Nice premiership you’ve got there, Theresa. Shame if something happened to it. That’s the message that many are reading into the European Research Group’s letter to the Prime Minister, her International Trade Secretary, Brexit Secretary and Chief Whip, obtained by Sam Coates at the Times and then widely leaked elsewhere. (You can read the full text here.)
The demands that matter: that the United Kingdom has “full regulatory autonomy” after Brexit and that any transition period be based on World Trade Organisation principles, rather than a standstill period in which the UK follows EU rules but can no longer shape them. The former means only the thinnest of trade relationships, as the essence of trade deals are common agreements on regulatory standards, while the latter means a sharp landing in March 2019, rather than the gentle transition that British business wants.
The thing is, the ERG aren’t entirely wrong. A close regulatory relationship with the EU will limit the UK’s trading strategy after Brexit (though you can fairly note that effectively the big trade hegemons of the EU and US impose regulations on everyone else, with the only choice which one of the two blocs you opt to be de facto led by). They are right, too, to fear that a standstill transition will stretch on forever, as the electorate becomes more pro-Remain and the complexities of Brexit take longer than the 20 months that the UK and the EU27 have rather over-optimistically allotted to it.
But they have two big problems. The first, as Andrew Cooper, the Conservative peer and former Cameron guru notes, what the letter confirms is mathematical. With 62 MPs, the Brexit ultras are big enough to force a vote of confidence in May’s leadership but not big enough to win it alone.
The second is that on both standstill transition and the regulatory relationship, the Brexiteers may already be too late. As far as standstill transition goes, frankly, the time to “prepare for no deal” (to the extent that is even possible) was before Article 50 was triggered. That didn’t happen, which means the government has two options: deal or catastrophe. The second was the Phase One agreement on the fate of the Irish border, which effectively committed the British government to a close regulatory relationship after we leave. (The agreement commits the government to maintaining the soft border on the island of Ireland, and domestic politics means a border in the Irish Sea is nothing doing either.)
That means that the only way you meet the ERG’s demands is with no deal at all. Can they get one? Well, it all comes down to the Labour Party. The number of MPs who know that “no deal” is a catastrophe is far greater than the 62 signatories to the ERG letter. But equally, the only way that Labour can maintain its electorally lucrative position of “constructive ambiguity” is to vote down the deal using a form of words that can be read as either pro-Remain or pro-Leave depending on the audience. Insufficient access, no full benefits, something of that kind.
All of which means that the hope that 62 Conservative ultras will be drowned out by the voices of Labour pro-Europeans may turn out to be in vain. No deal is more likely than it looks.
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