THERESA MAY’S MISTAKEN PRECEDENT FOR A BREXIT BASED ON CHERRY-PICKING

As the start of Brexit negotiations with the EU-27 looms, the trickiest conundrum facing Theresa May is that of reconciling the need to agree continuing access to the single market for British business with her insistence on ending UK participation in EU free movement. Taken at face value, it is impossible to resolve. EU leaders have been consistently clear that Britain cannot have access to the single market without accepting free movement. If restoring control of our borders is so important, we will have to make do with a free trade deal from outside the single market – like the ones Canada or South Korea negotiated (after 8 and 7 years of discussions respectively).

But Theresa May thinks she has found a third way: a sector-by-sector approach. Her plan is for the UK to leave the single market en bloc, but renegotiate continued access to it on preferential terms for some key UK industrial sectors as part of a wider free trade agreement. According to this vision, these lucky sectors would continue to enjoy de facto membership of the single market, but without the requirement to be bound by decisions of the European Court of Justice. Problem solved, our Prime Minister thinks. We get our borders back, we ditch the ECJ’s jurisdiction, and the sectors most dependent on the European market continue to operate inside the single market, without the bits we don’t like. Simples.

This week, Ivan Rogers – Britain’s former Ambassador to the European Union – poured a gallon of scepticism over this plan. Asked whether Angela Merkel and other leaders would accept a sector-by-sector deal, Sir Ivan replied: “They’re saying, ‘fine, you have now accepted you are not in the single market… but you still want to have large elements of your cake and eat it’. People do say, did say to me repeatedly over months and years, that’s not on offer….[Merkel] and others will agree there will be no sectoral deals in either the single market or the customs union”.

A quick look at the mechanics of the Government’s sector-by-sector approach seems to vindicate Sir Ivan’s judgement. How could the aerospace or financial services industry still be in the single market yet not bound by the ECJ’s judgements that govern the sector? If the EU insists on free movement as a condition of single market access, why would they offer exemptions to a raft of the UK’s most important industries? Every EU leader’s utterance on the subject has stressed the indispensability of the integrity of the single market. To have a strategy based on not believing a core principle of what binds the member states of the EU together is somewhere between grossly naïve and delusional.

The truth is that a Brexit deal on a sector-by-sector basis is a fantasy. So how is it possible that Theresa May thinks this fantasy is in the land of the living? The answer, I think, lies in her time as Home Secretary, and in particular the lessons she learnt from the one key EU negotiation she undertook in her time there.

The decision point was set up for her by Tony Blair’s government in 2007. Article 36 of that year’s Lisbon Treaty gave the UK (and Ireland) the right to opt out of all the police and criminal justice measures adopted under the Maastricht treaty, before the European Court of Justice took over jurisdiction of them. Britain was given 7 years (until June 2014) to decide on whether or not to use this opt-out on an all-or-nothing basis. But if Britain chose to opt out en bloc, it could then apply to opt back in to individual measures that we considered to be in our national interest.

In 2014, Home Secretary Theresa May notified the European Commission that we would opt out of all 130 measures. As she put it at the time, “our guiding principle was that if there is no clear purpose for a European law, there shouldn’t be a European law”. At the same time, she made clear that we would seek to opt back in to 35 of the 130 measures that enabled trans-European cooperation in areas vital to UK security: such as the European Criminal Records Information System, Financial Intelligence Units, the Prisoner Transfer Framework, and (though this was on a separate legal basis) the European Arrest Warrant.

Apart from a procedural hiccup or two in the House of Commons, Theresa May had a successful negotiation. And she was very pleased with herself about it. As she wrote in the Daily Telegraph in November 2014:

“Many critics said that having sought to opt back into 35 measures, the European Commission and other member states would block us from doing so, or force us to opt into a higher number than we wanted. But they were wrong: our negotiation was a success and we have secured agreement.”

So here was a negotiation led by Theresa May in which Britain chose exit from EU cooperation, followed immediately by selective re-entry for cherry-picked dossiers that were central to the UK’s national interest. And it worked. Bingo. Theresa May’s biggest negotiation with the EU was a spectacular success for the cherry-picking strategy that she is now using to approach Brexit.

So it can work again, right? Wrong. The strategy of “exit then cherry-picking” worked with the JHA decision in 2014 for a simple reason: it was set up as an “exit plus cherry-picking” deal in the Lisbon Treaty itself. It is a colossal error to think that the same approach can work in the case of Brexit – a negotiation of phenomenally greater complexity, played on multiple chessboards simultaneously, where interests between the EU and the UK are nowhere near as simply aligned, and where opt-outs have not been negotiated by existing treaty provisions.

Of all the strands of wishful thinking this government is bringing to the Brexit process, this is perhaps the most damaging. Conceiving of Brexit as amenable to cherry-picking on a sector by sector basis is about to induce the mother of all lobbying operations inside Whitehall, as every industry seeks to make its case to be one of the chosen few. That will be a monumental headache in itself. But more fundamentally, it is an approach that has precisely zero chance of success, fuelled by a false analogy with Theresa May’s greatest EU negotiating moment three years ago. Listen out in the next few months for the sound of Britain’s Brexit plan crashing onto the rocks, with a Prime Minister at the helm convinced she can repeat the trick right up to the moment that the boat starts to run aground.