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Brexit is stuck — again.
This week EU negotiator Michel Barnier held preparatory talks in London with British counterpart David Frost but returned to Brussels saying the UK’s positions — on fisheries, governance and the level-playing field — remained unchanged.
Fresh off the Eurostar, Mr Barnier spoke openly of the “tensions” between London and Brussels, using a speech to repeat now-familiar EU talking points on the basic foundations for any “zero-tariff, zero-quota” EU-UK economic partnership.
Longtime Brexit watchers will be experiencing déjà vu. Back in October 2017 talks to sort out Northern Ireland, the financial settlement and citizens’ rights were deadlocked and in the doldrums, but by December there was a deal.
A version of that drama repeated itself in October 2019 after Theresa May’s deal was junked in favour of Boris Johnson’s clean-break Brexit. Out went the Irish “backstop” to be replaced by a “frontstop” that left a limb of the UK trapped in the regulatory orbit of the EU.
Once again, an apparently philosophically intractable issue was resolved sufficiently to move to the next phase.
Whether the current impasse plays out the same way depends on whether you believe this is another iteration of that cycle — or if the philosophical divide on state aid is really so deep that it prevents a deal being done.
Perhaps there was a chink of light when Mr Barnier fumed at what he called the UK’s insistence that it cannot commit “to a level playing field or to basic safeguards for our future relationship”.
That phrase “basic safeguards” leapt out. It would seem to fall short of the much fuller “level playing field” demands in Mr Barnier’s mandate, that extend into areas such as tax policy which is currently the basis of many state aid disputes in the EU.
Maybe the phrase points to an eventual solution in which the UK does outline a discrete, and entirely sovereign, state aid regime — but with a sufficiently independent, toothsome and nimble regulator, reassuring the EU that the UK will play broadly by the same rules.
That, to be clear, is still a big step forward from the light-touch, regulator-free position that Whitehall insiders say is the preferred approach of Dominic Cummings, the prime minister’s chief adviser.
We must wait and see what emerges — how hard this will be to resolve depends on which bits of the UK internal machine you speak to, but until a text or document is published, all speculation on whether the talks can be rescued is idle.
One other tangential ground for hope, perhaps, is that the Johnson government really hasn’t given much indication of why it wants such a free hand on state aid, other than an ideological position that it wants to be “free”.
Indeed, the hypothetical freedom to diverge seems more enticing than divergence itself. For example, after much bellyaching from industry, the government this week finally gave details of the new “UKCA” quality assurance marking that will replace the EU-wide “CE mark”.
It turns out the technical requirements for the UKCA marking will be “largely the same as they are now” — ie a copy of the EU regime — and the UK will recognise the EU’s CE marking for a further year when the transition period ends on December 31.
Similarly, Michael Gove’s decision earlier this year to phase in new border controls over six months speaks again to pragmatism rather than a real appetite for disruption or destructive radicalism.
And the apparent soft-pedalling on US trade talks in the face of opposition from farming and animal welfare groups over diluting welfare standards again hints at practical, political caution — for all the Brexiter bravado.
Against that general backdrop, failing to promulgate a UK state aid regime that provides — to quote Mr Barnier — “basic safeguards” for the EU, would seem a rather odd hill for Mr Johnson to die on in this negotiation which in many other respects is close to completion.
Given the thinness of the free trade agreement the UK is seeking, it should surely be possible to cut a deal with Brussels that leaves space for the government to pursue its policy agenda, whatever that actually turns out to be.
Because the tough talk about a no-deal emanating from No 10 — that the costs will pale when compared with Covid-19 — is wide of the mark. No deal will be a mess, and a self-inflicted mess at that.
Brexit by numbers
If the government needed further reasons to strike a compromise with Brussels, the growing drumbeat for independence in Scotland should provide it — with polls consistently showing support for a Yes vote for the first time.
Brexit is not happening in a vacuum. This week Nicola Sturgeon, the Scottish first minister, announced she would publish draft legislation for a new independence vote before next May’s elections for the parliament in Edinburgh.
As my colleagues George Parker and Mure Dickie reported recently, Michael Gove, the Cabinet Office minister, spelt out the risks very clearly to the cabinet in July, with polling evidence from election guru Isaac Levido. It was said by one present that the “penny dropped” — including with chancellor Rishi Sunak.
And the appointment of Simon Case as the UK’s top civil servant — a man who cares deeply for the Union and is clearly trusted by Mr Johnson — will add a further voice of caution about the additional risks a no-deal Brexit poses.
Tensions are already high as the government ploughs on with plans to pass legislation to underpin the UK internal market, despite warnings from both Scots and Welsh that a Westminster-centric approach could “accelerate the break-up of the Union”.
A no-deal Brexit by the Johnson government would surely help Ms Sturgeon make the case that Scotland would be better off leaving a political union run with such apparent recklessness — whatever the short-term economic costs.
Source: Economy - ft.com
