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The coronavirus response means the government will need to extend the Brexit transition period

With the UK and EU both battling the coronavirus pandemic, the government will need to accept that its current Brexit timetable is no longer viable

With the UK and EU both battling the coronavirus pandemic, the government will need to accept that its current Brexit timetable is no longer viable, says Joe Owen

The UK government is consumed by its response to the coronavirus pandemic. It has postponed the COP26 UN climate summit, due to be hosted in Glasgow in November. It has delayed the strategic defence and foreign policy review and a comprehensive spending review.

But the task that was going to dominate government attention this year – negotiating and then implementing the UK’s new relationship with the European Union – is still, in principle, happening on the same timetable. In practice, the government has already shown that Brexit timelines play second fiddle to the coronavirus response. Teams working across Whitehall to negotiate a future UK–EU relationship and prepare for the practical changes at the end of transition – covering the UK’s border, internal security, immigration, regulatory system – are being redeployed on to the immediate fallout of the virus.

This is the right priority, but it renders the government’s Brexit timetable essentially impossible. Meeting the 31 December deadline would have been heroic: doing so in the midst of an international health crisis, with the energies of governments across Europe focused on their handling of the outbreak, seems out of reach. Negotiations are grinding to a halt when they should be approaching full speed. The government may not be willing to request an extension, but – if only for the sake of businesses needing to prepare – an extension is now necessary.

Coronavirus postpones benefits of Brexit and compounds the costs

The Johnson government’s line has long been that it would not extend the transition – a line which has continued despite the rise in Covid-19 cases and deaths. The government has been prepared to accept short-term disruption to the economy, deal or no deal, in order to quickly secure what it sees as the benefits of Brexit – namely, trade deals and greater control over immigration and regulations.

But the effects of the coronavirus are likely to delay those perceived benefits. There will be no big trade deals negotiated while the world’s governments are similarly distracted by the pandemic. There is little immigration to control when travel is suspended. Regulatory freedom makes little difference to an economy in deep freeze.

With the benefits being delayed, it makes little sense to reject a delay to the costs. Short-term economic disruption might have been acceptable to a government voted in on an election platform of “getting Brexit done” – when the UK was functioning as normal. But it is hard to see how the government can square the inevitable, if short-term, disruption from Brexit with a pledge to do “whatever it takes” to support the country through an undetermined period of economic (and social) lockdown.

The UK and EU should decide on the length of the extension in June – but signal their intentions to business sooner

The questions for the UK government on transition extension is less about “if”, but more “when, and for how long.” Under the Withdrawal Agreement, both sides have a clear path for extending the transition. They can agree to extend once, for up to two years, and must make this decision by 1 July.

But this will involve some negotiation. The scale of the UK’s continued financial contributions to the EU – the UK might hope for reduced contributions more on the scale of Norway, as an EEA member – and its ongoing participation in EU schemes such as Common Agricultural Policy will be a potential source of tension.

Nobody yet knows how long much time will be needed to take account for days lost to coronavirus. If the decision to extend is a one-off, as the withdrawal agreement states, then its important to get the length right . Too short and a second (or third) wave of coronavirus cases would cause renewed disruption. Too long and the uncertainty is dragged out even longer.

An extension might be inevitable, but it doesn’t mean it should be rushed. Preliminary discussions could start soon, over financial contributions for example, but deciding the length of the extension should wait until scheduled talks in June, at which point the two sides should understand more about how much time will be lost to the handling of the coronavirus outbreak.

The presentation of any decision must be considerate of the politics on both sides – this isn’t the UK going back to Brussels, yet again, because it can’t make up its mind on what it wants. It’s both sides clearing the decks to focus on a more pressing issue.

Businesses must be given time to prepare

Agreeing to extend the transition period will still leave the two sides with the problem that existed before coronavirus: the time will likely be consumed by negotiations, so how can changes be eased in rather than introduced overnight? Businesses will need more than a handful weeks to properly adjust once the outcome of the deal is clear.

One option would be to set a new date for the transition to end, and if a deal is agreed by that point then an extra slot of time automatically kicks in – giving businesses breathing space to adapt once the details are known. The key is to give business early warning of a revised timetable – and then enough time to prepare.

This government has promised it would not ask for more time. But not all policy U-turns are a sign of weakness – and certainly not when made to help manage an unprecedented national crisis. The greater risk is that the government tries to conclude Brexit and tackle the coronavirus at the same time, and finds it can do neither well.

Johnson government
Institute for Government

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