Lord Adonis needs to get real
By Pete North - February 8, 2021
The Daily Express reports Sir Keir Starmer will try to reset his faltering leadership with a pledge to make his party “unashamedly pro-business”. “Sir Keir is reported to be preparing to unveil a policy agenda believed to include tax cuts for firms and a pledge to extend the business rates holiday to help companies battered by the coronavirus pandemic”.
Responding to such reports, Lord Adonis urged Starmer to go even further by pledging to get Britain back into the single market and customs union. The Labour peer, who has been calling for Britain’s return to the European Union tweeted: “The ‘unashamedly pro business’ policy Labour should adopt is to rejoin the Customs Union and as much of the Single Market as possible.”
This is why I’m even more certain than ever that re-joining the single market is never going to happen. Just the other day I was saying that if there is going to be a major shift in the UK-EU relationship then it would be for Labour to decide. But Starmer has got bigger problems. He has to put his party back together in such a way that it’s electable – and if the Europe policy is in any way designed to appease the likes of Adonis, then Labour is going nowhere.
Starmer has to prove that he accepts Brexit and is not seeking to re-join by the backdoor. If there is any mention of the single market and or the customs union then there’s no way Labour can rebuild trust.
More to the point, it’s a dead end. Even before the door was slammed shut permanently on the EEA Efta option (you can argue the toss when that was), it was by no means a sure thing. The UK was going to have to sweet talk the Efta states in order to pull it off. Attempting to rejoin the EEA now is a much more involved process.
Prior to our exit from the EEA, it was near to an off-the-shelf solution, but now we’d be looking to replace the Northern Ireland protocol. It could be folded up into an EEA protocol, but one would assume there would need to be some kind of consent from Northern Ireland which makes it politically complicated.
It is something of an irritation to see a new wave of newly minted EEA Efta evangelists long after the window has closed, but even more so to assert that we can “simply” re-join it as though it were a small matter of exchanging contracts.
As to joining the customs union, I shall spare you the usual pedantry. Assuming a customs union was on offer, much like when the UK joined the EEC, we would have to junk all of our independently negotiated agreements and probably terminate CPTPP. Since this would be somewhere far down the line, our customs systems under the TCA will have stabilised and it’s hard to see any additional benefit – particularly looking at the inherent pitfalls of fixing our external tariffs to align with the EU.
Ultimately Adonis has not thought it through. As much as it’s technically problematic he’s also got the problem of selling it. Brexiters will no doubt take great pleasure digging out all those remainer attack pieces on the Norway option and using their own material against them. The weight of political baggage is too great for it to fly and there is no real desire to keep dragging these questions out for yet another airing.
One suspects that Starmer is smart enough to realise that with his track record, adopting such a plan would be political suicide. Thus, the single market window is closed until both the Brexit Tories and Starmer are gone, by which time trade will have diverted and we’ll be a way along other avenues.
One other small detail of note is what the EU might think of any of this. It does seem to be a peculiarly British characteristic to plot our relations with the EU without any reference to what they might have to say about it. Right now the EU is more than happy to cannibalise British exports to assist in its own covid recover. So far as they’re concerned, they have honoured the British sovereignty demand and provided the bare-bones agreement we insisted upon. What’s in it for them to change gear?
Ultimately, in order to rebuild our trade with the EU we’re going to have to work with what we’ve got. That means taking the time to understand the nature of the TCA and how to work within it, and how we might improve it. It was never designed to fixed relationship.
As is, the UK is primed for new equivalence agreements, and when we know where we are diverging we can once again look at mutual recognition of conformity assessment in various sectors, and we can look to improve the Rules of Origin thresholds. It’s never going to be as good as the single market, we can repair the situation eventually.
The first job is to sort out the Northern Ireland mess. Brexiteers are now pushing to junk the protocol, talking openly about a border in Ireland. I doubt that’s going to happen but politically it cannot remain as it is. It’s going to be a festering sore and we will need to revisit it. The EU was willing to work toward a phase-out of the backstop in subsequent trade talks prior to Johnson’s meddling. We must somehow persuade them to look again at it via the TCA.
Being that the NI protocol does not encompass the full provisions of the single market, it may be possible later down the line to turn that slimline acquis into a UK wide arrangement on goods. Though a goods only single market was ruled out during Brexit talks (described as “cherry picking”), and with the EU keen not to set any problematic precedents, more may be achievable when the air has cleared, particularly if the political pressure in Northern Ireland continues to mount.
No doubt some avenues will remain closed by way of MFN clauses, but we will now have to get thinking and explore every option inside the scope of the TCA. Alliances with the CPTPP7 (EU FTA holders) could help matters. The EU may not be in a rush to do the UK any favours, but it may warm to multilateral liberalisation. The UK could even take up a coordinating role between the EU and CPTPP.
Ultimately the debate needs to move on – beyond the stagnant old debates and engage with reality. I’d actually prefer it if rejoiners dropped the pretence and made an outright case for re-joining. EEA-Efta as an exit and evolution mechanism was ideal, but rowing back for its own sake doesn’t get us anywhere. In either case we’re dealing with people who cannot and will not accept that Brexit is a done deal. They will fade into irrelevance.
We have yet to fully comprehend and assimilate the consequences of leaving the EU in the way that we have, and there’s going to be a long and confusing process working what is happening and why. Some of it can be pegged on Covid some on lack of preparation and some on third country controls. We will no doubt see a certain political obstinacy form the EU too.
For the moment, it would appear that the Tories are still in denial and haven’t yet come to terms with how much of a mess they’ve made of it, and we won’t get round to sorting any of it out until the penny drops. Only then can we have a realistic discussion about what to do and how to go about it. To a large extent we have already made our own bed, but this current disintegration of trade and cooperation doesn’t serve the EU in the longer term either. We must therefore look at things afresh when the lessons are learned.
If in the longer term, a larger, more fundamental reform of European institutions were to take place, in recognition that the EU must evolve, then we could look again at the single market. Tony Blair seems to get it. He understands that Labour doesn’t get anywhere near power again unless they accept that Brexit is a done deal and in a recent speech he said “If a return to Europe is ever to be undertaken by a new generation, the UK should do it as a successful nation Europe is anxious to embrace, not as supplicant with no other options”.
I do wonder if there is any significance in his use of the term “Europe” as opposed to the EU, but one thing we can all agree on is that Britain is still key to the political life of Europe. Neither can ignore the other.
Ultimately Britain cannot escape the pull of European political, economic and social gravity. The TCA may be a starting point but it isn’t a solution any more than re-joining is. We are committed to different path for the next two decades at least, in which time we have a lot of internal politics to do to reconstruct the nation. Going over old ground is an unhelpful distraction when we need to be getting on with what we’ve got, like it or not.