THE Conservative Government has ramped up its rhetoric again on the UK’s future relationship with the European Union or lack thereof, reheating tiresome talk about walking away, while German Chancellor Angela Merkel has set out the economic realities around where things go from here.
Tory Brexiters have, of course, for a long, long time now been making it plain they will walk away without a trade deal with what as a bloc is by far the UK’s biggest trading partner. And some even seem quite tickled by this scenario. The UK Government has nevertheless continued with the talks on the future relationship, although it is difficult to shake the impression that it could have engaged far, far more constructively with the EU if a trade deal is what it wants.
It does truly appear, negotiating stances aside, that this Conservative Government would drag us out of the European single market without a deal, especially given it was the hard, separatist line on Europe which swept Boris Johnson to his convincing election victory in December.
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That said, it will be everyone, Brexiters and Leavers alike, who will foot the bill for the economic consequences of the UK Government’s Brexit crusade. And it should go without saying that this cost will come at a particularly unwelcome time, to say the least, given the economic crisis triggered by the human tragedy that is the coronavirus pandemic.
Under arrangements with the EU for the talks, the UK has had until today to extend the transition period. A poll published at the weekend showed a majority of people in Scotland were in favour of such an extension. Of people in Scotland polled by Survation on behalf of Edinburgh-based Mark Diffley Consultancy and Research, 63 per cent believed the transition period should be extended. However, a UK-wide survey which ran alongside the Scottish poll found 52% of people were against delaying the transition date.
The Conservative Government has of course kept making it plain it will not seek such an extension and will refuse to agree to one even if the EU asks. It even seemed to celebrate painting itself into a corner on this earlier this month.
The Cabinet Office, following a Withdrawal Agreement Joint Committee meeting on June 12, co-chaired by Minister for the Cabinet Office Michael Gove and European Commission vice-president Maros Sefcovic, declared: “The UK took the opportunity provided by this second meeting to emphasise the UK’s decision not to extend the transition period. There will be no further opportunities to extend the transition period.”
Ms Merkel, speaking ahead of Germany taking up the presidency of the EU Council today, told The Guardian: “With Prime Minister Boris Johnson, the British Government wants to define for itself what relationship it will have with us after the country leaves. It will then have to live with the consequences, of course, that is to say with a less closely interconnected economy.”
She added: “If Britain does not want to have rules on the environment and the labour market or social standards that compare with those of the EU, our relations will be less close. That will mean it does not want standards to go on developing along parallel lines.”
These comments set out the realities of the situation, in what appears to be a cordial and matter-of-fact manner.
Ms Merkel exudes a much calmer tone than the jingoistic walk-away-type rhetoric we have seen at times from the UK side. The Conservative Government’s approach has at times seemed akin to a “toys out of the pram” philosophy.
The latest threat to walk away from the talks with the EU without agreement came, a Downing Street spokesman revealed at the weekend, during a conversation between Mr Johnson and Polish Prime Minister Mateusz Morawiecki.
“He said the UK would negotiate constructively but equally would be ready to leave the transition period on Australia terms if an agreement could not be reached,” the spokesman declared, referring to Mr Johnson.
On Ms Merkel’s point about the consequences of a less interconnected economy, we should remember the UK is now in any case trying, if we take its statement about desiring a comprehensive free-trade agreement with the EU at face value, for a consolation prize. Albeit an important consolation prize in trying to mitigate some of the huge economic damage from Brexit.
In having decided even under Mr Johnson’s predecessor, Theresa May, to leave the European single market no matter what and to end free movement of people to and from EU countries (and at the same time lose truly frictionless trade), the UK has already signed up for significant negative economic consequences. These have not arisen yet, following the UK’s technical Brexit on January 31, because of the protection of the transition period, but will begin crystallising when this ends.
The May government’s own economic forecasts confirmed the detrimental impact of leaving the European single market will be major. It is worth noting this damage will also be very, very large indeed relative to the tiny benefits the Conservative Government is trying to eke out from the free-trade deal it has started talking to the US about.
So the UK is, in its ongoing trade talks with the EU, in a sense like someone buying a tombola ticket after all the big prizes have been won. Or like someone at a fairground coconut shy with too few throws to secure the giant cuddly toy. Of course, it had the ticket and the throws it needed to maximise economic prosperity as a member of the EU but chose to discard these.
Even if the UK and EU can secure some kind of trade deal, there are huge questions around how comprehensive this would be, in actual fact. Various experts have, for example, noted there is little sign of the services sector being included to any significant extent in any agreement.
Ms Merkel’s comments do, however, highlight the fact that everything is not yet set in stone on major issues that will define what type of deal, if any, can be concluded.
Who knows if face-to-face talks will yield any more progress than the video-conferencing of recent weeks? Virtual meetings do not afford the opportunity for discussions on the sidelines during which possible solutions to entrenched differences can be floated in an informal context. A UK attitude towards the talks which has appeared for the most part testy, asserting a sovereignty it has always had and was never in question, would hint at a continuing lack of progress. But it would be good if this turned out not to be the case in terms of damage minimisation.
Michel Barnier, the EU’s chief negotiator in the talks, said late last week: “Our problem is not related to timing, but to substance, in particular that the UK keeps backtracking on its commitments in the political declaration.”
Ms Merkel highlights the importance of commitments to common ground from the UK on big issues such as labour market rules, and social and environmental standards if it wants to be closely interconnected in economic terms with the EU.
These all sound like areas in which countries around the world should surely always be striving for high standards. You only have to look at EU countries to see they have done well in pursuit of such high standards, which benefit the economy and society.
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And the last thing anyone in the UK should want is any attack on labour-market safeguards built up during our EU membership. This is the case at any time but especially so in the middle of a grim economic downturn. European-style social policies, in terms of labour-market protections and more generally, will surely be far better for household confidence, spending and the economy in the UK than measures resulting in, for example, US-type job insecurity.
Of course, how much of this the Conservative Government will recognise, or choose to acknowledge given its ideologies, remains to be seen.
Sadly, there continues to be an attitude among Brexiters that the EU needs the UK as much, or more so, than the other way round.
This is a foolish notion. The UK is one country. It is a relatively big country but it is not the economic power it once was on the global stage. The continuing EU bloc has Germany and France at its core, and comprises 27 countries in total. It has a raft of free-trade agreements with countries around the world.
So common sense would dictate that, if the UK Government carries out its threat to walk away from the trade talks and leave the single market on “Australia terms”, it will be cutting off its nose to spite its face.
Of course, it will be ordinary people in the UK who will pay the price for this hidebound ideology if it does walk away, with such an outcome adding to the seemingly already inevitable and major cost of leaving the single market in terms of living standards.
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