Post Brexit: prepare for transition to end with ‘no-deal’ in 76 days
On Saturday 17 October 2020, UK Prime Minister Boris Johnson wrote an open letter to the nation:
“Since the outset of our negotiations we were totally clear that we wanted nothing more complicated than the relationship the EU has with Canada.
One based on friendship and free trade.
But for much of the last few months the EU have refused to negotiate seriously.
Demanding the continued ability to control our legislative freedom and our fisheries in a way that is completely unacceptable to an independent country.
Which is why yesterday [16 October 2020] I decided that we should get ready for the end of the transition period on January 1st with arrangements based on the simple principles of global free trade, like Australia’s relationship.
For whatever reason the EU are not willing to offer this country, after 45 years of membership, the same terms as they did to Canada.
So now is the time to prepare.
And with you by our side we can do that with high hearts and complete confidence.
By embracing this alternative path we will prosper mightily as an independent free trading nation, controlling our own borders, our own fisheries and setting our own laws.
The UK-wide referendum vote in June 2016 returned a wafer-thin majority in favour of Brexit. Devolved regions, including Scotland – and British Overseas Territories, including Gibraltar – voted, some of them overwhelmingly, in to ‘remain’.
Over the last three-and-a-half years, the UK has struggled to come to terms with the outcome of the vote. Initial discussion focussed on how profound the split should be. A minimal split – with the UK in a similar position to other EU neighbours, such as Norway, allied within an economic but non-political ‘European Economic Area’. This was favoured by business, commerce, central and left leaning political parties. Or, whether to make a total break – leaving the UK outside: the ‘Single Market’; the ‘Customs Union’; and other forms of shared activities – such as anti-criminal, scientific, environmental and educational cooperation – the stance favoured by the ‘hard-line’ Brexit proponents. In the end, the UK has chosen to sever all ties and leave on ‘third-country’ status. This is entirely the UK’s own decision. Whenever the subject has been raised, every EU representative has consistently expressed regret – firstly about the UK decision to leave at all, and then for the conditions under which the UK has chosen to leave.
Throughout the three-and-a half year Brexit process, the EU has shown patience with the UK – given that the decision to quit the bloc is one that can only weaken the strength of Europe and one that will harm its future – directly through the need to apply ‘third-country’ conditions to all dealing with the UK from 1 January 2021, and indirectly from the lack of the leading contribution from the UK to all aspects of social, economic, financial and scientific life in Europe.
UK management of the leaving process and timetable
Following the Brexit vote, the UK began to consider the terms on which it wished to end its membership of the EU. Nine months after the referendum, Article 50 of the Consolidated EU Treaty was invoked by the UK on 29 March 2017 – triggering the minimum 2-year ‘notice period’ required by the treaty.
During the notice period, the UK remained a full and active member of the EU with all the rights and responsibilities – along with the freedoms and constraints – that it had been party to developing during its 47-year membership. It continued to be represented and participate within each of the three ‘EU pillars’: the European Council, European Parliament the European Commission.
Towards the end of the minimum notice period, instead of a leaving on 29 March 2019, an extension of two weeks was requested by the UK Government in order to give the House of Commons time to reconsider its rejection of the negotiated withdrawal conditions. The revised leaving date, 12 April 2019 – was again postponed. This required the EU to accept the UK’s request for a ‘flexible’ extension with an end-date of 31 October 2019.
Between April and October 2019, a 500 page ‘Withdrawal Agreement’ was negotiated between the UK and EU. In the end, this Agreement was subsequently ratified by the UK and European authorities during January 2020 and passed into UK Law and then formalised in an International ‘Treaty’.
The UK ended its membership of the EU at 23:00 GMT on 31 January 2020 after 47 years.
From 1 February 2020, the UK – whilst no longer a member of the EU – has been allowed to operate as if had remained an integral part of the European Union’s ‘Single Market’ or ‘Customs Union’. The ‘transition period’ established in the Withdrawal Agreement allowed the UK time to negotiate future trading terms and to prepare for leaving the Single Market and Customs Union.
The length of the Transition Period was always the UK’s to set. Any time until at least until the end of 2022 was an option – simply by naming the date. The Conservative Government in its election manifesto, however, had stated that it would deliver the end of transition in the shortest possible practical time – claiming that it had an ‘oven-ready’ deal requiring minimal negotiations and a straightforward implementation – and did not need longer.
An end to the transition period was set as 23:00 GMT on 31 December 2020 by the UK Government – and immediately enshrined in UK law, leveraging the Government’s 80 seat majority in the House of Commons. And so, the transition end-date became a constitutionally unchangeable event.
UK negotiations on terms of trade and the relationship with the EU post-transition
Between June 2016 and October 2020, a series of UK Ministers responsible for Foreign and EU affairs have held responsibility for overseeing the UK’s departure from the EU: setting the strategic direction; defining the ‘red lines’ without which there could be no deal; steering the decisions through Parliament in Westminster; negotiating the ‘Withdrawal Agreement’ with counter-parties from the EU; attempting to negotiate a ‘deal’ with Europe for the end of transition; replacing EU law and regulations with domestic equivalents – eight major Acts of Parliament and 600 ‘statutory instruments’ – and; preparing civil service, UK businesses and citizens for the end of the ‘4 freedoms’ – free movement of goods, services capital and people.
The optimism maintained by successive Ministers since 2016 is little short of heroic. The success that the same Ministers have achieved in securing and preparing for a ‘smooth’ transition is a long way short of heroic…and include: David Davies, Dominic Raab, Stephen Barclay, David Jones, the Baroness Anelay of St Johns, the Lord Callanan, the Lord Bridges of Headley, Steve Baker, Suella Braverman, Chris Heaton-Harris, Kwasi Kwarteng, James Cleverley, Robin Walker, and James Duddridge.
The European Commission has been directed and led by European Commission Chief Negotiator, Michel Barnier, throughout.
The EU set out its brief to its negotiating team in February 2020 – and the UK a month later.
The UK’s ambition was for a trade deal on the most favourable terms in place with any third nation – with some additional agreements on recognition of each other’s regulatory standards. David Davies spoke of it as “Canada + +”. The EU never acknowledged that this could or would be politically or operationally feasible.
Ending transition without a deal for trade in goods in place means hard borders, trading under WTO terms with tariffs and quotas, and no automatic recognition and acceptance of UK qualifications, certification, or standards. Further, without a deal for trade in goods as a foundation, it is all but impossible to imagine agreement on services, finance, education, scientific and anti-crime cooperation.
During the early years of negotiations, the EU published a guidelines for smoothing some of transition issues – especially those needing time to make adjustments – for instance in aerospace, the airline and haulage industries. With the UK initial vacillation on what it wanted, compounded by the series of arbitrary delays, and the final insistence by the UK on its red lines for the fishing industry and non-acceptance of the EU rules on non-intervention and government subsidies in competitive industry.
The concessions – unilaterally offered by the EU to make UK’s leaving easier – were not indefinite. Timed to run from the UK’s notice of leaving in 2019, they had fixed end dates – depending on the complexity of achieving a smooth transition – after 3-6 months.
It is significant that EU attitudes and patience with the UK have hardened. By the end of transition on 31 December 2020 all the concessions have ‘expired’ – and have not been renewed by the EU. The ‘cliff edge’ so feared by Theresa May is looming. It is almost incredulous that the UK Government is deaf to the concerns raised by 70 business groups united with the voices of trades unions and academic experts alike.
How will history judge the hard-line Brexiteers? Perhaps, ‘be careful what you wish for’.