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Conservative Home: John Longworth: May has capitulated – and here’s what must be done to fight back

Date: 09 12 2017

John Longworth: May has capitulated – and here’s what must be done to fight back

John Longworth is co-Chair of Leave Means Leave, an entrepreneur and a Member of the Advisory Board of Economists for Free Trade. He was formerly Director General of the British Chambers of Commerce.

This latest capitulation by Theresa May has been cautiously welcomed by some politicians, presumably because there is general relief that we have seen the end of the beginning of the negotiations. However botched, misguided and detrimental to our national interests the process has been to date, at least nothing is agreed until everything is agreed, and it is therefore crucially important that we do not face yet more defeats at the hands of the EU. If we do, it will be perceived by a large proportion of the British public as the greatest betrayal in living memory, and the Conservative Party will be punished furiously at the next election.

The Government set out on these negotiations with entirely the wrong strategy, immediately placing itself on the back foot by defining success as the achievement of a trade arrangement with the EU – something within the gift of the latter only.

In fact, the measure of success is entirely different. It is whether we take back control of our borders, money and laws and in addition, whether we are economically better off out of the EU than we otherwise would have been in the EU. This latter can be achieved just as well by leveraging the policy freedoms that WTO trade terms afford as it can by striking a trade arrangement. In fact, a trade arrangement is only worth so much, and paying more in money or restriction of freedoms than it is worth becomes counter-productive.

The Government must not continue to make the same mistakes going forward, and the next phase gives it an opportunity to redeem itself. However, if our leadership continues to view this as an exercise in damage limitation, as the Chancellor and Treasury clearly do, rather than in maximising opportunities, then we are lost before we begin.

The likes of Ollie Robbins and Jeremy Heywood have already baked into this fudge cake of a deal – and some massive bear traps, I suspect, in collusion with their opposite numbers in Brussels. The Prime Minister has no doubt acquiesced to emerge smelling of vanilla.

The clause 49 text leaves open the possibility of UK regulatory alignment (membership of the Single Market in all but name) forever, using the Irish tail to wag the UK dog.  This would preclude some of the most important benefits of Brexit – deregulation, trade deals and possibly even external tariff removal.

The acquiescence of the government to pay our “dues” leaves it open to us paying a huge bill – presumably up to Breugel‘s estimated €100 billion! There is no time limit on the transition period, and no guarantee that we will have reached an agreement in time to walk away if we don’t like it.

If we are to have any leverage and any ability to get ourselves out of this sticky mess, it is vital that the Prime Minister make it clear that we will pay nothing until everything is agreed to our satisfaction. It is equally vital that preparations are made to move to WTO, and that we are serious about walking away from trade talks.

For this to be credible, we must insist that an “in principle” agreement on trade be reached by the end of March 2018, otherwise the EU will have us over a barrel – and that under no circumstances should negotiations of any kind drift into the transition period. This latter should be strictly time limited to no more than two years and for the implementation of specific technical issues, not a blanket continuance of the status quo.

This latest agreement may have been full of weasel words, but now is the time for straight talking, lest we store up a huge cauldron of future fudge to drown in.

December 9th, 2017: Conservative Home