Later this week, there will be a critical Brexit meeting at Chequers. There needs to be. Even though we are not much more than a year away from the Brexit date, key aspects of the UK’s situation remain unclear. One of the most vexed issues concerns the so-called “transition period”, which is due to come into force after March 2019 and to last “about two years”.
“Transition” sounds like such a reasonable thing. It connotes gradualism, moderation and the capacity to make adjustments in good time. Indeed, that is exactly what it could be. But, in reality, the transition period has appeared at the centre of negotiations about Brexit for mainly political, and otherwise unnecessary, reasons. Agreeing to the transition has been the route to compromise between Leavers and Remainers. For Remainers, it has been a way of not only postponing the evil day, but increasing the chances that, either because of opposition from the public, a vote in Parliament, a second referendum, or a general election, Brexit could be overturned.
Of course, the proponents of transition argue that without it the UK would face a “cliff-edge”. In reality, there is no cliff-edge. In any case, for the transition period to be of any use in avoiding what people may fear to be a cliff-edge, the ultimate destination needs to be clear and businesses need to be able to prepare for it. Otherwise, the transition period becomes the “delay period” and the cliff-edge is merely postponed for the length of the so-called transition.
Giving in to timidity and procrastination might be understandable and forgivable if the transition period were costless, but it isn’t. Far from it. The UK Government has indicated that it is prepared to hand over a very large sum of money, of the order of £40bn, to secure some sort of free trade agreement (FTA) with the EU, to which the transition period is the gateway.
Moreover, it was always on the cards that any transition period would involve restrictions on the UK’s freedom of action. Recently, Michel Barnier, the EU‘s chief negotiator, has made it clear that the UK would have to implement every new EU law while having no say or vote upon them, and simultaneously being unable to conclude trade agreements with other countries.
An even more serious danger is that, in order to secure a trading agreement, the Government will be prepared to make long-term concessions in relation to trade policy and regulatory alignment, thereby hamstringing the British economy and preventing any benefits from Brexit.
Admittedly, the EU argues that, from a legal point of view, it is impossible for it to conclude an FTA with the UK until we have formally left the union.
The EU is a remarkable animal. It falls back upon the law whenever it suits and, whenever it doesn’t, it finds a way around. With regard to the proposed EU constitution, where was it written in any EU legal document that the Irish or the Danes should be compelled to carry on voting until they delivered the verdict that the establishment wanted? Even if we accept this legal constraint, this does not mean that the UK is bound to put up with an extended limbo period, half in and half out of the EU. It should be possible to construct a stripped down and simplified FTA which could be implemented very quickly.
To read Roger Bootle’s piece for the Daily Telegraph in full, click here.