This woman is not for turning
The form that the UK’s departure from the EU will take lies somewhere between the poles of so-called “hard’ and “soft” Brexits.
The simplest way out of the current mess would be for Theresa May to seek a transitional arrangement that buys more time for both politics and business to adjust. She would probably have had to do so anyway, because it is unlikely that a comprehensive trade agreement could have been finalised in the next 18 months. Her shaky support at home makes a transitional arrangement even more important as a way of creating parliamentary consensus and protecting the economy from an unnecessarily sudden shock.
Ready made templates
There is only one obvious, ready-made template suitable for a transition: joining the European Economic Area. This would not yet allow the Government to deliver on its immigration promises, but would set Britain on a smooth path out of the EU while we get our house in order and negotiate the finer details of whatever our new relationship is.
Joining the EEA would require the permission of its current non-EU members – Norway, Iceland and Liechtenstein – but assuming they can be persuaded, it is the obvious halfway house. Shunning the EEA and seeking just to join the European Free Trade Association, as some Brexiteers advocate, isn’t actually much simpler than going for a fully complete Brexit, because in order to maintain full market access it would be necessary to negotiate a lot of bilateral agreements with the EU, as Switzerland has done.
EEA membership, by contrast, is relatively straightforward. It allows unfettered market access in return for an agreement to obey whatever regulatory diktats come out of Brussels. Britain would get back control of home affairs and could request, separately, to remain part of the customs union until we are ready to sign our own, new trade deals and work out a new tariff schedule.
Before any Remainers get too excited by the prospect of this watered-down Brexit, however, it should be made clear that EEA membership is not a permanent solution, as a permanent arrangement it is the worst of all worlds, requiring obedience to Brussels but allowing no input into its rule making. The fact that it denies the Government the ability to control immigration will also be unacceptable to voters in the long-run.
It makes sense, therefore, to set a clear time limit on the transitional arrangement. Five years, extendable by mutual agreement, should allow enough time to work out a proper long-term trade agreement between Britain and the EU, while giving businesses and investors time to understand and adjust to the changes.
Most Brexiteers understand that Brexit cannot be pulled off in the blink of an eye. Their fear that it might never happen does not, however, justify a headlong rush into the unknown when there are better ways to approach it.
Voters have forced the Government’s hand and it is no longer possible for May to set her own pace and priorities. Parliamentary involvement might be annoying and inconvenient, but there is now no way around it. The Government will negotiate more effectively if it recognises its new situation at the outset, rather than facing a crisis later when it can’t deliver on its promises.