I understand what it takes to make a deal. In my 25 years in business I was involved in many complex commercial transactions and in my 8 years in politics I have experience of negotiations between the EU and third-party countries. I believe there is a fundamental difference between the two types of negotiation. While some people might wish otherwise, when it comes to international negotiations, you can’t just row back on commitments you’ve previously made in good faith, throw a bit of money at the problem, and expect to move on without consequences. When the issue is the UK’s departure from the EU, and what’s at stake is the future of our economy, to imagine otherwise is nothing short of reckless.
There’s been a lot of talk in Westminster over the last few days of a new way out of the Brexit impasse – a so-called ‘managed no deal’. Those promoting it claim that it will cut the UK’s exit bill in half, while delivering the two-year transition period that our businesses desperately need to protect the economy and jobs and pave the way for negotiations on our future economic relationship with the EU. Or alternatively that disruption might be minimised with a series of ‘mini-deals’ covering things like aviation and borders.
Those proposing this route make a series of fanciful and, frankly, implausible assumptions. Firstly, they claim that the EU would be willing to negotiate on this basis with the UK, in a scenario where we had reneged on the Withdrawal Agreement and the financial settlement which forms an integral part of it. Secondly, they assume that – even with these mini-deals – significant disruption could be avoided. And, finally, that such deals could be delivered in the time available.
As the Minister for Business and Industry, I see on a daily basis the complexity of the legal and practical arrangements on which UK-EU trade depends: from complex supply chains, to frictionless borders, to data transfer arrangements and mutual recognition of qualifications. This simply cannot be unpicked without extensive economic and logistical disruption – what use is a mini-deal on airline landing rights if the licences of the pilots flying the plane aren’t recognised? Or a promise to facilitate customs inspections if the goods being exported can no longer be lawfully sold in the EU? That’s why we came to the conclusion over a year ago that the only feasible transition would be one where the ability to trade remained exactly the same as now while the long-term arrangements are worked out.
And we also can’t escape the fact that the Government agreed – on 8 December 2017 – the basis for the financial settlement with the EU. This was a key requirement before the EU would move on to detailed negotiations on the Withdrawal Agreement and Political Declaration. It underpins the guarantees of UK citizens’ rights in the EU, the business-critical transition period, the arrangements for ensuring an open border in Ireland and the process for agreeing our future relationship with our single largest trading partner. Reneging on this commitment would put all this at risk: how can we expect to go back on our side of the deal while expecting the EU to maintain theirs in its entirety?
In business, as the saying goes, if something looks ‘too good to be true, then it almost certainly ain’t’. So it’s time to be straight with people. There is no such thing as a managed no-deal. There is just no deal – which would be catastrophic for business and the economy and put hundreds of thousands of jobs at risk. That is why we need to concentrate on securing a realistic negotiated withdrawal from the EU; one which gives certainty and stability and allows us the time we need to negotiate the ongoing, close future economic relationship with the EU that we need.