Brexit: the battle goes on

09/05/2017

More recently, we had the former Greek finance minister Yanis Varoufakis tout the same solution. His view was that Mrs May should ask for a "Norway-style agreement" for five years as an alternative to a hard Brexit in order to give Parliament time to iron out the specifics.

Then, in the last few days, the bandwagon has acquired another customer in the form of Lord David Owen, supported in the Telegraph by Liam Haligan – he of WTO option fame.

Lord Owen is following exactly the same line promoted by Varoufakis, arguing that the EEA option buys time to negotiate a EU/UK trade agreement. But if there is undue delay, he argues, the UK only has to give a year's notice to leave the EEA. We would, he says, then exit on WTO terms, but at a time of our own choosing.

The essential flaw in these nostrums, though, is that in committing to an EEA-type agreement as a precursor to a free trade agreement over the longer term, all we are doing is agreeing to a managed decline in two stages rather than one.

The problem is that even full-blown Efta/EEA participation represents a less advantageous position than full Single Market participation, while a bilateral free trade agreement represents a further deterioration. Thus UK negotiators would be in the unique and unwelcome position of seeking staged negotiations, the outcome of which - after considerable expenditure and time - would be a less advantageous position than we have now.

Varoufakis and Lord Owen, therefore, are just more of those who, in realising the obvious (that we cannot conclude an FTA inside the two-year period), are struggling for a solution without really having thought out what it is we need to achieve.

The great danger, of course, is that if the UK pursues an interim solution where the final step is worse, the interim will become permanent. There will be no incentive to move beyond it. Through this, we could see the EU absorbing the EEA into its membership structure, which is possibly why the "remainer" faction is so keen on the idea.

It was for this reason that we went further with Flexcit. The key to the European dimension of the exit plan is not Phase One, which deals with the mechanics of leaving, but Phase Three, which offers the opportunity to develop a vastly improved trading scenario, separated from the EU's political agenda.

The mistake we have all made is in concentrating far too much on the mechanics of extraction and not sufficiently on the end game. But our further mistake, as we pointed out in an earlier piece, was to think that the government actually had the capability to take us out of the EU in the time period allocated. This isn't possible and never was possible.

In this context, I referred to the hugely important book by Alan S Milward, published in 2002 under the title: "The Rise and Fall of a National Strategy, 1945-63", which I acquired when Booker and I were writing The Great Deception.

To revisit the argument, I noted that the author's thesis was that the UK came out of the Second World War determined to avoid entanglement with the developing plans for European political integration. Milward charted the progress through the next 18 years, which is the time it took for successive governments to come terms with joining the European Community, arguing that it took that long to achieve a change of strategy.

Prior to the referendum, this government had no intention of leaving the EU, and that the result of the referendum was unexpected – for which it had done no contingency planning. For it then to cope with a complete reversal in the long-term national strategy is simply too much to ask.

With that in mind, we're in the process of making another mistake – assuming that winning the referendum campaign was the end of the matter. Assuming that we do end up with an intermediate settlement which then drags on, we are going to have to fight yet another campaign before we see this thing through to the end.

Whatever the outcome of this current process, it is not going to be anything like satisfactory – simply because it is not within the Government's capability to achieve anything that we would find acceptable.

Perhaps, if we do end up with something close to an EEA option, what we need to be doing is working with the No2EU faction in Norway, and with the other anti-EU factions in the Efta states, to seek a fundamental reform of the EEA.

We need to revert to the idea foreseen in the original EEA concept, the European Economic Space with equality of decision in the management of the Single Market and the related decentralised agencies.

With "houses" of equal status in the European "village" - as originally promised by Delors) – we have a tenable, longer term solution which, I suspect, the Norwegians would particularly welcome.

Earlier, when I mooted this idea, I was less than confident that this could happen after May had burned so many bridges. But if the idea of using the EEA as an intermediate does come from the Commission, with an element of popular support in the UK, then it could still happen.

Here, there is one point that Lord Owen makes which does have some validity. "It is very important", he writes, "that Brexit does not become the property of the Conservative Party or Conservative MPs during this General Election". And with that we can agree. Brexit belongs to us all, and it is for us all to decide its final shape.

The whole issue though, as Pete points out, is unfinished business. The referendum started a revolution but its execution is being hijacked by the very people against whom we were all rebelling.

To accept that this general election gives an unrestricted mandate to Mrs May - to do whatever she chooses - is, therefore, not an option. The battle goes on. Far from being over, it's only just started.