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The new Prime Minister needs a credible Brexit negotiation strategy – he also needs conviction and commitment

Written by David Blake

Only a credible non-cooperative strategy that cannot be blocked by either the EU or Parliament will get us out of the EU by 31 October. And that strategy needs to be executed with ruthless conviction and commitment by the new Prime Minister.

Both Boris Johnson and Jeremy Hunt have said that they will: renegotiate the Withdrawal Agreement (WA) and backstop; leave the EU with a ‘deal’ on 31 October, although Hunt is prepared to delay this for ‘a short while’ to achieve a ‘better deal’; and get parliamentary approval.

The naivety of these positions is breath taking. Have they not observed how easily the EU has run rings around us? It is clear we are in grave danger of validating Einstein’s definition of insanity – doing the same thing over and over and expecting a different result. 

The new Prime Minister needs a credible negotiation strategy

To avoid this, the new PM needs a clear strategy to leave the EU on the basis of what game theorists call a non-cooperative solution    one that the EU cannot block if it is not willing to cooperate in producing a solution that makes both sides better off.

This means that the starting point for any negotiations with the EU cannot be the WA.  The EU says that it will not renegotiate this and it remains completely unacceptable to the vast majority of the British people. As Chairman of Lawyers for Britain, Martin Howe QC, says: ‘I can’t think of any clause in the WA end-to-end which is actually in the interests of the UK’.

A non-cooperative solution requires the UK to specify the terms under which it will both leave and trade with the EU in the future –  and to do so in a way that the EU cannot block.

Theresa May specified the leaving terms very clearly in the Lancaster House speech in 2017: leave the Customs Union, Single Market and jurisdiction of the ECJ. In other words, a clean Brexit. 

The non-cooperative solution involves three steps. And each one has to be credible to the EU

The first step is for the new PM to restate that a clean Brexit will be implemented by 31 October 2019. This is credible and does not require EU consent.

The second step is to set out in a new Departure Statement (DS) how the principal issues involved in departing from the EU will be implemented: citizens’ rights, the financial settlement and the border between Northern Ireland and the Republic. The PM can: guarantee the rights of EU citizens living in the UK without granting them the special status of the WA; agree to pay our financial obligations up to the point of departure; and restate that the UK will not impose a hard border.  All these are credible and do not require EU consent.

The big advantage of being absolutely clear on the border is that it will force the EU and, in particular, the Irish Taoiseach Leo Varadkar to agree a workable solution that allows the UK to leave the Customs Union and Single Market at the end of October.  Solutions exist to protect the integrity of both the UK and EU internal markets without any physical infrastructure on the border or any need for new technology.  The Smart Border 2.0 report commissioned by the European Union Parliament from customs expert Lars Karlsson confirms this. Annegret Kramp-Karrenbauer, Angela Merkel’s successor, has said that a workable solution could be agreed in five days of discussions.  There were discussions between British and Irish customs officials on creating an invisible border, but Varadkar stopped these when he came to power.  In doing so, he politicised the border issue  – ably abetted by collaborating British ‘negotiators’.

It was this single issue that was then exploited in order to propose the backstop comprising a ‘single customs territory’ between the EU and the UK. Northern Ireland, in addition, would have to abide by the rules and regulations of the EU Single Market. So long as the backstop is in operation, the UK would have to meet ‘level playing field conditions’ that prevented the UK competing against the EU. The UK would not be able to leave the backstop without the consent of the EU.

This, of course, is completely unacceptable. By making it clear that the UK will leave the EU on 31 October 2019, the positions are immediately reversed. Both the EU and Varadkar have said that there will be no hard border. Varadkar would be forced to restart the discussions.  He knows full well how devastating for the Republic’s economy a ‘no deal’ Brexit would be: the Irish Central Bank predicts a 4% cut in GDP and 100,000 job losses. And there are plenty of five-day periods between now and the end of October to agree a workable solution.  But it requires the UK side to make it absolutely clear that we are leaving on Halloween. This too is credible and does not require EU consent.

The third step is to make a Future Relationship Statement (FRS), setting out the terms on which the UK will agree to trade and cooperate with the EU.

There is only one set of trading terms that the EU cannot block. Under WTO (World Trade Organisation) rules, we are free to set the tariffs and product standards for trade with the EU, so long as these are the same as for all members of the WTO under MFN (most favoured nation) rules, unless we have a free trade agreement (FTA) in place.  This is the default position, so is both credible and does not require EU consent.

We can actually do better than this and offer the EU to continue trading in goods on current zero-tariff terms under Article XXIV of GATT (General Agreement on Tariffs and Trade) and in services under Article V of GATS (General Agreement on Trade in Services), while a FTA is being negotiated.  But if they refuse, we can temporarily revert to the MFN rules under Article I of GATT.

We need to exploit the fact that the UK has a huge trade deficit with the EU – we are net buyers of goods of around £100bn, equivalent to 5% of our GDP.  Since we will no longer be bound by the EU’s Common External Tariff, we can lower the tariffs we set on goods that we do not produce domestically. But whatever tariffs we set, the EU will be worse off, given that they sell us mostly high-tariff goods like cars and agricultural products. We would pay tariffs to the EU of around £5bn and they would pay tariffs of £13bn. In addition, we would save the £11bn net contribution to the EU.

This provides a strong incentive for the EU to agree a FTA in due course, unless they want to continue punishing us for leaving, and in doing so damage the EU economy even more.  Given that we have a services trade surplus with the EU of around £30 bn, it is essential that this is secured in a future trading relationship. This means a Super-Canada deal, already offered to us by the EU in March 2018

However, we cannot force the EU into accepting any deal that works for us in terms of services, and, in particular, financial services. Still this does not prevent us leaving the EU on the basis of the above DS and FRS.  There are enough ‘mini deals’ in place – covering visa-free travel, aircraft landing rights, road haulage licences, defence and security etc – for the citizens and businesses of both the UK and EU to continue visiting and trading with each other. In addition, a sufficient number of the international trade deals negotiated by the EU have been novated that we can continue trading on the same terms with most of these countries as we do now. A key example is Switzerland which accounts for more than a quarter of our trade under these EU-negotiated deals.

But unless the strategy is clear about what is needed to deliver these outcomes, we will soon be back wading through the same treacle of compromise and capitulation that have been the hallmark of our negotiations over the last 2 years. The only strategy that is guaranteed to work by 31 October is the non-cooperative one outlined above. 

The new Prime Minister also needs to demonstrate conviction and commitment – and that involves putting Parliament in its place

A credible negotiating strategy is necessary, but it is not be sufficient. The new Prime Minister also needs to have ‘conviction and commitment’, as Dominic Raab has pointed out.  But Boris Johnson – the front runner to be PM – has already wavered by first stating categorically that the UK will leave the EU by 31 October and subsequently saying that this is merely ‘eminently feasible’. This change was immediately picked up by EU negotiators. One told the Daily Mail that the EU believes Johnson will end up trying to sell an amended version of the WA. This is perfectly plausible: after all Johnson supported the WA on the third vote. Hunt voted for it three times.

The new PM also needs to demonstrate conviction and commitment with the other group trying to block Brexit: the British Parliament.  It too needs a lesson in democracy.  We voted to leave the EU in June 2016 by a bigger majority than any vote that any individual MP has ever received. 

So if MPs are still determined to block the deal that the next PM sets or try to insist that the deal is put to a ‘confirmatory vote’ – weasel words for a second referendum to get Brexit reversed – then they also need to be blocked. They need to be made to understand that it is the people who are sovereign not MPs. 

If this, in turn, means that Parliament is prorogued until after 31 October 2019, then so be it.  Constitutional historians like Professor Jonathan Clark argue that this would not be ‘“unconstitutional”. [It] would be in accord with statute law, but applied in a situation that legislators could not foresee. [Nor] would [it] be “undemocratic”, for the point at issue is the clash between two sorts of democracy, representative and direct’.

However, prorogation might not be necessary since, in June 2019, Parliament voted down a Labour motion to block a no-deal Brexit. Indeed, Maddy Thimont Jack from the Institute of Government argues that MPs have no decisive route – such as legally binding backbench motions, emergency debates, amendments to the Queen’s Speech, or ‘no confidence’ votes – to stop a PM determined from leaving the EU on 31 October.

Only a credible non-cooperative strategy executed with ruthless conviction and commitment by the new Prime Minister will get us out of the EU by 31 October

The message needs to be clear, simple, with no compromises. Time’s up for doing the same thing over and over and expecting a different result.  Only a credible non-cooperative strategy that cannot be blocked by either the EU or Parliament will get us out of the EU by 31 October. And that strategy needs to be executed with ruthless conviction and commitment by the new Prime Minister. Given that both Johnson and Hunt have voted for the WA, the new PM would need to signal his conviction and commitment by appointing a Brexit Secretary who refused to vote for the WA on all three occasions. 

About the author

David Blake

Professor David Blake is at Cass Business School