The crumbs of hope

From the start, the government’s approach to Brexit has been characterised by divisions, confusion and chaos. And it took Theresa May far too long to accept the need to settle the three issues at the centre of the first phase of the negotiations – citizens’ rights (for EU nationals in the UK and Brits in the EU27), the Ireland/Northern Ireland border, and valuation of the UK’s budgetary liabilities – to have even a chance of addressing the crucial issues of trade, security, research, and a myriad of other issues in the remaining time available.

Prior to this month’s European Council meeting ultra Brexiters in the cabinet had been deliberately holding up an agreement on the first phase issues, not least on the UK’s budgetary liabilities – an issue where they think they can portray the EU as holding the UK to ransom, hoping that most people will not look behind the lurid headlines that their friends in the press conjure up. They have clearly been aware that the government is losing public support and so have wanted to keep a Brussels bashing issue alive as long as possible.

But these are minor skirmishes compared to the importance of what comes next. There is precious little clarity over what kind of long-term deal the government wishes to negotiate, and seemingly even less understanding of what will be possible.

Trade is far from being the only issue, but it is a crucial one for our faltering economy. Theresa May has repeatedly called for ‘frictionless’ trade with the EU after Brexit. The head of the EU27 negotiation team, Michel Barnier, has repeatedly told her that trade cannot be frictionless if Britain leaves not just the EU, but the single market and customs union too. Yet this is exactly what the government foolishly said it wants to do. It has ruled out membership of the European Economic Area (EEA), an arrangement that enables Norway, Liechtenstein and Iceland to be virtual members of the single market.

It has also ruled out the Swiss model, a complex web of bilateral treaties with the EU. It doesn’t even mention the Ukrainian model of a deep and comprehensive association agreement. If the government is ruling out all the permutations of a close association with the single market, then it might logically want a lesser form of access to the single market, such as that recently (and laboriously) negotiated by Canada. But this was rejected as insufficient by Theresa May. And indeed, it does not cover services – some 80 per cent of the British economy.

So what exactly does the government want? Has it actually decided or does it remain split? Will it put options to parliament or decide itself? Is it even capable of deciding itself?

The last question is far from rhetorical. The ultra Brexiters don’t actually want a deal. They think any deal will entail acceptance of European standards on consumer protection, workplace rights, environmental standards and fair competition – the very things the neoliberal right hate about the rules for the European market and why they wanted to leave the EU in the first place. No matter that a no-deal Brexit would leave a legal limbo for everything from airplane landing rights to citizens’ rights, and mean a sudden-death end to participation in EU agencies and programmes. No matter that it would mean immediate WTO tariffs on trade with Europe and dropping out of trade agreements with countries across the world that we currently have via the EU. They don’t care. For them, it’s a price worth paying to secure their ideological dream of a deregulated, low tax, low public service corporate free-for-all.

Other ministers do want a deal, keeping full access to the single market. But they do not seem to realise that the single market is in essence about agreeing and applying the same rules as each other, from technical standards to those rules that protect consumers, workers and the environment, and ensure fair competition. To have full unimpeded access to that market means playing by the same rules. Wanting to have separate, divergent rules means losing that easy unimpeded access. Restrictions, controls, delays, and extra costs will appear.

Lord Kerr said several months ago that the Brexit negotiations would ‘test to destruction the theory that the UK could have its cake and eat it.’ We are getting close to the point at which that theory will be disproved.

At that point, a rational government would go through an agonising reappraisal: leave the single market and customs union and take a huge economic hit; stay in them and become a rule taker, not a rule maker; or reconsider Brexit entirely. But among Conservative MPs, there may not be a majority for any of these options.