Pulling the trigger
To leave the EU we need to resign the treaty that joined us. Then we can either leave without saying a word or negotiate terms. Such terms are likely to cover transitional provisions and ongoing relationship. It is hard to avoid transitional provisions as many funding programmes are long term so can’t be arbitrarily switched off after two years without causing chaos. For example, the framework budget covering CAP and grants runs until 2020.
The Article 50 agreement is subject to the EU commission authorising negotiations to start, and the agreement is subject to approval by the EU parliament and a qualified majority of the EU council. But in the absence of agreement withdrawal takes place automatically after two years. What is left of the EU would have to sign a treaty to remove the UK from EU treaties. The withdrawal agreement is subject to ratification by 28 member states, including the UK parliament who can veto it by negative resolution.
The alternative to Article 50 is invoking international law to terminate membership on the spot relying on us being prevented from exercising our membership rights (eg Juncker telling our MEPs to stay at home) or relying on the EU having become something different to what the last treaty promised. But as it would takes years for courts to decide whether we were entitled to walk our government is unlikely to want the uncertainty. It cannot be ignored however as if we got into a Falklands situation over Gibraltar politically at home our politicians may end up under pressure to stop sleeping with the enemy, cut our losses and go to WTO terms.
Some of the EU treaty obligations are duplicated by international law or UK law so would stay. Then we have to work out whether anyone has such a thing as ‘vested rights’ – do rights acquired under the treaty survive its withdrawal? We have to choose whether to rejoin part of the EU by joining EFTA like Switzerland or the EEA.
We would probably want to repeal the European Communities Act 1972 to disapply EU law, meaning we would have to decide whether we want a new Act to continue to enable secondary legislation such as regulations which would otherwise disappear with ECA72. We are expected to want to keep crime prevention cooperation. But many laws will need rewriting as without EU law to interpret them they would overnight acquire a different meaning. It would be useful to tell UK judges whether they must, may or must not interpret any UK law using EU law. We would need to know which court decides EU law disputes.
We need to decide which EU-required legislation to repeal, amend or keep as it stays in force regardless of leaving. Food, environment and employment have been massively interfered with by EU law. Business will be lobbying to ensure the social chapter disappears with the EU membership whereas unions will demand it stays. We will have to decide what pesticides to allow. We will have to work out where international law leaves fishing, given the starting point is that we would be going from a 12 mile territory to a 200 mile one. The navy may have to be funded to prevent a return to Icelandic cod wars. Will we dumb down environmental standards? Will we enforce our own higher animal welfare standards? Will we abolish the landfill tax? Will we bring back UK passports and driving licences? Will we legalise selling in pounds and ounces.
Will we replace common asylum policy with bilateral agreements? We have to decide whether to voluntarily continue right to work or claim benefits for EU citizens depending whether we are prepared to face expulsion of our 1.4M nationals in the EU, mainly in Spain, Ireland, France and Germany. Will we keep Erasmus, will we will still fund EU students and will we come out of the Bologna Process for higher education harmonisation such as credit transfer? Will we keep Erasumus for All for sport? On copyright directives, would be repeal them and go back to WIPO and Berne? Would we jettison the requirement for European content in TV? What happens to the distance selling directive and consumer protection? How do we beef up NATO when one of the only two real military powers in the EU pulls out of EU defence cooperation? Who will our military and police work with on piracy and nation building, will we assist ad hoc like Canada and Norway have done, will we want to be an associate member of the European Defence Agency?
We may want to agree what happens to accrued pensions and benefits in other member states and what happens to EU nationals current entitled to social housing. Do we keep financial compensation scheme levels? Do we keep the same anti discrimination laws? Do we allow herbal remedies again? When can we have imperial measurements back? Do we speed up cancer drug approval by repealing clinic trials directive implementation? Do we stay in the European Medicines Agency to avoid having to get marketing authorisations? Do we ban health care professionals relying on recognition of qualifications? Will doctors train longer hours if we repeal the 48 hour cap? What happens to the European Health Insurance Card? .
We would also need to decide if we want to be in TTIP, given it was a reason for leaving the EU, and if we do then we would need to find out if we can sign up individually. Plus we would want to go after preferential trade agreements with Brazil, India and China, which the EU blocked us from doing. We would also want to seek foreign direct investment agreements with the likes of the USA who say they would rather we were less tied up in the EU.
We can expect the EU to try extract all sorts of final payments such as bailouts for Greece under the European Financial Stabilisation Mechanism.
There are also policy issues to confront. How will we afford pensions formerly funded by EU workers and how will we fill any skills gap?
Finally there are settlements to agree within the UK as regions and interest groups lobby for replacement of EU subsidies such as west Wales and the loss of CAP with its subsidy for farmers.
The Norwegian EEA option has already been rejected by the government as it forces us to accept about two thirds of EU law with no say in it, to accept free movement, and we have to pay for access to the single market which merely avoids an average WTO 1% tariff. It does however avoid the Euro, CAP, CFP, and justice, home affairs, common defence and foreign policy, the Euro army, Euro bailouts, Euro arrest warrants and our fish being siphoned off. But members have to pay grants to new EU members (in our case the five basket cases in the east) plus they have to pay for EU programmes according to GDP (in our case the lion’s share). Parliament calculated we would save only 17% on contributions if we downgraded from EU to EEA. And even in the EEA Norway found it was not safe when the EU imposed a 16% anti-dumping duty on salmon. Leavers would ask what did we come out of the EU for if we are diving head first back into regulations and uncontrolled immigration?
More feasible is the Swiss EFTA model with free trade agreements but that is undesirable too, as if we went back to our original EFTA membership nowadays we would be expected to play along with EU foreign policy and defence and EFTA members are in the Schengen zone so we would have to see if we can avoid that – Switzerland did not avoid it. It does allow us to decide our own VAT levels and to sign free trade deals with the rest of the world. To join the EEA we have to first join EFTA, so suddenly it is not for certain that EEA avoids the Schengen zone and common defence and foreign policy. Worringly Switzerland signed an extra agreement allowing freedom of movement, even to EU citizens with no job. But they do avoid rules on environment and competition, although have signed bilateral agreements to voluntarily apply most EU law anyway and have even joined Europol and Eurojust. Parliament calculated we would save 60% on our contributions if we had the Swiss-style EFTA membership. But it would leave us powerless to influence the market in services where we do have a surplus with the EU. Leavers would worry that we would be dragged into the EU army with pressure to allow free movement.
The third option has been referred to in the press as a return to the commonwealth, but the parliamentary reports calls it the Anglosphere as it might not be able to stretch as far as the whole commonwealth unless they are up to scratch. All we do know is that USA, Canada, Australia and New Zealand are OK. They already share an intelligence network which we deny to the leaky EU. TTIP and NATO may feature heavily. As the old idea of the imperial parliament is not on the cards, all it really seems to mean is setting up trade deals with the world once we are no longer banned by the EU from breaching fortress Europe. Rekindling commonwealth links has the benefit of more of a common culture, language and history.
If we decided to keep out of the EU altogether and just cut a deal on WTO terms we would suffer a 1% most favoured nation tariff for the 6% of our firms who export to the EU, in return for avoiding all EU rules except exporters who would have to make products compliant. However, the EU may want to avoid taxing our liquified natural gas to spite their own wine and car producers. If we join the EEA there would be about a 3% cost of determining country of origin for re-exports that came into the UK from outside the EU and carry on into the EU from here.
There is a precedent for withdrawal, and that is Greenland who left the EEC in 1975 after deciding in a referendum in 1972 on a rather similar turnout of 75% and 52 to 48 to withdraw. They agreed tariff-free sales of fish in return for a share of their fishing. They also gave vested rights for EC workers already in Greenland. But that was pre-EU and Greenland was only leaving as part of another country.
Fudging Brexit by keeping free movement and regulation from Brussels will only stoke the flames just to pacify big business. The five president’s report and subsequent leaks reveal that the EU army, EU tax, compulsory Eurozone and United States of Europe will make staying in the EU unacceptable and hanging on the sidelines impractical.
We need to unravel our whole EU membership and start again treating the EU as one of many nations we will set up deals with. The declining global market share held by the EU is a reason to escape the insular continental approach and put up with short term costs to position ourselves for the long term need for a global outlook.
I see the main price of democracy being difficulty for banks trying to passport into the EEA. But they ruined us in 2008 and must not be allowed to wag the dog again. Taxpayers are not prepared to fund a sudden expansion of the NHS, housebuilding and schools to accommodate EU immigrants many do not want at all. Perhaps though free movement could be funded by extra taxes for graduates, the City, Scotland and Northern Ireland who want it so badly. Then we will find out if they really want it, or just want the cheap labour and subsidies at everyone else’s expense.