We urgently need an insurance plan for no-deal Brexit – here’s my idea

The Guardian - 26 Oct 2018
With time running out in the Brexit negotiations, and several vitally important issues still to be resolved, attitudes in parliament around what kind of deal would be acceptable are hardening.

I very much hope that the prime minister will return from the negotiations with a deal that parliament can support in the national interest. No politician – at least none that are serious about protecting British jobs and livelihoods – can accept the idea of crashing out of the European Union next March without a deal. But that’s the track we’ll be on if MPs both reject the deal reached through the negotiations, and then cannot decide on the terms of our departure.

So we need to draw up an insurance policy, quickly, which can be used in the event of the prime minister’s deal failing to make it through parliament.

Any such policy must meet the test of delivering our safe exit from the EU, thereby honouring the referendum result, and do so in a way that does not harm British industry. It should have, as its longer-term aim, the agreement of a free trade deal with the EU that delivers prosperity and sets us free to make our own laws, implement a balanced immigration policy, and reach our own trade deals around the world.

A Canada-style deal has always been the most attractive proposition. I believe a mutually beneficial relationship with the EU, underpinned by an ambitious free trade arrangement, must remain our end goal.

But there are real problems with going for that option straightaway, given so much of the past two years’ negotiations appears to have been wasted.

It will be almost impossible to negotiate this outcome in the time we have left before our departure. Yes, the EU has made clear it is open to a Canada-style deal. Yes, it has even said it can come with some plus, plus, pluses to make it work even better. But the EU says the price for this is that it must be for Britain only, with a border in the Irish Sea, carving our country down the middle. This is unacceptable and simply will not fly.

Moreover, we cannot be sure that a Canada-style deal would pass through the House of Commons at this moment, and a satisfactory resolution has yet to be found for the Irish border. It’s because we haven’t been able to convince the Europeans that technological solutions can deal with the border that they are intent on having.

I am convinced that, in time, solutions can be found and a Canada-style deal can be made to work for our constituents’ jobs and living standards, for the Europeans and for MPs. But there’s the rub. We haven’t got time. We are fast running out of it. “Canada now” just does not work.

That’s why I have been discussing with colleagues on the Labour and Tory benches an alternative option – an insurance policy – that we can negotiate with Europe, pass through parliament, and which can protect the integrity of the UK.

If the government fails to negotiate a suitable deal in time, we should go for “Norway for now, then Canada”. This option would involve membership of the European Economic Area, European Free Trade Association and a customs union, preventing the need for a hard border, for as long as we need to negotiate our longer-term relationship with the EU.

Although the safe harbour of a “Norway for now” option alone would suffice for some colleagues, the addition of “then Canada” is crucial to winning support from others, particularly on the Labour benches, whose constituencies voted to leave and wish to see that as our ambition.

Hence the importance of having an insurance policy that, while affording breathing space, does so with that longer-term objective of securing a Canada-style trading relationship with the EU where we will control our own borders and are not subjected to the European courts. Indeed, the monies the EU want from us should not be paid until that Canada-style deal has been reached.

“Norway for now, then Canada” offers the chance of delivering Brexit in the safest way possible, if the present negotiations fail to deliver a satisfactory outcome. An immediate aim is to unite MPs with as broad a range of opinions as possible around this insurance policy. If we can succeed on this front, the Commons could help similarly to unite the country.