Brexit: Treasury Committee – oral evidence

16/07/2016

Interestingly, none of the members of the much-depleted committee sought to question me on the document – nor even did they refer to it. And while, in last week's session, Monnet Professor Dougan was given free rein to trash the so-called "Liechtenstein solution", my explicit rebuttal (in my main supplementary document) was not referred to directly and I was not invited to comment on it.

However, committee member Steve Baker did refer to it indirectly, seeking to summarise my position, as follows:

I think the platform you are proposing is that we join the EEA, with a Liechtenstein-style arrangement on freedom of movement, and then move on to adopt and further the model of the UNECE in order to have a more global platform. Have I correctly understood and characterised what you are saying?

There was no mention of Efta, no recognition that we are already in the EEA and could slide over, and no concession to my paper, which was careful not to describe the freedom of movement option as the Liechtenstein solution. My response, though, was as follows:

More or less, yes. Let us concentrate on getting out. Do not forget, this is not just trade. You have defence, you have got security, you have got justice and home affairs, you have got aviation, and you have got space policy. There are all these other issues you have to look at. These are going to take an enormous amount of time, effort and political capital, and there will be trade-offs with trade and other aspects.

We have got to settle those, and if we try to take on too much, in my view, we are going to get into trouble. Let's settle Europe. I said earlier I would quote from this book looking at how we got into the EC in the first place, and the tactic taken was to swallow it whole, swallow it now. In other words, buy in with minimum argument, minimum negotiation, settle a deal. Once you have the deal settled, you use it as a process and then move on to the next stage and the next stage.

Now, Mr Hammond - the other Mr Hammond - was saying yesterday in the Guardian that it would take six years. I see the process taking 20 years, and if you think in terms of Clapham Junction trains, we are taking two trains down similar tracks and only gradually diverging over a period of time. We settle this and move on; settle this and move on, and so on.

There was plenty of meat there for a follow-up but Mr Baker was much more interested in talking to his bestest friend Shankar Singham, whom he had met recently at the Legatum Institute.

Bearing in mind that the inquiry title is: "The UK's future economic relationship with the European Union", it is all the more remarkable that Baker wanted to hear about Singham's "prosperity zone of countries with like-minded attitudes to trade and business" – something not directly related to the issue at hand. Nevertheless, while I got 244 words to sum up the whole of Flexcit, Singham got nearly twice the length to cover unrelated issues.

With somewhat less than stellar clarity, Singham thus told us that:

There would be the contemplation of other agreements until the Article 50 process is concluded and preliminary negotiations and so forth. However, I am not sure that the knowledge in the minds of our negotiators in Europe that we are contemplating these other arrangements and deals is such a great imposition over and above what we are going to have to do anyway.

The thing that is going to take the time and the difficulty here is the negotiation with the EU. That is going to dominate the discussion. These other things, I do not think, are going to be necessarily as complex. However, we need to do something on them, and we need to envisage and envision them, before we conclude with the EU.

This, Baker let go without any discussion of the fact that continued EEA participation is contingent on membership of Efta, or that any negotiations on the vital alterations to the EEA Agreement (a treaty in its own right) are carried on outside the framework of the Article 50 talks, and with an entirely separate actor, the EEA Council. Thus, the talks will be tripartite in nature, with three separate bodies.

Before this exchange, though, Baker has told us that "we are running short of time". He then lets Singham run on for 550 words, and cuts me short on 98 words, saying: "I am sorry to interrupt you, but we are all terribly short of time…". It is at that point that I have raised the issue of negotiating separately with the EEA Council, a point to which Baker never returns.

In fact, this is clearly not my day. There are plenty of interventions from fellow witness, Hosuk Lee-Makiyama, who gets 36 interventions comprising 4,864 words, while Mr Singham gets a remarkable 37 interventions, speaking for 5,608 words. On the other hand, I am rationed to 22 interventions, and a mere 2,387 words – less than a fifth of the total given to witnesses. I am allowed to speak for less than half the time given to each of the other witnesses, and asked very few supplementaries.

Yet much of the material from the other witnesses was addressing world trade rather than UK-EU relations, so the subject was short-changed as well. The core problem of how we plan our immediate exit from the EU (the reason I thought I was there) was barely given an airing. However, there is some material of value, and I will look at some of in the next few days or so.