Chequers deal is attempt at a hybrid that Britain could accept

It’s getting serious. And the stakes could not be higher. If the negotiations fail, there is no status quo to fall back on.

Not reaching an accommodation that both sides can live with will lead to the worst of all possible Brexits, for all sides. The economic costs might fall most heavily on the UK, but the political costs will be spread far wider.

So where have we got to? To a Chequers deal that seems to have annoyed every conceivable audience, foreign and domestic.

It is disliked even in the prime minister’s own party, by both Leavers and Remainers, albeit for different reasons. In fact, in this sense alone it is a remarkable document, having seemingly united all sides in opposition.

Yet step back and consider what the deal struck at the prime minister’s country residence represents. There is huge political pressure on Theresa May, restricting her freedom to make concessions.

Seen from this perspective, the Chequers paper was a brave gambit, and it cost her a significant amount of political blood to achieve.

She has already gone too far for a loud minority of Conservative MPs. Any further concessions could easily mean a wider rebellion and, possibly, a challenge against her leadership. No-one can predict how that would turn out, but the EU would likely face a more, not less, combative UK.

On top of which, the government reckons Chequers represents a great deal for the EU. It promises the continuation of trade as now in areas where EU does well.

The EU would maintain the current terms on goods, where it enjoyed a £95 billion surplus with Britain last year. But it would also reduce Britain’s access to the EU in services, where the EU has a £22 billion deficit.

And, no less important, the white paper underlines the commitment of Britain to avoiding a border in Ireland. Michel Barnier has, of course, argued recently that it represents an attempt to achieve some kind of comparative advantage.

Personally, I was struck by the fact that the need to solve the Irish issue was now shaping government policy. Rather than seeking special exemptions for areas of economic advantage — financial services, for instance — the government had focused on ensuring frictionless trade in those areas necessary to avoid the need for an intra-Irish border first and foremost.

I am not for a moment suggesting the UK has handled the Brexit process well or has been a reliable negotiating partner. Quite the contrary.

The language, the instability, the absence of clear proposals have all blighted the period since Theresa May sent her Article 50 letter to Donald Tusk in March last year. And it is far from clear that Chequers will survive the parliamentary debates to come.

Nevertheless, Chequers represents a genuine attempt to identify what is required from Brexit: the kind of hybrid outcome which Britain could accept.

The EEA option, however appealing economically, would not be politically acceptable for this prime minister or her party.

As for something along the lines of “Canada”, it would mean a serious economic hit and implementing the “Irish backstop” — that is to say creating new barriers between Great Britain and Northern Ireland.

And it’s worth pausing to underline how unacceptable this is in Britain. The notion that part of the United Kingdom would be subject to laws over which our parliament has no say is anathema to many MPs — and this is not a problem confined to the Democratic Unionist Party.

Simply put, the integrity of the United Kingdom will always be more important to British politicians than the integrity of the single market.

Which brings us back the need for a hybrid solution that goes beyond the commission’s mantra of “in the single market or out of it”. For all that the idea of the “integrity of the single market” has taken on a theological quality in the Brexit debate, we should remember two things.

First, even within the EU itself, the four freedoms are not only divisible, but divided. Second, this “integrity” is obviously negotiable — as the cases of Switzerland and Ukraine illustrate all too clearly — for non-member states.

Nor, would the kind of “blind” or “fudged” Brexit increasingly discussed be the answer to the dilemma. We all hear talk about a vague political declaration that will not bind the member states.

And it’s not just Brexiters who would baulk at the lack of good faith this approach implies. It would also confirm for the Labour front bench, hardly Europhiles themselves, many of their worst suspicions about the European project.

And, finally, why would Britain accept vagueness on the Brexit issues it cares about — the terms of a future trade deal — while being forced to accept excruciating specificity when it comes to the Irish backstop?

So what if the talks fail, or if they culminate in a deal that imposes real economic pain on the UK? Yes, the much vaunted “integrity” of the single market will be preserved, but at what price? First, the economic pain would also be felt in the EU, albeit not as severely as in the UK.

More importantly, the acrimony that would result would damage UK-EU relations for years to come. Theresa May might have offered an unconditional commitment to European security, but it’s hard to imagine the British people feeling the same way.

It is impossible to discount that, in a context where politicians are blaming the EU for a damaging outcome, populist politics would emerge strengthened and the British commitment to the security of the West would be reduced.

And remember, the UK is one of the few member states that meets Nato’s 2 per cent of GDP defence spending target and one of only two EU countries that spends 20 per cent of defence resources on equipment.

If Europe is serious about achieving “strategic autonomy” in this most uncertain of times, it can only do so with the UK. Are abstract and empirically unsubstantiated principles about the integrity of the single market worth risking that?

By Professor Anand Menon, director of The UK in a Changing Europe. This piece originally featured in Times Red Box.

Disclaimer:
The views expressed in this analysis post are those of the authors and not necessarily those of the UK in a Changing Europe initiative.

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