The authoritative source for independent research on UK-EU relations

25 Jul 2018

UK-EU Relations

The recent White Paper has many rough edges, and seems to have been assembled by a process of ransacking the many existing agreements which the EU has with third countries in order to find bits that best suit the UK’s aspirations.

Its shape, however, is recognisably one which nudges the UK towards closer alignment with the EU post-Brexit than Mrs May had previously seemed prepared to concede.

The natural consequence of this shift towards a relatively close relationship with the EU post-Brexit is subsequent further easing towards a relatively dense multilateral framework within which to manage the UK-EU future relationship.

The incremental shifts would likely emerge both before and after March 2019: the key theme is rejection of the unilateral impulse that animates much of the crude Brexit vision.

Hence the resignations of David Davis and Boris Johnson and several junior Ministers, hence the fury of right-wing backbenchers. This led to the chaotic scenes in the House of Commons of 16 and 17 July.

The Taxation (Cross-border) Trade Bill had its Third Reading on 16 July. The Bill’s purpose is to lay the foundation for developing a customs regime post-Brexit, albeit that much detail will depend on the outcome of the negotiations with the EU. Four amendments were proposed, all of them associated with the European Research Group on the right-wing of the Conservative Parliamentary party.

Predictions that the government might find to its dismay that these amendments were approved were confounded when the government agreed that it would support the amendments.

They require, in summary, that primary legislation be required should a customs union between the UK and the EU be agreed; that the collection of tariffs by the UK on behalf of the EU shall be excluded unless reciprocity follows; that the UK VAT regime be separate from the EU’s; and that it be unlawful to enter into arrangements under which Northern Ireland forms part of a separate customs territory to Great Britain. All were duly passed, the second and third by just three votes.

The Trade Bill had its Third Reading the next day, 17 July. The Bill’s purpose is to provide a basis to build a future trade policy for the UK post-Brexit. It contains provisions of intricate detail, but the first priority will be to address the implementation of agreements which correspond to the EU’s current free trade and other agreements, the benefits of which are immediately lost to the UK after Brexit.

An amendment designed to require the government to negotiate a customs union with the EU post-Brexit should an agreement delivering a frictionless free trade area for goods not be secured by 21 January 2019 was defeated by six votes.

An amendment designed to require pursuit of an agreement that would enable the UK to participate in the European medicines regulatory network post-Brexit was accepted.

How serious are these changes? That is a question that needs to be answered on three levels.

One, in varying degrees they subvert the proposals agreed at Chequers and found in the White Paper. The exclusion of the collection of tariffs by the UK on behalf of the EU unless reciprocity prevails clearly contradicts Mrs May’s carefully crafted plans. This was doubtless its precise intent.

The enforced separation of EU and UK VAT regimes militates against the trend towards regulatory convergence which animates the White Paper. By contrast the amendment aimed at enabling UK participation in the European medicines regulatory network is more-or-less in line with the thrust of the White Paper, albeit that, if converted into practical detail, it will stretch still tauter the tension between the UK’s status as a third country and its readiness to accept the institutional disciplines of EU networks, including the authority of the Court of Justice.

Two, the scope of the subversion is of varying long-term significance. The collection of tariffs by the UK on behalf of the EU, whether on the basis of reciprocity or not, was never likely to find favour with the EU, so its suppression at this stage simply anticipates its likely later suppression by the EU.

As quickly as 20 July Michel Barnier had expressed his own scepticism, and so the need for deeper and more realistic discussion on matters associated with customs remains unaffected by the UK’s internal twisting.

Problems associated with the Irish border are highlighted because once these Bills become Acts legislation will direct that customs arrangements shall not cause any separation between the four elements of the UK.

This challenges the viability of the backstop specific to Northern Ireland to which the UK agreed last December. But it is not news that this is the most awkward element in the whole delicate process of pinning down a satisfactory Withdrawal Agreement, and the events of the last two weeks do not alter that.

Three, in formal constitutional terms, these events may not matter at all. Were Mrs May to agree a deal with the EU that violated the dictates of these measures, and were then to secure the passage of primary legislation which repealed any legislative blockages and authorised the acceptance of the terms of that deal, then there could be no constitutional objection.

This is the savage simplicity of the rule of Parliamentary sovereignty – what is done one day may be undone the next. What this latest outbreak of Parliamentary hostilities demonstrates – not least, but not only, to the EU – is how politically difficult it will be for Mrs May to secure the necessary support for such primary legislation.

And this brutal fact of Parliamentary obstruction is the abiding problem. Allowing the British people to vote Leave without ever defining precisely what that meant was a strategically brilliant way to win a referendum, but it has left us, more than two years on, still squabbling over what Leave should mean. Several possible models of Brexit are in the air, some likely to be acceptable to the EU, others not.

The only one that might feasibly be accepted by a majority of MPs is one that is anathema to the leaders of both major parties – a shift to the “Norway model”, or something akin to it. All other models seem to lack a Parliamentary majority, but the alternative, leaving without a deal at all and bathing in economic ruin, is probably the most unpopular of all among MPs.

Mrs May’s reputed hero, Geoffrey Boycott, often appeared to take grim satisfaction from the demise of his batting partners, focusing instead on his personal achievements. Mrs May is running out of partners too. Grim – but not satisfying.

This is why, if she cannot secure Parliamentary support for a deal and yet wishes to escape the noose of no deal, she may need to look beyond Parliament, to the voters in an election or a referendum.

By Stephen Weatherill, Jacques Delors Professor of European Law at Oxford University.


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