Deal or no deal?

Sorry, UK politics again. Our current affairs at the moment seems totally dominated by the question of deal / no deal with the EU. I just wanted to put my thoughts down.

For my money, Day #1 after the referendum, there should have been an announcement that there *would* be a deal with the EU, or, at least, an attempt to strike one come what may. Exactly how much of life was encompassed by this deal would be subject to later negotiation. I’d see the deal having two or three parts.

Part I would be the amount of money the UK needed to hand over in order to honour its existing commitments. For this reason, it might have been better to leave at the end of a budget cycle, which I think is seven years. In theory, that commitment would then be zero, although I expect there must be a few things which span multiple cycles, so would probably be greater. The UK parliament (ultimately) could then argue with the EU about what that actual number was.

Part II would be to settle the things you would do going forward, in every circumstance. There must be several areas like this, where both the EU and UK gain pretty much equally. I’d suggest that something like guaranteeing the healthcare and security of ex-patriots falls into this category. Again there might be a cost, again it is open for barter, but the point is, you remove a lot of uncertainty from the equation.

Part III would be the optional things. Like, “we want unhindered, tariff-free, access to your markets, how much will it cost?” Again, you come up with a number (actually, numeric cost is just one of the factors here), then you decide whether the terms are acceptable or not. In that way, you kind-of cherry pick how the future relationship will look. The EU has said that “there will be no cherry-picking”, but frankly this was a dumb thing to say, especially when they ultimately proposed a deal which included both free trade, and the UK government’s wish to control immigration. If that isn’t cherry picking, what is? But again, the precise numbers tbd. This is where is might get a little contentious, in that you argue whether you want a WTO relationship, or something more. Indeed if you want to ride piggyback onto something like Galileo or the Medicines Agency, it is difficult to see where WTO is relevant – the relationship we have with the EU currently is far wider.

So I think you come up with two numbers. The first is a number (not necessarily an agreed number, but a requested number) just to honour existing commitments and to guarantee some basics going forward.

The second number would take a bit longer to come up with, but would basically be what “the best” relationship would cost going forward. And the UK and EU could each decide what “the best” relationship looks like, or whether the price the other side wants is worth paying. Again I realise a lot of stuff is intertwined so I’m not just talking about money here.

In terms of making (the UK) parliament (and therefore the public) aware of where we are in the process, I think the UK government acts almost as a broker. “The EU wants us to pay £xbn/year for access to y“, and let (the UK) parliament decide whether to agree or not. In that way, you don’t need to rely upon any skill in negotiations – the UK government, or some appointee, simply relays what the EU is asking for, and the UK parliament decides whether this is acceptable or not. And, if the EU asks for £10bn for access to something which the UK parliament judges is only worth £5bn, then the UK walks away and everybody loses. So it is in the EU’s interests to be reasonable. In any case, if all this is made public, then when people say “the EU wants to punish us to stop other countries leaving”, this is something that we can all judge for ourselves. Possibly one reason for trying to obfuscate the process (as I think the UK government has done) is that they wanted a bigger role in the process. But I don’t think, with the highest turnout this century in the 2016 poll, that the people of the UK (and, by implication, parliament) were ever prepared to accept opacity. Plus, of course, this has dogged the UK government all the way.

I must admit I was very surprised when, early on in the negotiations, the sum of £39bn (which the UK would pay to the EU) was mentioned, before any detail was made public. I thought, if this is just the price to honour existing commitments, then we will have another bill, an ongoing cost, to cover the future relationship. But as time has gone on, nobody has talked about this, even to say “this bill is zero”. If the £39bn was intended to cover the cost of the future relationship as well, then how could anybody possibly know that number without also knowing what the details of the future relationship would be?

One comment

  1. OK, to be clear, the EU is calling the £39bn a \”divorce bill\”, which sounds to me like \”honour existing commitments\”. I've seen stories where the EU expects the UK to pay this sum, regardless of whether the pair agree to a deal or not. If, indeed, £39bn represents the UK's existing commitments, it seems fair enough for this to be honoured come-what-may. So are we to expect some other bill in the future?


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