‘No deal would be better than a bad deal’ was the Prime Minister’s...
The Cabinet met on Wednesday to focus on the big issues before Parliament reassembles Today. Departments have been working on how they will contribute to Brexit and Ministers were asked to report on what had been achieved. Mrs May said “We must continue to be very clear that Brexit means Brexit. She ruled out a second referendum and any attempts “To stay in the EU by the back door”.
The problem, with which the Government now has grapple, is that there is no one definition of Brexit. Hard line Brexiteers mean one thing and a majority of the Cabinet want something else. The former Chancellor of the Exchequer, Lord Lawson, reflected the former view when he urged “stop wasting time trying to negotiate the unnegotiable – some special trade deal with the EU – it is possible to have a relatively quick exit”. That is not the view of a majority of the Cabinet who want a deal that includes some access to the EU single market. They are concerned that the British economy would be damaged and lots of jobs lost if UK trade with EU members was made uncompetitive by EU tariffs.
Hard line Brexiteers argue that Britain was a great trading nation long before the EU was created and we could be so again without EU membership. The problem is that our trade relations with the rest of the world since 1975 have been substantially shaped by EU membership. Post Brexit we have to renegotiate trade relations with 53 countries and cannot start doing that until after we have actually left. That will not be until at least two years after Article 50 has been activated and in the hiatus our exports could slump, creating a balance of payments crisis and jobs lost. That is why a majority of the Cabinet want continued access to the single market.
That is not impossible. Norway, Switzerland, Turkey, Singapore and Hong Kong all have such access and Canada has negotiated a deal which took seven years and has still not yet come into force. Norway has full access to the single market but pays a financial contribution and has no influence on the EU rules it must obey, including free movement of people. Switzerland has a free trade agreement with the EU but not full access to the single market for its banking and some of its service sectors. Those sectors make up 80% of the UK economy so the Swiss model is unsuitable for us. A similar exclusion applies to the Canadian and Turkish models. The Singapore and Hong Kong models are also inappropriate for different reasons. Thus the Cabinet concluded that we need a unique deal but some EU leaders don’t want to offer us one lest it tempts other members with Eurosceptic populations to follow suit.
In the 41 years since we joined, Parliament has regularly incorporated EU legislation into UK law. Brexit will require a review and deletion of that legislation. Some of those laws include important provisions on employee rights and revision will be politically sensitive. We also have to seek accession to full membership of the World Trade Organisation. New arrangements for cooperation on foreign, defence and security policies will also be needed. None of this will be straightforward and our Government and other parties need our prayers for wisdom. Ordinary people will suffer if they get it wrong.