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Questions and answers on Labour and the Brexit negotiations

By John Mills

What has happened so far?

On 1st February 2017, about 80% of Labour MPs voted for triggering Article 50, thus helping to assure a House of Commons majority of 498 to 114. Despite a three-line whip in favour of the proposal in front of the House, 47 Labour MPs voted against and 5 did not vote – a total of about 20% of the Parliamentary Labour Party.

The Bill is now with the House of Lords. They have agreed two amendments. One guarantees the right of EU nationals already in the UK to be allowed to stay notwithstanding that no reciprocal undertaking is currently on offer from the EU 27. The other is to ensure that both the House of Commons and the Lords can have a meaningful vote on whatever the outcome of the Brexit negotiations is. Both these amendments are likely to be voted down by the House of Commons. It therefore now seems very likely that Article 50 will be triggered by the government before the end of March 2017, in line with the schedule which was proposed some time ago.

What happens next?

Once Article 50 has been activated, there is a two-year period laid down by the Lisbon Treaty during which negotiations for the UK to leave the EU will proceed. At the end of this period, the UK will automatically cease to be a member of the EU unless a further extension of time is agreed. As extending the time period requires a consensus among the EU27 which may not be forthcoming, there is no certainty that further time will be available.

This could be a major factor because there are a number of reasons why it may be difficult to get the negotiations completed and ratified by all concerned within 24 months. The EU may insist on agreement about separation being concluded before discussions about subsequent trade arrangements begin.

There are difficult issues to be resolved about how much the UK should pay the EU27 for past overspends, pension entitlements and future liabilities, which could hold up starting discussions on other matters. Trade negotiations are likely to require unanimity among the EU 27 which could well lead to hold-outs and delay.

Much will depend on the extent to which the EU27 want to try to “punish” the UK for leaving the EU, thus making agreement more difficult to secure. Finally, there are elections coming up in key EU countries with unpredictable results, so that we may not have a consistent negotiating stance taken by the EU over the two-year period.

What potential outcomes are we facing?

The government’s negotiating strategy seems to be reasonably clear. It is for the UK to leave the Single Market, the European Economic Area (EEA) and the EU’s Customs Union and then to negotiate a free trade deal covering as many goods and services as possible, perhaps with some carve-backs into the Single Market for specific sectors such as motor vehicles, aerospace, agriculture and perhaps some services.

This would be the best outcome from the point of view of both the UK and the EU and one which it seems very probable that most people in the UK would regard as satisfactory. Free Trade involves only marginal increase in paperwork for goods movements compared to what we have at the moment and the equivalence needed on product standards, safety, etc. is already in place. This would therefore provide the UK with access to the EU27 market on more or less the same terms as we have at present.

Labour should surely support the government in aiming for this outcome and, in particular, should not obstruct it being achieved.

What will happen if the negotiations stall?

The free trade outcome, however, depends on agreement on it being reached within two years or perhaps rather longer if a time extension is agreed. What will happen if, within this time period, no agreement has been secured?

It is impossible to tell for sure but it seems probable that the outcome will then be a choice between one of two options. One would be the EU27 telling the UK what it was prepared to accept and the other would be the UK walking away from any kind of trade deal with the EU. The first would probably take the form of a “take-it-or-leave-it” offer from the EU for the UK to leave the EU but to remain in the EEA.

The other would be for the UK to opt to deal in future with the EU on World Trade Organisation (WTO) terms, with no preferential arrangements in place. What would these two options look like (published tomorrow)?


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