Brexit: We must not walk into the trap of an extended transition period

Brexit: We must not walk into the trap of an extended transition period

Need to talk more about Brexit? Well here you go…

The transition period is supposed to be the time when businesses and Government adjust to the new arrangements for trade with the EU. Theresa May’s preferred own term of ‘implementation period’ makes clear that the original vision was for a period of time in which the practical systems would be put into place to allow the new trade agreement to come into force.

By definition, the implementation period therefore requires that before it begins we have an agreement to implement. Without an agreement to implement, a transition period is simply about delay and disguises the fact that while we may have left on paper, we are still effectively in the EU.

When I was involved negotiating for the UK Government with the EU on the terms of the future EU Constitutional Treaty – with Michel Barnier on the other side of the table – every negotiation concluded in the final days and even the final hours before the deadline.

The two sides can seem far apart but even so agreement generally emerges at the eleventh hour. That is why, if we can hold to a deadline for negotiations to end, we should not rule out an agreement emerging between the EU and the UK. It is, based on history, the most likely outcome.

However, we seem to be letting things slip. First we moved from a promise that the Withdrawal Agreement would include detailed heads of terms on the future trading arrangements with the EU. These have now apparently been diluted to a loose political agreement which it seems likely will contain sufficient ‘constructive ambiguities’ to allow the details of the future trading arrangement to be kicked down the road beyond the March 2019 deadline and into the transition period itself. Now the Government wants to extend the next deadline by delaying the end of the transition period.

We know that we hold maximum leverage in the negotiations before we agree to the Withdrawal Agreement which will see us hand over a potential £39 billion. We also know that businesses and individuals want certainty about what our future relationship with the EU will entail.

Once decisions are made and when we know what we are doing, we can all get on with earning a living and making the most of the new opportunities. Delaying decisions will weaken our negotiating position and is likely to cost investment and jobs.

The Government says it hopes that by giving more time for a deal to be reached, an extension of the transition period would make it less likely that the EU’s demand for a backstop on Northern Ireland would ever come into effect. This is wishful thinking.

The problem lies with the backstop itself, which was never necessary and should not have been agreed to. It effectively commits either the entire UK or Northern Ireland to remain part of EU arrangements – including the Customs Union – on the basis of a flawed analysis of what the EU says is necessary in order to prevent a hard border between Northern Ireland and Ireland. Both the EU and the Irish Taoiseach have made clear there would be no hard border in the event of ‘no deal’, yet EU negotiators have refused to engage with proposals to ensure a smooth border in a future UK-EU deal.

If the Government agrees to this backstop, which it knows it can never accept, then the EU will use the threat of it as leverage to make it impossible to reach an agreement that is either in our interests or that delivers what people voted for. There is already talk that the extension of the transition would allow time to negotiate a customs union for the whole of the UK to satisfy the EU’s backstop conditions.

The Government has said it doesn’t want to stay in the Customs Union, the people voted to leave the Customs Union and yet this is the position we have got ourselves into.

The danger in the Government’s strategy is therefore that we remain locked in the transition period or accept a deal that satisfies the EU’s interpretation of its backstop conditions, either of which would keep us under the control of the EU and locked into EU institutions that we voted to leave.

The Government may believe that its customs proposals in the Chequers proposal can satisfy the EU’s backstop conditions, but the EU has made it clear it does not agree – and if we enter the transition period without these issues resolved, then the EU will hold all the negotiating leverage.

There is the further issue of cost, with estimates of an extended transition period ranging from an additional £10 billion to £15 billion. These are huge sums of money that belong to taxpayers, not to Government. The voters – the taxpayers – have already said they want them to stop.

There is a trap being set here and we must not walk into it.

Things would be easier if there were more trust in the process. Before Chequers, those of us who were involved in the Leave campaign and who had stayed in touch with Leave voters since the referendum had faith that the Government was committed to delivering a form of Brexit that would respect what people across the country had voted for.

The Government’s handling of the shift in policy that led to the Chequers proposal and the handling of negotiations since then has eroded that sense of confidence and trust. Now is not the moment to be giving the negotiators more time.









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