Brexit Negotiations – Follow the Money

It is clear that the latest round of Brexit negotiations has an edge that wasn't around before. Deadlines are tightening. Positions are hardening; albeit, in the view of EU negotiators, not hardening enough.


We should welcome this edge; it means they are getting down to business. But the outcome of the negotiations is not yet emerging from the fog.


The UK position papers told EU negotiators little they didn't know about the technical options, and fell into either the category of a recital of options, without clarity about what the proposal is, or else sought an outcome which was in the "having cake and eating it" variety, as both the Irish border and customs "arrangement " appeared to do.


The UK negotiators do not seem to take sufficient account of the nature of the EC's negotiating mandate at this stage: i.e. sufficient progress on citizen's rights, Irish border and budget settlement. Repeated efforts to extend discussions further before October will not be able to be substantive on the EU side.


So, the failure of the UK to offer a negotiating proposal on the budget, and the Panglossian approach to border issues and customs make the negotiations more fractious. 


There are, of course, Brexiteers who say " Why must we dance to the EU's tune; the withdrawal agreement and future relationship cannot be separated" and, of course, this is true. But the reality is that the EU needs, first and literally, to see the colour of British money. The "divorce bill" is difficult enough. The present value of meeting UK obligations is always going to look huge. But imagine the domestic political difficulty if the UK ends up paying large sums on an on-going basis to the EU budget.


And therein lies the central dilemma of these negotiations. After Brexit, the Treaty no longer applies directly and the ECJ will not, as a matter of simple reality, have any direct jurisdiction in the U.K. A transition is accepted. Both sides have a desire to keep tariff-free and barrier-light trade in goods. Both want to protect accrued rights. But the more these are achieved and the further the deal goes in extending access to EU markets and cooperation in everything from research to policing, the more it will seem that the UK is enjoying its' cake on a plate whilst also eating it. The risk of copycat by eurosceptic parties across Europe will escalate. 


The one antidote to this is if the UK pays a large exit bill and significant contributions to future budgets; sufficient to avoid other governments across Europe having to explain why their taxpayers are picking up a Brexit bill. That is a lot more than UK taxpayers are expecting, so this is where the negotiating gap really lies. This is why the " no deal" threat is issued by the UK, because no deal means no bill. 


Ministers and pro-Brexit media in Britain have prepared the public for the prospect of a Brexit bill, but not at a level which would satisfy EU governments; and no preparation has been done for the prospect of payments for the future relationship, i.e. "paying membership fees whilst losing the vote". 


When Ministers (after the Conservative Party Conference?) move into this territory and prepare this ground, then I think we will see "sufficient progress" in EU terms for the future relationship Treaty to be put on the table.


Follow Lord Lansley via @AndrewDLansley