The Times, 5th January.
Early March: Triggering Article 50
The government has set itself a deadline of March 31 to formally give notice to quit the European Union and begin the two-year exit talks process.
Theresa May will not wait until the final deadline to push the button, and the process will begin much earlier, probably at the start of the month. This will allow Brexit to be discussed formally at March’s two-day European summit meeting, due to be held on March 9 and 10.
Technically, in order to fulfil the criteria laid down by the European Union, all the government needs to do is send a simple letter stating its intention to leave the bloc. In reality it will provide much more information than this — setting out its vision for the UK’s future relationship with the EU, which will form the basis of negotiations.
Some of this we might hear about when Mrs May gives a keynote speech on her approach this month. This will be fleshed out in a document likely to be put before parliament in February. The government’s final proposals will then be included within the Article 50 notification.
The first thing to look for will be what the government intends to do about immigration. The other member states have made clear that they want the UK government to clarify what future arrangements will be in place for EU nationals wishing to come to work in Britain post-Brexit. The Home Office is working up potential options but no decisions have been taken.
The fundamental question that has to be answered is whether EU nationals would be given preferential access or face a level playing field with other countries.
The Brexit secretary David Davis is understood to favour the former option because it gives him greater leverage in the negotiations to argue that Britain should have preferential access to European markets.
Other members of the cabinet, such as Liam Fox, disagree, arguing that the UK should be able to select the best talent from across the globe and that trade deals will be easier to strike if access to UK labour markets is spread broadly. Mrs May has yet to state a settled view even in private.
Beyond immigration the key thing to look for will be what future customs arrangements the government asks for. This will involve some form of trade-off between barrier-free access to European markets and our ability to do free trade deals with other countries.
The government appears to be approaching this from two angles. The first is an overriding desire to prevent a “hard border” between the north and south of Ireland. The second is to prevent physical customs checks on integrated supply chains — particularly in food — that would be economically damaging. Both these priorities suggest that ministers need some form of customs deal. In order to get it they may need to make substantial concessions in other areas.
In other areas the government is likely to signal that it wants to remain part of cross-border justice and law and order agreements and bodies and is prepared to pay its way.
It will also seek to remain an associate member of organisations such as the European Investment Bank and scientific and academic research funding bodies.It will also seek a deal to remain part of organisations such as the European Medicines Agency, which is based in the UK. The only red line will be the European Court of Justice.
Given post-Brexit there will have to be some form of court of arbitration on trade. A new body will certainly have to be created, possibly including a mixture of EU/UK justices.
April/May onwards: The Talks
In addition to the new ambassador, Sir Tim Barrow, there will likely be two key figures on the British side who will lead the political and the technical Brexit negotiations: David Davis, the Brexit secretary, and Oliver Robbins, the civil servant who acts as Theresa May’s “sherpa” on European talks.
On the European side things are a little more complicated. The talks will formally be led by the Commission, which is being represented by the former French minister and commissioner Michel Barnier. But he will have two Belgians over his shoulder: the diplomat Didier Seeuws, who will represent the council of ministers, and Guy Verhofstadt, who represents the European Parliament that also has to ratify the deal.
After the Christmas break, Brussels officials, national ambassadors and “sherpas” for the EU27’s leaders will begin detailed work on the guidelines, laying down the ground rules for the structure of Brexit negotiations.
Included in the list of red-line demands from the EU27 will be a financial separation settlement or bill totalling between £30 billion and £50 billion and an equally politically toxic condition that European judges oversee the divorce process.
It will mean that, at a minimum, the government will be expected to pay nine months of contributions in 2019 and a full year of membership fees in 2020 without any rebate, which will end when Britain leaves the EU.
On top of the outstanding contributions, Britain is on the hook for an additional £20 billion in other financial liabilities, including a multi-billion-pound bill to fund 70 per cent of final salary pensions for EU officials over the next three decades.
“It will be the first row of Brexit, the most difficult and dangerous moment in the EU’s history,” said one Brussels negotiator. “If it goes wrong, and it is 50-50, then the exit process could fail. The real question is not hard or soft but whether Brexit will be orderly or chaotic.”
EU negotiators are planning on the basis that a Brexit agreement will be wrapped up within the two years allotted under Article 50 but in three parts that will include a structured schedule of negotiations into the next decade.
“Within the Article 50’s two years we will do the divorce and take a political decision on where Britain’s final destination is and the date it will arrive there. From what we have heard that looks like a free trade agreement plus,” said a Brexit negotiator for a national government. “Added to that will be bridging, transition agreements setting a schedule of how Britain will reach that landing point, with negotiations going beyond the two years.”
Diplomatic sources warn that “theologians” in the European Commission will insist that the EU courts are the final arbitrator in any of the inevitable political and commercial disputes arising from the divorce and transition period, envisaged to last as long as seven years.
Summer/autumn: Great repeal bill
The so-called great repeal bill will be introduced in the next parliamentary session, which begins with the Queen’s speech in May. The idea is to transfer all EU law on to the British statute book.
The government says that it will offer regulatory certainty for business in the post-Brexit landscape, and parliament will then have an opportunity to repeal various provisions that it doesn’t like.
Lawyers from every department have been tasked with mining four decades of EU directives and regulations to work out what rules need to be transferred. That is as much work as it sounds: on some estimates the EU has as many as 40,000 legal acts, 15,000 court verdicts and 62,000 international standards. Some are already incorporated into UK law but will need amending; others are not and will need incorporating.
Even after the appropriate rules have been identified, there’s a more complex problem. What the EU does is inherently cross-border in nature, and the way the rules are written is bound up in its own institutions.
Most regulations refer frequently to the powers of the European Commission or some other EU agency; many don’t make sense outside their European context.
Parliamentary process is another wrinkle. Many Eurosceptics’ antipathy towards Brussels is founded on the economically liberal principle that the EU stifles competition through excessive regulation. They are not keen on the idea that they are expected to vote for each of the regulations to become enshrined in British law.
Soft Brexiteers will want assurances that regulations such as workers’ rights and environmental protections will not be watered down, so there’s a risk for Mrs May that she gets caught in a pincer movement in both houses. It seems very unlikely that the repeal bill will be near the statute book by the end of this year.