Now is not the time for a ‘least worst’ Brexit – it’s time for a referendum on Brexit itself

There are 340 days to go until the UK leaves the EU.

The time remaining for the UK and EU to negotiate a withdrawal agreement is even less than that.

Domestic legislation still needs to be passed to retain EU law in national law. Time will also be needed to give domestic legal effect to any withdrawal agreement.

Time is short even to do what the UK Government wants to do, namely to leave the EU, its Single Market and Customs Union, and instead negotiate with the EU a new relationship based on a free trade agreement.

And yet we still seem to be talking about alternative options. Indeed, the term “least worst Brexit” seems to be gaining some currency as politicians and others wake up to the reality of what the UK intends to give up from its EU membership as well as all the difficulties and limitations associated with what the UK Government aspires to achieve.

A prime example of these attempts to temper the effects of Brexit is the idea of remaining in a customs union. The focal point for this debate is Parliament, with both the Lords and the Commons seeking to steer the Government towards a customs union.

For the Commons, a debate will be held on Thursday on a motionthat calls on the Government ‘to include as an objective in negotiations on the future relationship between the UK and the EU the establishment of an effective customs union’ between the UK and the EU. It will be a debate with no immediate legal consequences and the reference to a ‘future relationship’ may look beyond the immediacy of current negotiations. The Lords, however, have gone further in amending the European Union (Withdrawal) Billto make the repeal of the European Communities Act 1972 conditional on Ministers laying before both Houses of Parliament a statement concerning the steps taken in negotiations under Article 50(2) to negotiate an arrangement to continue participating in a customs union with the EU.

In response to these moves, the UK Government has today repeated its position that the UK will be leaving the customs union. So what should we make of attempts by Parliament to push for a least worst Brexit?

The first thing to be clear about is that the UK Government is not negotiating in Brussels according to a mandate that Parliament has set for the UK Government in advance of negotiations. Our constitutional set up is instead one in which Parliament’s role is to legislate to implement international agreements and, in more recent times, to signal its approval of such agreements prior to ratification so as not to lead to the circumstance in which a Government is confronted with a Parliament unwilling to legislate for a deal that it does not like. We are now 15 months on from the Lancaster House speech in which the UK Government set out what sort of Brexit it wanted. We are also more than a year into the negotiations that will lead to the UK’s withdrawal from the EU with likely less than half a year left to finalise the deal. This hardly seems the moment for Parliament to decide it wants to instruct the UK Government on what it should be negotiating.

Secondly, Parliament cannot simply legislate for a customs union. The UK is leaving the EU and any future relationship can only be negotiated between the UK Government and the EU. The Lords amendment to the Withdrawal Bill does recognise that in the sense that it only demands that Parliament is informed about those negotiations. As such it is also an amendment whose condition is easily satisfied. After all, ministers may simply state to Parliament that ministers have taken no steps to negotiate a customs union as it is not government policy to have one with the EU.

Given that the Government is clear about what it wants, the only real option for Parliament is to bring the Government down one way or another. And if this Government is gone, are we really talking about forging a least worst Brexit or something else all together?

Because if there is a strong enough political momentum to reject the Government’s Brexit strategy and to argue instead for a customs union and likely also the Single Market, then perhaps there is political momentum to push for retention of EU membership itself.

As I argued in Brexit Timeand as I have been suggesting here, Brexit is a choice in time and of time. In the time that remains before the UK leaves the EU, I think the choice is not between the UK Government’s form of Brexit and a least worse version. It is between what the Government is seeking or the UK remaining in the EU.

So I have come to a conclusion. There should be a referendum on the question whether the UK leaves the EU on the terms that the UK Government negotiates, or the UK remains a Member State of the European Union. There is no time for a third way option and all the chatter that suggests that such an option might be viable is, to my mind, a distraction.

I fully understand those that believe another referendum could be divisive. But to be clear this would be a referendum on a different proposition. And it seems to me that people on both sides of this argument need to have the courage of their convictions. Either the Government is right to push for an end to EU membership on the terms it negotiates, or it is wrong and the status quo should prevail. As I have also argued on this blog, if there is to be another referendum, time is limited.

This is not the time for Parliament to try and find a middle ground. It is time for Parliament to allow the electorate to make a decisive choice. If Parliament wants to legislate for anything it should be to for a referendum.

A Customs Union Without a Single Market : Is Corbyn’s Position Credible?

In speeches this week, the Leader of the Opposition and the Prime Minister are setting out their visions for the UK’s future relationship with the EU. Things got underway today with Labour’s Jeremy Corbyn announcing that Labour would press for the UK to remain in the Single Market and a Customs Union with the EU through a transitional period, with the possibility of concluding a permanent Customs Union a “viable option”, provided the UK could have an “appropriate say” in future EU trade deals with non-Member States.

The political intention is to create clear water between a Labour Brexit and a Conservative Brexit. Under a Conservative Government, the UK will leave the EU, its Single Market and its Customs Union at the end of any transitional period. The Conservatives see this as vital to deliver on its promise to regain control over regulatory policy and trade policy once the UK leaves the EU. As part of its “Global Britain” strategy, the Government wants to be free to enter into free trade arrangements not just with the EU but with other non-EU states. Labour, by contrast, has decided that the pursuit of an independent trade policy is not something that makes the electorate vote one way rather than another. Instead, it is content for the UK to have tariff-free trade with the EU through a Customs Union. Crucially, and despite the insistence of some parts of the Labour Party, the Labour leader has not committed to keeping the UK in the Single Market after the end of the transitional period. This is for two reasons. Firstly, and despite contrary analysis even from Labour supporters, the Labour Leader continues to believe that EU competition and state aid rules would prevent a future Labour Government carrying out its economic programme. Secondly, and despite the warm words in his speech about EU nationals, the Labour Leader is not willing to accept free movement of people in return for free movement of goods and services.

So what might a post-Brexit Customs Union between the UK and the EU look like?

In certain respects, the Labour Party’s proposal would take the UK back to its early membership of the EEC. When the UK joined the EEC in 1973 it became part of the Customs Union which had been completed among the six founding states in July 1968. Under transitional arrangements, the UK, Ireland and Denmark adopted the EEC’s Common Customs Tariff and progressively eliminated any remaining customs duties. The Single Market as we know it now was still in its early development. While rulings of the Court of Justice were being used to remove non-tariff barriers on a case by case basis, it wasn’t until the Internal Market programme of the mid-1980s – a programme backed by the UK – that major steps were taken to advance EU harmonization efforts to converge the regulatory policies of EU Member States. But the “1992” programme was largely focused on trade in goods, with non-tariff barriers in services being slow to change. Labour mobility was also relatively low. In other words, a Customs Union without a Single Market would turn the clock back to the 1970s with the limits on cross-border market access arising not from customs but from pervasive non-tariff barriers in both goods and services markets.

Of course, the crucial difference between then and now is that the progress which has been achieved in eliminating non-tariff barriers does not automatically disappear as soon as the UK leaves the EU. Indeed, from a domestic regulatory perspective, the European Union (Withdrawal) Bill aims to domesticate all existing EU regulatory requirements as a matter of UK law. But two things are not clear from Labour’s proposals today. Firstly, how will the current system of rules be made to operate if the UK is not part of the wider European administrative and judicial landscape which makes existing Single Market rules actually work in practice? Secondly, to what extent can or will UK regulatory policy diverge under a Labour Government?

In his speech, Jeremy Corbyn referred to “staying close” to the EU and to continue to support EU agencies with regulatory tasks including the European Food Safety Authority and the European Chemicals Agency. But even the three European Free Trade Association (EFTA) states that join in the Single Market through the European Economic Area agreement have limited direct participation in the work of European agencies. Their representatives do not form part of the management boards of the agencies. The UK could hardly get a better deal on EU agencies while staying outside the Single Market than Norway which participates in the Single Market.

The Labour leader was also keen to assert that his proposals on a Customs Union would not see a hard border on the island of Ireland. However, it is regulatory alignment that is as much an issue for the border in Ireland as the elimination of tariffs. Arguably there is more reason to have a frontier control to ensure the physical security of the European market than there is to ensure the collection of tariffs on the import of goods onto the island of Ireland. Again, it is unclear why Labour is focusing on a Customs Union at the expense of the continued elimination of non-tariff barriers to trade through the Single Market.

If we step back from the specifics of Brexit and look at the wider international landscape, the vast majority of regional trade agreements that are notified to the World Trade Organization are regional Free Trade deals rather than Customs Unions. These Free Trade arrangements do the same work in eliminating tariffs in trade in goods between participating members but leave those states free to control their trade policies with non-members. As tariffs are reduced, it becomes more and more obvious that the big issues are around regulatory alignment and regulatory cooperation. Pursuit of a Customs Union on its own is simply not a strategy pursued by the world’s major trading nations.

In the end it is difficult to see how a Labour Government can credibly pursue a UK-EU Customs Union without at the same time having an arrangement with the EU on alignment of UK regulatory policy. After all, there is little point giving non-UK/EU goods the benefit of free circulation in a UK/EU market if in practice, non-tariff barriers impede their cross-border movement. Indeed, the success of the EU’s external trade policy – the free trade agreements with which a Labour Government would be aligned in a UK-EU Customs Union – is wholly predicated on the capacity of those goods to move freely in the market once they comply with common EU regulatory norms.

Today’s speech is more about trying to define a Labour Brexit that is different from a Conservative Brexit. In that respect there is a clear divide between a UK in a Customs Union and a UK that pursues a Free Trade model. But neither approach solves the border issues on the island of Ireland. And a Customs Union without barrier-free movements of goods and services is just a description of what a Labour Government under Harold Wilson inherited in 1974.  If Labour is to avoid accusations that it is trying to turn back time while lip-syncing its way through difficult discussions about the Single Market it is going to have to do more than pin its hopes on a UK-EU Customs Union.