On Friday 15th July, the Chamber was privileged to host Steve Baker MP, who offered a personal perspective on Leaving the EU.
The timing could hardly have been better. When we invited Steve Baker, it was to help us try to see through the fog of uncertainty in the wake of the EU exit vote. Only a few days before our event, the Conservative Party was embarking on a 9-week process to find a new leader and Prime Minister. And yet, when we sat down to breakfast, the new Prime Minister was in place, senior cabinet appointments had been made, and the leadership of the teams charged with exiting the EU and negotiating the UK’s new global relationships established.
For the Chamber and our guests, the breakfast was an opportunity to hear and question someone who, as co-Chairman of Conservatives for Britain, has been prominent in making the case for a new relationship with Europe and the rest of the world.
A PDF copy of Steve’s presentation is available on his web site. In order to gain full benefit of his analysis, readers may wish to follow the various links and references throughout the document.
Conservatives for Britain was launched in 2015 to represent Conservative Party supporters wishing to see a new relationship between Britain and the EU based on free trade and friendly co-operation, rather than political union. Initially it sought to help drive David Cameron’s renegotiations with the EU, but with the granting of only minor reforms, it put its support behind Vote Leave campaign. It argues that Britain outside the EU can achieve both increased global influence and economic success.
The voluminous literature included Change, or go – How Britain would gain influence and prosper outside an unreformed EU, published by Business for Britain. Anyone wishing to read the detailed analysis across all aspects of the UK’s business, financial, defence, legal, educational, cultural, social and international interests can click the image for a PDF version.
Steve suggested that we should look beyond the current hawkish political statements being made by various EU leaders and officials, which are quite the norm in such a situation.
The presentation cited BDI (the German equivalent of the CBI) chief Markus Kerber, who told the BBC World Service before the referendum: “Imposing trade barriers, imposing protectionist measures between our two countries – or between the two political centres, the European Union on the one hand and the UK on the other – would be a very, very foolish thing in the 21st Century… The BDI would urge politicians on both sides to come up with a trade regime that enables us to uphold and maintain the levels of trade we have…” The day after the referendum, his official tone on the BDI web site was quite different: “Tough negotiations with the UK will dominate the EU agenda for the next two years. A whole range of issues, such as access to the European single market, regulatory standards and professional mobility need re-negotiation… We expect business with the UK to nosedive in the coming months. Bilateral trade will inevitably suffer and new direct investments by Germany in the UK are extremely unlikely.” Which will prove the more pragmatic course?
Informal discussions by those likely to be conducting actual negotiations are said to have been reasonably positive in tone. Meanwhile, trade negotiators from other countries have already started approaching Britain.
Steve emphasised the need for Britain to take control of the process, with an implementation map broadly defined as Informal Negotiations – Formal Negotiations – Implementation:
- Informal Negotiations. No immediate use of Article 50; UK government to explore how the other EU countries and the Commission want to proceed.
- Act of Parliament: Section 2 of the European Communities Act 1972 enshrines the supremacy of EU law. It must be repealed but it would be best to do it as part of an overall agreed transition with the EU. Ultimately, however, it is entirely a matter of UK law and what Parliament decides. Via a single Act of Parliament, Britain can repeal this fundamental law, simultaneously incorporate all existing EU law into UK law, and provide for amendment or repeal of specific laws over time.
- Formal Negotiations. After the informal phase the government will know the appropriate mechanism for a new relationship or not. Article 50 may not be the only possible path – history suggests that it may be possible to agree a different legal mechanism to Article 50.
- Implementation of new arrangements.
In terms of trade deals, Steve argued that leaving while preserving full trading relations may be more straightforward than generally believed. Pointing to analysis from Lawyers for Britain, he believes that many of the existing EU free trade deals can be ‘grandfathered’. Both the EU and its member states (including the UK) are usually parties to such agreements, and the UK can continue to apply the substantive terms of these agreements on a reciprocal basis by mutual acknowledgement. This, he argued, was an effective response to suggestions of years of uncertainty while the UK renegotiates international trade arrangements. The same body argues that there would be no impediment to the UK resuming its WTO seat.
It is clearly very early days. We thank Steve Baker for his analysis and personal perspective. It will certainly help all present to understand some of the nuances of Britain’s and the EU’s positions in months to come.
(Postscript: the tone and substance of the initial meeting between Theresa May and Angela Merkel does seem to have borne out a number of the observations made by Steve Baker in this meeting.)