A glimmer of hope from Brussels

John Baron MP believes there are signs the EU may be moderating its Brexit position.

On 15th January the House of Commons finally had its first opportunity to pass its initial verdict on the Withdrawal Agreement negotiated by the Government and the European Union. Its record defeat was not as crushing as that delivered to my own amendment to stop the Agreement's backstop being indefinite, which was voted down by a majority of 576! However, a week is indeed a long time in politics. The backstop is now centre stage again, and this time there may just be a breakthrough. The present situation resembles a three-dimensional game of chess with the various parties involved having to consider carefully their next move for fear of the consequences – and the time constraint is pressing.

As I wrote in my last column, the Prime Minister's deal is too unpopular with too many MPs. Remainers and leavers alike, and many in between, dislike the fact that it ditches the upsides of being inside the EU without taking advantage of the upsides of Brexit. This 'perfect storm' explains why, most unusually given the different viewpoints being supported, the crowd in Parliament Square roared as one when word of its stinging defeat reached them.

The Prime Minister is under pressure to find a way forward around which a majority of MPs and the EU can coalesce. Given the myriad of options, this will not be straightforward. Nevertheless, a resolution to the hated 'backstop' could well command widespread support amongst all parties, including the DUP. There are elements of the transition period which are uncomfortable, but these can be endured because it has a defined end. The opposite is true of the backstop.

As such, I have tabled three amendments for next Tuesday's debate in an effort to make the Withdrawal Agreement more palatable. They attempt to remove the backstop altogether from the Withdrawal Agreement (amendment K), limit it to no more than six months (amendment L), or include a unilateral right for the UK to exit it (amendment M). I have suggested to Colleagues that they 'buckle up' as there could be some turbulence!

The Government is being urged by Parliamentarians, and many commentators outside Parliament, to compromise on its negotiating positions and to rub out its 'red lines' of leaving the Single Market and the Customs Union. Some even go as far as to suggest that these red lines are 'arbitrary'.

To describe these red lines as such is to forget why the Prime Minister drew them up in the first instance. As the EU has been adamantine in its approach that Freedom of Movement is an indivisible component of Single Market membership, it is essential to leave it in order to regain the ability to run an independent, controlled and fairer immigration system – one that no longer discriminates against the rest of the world outside the EU.

In addition, leaving the EU but remaining within the Single Market means we remain bound by EU rules and regulations, including the ECJ, but without any means of influencing what these look like or shaping future developments – no seat at the European Council, no UK Commissioner, no UK MEPs, and no British judges at the ECJ. This is not a desirable or sensible position for one of the world's largest economies to adopt.

Moreover, remaining in either the Customs Union or a customs union is not compatible with running an independent trade policy, one of the key advantages of Brexit. Customs Union membership would also entail having to abide by European Common Tariffs (over which we would have no say or influence, for the same reasons as above), EU regulations, as well as ECJ case law – to which British firms or individuals could no longer apply for redress.

In addition, as Turkey has found to its cost, membership of a customs union means any country with which the EU strikes a trade deal gets full access to your markets, but is very unlikely to offer reciprocal access for your firms into their market – after all, why should the EU negotiate for this on behalf of a non-member state? Thanks to Mexico's trade agreement with the EU, Mexican firms have tariff-free access to the Turkish market, but Turkish firms do not enjoy corresponding tariff-free access to the Mexican market. As a European Parliament publication into the EU-Turkey customs union concluded in 2016:

"In sum, the existing legal and institutional framework of the customs union translates into an overall relationship of general dependency both economically and politically of Turkey upon the EU. Turkey is obliged to adopt a considerable part of the acquis in several fields and to align its custom and commercial legislation with the EU legislation, without involvement in the EU's external trade decision-making processes with regard to negotiating free trade agreements with third parties. Without setting out a binding roadmap to membership these systemic weaknesses undermine the legitimacy of the relationship and creates for Turkey a sovereignty shortfall. The obligation to align with the preferential agreements of the Community is coupled with the obligation not to participate to other free trade agreements."

It is worth noting that Turkey has a looser form of customs union than many advocate for the UK, notably excluding farm produce. Is an even deeper form of this type of customs union really the sort of relationship with the EU that the British Government should be negotiating? In such circumstances, which would almost certainly see the UK contribute to costs, vassalage would be an accurate description, not an overblown term.

Meanwhile, in the furtherance of this 'softer' Brexit, or stopping it altogether, a number of remain MPs is bent on subverting centuries of procedure and precedent to wrest control of House business in order to pass legislation to prevent 'no deal' by revoking Article 50. Due process is a hallmark of our stable and predictable system, which at times throws up frustrating results – as indeed the Government found when the Supreme Court ruled in favour of Gina Miller. Yet its reaction was not to try to subvert due process, but instead to get on with passing the relevant Act to satisfy the situation. Parliament should not become the executive.

In their actions, remain MPs claim to be asserting the views of a majority of their colleagues who do not want a 'no deal'/WTO Brexit, blind to the fact that this is the default outcome of their own votes in March 2017 to trigger Article 50 with a majority of 384. Indeed, the remain MPs supporting these attempts seem not only to believe that people did not know what they were doing in the referendum, but now also seem to believe that MPs did not know what they were doing when triggering Article 50.

A good deal is preferable to no deal, but dire predictions about leaving on WTO terms should be taken with a pinch of salt – just as the dire predictions should we vote to leave the EU in 2016 proved to be so false. This line of argument ignores the fact that investment is about comparative advantage. Lower taxes, more flexible labour practises, top universities, and a skilled workforce are just some of the factors that outweigh 3-5 per cent average WTO tariffs. The UK's record low unemployment record, high manufacturing output and record inward investment is testament to this despite the perceived concern about exiting on WTO terms. We profitably trade with the rest of the world outside the EU on essentially WTO terms.

Commerce and common sense usually prevails, and will once again prevail especially with regard to the Irish border. There are tentative signs over the last week that the penny is dropping with the EU, especially in Dublin, that they may be trapped by their own rhetoric into constructing a 'hard border' on the island of Ireland. This is why Michel Barnier's recent comments that, in a WTO situation, 'we'll have to find an operational way of carrying out checks and controls without putting back in place a border' are promising; certainly, these sound very much like the innovative technological solutions proposed by Brexiteers over the last two years. Further commentary from the Germans and the Poles also suggests possible fractures in their approach.

This phase of the game of chess is drawing to a close – indications suggest most players are moderating their positions. I continue to hope that the Prime Minister will be able to secure some legal assurances on the backstop, and will consider any solution compatible with the sensible 'red lines' the Government has drawn up.