Brexit plan gets business cheers but Tory anger

The UK government published its long-awaited plan for Britain’s future relationship with the EU yesterday but was immediately faced with resistance from Brexiteer Tory MPs.

Ministers won cautious approval for the White Paper from business leaders but are set for a tough fight against eurosceptics in their own party who denounced the plan as “vassalage”.

The 98-page document sets out a significantly “softer” version of Brexit than desired by Tory Brexiteers, prompting the resignation of Boris Johnson and David Davis from Mrs May’s Cabinet earlier this week.

It involves the UK accepting a “common rule book” on trade in goods, with a treaty commitment to ongoing harmonisation with EU rules. The UK would enter an association agreement with the EU, making continued payments for participation in shared agencies and programmes.

An independent arbitration panel set up to resolve UK-EU disputes would seek guidance from the European Court of Justice, but only on the interpretation of EU law.

CBI director general Carolyn Fairbairn welcomed the plan, saying it put “pragmatism before politics”, but warned there were still “gaps” on the future VAT regime and customs systems.

“With three months left to go, it is now a race against time,” Ms Fairbairn said. “This is a matter of national interest. There’s not a day to lose.”

Liz Cameron, the director of the Scottish Chambers of Commerce, welcomed plans for visa-free travel for tourism and short-term business activity, as well as a UK-EU Youth Mobility Scheme.

However, Ms Cameron added that the labour-intensive Scottish hospitality, manufacturing, oil and gas, and food processing sectors “need urgent clarity on the longer-term arrangements for the recruitment of workers from EU and non-EU countries”.

There were shambolic scenes as the document was unveiled, with House of Commons Speaker John Bercow forced to suspend the session of Parliament so MPs could be issued with copies of the White Paper. The Speaker rebuked new Brexit Secretary Dominic Raab, saying it was “most regrettable” that journalists had been briefed on the contents of the document yesterday morning, before MPs had a chance to look at a copy.

Mr Raab faced hostile questioning from all sides, including his own. Jacob Rees-Mogg, the chairman of the backbench European Research Group, said the proposals amount to “vassalage” and “a bad deal for Britain”.

The Scottish Government’s external affairs secretary Fiona Hyslop said the White Paper had “fallen short on employment rights and environmental protections” and offered “little reassurance” on the economy.

“While the paper provides an indication that the UK wants to participate in pan-EU programmes in areas such as science and research, there continue to be too many unknowns on issues such as whether the UK’s proposals can deliver continued use of the European Arrest Warrant and what they mean for the future migration of people,” Ms Hyslop said.

The EU’s chief Brexit negotiator Michel Barnier said he would assess the White Paper to see if it was “workable and realistic” before meeting Mr Raab next week.

THE BIG ISSUES IN THE WHITE PAPER – AND THE QUESTIONS LEFT UNANSWERED

Q What does the Brexit White Paper say about... customs and trade?

A The government says it wants to create a “free trade area for goods” between the UK and the EU. This will involve the establishment of a “combined customs territory” with EU tariffs and checks applied to goods destined for the continent, and the harmonisation of regulations for goods under a “common rulebook”. The government says this would “preserve frictionless trade for the majority of UK goods trade and reduce frictions for UK exporters and importers”.

Q ...immigration?

A The government insists that free movement of people will end after Brexit, but the White Paper states that the UK “will want to continue to attract the brightest and best, from the EU and elsewhere”. The detail of exactly how that will work won’t be known until a review of migration is concluded, but the White Paper says new arrangements will allow businesses to hire the workers they need, and visa-free travel will be extended to tourists and businesspeople on short-term work visits. EU students will also continue to be welcome. Brexiteers feel this could become free movement in all but name if the UK government could be forced into further concessions.

Q ...devolution?

A Harmonising rules for agricultural and food products would be “legislated for by Parliament or the devolved legislatures”, but it isn’t yet clear what would happen if the Scottish Parliament disagrees on a specific regulation in a devolved area. The UK government says only that it will “work closely” with Edinburgh, Cardiff and Belfast. Negotiations on dispute resolution are ongoing.

Q ...the European Court of Justice?

A The White Paper says that when there are disputes between the UK and the EU over the “common rulebook” on goods, “the UK recognises that only the European Court of Justice can bind the EU on the interpretation of EU law” – so any deviation from EU rules means losing access to the European market. A new joint committe from London and Brussels will oversee any conflicts, but may be forced to refer to the ECJ for its opinion on the rules – a source of anxiety for Brexiteers.

Q ...the service sector?

A The White Paper concedes that the UK “can no longer operate under the EU’s “passporting’ regime” that allows the services sector, making up four-fifths of the British economy, to trade in the EU on the same terms as now. Businesses had hoped for a “mutual recognition” regime, where the UK and the EU accept each other’s regulations, as the next-best option for frictionless trade. Instead, the White Paper says there will be a “new economic and regulatory arrangement” to ensure the deep links between the UK and EU economies in services can continue. However, it isn’t clear how this will operate, or if the EU will accept what it considers to be ‘cherry picking’ of parts of the single market.