September 22, 2017 by Paul Goldsmith
Theresa May’s appearance in the Church of Santa Maria Novello in Florence had much significance, not least because it is the place where Galileo was first accused of heresy for daring to think differently about the world. Remainers often characterise Leavers as ‘flat-earthers’, ignoring any evidence Brexit might be a mistake. Florence is the place that kicked-off the renaissance, during which city-states like the Italian city became economic powerhouses, competing and cooperating for everyone’s benefit.
May agreed that rather than standing in the way of the sort of development of EU Government Jean-Claude Juncker set out last week, it is better than the UK forge a new relationship of co-operation with the EU. The problem, as Margaret Thatcher suggested it might do in her Bruges Speech in 1988, is that the UK was always fine with being in the Common Market, but not being in Common Government. Britain’s population voted in 1975 to be in the Common Market, but Thatcher argued that if the EC (as it was at the time) continued its journey to centralisation and regulation it would damage it. Sure enough, here we are, and in 2016, Common Government was rejected in the EU referendum.
The key word was ‘shared’ – the shared history, the shared challenges they face, and the shared future they can create together. She acknowledged that the challenges the EU faces don’t have borders, so in one sense it might be odd that Britain is withdrawing, but May was at pains to point out that this in no way reduces Britain’s commitment to addressing these challenges. It is just that it is quite possible, again just as Thatcher said, to do so as a sovereign nation, willingly co-operating with the EU. May insisted that the UK might leave the EU, but it not be leaving Europe.
May then went through the progress that has been made on the three issues EU negotiator Michel Barnier has insisted need ‘sufficient progress’ before a new trade deal is even talked about. There was the Northern Irish border (no physical wall), and there were EU citizens rights (life can go on with their rights being upheld – with UK courts being able to take into account ECJ judgements, but not bound by it.
There was then an interregnum before May addressed the divorce bill.
The economic partnership – the task is to find a new partnership, starting from an unprecedented position, in that at the moment the two sides have all the same rules and regulations. The key is what to do if one side wants to make changes. It is not a stark and unimaginative choice between two mutually exclusive choices. May doesn’t believe the British people will put up with a loss of democratic control of their laws now they have voted to leave, so agreeing simply to stay in the single market, accepting rules and regulations but not influencing them won’t do. A Canadian free trade deal may be the most comprehensive the EU has signed, but it is also not appropriate as Britain is already in the EU and wants better access to its markets. So May wants a new and bespoke partnership.
This new partnership won’t involve tariffs and a race to the bottom on regulation, nor taxes. The new relationship wouldn’t involve damaging competition but would involve a set of rules governing how both sides behave in a way that defends the same values the two sides have. These two sides will be each other’s largest trading partner so the stakes are high. May said that the ECJ or the UK’s courts cannot be the sole source of dispute resolution between the two – there will have to be a shared solution.
The security relationship – May wants the quality of security cooperation to be maintained. Based upon the values they share of peace, human rights and the rule of law. May proposed a bold new strategic agreement providing a comprehensive framework for security and justice. High standards of data protection and human rights and an ongoing dialogue and joint action. The UK has the biggest defence budget, one of the largest development budgets, a strong intelligence network too. She wants an unprecedented level of engagement between the UK and the EU on this area.
The transition period – So how do we get there? Britain will leave on March 29th 2019. It will be able to make new trade deals. But neither the EU or member states can at that point implement the new arrangements the deal Britain wants. It will take time to put in place the new immigration system, but people coming to Britain will need to register. Legal ratification will take time, and people and businesses in Britain and the EU would benefit from a period of orderly implementation. She is proposing this ‘transitional period’ under the current existing structure of EU rules and regulations. It will be time-limited and dependent on the time needed to set up the systems and processes ready for leaving. There should be a clear double lock – a guarantee of an implementation period and a guarantee it will be time-limited.
Which is where the ‘divorce bill’ was turned to. In this context, May is conscious of the uncertainty for EU taxpayers over the EU budget. May doesn’t want them to think they will pay more or receive less over the full current budget period. May admits that the UK may take part in programmes promoting science, education and culture, which will require money to be contributed to the fair share of the costs involved. This is course, isn’t the ‘divorce bill’ – it is an initial offer to cover the transition period. It happens to cover what most agree to be the UK’s current commitments under the budget agreed a few years ago and lasting seven years.
A sovereign United Kingdom and a confident European Union both free to chart its own course. A new alliance standing together in the world. She believes the costs of failure to agree the right deal for both sides are great. The negotiations will be difficult, but if approached with respect from both sides, aware of the challenges, it is possible. The tone she wants to set is one of partnership, friendship and trust. So that this negotiation period isn’t remembered for the difficulties faced, but for the vision showed. Not the challenges endured, but the creativity to overcome them. Not for the end of a relationship, but a partnership began.