Rupert Darwall

How Brexiteers can still save Brexit | 30 July 2018

How Brexiteers can still save Brexit | 30 July 2018
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Brexit hangs by a thread. The Chequers Plan has already failed. Public hostility and its one-sided nature mean that it cannot provide a durable basis for the UK's future relationship with the EU. 

Only eighteen months ago, the Prime Minister was saying that Britain could not possibly stay in the EU Single Market. It would mean "not leaving the EU at all." Yet this is precisely what the Chequers Plan does, with its acknowledgment that the Single Market is built on a balance of rights and obligations and its proposal for a new framework that "holds rights and obligations in a fair and different balance." Fair and different is not Brexit.

The Prime Minister's mishandling of the Brexit negotiations has led to a Withdrawal Agreement in which the UK promises to pay £39bn in return for an agreement to agree and the imposition of the Commission's view on the Irish customs border issue. As every lawyer knows, in law, an agreement to agree means there is no agreement. Then there is the Irish backstop that freezes the UK in indefinite vassalage. Add to that the palpable deceit practised by the Prime Minister in arriving at this point, and by rights the Chequers Plan should be as dead as the proverbial dodo.

Instead we see the Government play acting a charade of preparing for a No Deal. Michel Barnier's rejection of the Chequers Plan's facilitated customs proposal shows how lightly Brussels treats the threat. A Prime Minister who explains that she's given way to Brussels on previous occasions to avoid a "chaotic leaving" puts herself in the position of having to accept whatever the Commission demands.

All this puts parliamentary Brexiteers in a strong position, but not one as strong as they believe. Before they were stitched up by the Prime Minister at Chequers, David Davis and his team were preparing a Canada-plus economic agreement. Out of government and having lost the argument in the Cabinet, Brexiteers nonetheless hope the government's difficulties will see their plan prevail. Failing that, they see their trump card as parliamentary paralysis leading to the UK crashing out of the EU on WTO terms, a prospect some relish.

Their betting is that the withdrawal legislation is now law and, come what may, the UK is on an automatic conveyor belt out of the EU. What they tend to overlook is that s.20(4) of the EU Withdrawal Act has provision to delay Britain's exit. Leaving aside the incalculable damage to the Conservative party, were that to happen, there is a risk of Brexit being put on ice indefinitely or the referendum even being reversed. The Commission wants a second referendum and the People's Vote campaign would become practically unanswerable if Brexit were delayed.

No plan survives first contact with the opposing side. In this case, the Brexiteers face opposition from a Remain Cabinet and a Remain-dominated House of Commons. But any plan based on a set of mutually incompatible assumptions has close to zero chance of success. In fact, Brexiteer strategising is based not on one, but two sets of mutually contradictory assumptions. The first is that crashing out of the EU on WTO terms is really not so bad for the UK, yet it will be awful for the EU, the horrors and mayhem that will ensue in Calais and other Channel ports will induce the EU to fold and accept Brexiteer terms on the EU's future relations with the UK.

The second set is that EU will behave as an economically rational actor to give the Brexiteers a win:win Canada-plus deal. Yet the main reason they want to leave the EU is that it is an emerging imperialistic state – as it has behaved throughout the Brexit negotiations, chalking up win over win against the UK. 

A viable strategy would assume that both the EU and the Prime Minister continue to behave as they have done to date. A Remain Prime Minister and a Remain Cabinet are hardly going to acquiesce in the Brexiteer plan for a UK crash out. Neither would it be wise for them to rely on Labour votes and for Jeremy Corbyn to act selflessly, when Labour's interest is in prolonging the Tories' Brexit agony.

Once Brexiteers accept that the Prime Minister has made such a disastrous hash of the negotiations that Brexit will not be achieved all at once, the path out of the current morass will be clear. The obvious first step in a two-stage Brexit is to default to the EEA, a step advocated by the former foreign secretary David Owen. Replying to Lord Owen's suggestion that the UK use the EEA as an interim measure, the Prime Minister wrote to Lord Owen in February saying she wanted to agree the interim period through the Withdrawal Agreement, not use the EEA.

It was a bad call. Getting EU agreement enabled the Commission to extract its pound of flesh in the form of the £39bn exit fee and impose its impossibilist conditions on the Irish border question. In her letter to Lord Owen, she justified this with the misleading claim that the UK is a member of the EEA solely by virtue of its EU membership. The truth is that the UK is a contracting party to the agreement establishing the EEA in its own right. Because defaulting to the EEA requires only the approval of the EFTA members to borrow the EFTA governance pillar of the EEA, it cuts the Commission out of the loop, enabling the UK to regain its negotiating freedom.

Even as a transition phase, the EEA suffers from Brexiteer misconceptions. EEA membership does not entail Britain paying a penny into the EU budget. The EEA Financial Mechanism provides for direct payments to EU member states in Central and Eastern Europe, bypassing Brussels altogether and strengthening the UK's negotiating hand in any Phase 2 negotiations. According to calculations by Oxford economics professor George Yarrow, Britain's annual payments under the Financial Mechanism would be of the order of £1.5bn: a trivial amount in the scheme of things.

For many, freedom of movement is the biggest problem with the EEA. Yet the so-called Implementation Phase will see untrammelled freedom of movement. By contrast, Article 28(3) of the EEA Agreement declares that freedom of movement can be unilaterally subject to limitation on grounds of public policy.

The real obstacle to using the EEA as the first and definitive step out of the EU is that it would put the Prime Minister in the uncomfortable position of admitting that a superior strategy had always been available. For her to accept it would be tantamount to a catastrophic admission that her whole Brexit strategy had failed. Furthermore, her duplicity in arriving at the Chequers Plan and the way she has tried to sell it to sceptical voters means she'd be just about the last person to be trusted with leading the second phase of the negotiations on Britain's long term relationship with the EU in accordance with the principles set out in her Lancaster House speech and subsequently reneged on.

Unlike the Prime Minister, loyal Tory Remainers would accept in a flash EEA membership as a port in a storm. The prospect of uniting both wings of the Conservative party would render the Prime Minister's continued opposition untenable. She'd have to accept it or go. For now, the ball is in the Brexiteers' court. Do the Brexiteers dare to save Brexit?

Rupert Darwall is the author of Green Tyranny: Exposing the totalitarian roots of the Climate Industrial Complex