In the latest surprise twist in the never-ending Brexit saga, Prime Minister Theresa May has offered an olive branch to opposition leader Jeremy Corbyn. Talks between the two negotiating teams appear to be proceeding at pace.
Many have assumed that no compromise between the two leaders is possible—and given their political differences, there is every reason to be sceptical about the possibilities of a breakthrough.
But in the small chance that May and Corbyn do come to a consensus on the shape of Brexit, what might it look like?
The details of the two leader’s positions are rarely discussed—often it is tempting to dismiss Labour’s policy as impossibly vague and Theresa May’s deal as unremittingly awful. Some have even argued that their ideal versions of Brexit are identical and that the current dispute is simply a matter of political positioning. But there are real differences of substance at play here.
The problems
First, the Withdrawal Agreement. It is true that here there is little disagreement between the two leaders: on citizens’ rights, the financial settlement and the transition period there is broad consensus. While there may be concerns over the Northern Ireland backstop both Labour and the Conservatives hope to replace these arrangements with their own plans for the future relationship.This is why the political declaration is so important: it contains the key to understanding how a future relationship can resolve, among other things, the question of the Irish border.
And it is in the political declaration where there are real differences of opinion. The current wording of the text is hard to decipher. It recognises the UK’s ambitions for an independent trade policy, while at the same time proposing to build on the single customs territory contained in the backstop. It refers to the UK “consider[ing]” whether to align with EU rules in relevant areas. And it talks of a “spectrum of different outcomes” for future administrative processes and checks.
Nevertheless, the declaration still points towards a hard Brexit: the text is littered with references to “regulatory autonomy” and notes that freedom of movement between the UK and the EU “will no longer apply.” On the basis of Barnier’s famous ‘staircase of doom,’ the political declaration leans in the direction of a ‘Canada-style’ Free Trade Agreement.
For Labour, which prefers a softer arrangement, this is problematic. The leadership has set three conditions for an agreement: first, the protection of workers’ rights and environmental standards; second, a comprehensive customs union; and third, a strong single market deal.
The (potential) solutions
Is there a way forward to find common ground between Labour’s position and the government’s current deal? Let’s take each of these conditions in turn.The first is perhaps the easiest on which to find compromise: after all, May herself has said she doesn’t want to see Brexit leading to a lowering of labour and environmental protections (though many are suspicious of the government on the issue). Indeed, in order to ensure a ‘level playing field’ for trade between the UK and the EU there are already provisions for protecting labour and environmental standards referenced in the political declaration and spelt out in detail in the backstop.
The problem is that these provisions are too weak and are not properly enforceable. In particular, the provisions in the withdrawal agreement are designed to prevent the UK from falling below current levels of protection, rather than to keep pace with future improvements in EU standards.
The political declaration could therefore be rewritten to state clearly that, in order to ensure a level playing field between the UK and the EU, the UK will dynamically align with all EU labour and environmental protections going forward.
The second of Labour’s conditions is trickier, since agreeing a comprehensive customs union requires May to move her red lines on an independent trade policy. But as Sam Lowe from the Centre for European Reform has argued convincingly, a customs union does not simply prevent the UK from developing an independent trade policy; instead it requires it to align its tariff regime with the EU’s common external tariff.
On other areas of trade—for instance, services, investment, and labour mobility—the UK could still have considerable flexibility.
This brings us to the third of Labour’s conditions—the trickiest and most important issue of all. A ‘strong single market relationship’ can be interpreted in a multiplicity of ways, but Labour figures have indicated that it means aligning the UK with single market rules.
This raises two questions. First, alignment to what extent—should the UK align itself to all EU single market rules, including the free movement of goods, services, capital and—most controversially—people? Or should it align itself to only a subset of these rules—risking the EU response that this amounts to ‘cherry-picking,’ as Theresa May found with her Chequers plan?
Partial alignment may be possible—as is the case under the EU-Ukraine Association Agreement—but the UK will not be in a position to pick and choose those aspects of the single market it wants to maintain and those it wants to shelve.
Second, how should this process of alignment be governed? Should the UK adopt EU rules autonomously—i.e. without prior agreement with the EU—or is this alignment to be written into an international treaty?
The former is already suggested in the political declaration. But only the latter will grant the UK meaningful market access to the EU. Yet this comes with its own challenges—the UK and the EU will need to decide on institutions to monitor and enforce the alignment and will need to determine the consequences for the UK of diverging from EU rules.
Building trust
IPPR’s ‘Shared Market’ proposal points a potential way forward—joint institutions to monitor and enforce the UK side of the agreement, along with a mechanism for restricting market access if the UK chooses to diverge – but this will need to be carefully agreed with the EU.It’s unlikely that May and Corbyn will be able to answer all these questions in the next couple of days. But it may just be possible to find a way of rewriting the political declaration with the EU to satisfy all sides.
For instance, the political declaration could be amended to include clear commitments by the UK to aligning its regulations with single market, as well as proposals for appropriate supranational institutions for enforcing such alignment.
To find such a consensus will surely be a Herculean task and require difficult decisions on all sides—and that’s before addressing the big political question of whether an agreed deal would need to be put to the public for a confirmatory referendum. Still, there may just be a potential path to a compromise on Brexit if both sides are open to it.
But perhaps the biggest challenge of all for May and Corbyn is that the political declaration is not legally binding. There is a risk, then, that if and when May steps down as the Withdrawal Agreement is passed, her successor will scrap any deal she comes to with Labour and proceed to negotiate with the EU on an entirely different basis.
It may be that the only way to make progress will be to build mutual trust across the UK’s political divides—something which is sorely lacking in the current Brexit debate.
