No Deal Is No Option

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In a Westminster Hall debate on alternatives to a no-deal outcome in negotiations with the EU, I argued that a no deal is not an option and that we should push for an EEA/EFTA Brexit. 

Stephen Kinnock:  Thank you Mr Sharma, and thank you to the Hon Member for Eddisbury for securing today’s debate.

I think that most of us here in this room, and all of us living in the real world agree that no-deal is inconceivable.

As the government’s own analysis shows, it would mean 8% lower growth nationwide, 10% lower in Wales, 12% lower in the Midlands, Northern Ireland and the North West, with the North East taking a 16% growth hit.

It would mean 10% tariffs on every movement along the supply chain  of something like the automotive industry, crushing not only that but also connected industries like the steel industry centered in my Aberavon constituency.

And the Head of HMRC told the Brexit Committee just before the turn of the year, Brexit preparation is already set to cost £1bn over the next five years, and that is on the basis of us securing some kind of deal.

So what all this tells us is that no deal is no option.

And this serves to underscore the importance of the final portion of the Brexit negotiations, in which the framework for the future relationship will be set out.

And if this House wishes to shape that we must move quickly, and so today’s debate could not be more timely, because we truly are in a race against time.

Later this month the EU will publish the legal text of the December Joint Progress report.

In mid-Marchthe European Parliament plan to publish a resolution, to be adopted ahead of the meeting of the EU Council, on the future relationship.

This will be akin to the 3 October resolution 2017 resolution, a resolution which made clear that there would be no regulatory divergence across the Irish border, and that made clear that transition could“only happen on the basis of the existing European Union regulatory, budgetary, supervisory, judiciary and enforcement instruments and structures”.

Sound familiar?

This isn’t something we can dismiss as white noise.

The October resolution was effectively the blueprint for the deals that have followed.

And so it will be for the final state portion.

That resolution will shape the draft guidelines handed down at the EU Council to Monsieur Barnier in just 29 days time.

And when the EU 27 meet on 22nd March to agree on the negotiating guidelines for the next phase, the future relationship,
there can be no turning back, because as we have seen thus far,Monsieur Barnier is a man who sticks to his mandate.

And when it comes to the final state Barnier has been clear: our options are either a deal based on the Canada deal, or one based on the EEA.

Once that basic model is agreed there will be some scope during transition to add or subtract from it, but to all intents and purposes the choice will be binary.

And this matters for two major reasons.

First, the Canada model offers little on services.

Services make up 80% of the UK economy, and almost 40% of our exports.

And as Barnier has said: “There is no place [for services}” because “There is not a single trade agreement that is open to… services. It doesn’t exist”

And Second, the Canada model leaves us without a Customs Partnership – which is incompatible with the desire to have a frictionless border in Ireland.

And so our conclusion should be clear: our preferred model, no, the only conceivable model for the future relationship is one based on EEA EFTA membership.

EEA EFTA offers the best possible terms of exit, providing the maximal possible access to the Single Market from outside the EU, while allowing for difference that preserve our desire for self-determination, letting us “take back control”.

The EEA ends the principle of direct effect: meaning this House must pass all rules relating to the EEA Internal Market into law ourselves.

It ends the jurisdiction of the ECJ, instead being governed by the EFTA Court, which frequently forges a different path to the ECJ, and which would, with the UK as an EEA EFTA member, have British judges on its bench.

In the EEA EFTA we would be able to shape the rules of the Single Market – of which only 10% have relevance to the EEA – and with the right of reservation, we would possess a veto over anything we considered inappropriate.

And that is not an empty vessel: the Norwegians have used their veto almost 20 times, most recently in rejecting the Third Postal Directive, for which they suffered absolutely no repercussions.

And the EEA allows for the reform of the operation of free movement.

Articles 112 and 113 can be triggered, as per the Protocol 15 precedent by which Lichtenstein has a quota based system – the same system that would, if one looks at Protocol 15 in detail, have been available to the Swiss had they voted to join the EEA.

And so, in the EEA EFTA there lays the keys to a Brexit deal that allows us to remain part of the Single Market, end ECJ jurisdiction and reform free movement.

The referendum exposed the deep divisions that exist in this country.

And the General Election result made clear that the Prime Minister and government do not have a mandate for the hard Brexit they sought going into June.

And so, there can be only one answer, and that is an EEA EFTA based Brexit.

A Brexit that can reunite our country.

Giving something to both Remainers and Leavers.

This is not and does not need to be seen as a zero-sum proposition. For a remainer to be happy a leaver must not be disappointed, and vice versa.

And in the EEA EFTA there is the opportunity to overcome the divisions that risk tearing us apart.

And so I am heartened to see colleagues of all Parties in agreement on this, both today and at last months debate secured by the Hon Member for Wimbledon.

But above and beyond this looms the Brexit stop-clock.

In just 29 days the EU Council will lay down the mandate that Barnier will operate within.

For Barnier, that mandate is his straightjacket, and so we must ensure that the full suite of options for the final state are on the table: particularly that of EEA EFTA membership.

But above all, we must see an agreement struck within these 29 days on transition, and we must also see the signing off of the full legal text of the phase one negotiations.

Without both of those vital issues tied up – and that means clearing up the Irish border fudge – there will not be enough time for any meaningful discussions of the final state portion of the Withdrawal Agreement.

And business, workers, UK and EU citizens will not have sufficient time to plan.

And that may leave us facing the catastrophe of no-deal by default.

Our countries relationship with the EU is on a burning platform, and we have less than 29 days to put out that fire.

Trade, jobs, employment rights, human rights, national security and peace in Northern Ireland and on the mainland, along with our place in the world all hang in the balance.

I only hope that the leaders of all of our parties – in government and opposition – grasp the need for speed, and the need for pragmatism, as many of us have done so here today.