UK not yet out of EU…

In my scenarios two days ago I noted that there is still a scenario – though very much the least of the four – where the UK remains within the EU. It is unlikely, but not as unlikely as some think, given that the whole process of extracting the UK from the EU is so complex and damaging. (To be clear, my “central forecast” would be the UK out of the EU and into some form of associate arrangement with the EEA by May 2019.)

To be clear how remaining in the EU is not going to happen: there is certainly not going to be a second in/out referendum; there is almost certainly not going to be a General Election won by a Remain party or coalition; and UK withdrawal cannot be blocked by Scotland. There is some “buyer’s remorse” among Leave voters but there are also Remain voters who are no particular fans of the EU. There was a referendum and Leave won, so it is the political position that the UK (all of it) will now proceed to leave the EU. End of.

However…

The assumption now is that the UK will leave the EU but remain in the EEA Single Market – known as the “Norway Model”. This is of significant benefit to many of those who voted Leave on grounds of sovereignty, because it means EU Law no longer has primacy (although in practice much of it still has to be adopted), UK citizens are no longer European citizens, and the UK can do its own trade deals and agricultural subsidy programmes. Single Market Access is also essential to keeping Scotland in the Union and to any hopes of maintaining London’s status as a global financial centre. However, it is hopeless for those who voted Leave on the grounds of immigration or border control, because a founding principle of the EEA is free movement of labour; additionally, only EU members can veto new EU members (who automatically also join the EEA upon meeting its requirements), yet each new member adds to the EEA membership fee.

Currently, Leavers are trying to argue that they will be able to join the EEA Single Market while at the same time implementing border control. Such a deal simply is not possible.

Ironically, it could be that the only way the UK can stay in the Single Market while implementing some form of inward border control is by remaining in the EU – not least since other EU countries may be minded to trade some form of border control in return for not losing their second largest member (and thus risking complete break-up).

As a pesky Liberal, the whole notion appals me, but here is how such a negotiation could go.

The UK could argue exceptionality on the grounds that, firstly, it particularly has to manage immigration from the Commonwealth; secondly, it was one of only three countries that allowed fee movement immediately to the new ten member states in 2004; and thirdly, it consists almost entirely of an island.

Here is a thing: as it stands, not all UK citizens are actually entitled to workers’ rights across the EU. As the Isle of Man and the Channel Islands have severe restrictions on those who may live and work there, they are outside the EU and people attaining UK citizenship only by association with them have their passports “endorsed”, marking them as not qualifying under free movement of labour.

The UK could argue that, given the above exceptionality and that, in any case, some of its own citizens have “endorsed” passports barring them from free movement, that it too should in effect be allowed to “endorse” passports from other EU member states where these were given out on grounds other than “native qualification”. Politically, an obvious example to use would be a Syrian refugee who would not qualify for a UK passport but did qualify for one in Germany due to its more liberal approach; the UK may wish to argue that it does not wish to recognise that passport as one of an “EU citizen”, since it would never have allocated one in similar circumstances.

On top of that, the UK may wish to argue that its generosity in 2004 in particular should now be countered by an agreement that it would not have to give free movement to citizens from any new EU member state (effectively all Albanian passports would be deemed “endorsed” by the UK, for example).

It could argue all of that as part of its negotiation to remain in the Single Market, but the chances of a sympathetic ear from other EU member states are absolutely zero. After all, two years after invoking Article 50, the UK is out, agreement or no agreement – so why on earth would other member states even begin such a negotiation, unless it were in return, say, for excluding financial services from the Single Market (as per Switzerland) and thus delivering a clear economic penalty to the UK?

However, what if the UK were to suggest that such an arrangement, giving it greater control of its border and calming fears about the immigration impact of EU expansion, would mean it could stay in the EU after all (albeit under an arrangement branded something like “Associate Membership”)? There would be something in that for other EU member states, whose native citizens would still have free movement and who would have thus limited the chances of the UK’s withdrawal leading to further departures. And there would be something in it for those who voted Leave on grounds of immigration – in fact they would have greater control of the border (as well as a veto of new members) inside the EU than outside.

 

I wouldn’t be putting the house on it, but in these crazy times such an outcome is not entirely inconceivable.

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2 thoughts on “UK not yet out of EU…

  1. Seymour Major says:

    Just a couple of points.

    One relates to Scotland. You may have heard yesterday that countries such as Spain and Belgium, which have their own problems with separatist movements, have indicated that they would block any attempt by Scotland to become a member of the EU if it became independent. That indication will help those negotiating on behalf of the UK to ignore the Scottish threat if they were ever going to take heed of it.

    We also heard EU officials stating that they would not allow the UK to retain free trade without free access by EU nationals. That is the bluster for the present but the UK actually has considerable leverage in the present political climate. I would not bet against the UK getting all that it asks for. See also here

    https://www.thesun.co.uk/news/1365849/eu-shows-first-signs-of-cracking-with-talks-of-new-immigration-deal-with-no-red-lines-for-britain/

    The political landscape is changing (not just in the UK) at such a ferocious pace at the moment that shocks and surprises are two-a-penny. After the news of the last 24 hours, it looks as though we could end up with a situation where the leaders of 4 parliamentary political parties in the UK (DUP, SNP, Conservative and Labour) are headed by women – I think that would be a world record.

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