “grandfathering” arrangements. That will not work. The trade provisions of those agreements will remain with the EU as such, and the UK will no longer be a member. Suggesting otherwise is just another attempt to obscure the need for hard choices and hard work.

If there is any risk of a hiatus between the conclusion of the Article 50 negotiations and the completion and ratification of the negotiations on the UK’s new trade relationship with the EU – and there surely is going to be such a risk – then the government also needs to spell out the implications of the option of falling back on WTO membership, including its own intentions on new tariffs for goods coming into the UK.

Edited by Yojana Sharma

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