A long and seminal weekend for Brexit began with the gathering of the UK cabinet at Chequers on 6th July to thrash out its disagreements and determine a stance on the UK’s future relationship with the EU.
It ended with the resignations of Brexit Secretary, David Davis, and Foreign Secretary, Boris Johnson, both standard-bearers for Brexit, who felt unable to support the Prime Minister’s proposed way forward. David Davis has been replaced by Dominic Raab as the new Brexit Secretary. He is pro-Brexit and has recently suggested that an extension of the transition period following Brexit could be needed. In contrast, on the day he was appointed, the Prime Minister confirmed that this would not happen. The new Foreign Secretary, Jeremy Hunt, campaigned for the UK to remain in the EU during the 2016 referendum, but has since become a Brexit convert.
The plan itself, based on twelve key principles, hints at a softer Brexit than many Brexiteers will find palatable. It seeks to establish a free trade area for goods, based on a common rule book and allowing continued regulatory alignment, with Parliament deciding how the rules would be implemented. Services would not be included within this arrangement. Instead, the proposal is for more ‘regulatory flexibility’ and ‘strong reciprocal arrangements’. A ‘combined customs territory’ would be phased in, allowing the UK to control its own tariffs and strike trade deals with other nations.
Under the proposals, freedom of movement would end and be replaced with a ‘mobility framework’ to allow continued travel between the UK and the EU and provision made for international students. The jurisdiction of the ECJ would end but UK courts would continue to pay regard to its decisions where common rules exist.
Several business leaders, concerned at the potential economic fallout that may ensue from a hard Brexit or ‘no deal’ scenario, cautiously welcomed the UK Government’s agreed line. Remainers were also encouraged by the position as representing a continuation of the closest possible relationship with the EU following Brexit. However, the details of the proposal and the positive response from some quarters was overshadowed within 72 hours by the ministerial resignations.
It is the reaction of Brexiteers that may prove the most telling as to the ultimate fortunes of the strategy, with some pro-Brexit MPs demanding that it be dropped. In his letter of resignation, Mr Davis told the Prime Minister that her proposed plan gives away ‘too much, too easily’. Many Brexiteers will echo that sentiment and, if the backlash against the Chequers plan forces a further change of direction, the likelihood of a ‘no deal’ outcome may also increase.
So, are we approaching the Brexit endgame? The Chequers proposal looks very much closer to the ‘Norway model’ of close alignment with the EU than the ‘Canada model’ espoused by (and expected by) some Brexiteers. However, it appears that the Prime Minister has looked at the parliamentary arithmetic and calculated that it will be easier to persuade more MPs to accept a softer style Brexit than a hard one.
But that may all be academic. The resignations of Davis and Johnson has shifted the focus and raised many big questions. Will there be further resignations from pro-Brexit ministers to follow, and what would the impact be? Will Theresa May bow to pressure from Brexiteers calling on her to ditch the proposal? That prospect seems unlikely and, if she remains resolute, would that trigger a challenge to her leadership? Even if the Prime Minister gets her way domestically, what would follow from a rejection of the plan by the EU? Would a ‘no deal’ scenario become the most likely outcome?
The EU will examine the proposals, due to be formalised in a White Paper to be issued on Thursday 12th July despite the current turmoil, to assess whether they are realistic and workable. Some commentators have cast doubt on the likelihood of the EU accepting the UK’s customs plan as it could be viewed as attempting to ‘cherry pick’ a deal.
Before the dramatic events long weekend unfolded, Brexit was entering a crucial phase. Decisions made in the coming days could prove critical to the entire process.
Article published: 10th July 2018
