We can’t prepare to leave Europe until we know where we’re going | Andrew Rawnsley | Opinion

We can’t prepare to leave Europe until we know where we’re going | Andrew Rawnsley | Opinion

Tick. Tock. We have now got to that scene in the Brexit movie where rivulets of sweat begin to drip down the faces of the crew. They have noticed that the clock is running down. It is nearly four months since Mrs May dispatched her letter telling the EU that Britain was leaving. Yet nothing has been agreed. The cabinet continues to quarrel about the ultimate shape of Brexit. The talks in Brussels are making little discernible progress in critical areas. Time is one of Britain’s worst enemies in this process â€" and the clock becomes a more deadly foe with each day that is wasted.

It never was credible that the many aspects of this country’s ties with its closest neighbours and most important trading partners could be renegotiated to the remorseless timetable that kicked in when Mrs May invoked article 50. Britain’s political and economic relationship with the EU is the product of more than four decades of intricate engagement.

To the apparent surprise of some of the politicians who willed our self-ejection from the EU, the relationship touches on everything from the secure transportation of radioactive waste, to airline flight paths, to the safety of medicines, to the regulation of data flows. The notion that such a deep and multidimensional relationship could be entirely recast in less than two years was always for the birds. “With one bound we will be free” competes against “have your cake and eat it” to be one of the cruellest deceptions peddled during the Brexit referendum.

If the past few months have served any purpose, it has been to educate members of the government in the perilous complexities of this enterprise. The insouciance with which the Outers sold Brexit is beginning to give way to a belated recognition of the scale of the enterprise and the calamitous consequences of botching it. David Davis, the lead negotiator for Britain, now tells people that the task makes “the Nasa moonshot look quite simple”. When I asked one official why the mood in government had shifted in recent weeks, he responded: “They have started to look into the abyss.”

The greatest terror for the Tories is what could happen to the economy â€" and with it their future as a party â€" if Britain ends up in the kamikaze scenario of tumbling out of the EU without any agreement about the future relationship. Business, which has turned up the volume of its warnings since the election, is finally pushing through the door of Number 10 and using the opportunity to tell Theresa May to her face that a “no deal” Brexit would be a national disaster.

So a concept previously discussed only among Brexit nerds is now going viral. It goes by the name of “transition deal” or, in the prime minister’s preferred euphemism, “implementation period”. The slow learners in the cabinet have finally grasped that Britain will require a smoothed departure if there is to be any hope of avoiding a shock Brexit. This is a win for Philip Hammond, long an advocate of a transitional agreement, who has become a more aggressive proponent since the election result so weakened Mrs May that she could not carry out her original plan to sack the chancellor.

Mr Davis, one of the more pragmatic of the Brexiters and more alive than most of them to the vertiginous scale of the stakes, has always been careful not to rule it out. To an extent perhaps not fully appreciated, Mrs May’s post-election reshuffle strengthened the wing of her cabinet that is opposed to a stark rupture. David Liddington, a Remainer whom she promoted to justice secretary, now has a key role in shaping the future legal relationship with the EU. Damian Green, the old friend from Oxford whom Mrs May has turned into de facto deputy prime minister, was a passionate opponent of Brexit and has acquired a pivotal role at the heart of the cabinet office and the cabinet committees. A significant recent convert to the idea of a transition has been Liam Fox. In recent days, the international trade secretary has said that he can live with it. So has his fellow hard Brexiter, Michael Gove.

The battle for a transition seems to have been won within cabinet, but this resolves one argument only to ignite several others. How long should Britain sit in the departure lounge? Business groups such as the CBI are lobbying for a lengthy period of continued membership of both the single market and the customs union to prepare for a post-Brexit world. The realists in the government agree that it will take a lot of time, perhaps as long as five years, for companies to adjust. The most hardline Brexiters are frothing with opposition at the very idea of a transition. They are infuriated by the implication that this means that freedom of movement will not end on March 2019. They see it as a Remainer ruse to stay in the EU in all but name. It will be a version of the Hotel California: Britain will check out, but never leave. This is not entirely paranoid. It is true that one of the attractions of a staged departure for unreconciled Remainers is that it will give Britain longer to thi nk about whether it really wants to go through with this.

The British debate tends to neglect an important fact. There can be no transitional arrangement without the consent of the EU27. Michel Barnier, the point man for the commission at the Brexit talks, currently has no mandate from EU leaders to negotiate a transition. He would have to go back to them before he could engage on the subject. Many of the EU27 are sympathetic to the idea, as they are also astonished that Britain has been late to see the need for this, but their agreement would come with big qualifications attached.

The first obstacle is that the EU27 won’t even talk about the long-term relationship until “sufficient progress” has been made on the terms of the divorce. Two of the fiercest areas of contention are money and custody. After two trips by Mr Davis to Brussels last week, there is no agreement in sight on the future rights of EU citizens in the UK and Britons living in the EU27. A working paper released by the negotiators reveals outstanding and fundamental disagreements on 14 “red” issues. As for the bill for departure, the two sides have yet to agree on a methodology for negotiating that number, never mind getting down to wrangling out the maths.

Well-placed observers on both sides think that compromises can be arrived at eventually, with sufficient goodwill and ingenuity. The EU27 may ultimately have a bottom line on the separation payment of around €40bn. This would be a lot less than the €100bn that has sometimes been suggested, so, with a bit of dexterity, Mr Davis might even spin it to his party as a sort of victory for Britain. On the other hand, €40bn is a lot more than nothing, which is the only sum that is acceptable to the Brextremists.

To make it more palatable to the Brexit press and hardline elements of the Tory party, there are ways of dressing up the payment so that it would not look like a direct contribution to Brussels. Some of the money could be designated as “investment and support” for eastern European countries. This is how Norway and Switzerland badge contributions that they pay to give them access to the single market. Given that €40bn is a relatively small sum compared with the huge costs to the economy that would be inflicted by a bad Brexit, most of the cabinet could live with that.

I say most. An interesting domestic political question is what Boris Johnson would do. Only recently, the foreign secretary ventilated the view that EU leaders could “go whistle” for a substantial divorce payment. He will have to eat his words and that will be rather humiliating. Or he could choose to resign over the payment issue, calculating that this would win him the love of the Tory members who will choose the party’s next leader and attract praise from the Brexit press that will influence the activists’ choice.

Let us suppose that the outlines of the divorce settlement can be agreed and in a way that doesn’t collapse this fragile and fissile government. Then the EU27 would be willing to talk about a transitional arrangement. With this caveat. The EU can only negotiate a transition if Britain is clear about where it wants to end up. Angela Merkel and other EU leaders won’t board that plane until they have some idea where it will eventually land.

Business, likewise, says that it can’t be expected to keep investment decisions on pause until the spring of 2019. Car manufacturers, airlines and banks need to know far sooner than that. They are demanding clarity about the government’s desired destination and its intended means of getting there and they want it by this autumn. Absent a clear flight plan, companies will continue to shift investment and relocate jobs elsewhere. So don’t be too beguiled by the apparent outbreak of cabinet unity about a transition. This will mean nothing unless they can agree where they want to transit to. Tick. Tock.

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