By Ian Dunt
Amid the headline figures, there are countless questions that need answering if we want our negotiations with the EU to work. So far, there’s just nonsense talk.
Whenever reality enters the Brexit debate, its supporters in parliament go beserk. They’re not used to it. Throughout the referendum campaign and the year that followed, the topic was covered like some sort of fairytale. Leading Brexiters could say whatever they liked without anyone challenging them.
Then the negotiations began and objective reality invaded our daydream. A report in the Sunday Telegraph cited Whitehall figures suggesting they would offer a divorce bill of £36bn to move talks on to future trade arrangements. The EU side is reported to be expecting something around the €75bn (£66bn) mark.
Citing headline figures is unhelpful. The talks will take place by agreeing broad principles on assets and liabilities and then seeing what kinds of numbers they produce. There are two main calculations: the financial framework liability and pensions.
EU financial frameworks work in seven-year cycles, with the current one agreed in 2013. Member states decide in advance how much they will spend for the years ahead, covering everything from academic research grants in Romania to decommissioning nuclear power stations in France. The EU is likely to argue that we’re on the hook until the end of 2020, when the existing period ends.
The pensions payments are more complicated. Do we pay by the proportion of UK citizens working at EU institutions or in line with our overall contribution? Which assets should be used to guarantee the pensions benefits? Will we pay in one go or in instalments? The list goes on and on.
These kinds of tedious questions are central to the Brexit debate, but there have been few attempts to grapple with them from its leading proponents on the Tory backbenches. After the Sunday Telegraph article, Jacob Rees-Mogg insisted that “legally we owe nothing”. Peter Bone found it all “very strange”. John Redwood said that “there is absolutely no legal need or political need to offer them anything at all”.
Downing Street claimed not to recognise the figure. It’s possible the statement can actually be taken at face value. The £36bn figure may have been given to the newspaper by a frustrated official trying to bounce the government into coming up with a realistic opening offer – or indeed to force it to adopt any position at all. The Europeans have been baffled by the British team’s total lack of meaningful engagement with the issue.
This needs to be urgently addressed. Until the EU is satisfied there is sufficient progress on the divorce settlement, we can’t discuss future trade. It’s in this second section of the talks that a transition arrangement can be agreed to cover us between Brexit day and the new trading agreement. Without it, Britain is hurtling towards the cliff edge.
But even without that dynamic, Brexit demands a realistic approach from the government. We’re about to cut ourselves off from our largest market and lose access to the trade arrangements we hold with other countries through the EU. We desperately need new trading partners. But if they find us knee-deep in a vicious legal dispute with our former trading bloc, we won’t be an attractive proposition. A similar problem arises at the WTO, where Brussels can make life very difficult for Britain if it chooses.
The next few years are filled with hazards for the UK. They become far less severe if we have a cordial relationship with Europe. Being realistic about what we owe is a first step towards that. The hawkish vitriol of parliament’s hard Brexiters is a step backwards. Its only accomplishment is the temporary alleviation of their emotional inadequacy.
Their behaviour is by this stage unremarkable. We’re used to seeing a certain kind of Tory backbencher talk utter nonsense on this issue. But the failure of No 10 to present realistic alternatives is much more troubling. Until they do, we are stuck on the no-deal conveyor belt, where each day the country’s situation becomes more precarious.