The authoritative source for independent research on UK-EU relations

12 Jul 2018

Politics and Society

Relationship with the EU

Although this report is focused on the policy choices the government faces, it is essential, first, to recognize the political reality within which those decisions must be made. Both in Brussels and at home, the government is confronting difficult negotiations over how best to move the Brexit process forward.

One difficulty the Prime Minister faces is that several sets of negotiations with the EU are taking place simultaneously. The two sides are wrapping up talks on the old relationship (albeit that the Irish border, which focuses on the future, is included with the ‘Article 50’ issues), negotiating how the transition period will work and beginning discussions on the future. The first two sets of talks ideally need to be concluded by October and by the end of the year at the very latest.

The deal needs to be signed off by the British Parliament, the European Parliament, and the European Council before the exit date of 29 March 2019. Should this work out smoothly (which is by no means certain), the transition period is currently set to run until the end of 2020.

By this time, the second phase of talks will have to be completed. It looks increasingly like the UK will need this period to be extended further. Regardless, there is a desperate need to crack on with negotiations.

The negotiating deadlock

Brexit boils down, in effect, to a battle between two different approaches. Theresa May declared at Lancaster House in January 2017 that it “is not the means that matter, but the ends”.

The UK approach to the EU is transactional, stressing the substantive importance of maintaining cooperation. The EU, for its part, is more procedurally minded. Process, rules and precedent matter enormously when trying to accommodate the interests of a diverse group of member states.

For the British government, the talks are—as the Prime Minister said—all about outcomes. Ministers routinely emphasize the breadth and depth of UK-EU collaboration, ranging from trade in goods to cooperative approaches to extradition; joint military co-operation, to the role of the City of London. For them, the UK and the EU simply have a mutual interest in continuing their close co-operation.

Michel Barnier, acting on instructions from the heads of the governments of the EU27, has made clear that any agreement must “respect the institutional architecture of the integrity of the European Union [sic]”.

What London sees as mutual interests are viewed in Brussels as an attempt to maintain rights while shedding obligations. Barnier’s whole approach—summarized in one infamous graphic—is predicated on what the British government sees as a stark and unimaginative choice: the UK can pick from existing models.

There will be no special treatment, however close the relationship. The UK, for its part, wants a deep and comprehensive relationship going beyond anything the EU
currently enjoys with other ‘third countries’. But while the EU is happy to have a relationship of (formal) equality, as with Canada, the deep relationships it has fostered with neighbours such as Ukraine or Norway have tended to rest on the latter becoming rule-takers.

And here’s the rub. The UK wants a special relationship, but one that leaves it free of EU-imposed constraints. Co-operation must take place within the framework of the red lines laid down by the Prime Minister: ending the jurisdiction of the ECJ, ending free movement, leaving the customs union and not paying “huge sums” into the EU budget. This has been a constant refrain since the Conservative Party conference of 2016 and there has been little sign of change, at least publicly.

Little surprise, then, that the word ‘creativity’ features so frequently in prime ministerial speeches. On security, Theresa May exhorted her audience at the Munich Security Conference to do “whatever is most practical and pragmatic” and demonstrate “real creativity and ambition” to ensure continued data sharing.

Some months earlier, in Florence, she had spoken of the danger of a “stark and unimaginative choice” between Norwegian-style membership of the European Economic Area and a more traditional
free-trade agreement.

However, the UK should not kid itself. Certainly, EU officials insist that, should the UK change its red lines, they would make a different offer. Yet different red lines would merely mean a wider range of choices between existing options for ‘third country‘ relationships with the EU. What it would not imply is that the UK could secure the bespoke—‘creative’—deal it has set its sights on.

In other words, the UK is not considered a former member with special privileges, but a third country with a choice to make between the closeness of the relationship and the level of autonomy.

This approach was best summed up by Barnier himself: “What is sometimes hard for the British to understand is that we don’t want to negotiate, and we don’t want to compromise on who we are. They want to leave, that’s their choice.”

Bluntly, the deal Theresa May has been attempting to achieve over the past 18 months is not on offer. Her Mansion House speech in March this year essentially listed yet again the bunch of cherries she would like to pick: UK courts considering ECJ judgments “where appropriate”; respect to the EU courts in those areas where the UK decided to stay in specific agencies; and comprehensive mutual recognition. Stubbornly unanswered to date has been the question of how these objectives can be achieved in practice.

The politics of Brexit in the UK

At some point, Mrs May (or a successor) is going to have to either change (or ‘pink’, in the jargon) those red lines, accept a vastly inferior deal to the one she’s been selling or walk away altogether.

And each option carries its own dangers. After all, aside from the negotiations with Brussels, she is engaged in (at least) three parallel domestic debates over Brexit, each made more complex by her weak political position.

The first is within her own government. Mrs May isn’t keen on sacking ministers, even when they publicly undermine her. So, she has chosen to try to appease the various Brexit factions via the only possible mechanism: studied ambiguity.

This has led to a revitalization of cabinet government, albeit by accident rather than design. The paradox is this has happened at the same time as collective cabinet responsibility has all but disappeared.

The cabinet’s Brexit subcommittee makes the big decisions on negotiations, and skews towards those advocating a consolidation of the government’s red lines. These internal negotiations are increasingly conducted by megaphone diplomacy, or via journalists’ dictaphones. But any meaningful agreement will have to be thrashed out within the cabinet itself. At the time of writing, the Prime Minister is due to hold another ‘peace summit’ to secure unity around the white paper.

That crunch talks are being demanded most publicly, and vocally, by David Davis is an indication that present cabinet dynamics suggest compromise with the EU. The Prime Minister is also conducting a running battle with her backbenches and the two wings of her party. On one side is the European Research Group, numbering over sixty backbench MPs and led by Jacob Rees-Mogg. It is an open question whether this grouping will accept a direction of travel that precludes leaving the customs and regulatory orbit of the EU.

On the other are Europhile Conservatives, numbering between a dozen and twenty MPs. Mooted rebellions from this grouping have so far largely dissolved on impact. This has served to undermine claims that they could make common cause with Labour in resisting any final withdrawal agreement. It may be that these rebels have the numbers to force the government towards an explicit customs union with the EU. Whether this plays out as a government defeat on the floor of the House of Commons on the Trade Bill, just before Parliament breaks for summer, remains to be seen.

On the other side of the Commons is a Labour Party that is itself divided at least three ways on Brexit. A small band of MPs who oppose any deal that does not end freedom of movement wield disproportionate influence. A vocal group of backbenchers favour a soft Brexit or, in some cases, a reversal of Brexit. Finally, a more pragmatic group is associated with the party’s Brexit lead, Sir Keir Starmer.

While the party’s position thus remains fundamentally ambiguous, Labour’s principal aim is the destabilization of the government, rather than support for a coherent alternative negotiating stance.

Less immediately, but equally importantly, the government must achieve support for its negotiation outcomes across the UK’s devolved administrations, as Nicola McEwen sets out in this report. Many of the policy areas of the UK-EU relationship most dependent on the outcome of trade negotiations— for example agricultural tariffs and fisheries quotas—are also areas of acute interest to the devolved administrations. Their future is thus tied up not only with negotiations in Brussels, or within the government, but also with Belfast, Cardiff and Edinburgh.

The white paper: squaring the circle?

Enter the government’s white paper. Trailed by David Davis as providing “detailed, ambitious and precise explanations of our positions”, it is an opportunity to square the circles the British government has helped construct and to answer the many questions that remain unresolved.

The government’s previous stab at a Brexit white paper consisted of a series of highlights from the Lancaster House speech. Less a policy position than a greatest hits collection. We really do not need a Volume 2.

Most importantly, though, if the government’s new white paper is to achieve anything, the Prime Minister has to do something she has proven spectacularly reluctant to do to date: fully recognize the consequences of the choices she has made.

That ending free movement means leaving the single market, with little if any possibility of partial membership thereof; that an independent trade policy means either a border on the island of Ireland or in the Irish Sea; that no ECJ involvement means regulatory divergence and greater barriers to trade; and crucially, that some members of her own party, indeed her own government, are going to be disappointed with whatever choices are made. Time is running out. Will the Prime Minister be bold enough, finally, to pin her colours to the mast?

By Anand Menon, Director, Alan Wager and Matt Bevington, researchers at The UK in a Changing Europe. This piece originally featured in our ‘The Brexit white paper: what it must address.’


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