The Leave campaign’s economic answers have now melted away

The Brexit team must negotiate an impossible web of red lines

 

Remember the days before the Brexit vote, when the Leave campaign assured the nation that all would be fine if we left the EU?

When they told the UK that triggering this mysterious Article 50, which gives notice to leave the EU, could be done with the minimum of fuss?

When UK voters were told that the EU would not dare deny the UK access to the single market? And if they did, well, there was the fall back of the EEA (Norway/Switzerland deal) plus European countries and others would be queuing up to do trade deals with us – hi Australia and a USA presided over by Donald Trump!.

And when the Brexiters were reminded the UK did not have the capacity to negotiate highly complex trade deals the UK was told  – not to worry our civil servants will sort it all out in the end.

That was only five weeks ago – and how times have changed.

The warning signs were there the day after Brexit when Stefan Löfven, Sweden’s Prime Minister — a decent man and former president of the Swedish Metal Workers Union — told a Newsnight interviewer point blank that there was no possibility of an EEA (Norway style) deal with access to the single market without free movement of labour.

Since then Theresa May has met Angela Merkel and Francois Hollande, whose message will have been the same.

The task of untangling the web of untruths and false promises and coming up with a workable solution which halts immigration to a trickle — but also lets us eat our trade cake — has been deftly handed by Theresa May to three Leave campaigners: Boris Johnson, Liam Fox and David Davies.

The task facing them was explained recently by Lord Mark Price, now Minister of State at the Department for International Trade.

According to a report of a meeting with a group of business people he said the task facing the government was not going to be easy.

He warned that none of the existing deals such as Norway and Switzerland would work for the UK; that remaining in the single market was not feasible given the political requirements on the free movement of labour and the UK would have to secure a ‘customised’ trade agreement with the EU – which would have to be negotiated sector by sector with the EU.

Before that could happen, we would have to agree our relationship with the EU as a precursor to embarking on trade negotiations with other countries.

And as a bonus he added that the UK had a strong desire to ‘grandfather’ existing free trade agreements that the UK holds through membership of the EU as part of the Brexit talks. He also requested from business some ‘red lines’ on Brexit negotiations.

Separately, ministers seem to be unclear on triggering Article 50 and how it will be done. Fair enough – nobody has done it before – so expect fun and games.

A House Of Lords debate took place last week and Government spokesperson Lord Keen of Elie seemed to imply that there could be legal challenges to the triggering of Article 50 but the Government could use the ‘royal prerogative’ to trigger article 50 as it ended a treaty.

There has also been talk of ‘buying in’ trade negotiators with experience of dealing with complex trade deals such is the size of the task.

At its recent policy conference Unite made it clear that access to the single market was essential for manufacturing – an issue that trade associations and employers with whom we have had some discussions fully agree with. Access to a ‘tariff free’ single market is a red line, as is not triggering Article 50 until we know the how things are going to look.

Unite also made it clear there was no need to trigger article 50 – a point the Prime Minister seems to also have flagged up by kicking it into the long grass – only for Hollande to boot it right back and tell her the UK needed to get on with it.

Unite is demanding unions have a seat at the table and in the coming weeks we will be using all the levers at our disposal, including our own relationships with unions in Europe and elsewhere, to protect the interests of our members in UK manufacturing as well as defend our hard won European employment rights.

The news last week that UK economy shrank at its fastest rate since the financial crisis of seven years ago, following Brexit, with manufacturing dropping to its lowest level since February 2013, was a sharp reminder of the background the talks will take place and the Brexit chickens come home to roost.

Continuing uncertainty, delayed investment decisions mean the options for the Brexit team (who were instrumental in creating the problem) are narrowing and will become even tighter as red lines are drawn, more EU governments tell the UK to get on with it and the economic effects of Brexit start to really kick in.

Tony Burke is assistant general secretary at Unite, with responsibility for manufacturing

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