Tuesday, 31 December 2019

UK and EU in 2020

New Year is a time for looking forward and also back. 2019 was the year when Parliament forced the previous (2017-19) government to seek an extension of EU membership - European Union (Withdrawal) (No 2) Act 2019.  A "no-deal" Brexit was therefore avoided on 31 October.  This showed that the UK's constitutional arrangements were capable of preventing action by the executive which would have had serious economic consequences.  Nonetheless, it was a difficult process and constitutional consequences have been signalled by the Conservative Party manifesto and, following their general election win, the Queen's Speech.

The 2019 general election resulted
in a win for the Conservative Party which, under the first past the post system, obtained 56% of the parliamentary seats on the basis of 43.6% of the votes cast. The Conservative Party actually increased its vote (compared to 2017) by around 330,000 but the Labour Party (offering the possibility of a further EU referendum) lost around 2.58m votes. The Liberal Democrats (offering remaining in the EU) gained 1.3m votes but ended up with 11 seats - one less than in 2017.  The anti-Brexit Scottish National Party (SNP), also increased its vote by around 264,000 but increased its number of seats from 35 to 48 - (see BBC News 13 December 2019). In my view, this data shows that first past the post is the fundamental problem with the UK constitution but it is the one problem which the present government is least likely to wish to address.

Looking at the election results this way is interesting but achieves little.  The notable Brexit commentator David Allen Green has expressed the view that a 'plausible case' can be made that most voters actually voted for a party against Brexit or, at least, for a party offering a further referendum.  However, as Mr Green states, and I respectfully agree, it is 'plausible, but inconsequential, in a FPTP system.'

The win has therefore to be taken as settling the question of whether Brexit is to take place. 1 January 2020 is 47 years to the day since the UK joined the "European Communities" which, over the intervening years, became the European Union (EU). The issue now is what trading and other terms will apply between the UK and the EU for the future.

At 11 pm GMT on 31 January 2020, the United Kingdom's membership of the European Union (EU) will end. Provided that the European Union (Withdrawal Agreement) Bill (EUWAB) is duly enacted, the UK and EU relationship will then be defined by the Withdrawal Agreement concluded on 12 November 2019.  The Bill also gives legal effect to the EEA EFTA Separation Agreement and the Swiss Citizens’ Rights Agreement.  (The Bill is virtually certain to be enacted given the government's majority in the Commons).

The Withdrawal Agreement sets out a transition (implementation) period up to 31 December 2020. The Agreement (Article 132) provides that the "Joint Committee" may, before 1 July 2020, adopt a single decision extending the transition period for up to 1 or 2 years.  The UK government has set its face against an extension and clause 33 of EUWAB will prevent Ministers agreeing in the Joint Committee to such an extension.  (Note: If Clause 33 becomes law then it could be reversed by further Act of Parliament).

For all the chutzpah of the Johnson government, there is at least a reasonable doubt that comprehensive trade and security agreements can be reached in the time available. Ursula van der Leyen (President of the EU Commission) has expressed 'serious doubts' over the limited time available for the second round of negotiations - Politicshome 28 December 2019 - and suggested that both sides should keep their options open during the discussions.

The October 2019 Political Declaration is not legally binding but envisages both an Economic Partnership and a Security Partnership.

Part II of the Declaration (Economic Partnership) states (para 17) that - "the Parties agree to develop an ambitious, wide-ranging and balanced economic partnership. This partnership will be comprehensive, encompassing a Free Trade Agreement, as well as wider sectoral cooperation where it is in the mutual interest of both Parties. It will be underpinned by provisions ensuring a level playing field for open and fair competition ... . It should facilitate trade and investment between the Parties to the extent possible, while respecting the integrity of the Union's Single Market and the Customs Union as well as the United Kingdom's internal market, and recognising the development of an independent trade policy by the United Kingdom."

Part III of the Declaration (Security Partnership) states (para 78) - "With a view to Europe's security and the safety of their respective citizens, the Parties should establish a broad, comprehensive and balanced security partnership. This partnership will take into account geographic proximity and evolving threats, including serious international crime, terrorism, cyber-attacks, disinformation campaigns, hybrid-threats, the erosion of the rules-based international order and the resurgence of state-based threats. The partnership will respect the sovereignty of the United Kingdom and the autonomy of the Union."

At the time of writing it is thought that, as part of a government reorganisation, the Department for Exiting the EU (DExEU) will be abolished and a new "Taskforce Europe" created - Independent 30 December 2019.  Reportedly, the taskforce will 'be spearheaded by Mr Johnson and his Europe adviser, David Frost, and will operate out of Downing Street and the Cabinet Office.'

In the absence of a future trade agreement, World Trade Organization (WTO) terms would apply from 1 January 2021. That could be a very difficult situation for the UK economy. It is therefore hoped that agreements can be reached in good time on trade and security for 2021 onwards. The future prosperity of the UK depends on it. Mr Johnson won his election but he must now deliver a Brexit which is not just for those who wish to leave the EU but which also also addresses the concerns of those who wished to remain.

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