Several of the weekend’s newspapers have criticised the Vote Leave campaign for failing to spell out how the UK will actually leave the EU in the event of a vote for Brexit.
Its an odd accusation as the process is set out in Article 50; basically we negotiate. Talk of the Norwegian or Swiss models is claptrap – we’re the UK and will adopt our on terms. I covered this in my recently published (and sadly not yet widely read) pamphlet on the EU debate Tilting At Windmills and so have produced the relevant chapter below. Enjoy.
The process to be adopted by countries that have decided to leave the EU is set out in Article 50. This provides up to two years for any negotiations to complete. At the end of that two-year period, the leaving country is deemed to have left and the terms of the treaties shall no longer apply to the leaving member. Exit negotiations can only be extended by mutual consent, and that the acceptance of the exit agreement requires a qualified majority vote of the 27 countries remaining in the EU; this vote is held in the EU Council, it does not go to the European Parliament or require ratification.
Now the two years was included to cover the possibility of Euro member states wanting to leave. In the UK’s case life is far simpler. All the UK requires is continued access to the single market plus the for all current UK expats to retain their residential and work rights. As there is an element of reciprocity in both these cases it should not take long to agree. There is also a haggle to be had about international waters and fishing.
In fact, a protracted negotiation and hassle is in no-one’s interest – it would create uncertainty on the foreign exchange markets, and thus on the cost of debt for both the UK and EU (and the EU has a bigger problem). Any competent and commercially savvy UK Prime Minister could sort the exit negotiations in a month, if that.
Post Brexit the UK must state its de facto position immediately, trade on and wait for the EU to catch up.
Access to the Single Market
All the UK is seeking is tariff free access for products and services originating in the UK to be sold in the single market. The quid pro quo for this is that the UK will continue to allow products and services originating in the EU to be provided tariff free in the UK. Given that the UK is more important to the EU than vice versa this should be relatively simple to agree.
The devil will be in the detail and in fighting compliance with EU directives. The UK should list those which it is prepared to observed, e.g. CE marking for those goods being sold into Europe. As for the rest, the EU can whistle.
The complicated area is likely to be finance. The UK must simply reject any EU influence on the UK financial system while complying with Basel and the UK legislation. It is ridiculous that bureaucrats in Brussels continue to seek to control the world’s preeminent financial centre.
If we have to continue to subsidise the EU through a block payment that makes sense as long as the payment is less than currently paid, and adjusted to reflect the proportion of trade that is tariff free.
Residence and Work Rights
These are reciprocal, slightly complicated by the distribution – there are more Poles and Romanians in the UK that there are Brits in Poland or Romania. The simplest solution is for all expats who have been in place since the referendum date to be granted visas for as long as they want; if they remain resident they keep the right. But if they cease residence then they would have to reapply for a visa if they wanted to return. Of course, other permutations are possible.
Again, a speedy solution is in everyone’s interest. If it can’t be solved in 2 years then the UK is no longer subject to EU law, but of course the rest of the EU is. So if no solution is found a EU citizen domiciled in the UK would lose his rights and would not be able to protest this under EU law. But the UK expat living in Europe would have a shot at a case in the ECJ on the basis of European rights.
In theory it should not be difficult to identify UK territorial waters because they were perfectly clear before the UK joined the EEC. Find the chart and draw the line.
There may be some reasonable argument that it is not just for a (say) Spanish trawler man who purchased fishing quota in what are now UK waters to have that removed. The options is either to purchase it from him (and sell on to a British boat) or to allow all EU boats to use their existing quota. This is a technical matter, but should not be that hard to solve.
And that is it. When agreed all UK representatives in European Institutions leave their job, we stop paying and Parliament starts sorting out which EU laws the public wants it to keep and which it can get rid of.
The important part is to minimise the uncertainty, as currency volatility combined with its knock on effects on interest rates could trigger another Euro crisis – and it wouldn’t do Sterling much good. The uncertainty could be massively reduced if the UK were to publish its vision of post Brexit and to implement it de facto as soon as practicable after the referendum. This would not be hard, as the economic solution would be to maintain the status quo. Issuing residence visas to EU nationals would not be hard. Changing the lanes at UK ports to put EU citizens into the same lane as the rest of the world is not rocket science either.
It is unfortunate that as far as one can tell the UK government is not working on this at the moment. This ignoring of a very possible outcome verges on malfeasance and is certainly not an example of good government. It would not take much to get the contingency plan produced and there are ample able civil servants. This failure, presumably caused by political considerations related more to the best interests of individual politicians and parties rather than the best interests of the country that they serve, is indicative of the rotten state of Parliament and the void of political leadership.
Impact of Failure to Agree
If the UK fails to agree terms some of its exports to the EU will attract tariffs at the current EU rates. As we know what these are we can anticipate. A quick look at the rates for our major partners is 1%. The UK, outside of the EU, will be free to apply whatever tariff it likes and it should be made clear that we will. That income can then be used to fund tax breaks for those firms exporting to the EU that defray the cost of the tariffs. Net result, no damage to the UK.