Richard North, 06/02/2018  
 


The controversy over the customs union non-issue took another bizarre turn yesterday when Michel Barnier came to town. Dropping off at No. 10, he met briefly with Mrs May and then stayed for longer discussions with David Davis.

Before the meetings, Barnier was warning that "there was not a minute to lose" in talks but, afterwards, he told the world that Britain could not avoid trade barriers with the EU if it left the customs union and the single market after Brexit.

Unable to cope with two things in one sentence, this was immediately translated by Mr Osborne's newspaper, the Evening Standard into the headline: "UK faces 'unavoidable' trade barriers if it quits customs union".

Mr Barnier was, of course, being more than a little disingenuous in lumping together both the customs union and the single market. He of all people should know that staying in the single market would be enough to secure market access and that the customs union is an irrelevance. After all, none of the Efta State parties to the EEA Agreement are in the EU's (or any) customs union.

But then, the EU's chief negotiator would also have been aware that Mrs May had committed irrevocably to leaving the single market which means that, with or without a customs union, the UK is going to encounter significant trade barriers.

It is thus a little difficult to discern precisely what game Barnier was playing when he stood alongside David Davis and declared to the media that the "time has come to make a choice" whether new trade barriers were a price worth paying for greater separation from the EU. The choice on the Single Market has already been made and it is not possible for the UK to be part of the EU's custom union after Brexit – but for the transitional period.

However, some clue as to his game might come from the narrative recorded by the Telegraph, where the newspaper tells us that, after the Barnier statement, there was time for a single question from the media.

"Mr Davis", said a journalist, "We're leaving the customs union, but how can your Government, how can your party, ever agree what the alternative arrangement should be? And Monsieur Barnier: do you have any idea what the UK wants, and whether it’s at all achievable?"

Barnier, apparently, opened his mouth to answer but was beaten to the punch by Davis who said that the UK wanted "a comprehensive free trade agreement and with it a customs arrangement". And left Barnier just to say: "I will not give a running commentary on the internal debate in the UK".

Barnier, then, if we are to take anything from this intervention, is being non-committal, attempting neither to add to nor resolve the confusion. That didn't stop Sky News surmising that Barnier was merely articulating the inevitable consequences of the UK Government's decision to operate outside EU structures.

That still leaves us with the confusion from Sunday's events and, Sky notwithstanding, Monday has brought us no relief. In the name of the prime minister, Downing Street has rejected the idea of continued customs union membership, while Mrs May herself has walked away from the Single Market. Thus, there is no choice to be made, whatever Barnier might have said.

In a land without choice, though, fantasy is king. The official response to Barnier is that the government's aim remains to keep trade "as frictionless as possible". Yet neither Davis nor Downing Street are offering any detail as to how this might be achieved, even if Davis described his meeting as "very constructive". The priority now is to reach an agreement over the transition period after departure.

Thus does the farce continue. A cabinet subcommittee is due to meet today and tomorrow, supposedly to decide the details of policy regarding a customs union. That will keep the pot boiling for the media, giving it endless opportunities to share its ignorance.

Earlier, helping it take full advantage of those opportunities was Hilary Benn, Labour chair of the Brexit committee. Speaking to the BBC Radio 4 Today programme, he announced that ruling out a customs union was a "profound mistake".

Yet even Benn can't be completely wrong – all the time. He makes the rather obvious point that time is running out for ministers to decide on their final goals and then, reflecting the views of us all, said: "I wish [Downing Street's statement] was clarity but I don't think it is".

We also get another obvious point from Benn when he said, "I think the government is in a state of open disagreement. The prime minister has been immobilised. We're 19 months since the referendum … and we still don't know what it is we want".

Once in the groove, though, there was no stopping Benn. There was "disfunction at the heart of government", he said, which meant that big decisions were not being taken, causing massive uncertainty for businesses. Part of the problem, he decided, was the rigid timetable imposed by May and her team.

"If you set red lines and fixed dates and you impose rigidity on a process that is incredibly complex, you end up in trouble", he said, adding: "what the government is now coming face to face with is the consequences of red lines it set, including saying leaving the customs union is what they want to do".

For all that, Benn's influence is not going to carry the day. A mere select committee chair is not going to turn the great engine of state. Mrs May's government is committed to its destructive course, from which there is no turning back.

Next on the agenda for the UK's team Brexit is an intensive period of negotiation with a view to settling the transition arrangements by the time of the March economic council. However, Barnier seems to be playing hardball. Reiterating the EU’s stance that during the transition period the UK would need to abide by existing regulation, he says: "The conditions are clear, very clear – everyone has to play by the same rules during this transition".

And then, clarity is still waiting in the wings. Barnier reminds us that there is a need for "clarity about the UK proposals for the future partnership", bringing us back to the cabinet committee meeting this week. Somehow, this committee will have to square the circle, coming up with something that looks credible to Brussels and which will not "enrage" the Tory right. Good luck with that.

In short, nothing has changed. The same old, same old mantras are bubbling up from the depths of the Tory psyche – "frictionless access" and tariff-free trade. And those mantras will sustain Mrs May's Tories right up to the point when the EU finally loses patience and the talks go belly-up.

In the meantime, Guy Platten, chief executive of the UK Chamber of Shipping, issued a rebuke to the political classes. "What has to stop", he said, "is the point-scoring and political gamesmanship. The shipping industry that moves 95 percent of international trade cannot plan for the transition until we know what we are transitioning towards. We need progress and we need it now".

However, what we need, and what we will get, are very different things. Mrs May, in her fantasy corner, is set to make sure of that.






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