EU Referendum


EU Referendum: Flexcit – not as we know it, Jim


20/06/2016




The purpose of Flexcit is to give reassurance to undecided voters, by showing that leaving the EU can be a safe, measured process. It need not have any economic fall-out.

As such, this exit plan does not seek to instruct government. It does not pretend to be actionable policy. It simply conveys a structured argument that says that, if it so desired, the Government can make leaving the EU relatively painless and ultimately very profitable. There is no "leap in the dark".

However, after Vote Leave peremptorily rejected this plan, and after Arron Banks took it on board and then distanced himself from it, it was never going to be easy to get it in front of the public. This is made more difficult by the legacy media's determination to ignore it.

Thus, we really appreciate attempts by supporters to bring Flexcit to the forefront, and have done our best to make the plan accessible. But anything which ends up with Flexcit being misrepresented or distorted, does not do us any favours. The crucial thing is that the plan is a package. It stands or falls as a whole. It is more than one part.

Problematically, though, we are seeing particular aspects of the plan being over-emphasised by the Telegraph in its recent article (above). Doing this and neglecting other parts is to present something which easily be knocked down by our critics. This straw man approach then allows those critics to claim they have demolished the plan, defeating the purpose of our developing it in the first place.

That this is the case has been partly aided by Roland Smith of the Adam Smith Institute. The Telegraph has him discussing a "staged exit from the EU" which appears to be Flexcit but is not. 

Smith initially presented a liberal case for leaving the EU on the Adam Smith website, with a move back into Efta and the EEA", part of a staged process. This was fair enough but, in a series of steps culminating in the Telegraph article, Flexcit has become more and more closely associated with the Norway option.

The point here, of course, is that Flexcit, very specifically, is NOT the Norway option. Phase One of our plan gives three choices, of which Norway is only one. There are two fallbacks, each devised to allow for the eventuality that Britain might fail to rejoin Efta – a prerequisite of the Norway option – or that it might be blocked from continued participation in the EEA.

With no reference to the fallbacks, the Telegraph mistakenly asserts that there is a "larger risk to the Flexcit plan", coming in the form of potential international opposition. Britain's re-entry into EFTA. This we are told "would require the unanimous approval of its existing members". And then, having secured that membership, the UK would "need all 27 of the EU's remaining nations to sign off on it entering the EEA".

Our concern here is that we have gone to extraordinary lengths to avoid our plan being dismissed on these grounds. Failure to join either Efta or the EEA may be a risk to the Norway option, but it is not a problem for Flexcit. If the worst happens, we simply move on to one of the fallbacks – their availability being an absolutely integral part of the plan.

Dwelling on the issue of "entering the EEA", it should be said that the argument has progressed, and in leaps and bounds. Here, the specific point is that the UK is already in the EEA. Thus, it is not a question of "entering the EEA" but of whether we can continue as part of it, having transitioned from the EU to Efta. This issue is discussed at length in Flexcit.

Latterly, we see the transition as one of treaty continuity. The 27 EU Member States (and the three Efta states) can agree that our participation can continue, by consensus. There is no need for each Member State to sign off on the process, making life a whole lot easier.

Further, we are in a much stronger position than might at first appear. The EEA Agreement as between the EU and Efta states relies on the participation of the Efta states. Without their participation, there is no agreement. If the EU refused to agree an orderly transition, the Efta states could pull out, collapsing the agreement and putting the EU's neighbourhood policy in disarray.

That would also have some disadvantages for the Efta states, but they would be able to measure these against the advantage of being part of the world's fourth-largest trade bloc. It would be a matter of who blinks first.

On this issue alone, then, the Telegraph seriously misrepresents Flexcit. But the error is then compounded by speculation that "France could put up a fight". Smith is cited as saying: "There are a number of people in the French political establishment, who would try to dig in and just not do anything", then suggesting that: "Paris could attempt to block a deal outright". But it could not. We have the fallbacks which will prevent this from happening

Failing to mention this, the Telegraph then speculates that, "if opposition proved insurmountable, Westminster would need a backup plan". Ignoring the fact that Flexcit has not one but two backups, we then get a dissertation on the "clean break" option, doing without any trade deal, and instead relying on the WTO option. This is exactly what we wanted to avoid. It creates uncertainty rather than resolving it.

Earlier, we see the Efta/EEA option described as one which, "would result in powers over agriculture, fishing, justice, security, and others being returned to the UK". These alone will "be enough to be getting on with, bearing in mind that we have spent 43 years outsourcing all our capacity in these areas".

Again, this understates the nature of Flexcit. While we will actually be repatriating most of the non-EEA acquis, we have to bear in mind that agricultural products – as well as fisheries products – form a major part of our trade with the EU. Therefore, to maintain regulatory convergence and support equivalence, we will need pro temp to attach both the CAP and the CFP to the EEA, with a country-specific protocol.

With other programmes and continued participation in number of EU agencies, this makes for an EEA-plus solution. It is a "British solution" not the Norway option.

Another area of error is the detail on Liechtenstein in relation to restrictions on free movement, which the Telegraph manages to get spectacularly wrong. Brussels, we are told, granted the principality special status in 1994 under Protocol 15 in the EEA agreement, allowing it to limit the number of new residents for a period of four years. And now, we are told, this agreement remains in place today, and is reviewed on a rolling five-year basis.

In fact, Protocol 15 only dealt with transitional arrangements. As we point out here and here, the current exemption from freedom of movement provisions arises first from Liechtenstein's unilateral use of Article 112 and then from a negotiated agreement, set out in Annex VIII.

Thus, Brussels didn't "grant" Liechtenstein any special status. The principality leveraged its position on the back of Article 112. It owes nothing to the largesse of Brussels – and the arrangement, involving as it does a treaty change, is permanent.

To weaken our case, by getting details wrong, does us no good at all. We are up against formidable and unprincipled enemies, who already have the ear of government and the BBC. Our greatest strengths are accuracy and meticulous attention to detail. We cannot afford to be associated with these errors - that hands the game to our enemies.