18 October 2018

The Prime Minister is considering an extension to the 21-month transition period that will follow withdrawal from the EU. Joe Owen argues that it won’t solve the Irish problem, but an extra 12 months is still an offer worth having.

Negotiators and their political masters are looking for a breakthrough in Brexit negotiations. They need something that will push things forward, unlock agreement on the Irish Border and get talks over the line in the coming weeks. Their latest plan: a 12-month extension to the 21-month transition.

An extra year or so would be a prize for those – on both sides of the Channel – faced with the Herculean task of negotiating a detailed future relationship and implementing it by December 2020. It would reduce the risk of the UK facing a second cliff-edge in mid-2020 with another no deal deadline looming. And it would increase the chances of a smooth transition to the new relationship.

The UK was always more pragmatic about a Brexit transition time limit than the EU

In her Florence speech, in September 2017, the Prime Minister first admitted the UK would need time after Article 50 for negotiating the future relationship and preparing new systems. How long would it last? That, she said, “should be determined simply by how long it will take to prepare and implement the new processes and new systems”.

Referencing the changes to the immigration system, the PM said that current estimates pointed to a time of “around two years”. But “around” can mean many things when it comes to government timelines – the much-anticipated immigration White Paper was due “around” summer 2017.

It was not then-Cabinet members, David Davis or Boris Johnson, who slapped a 21-month deadline on the interim-period – or indeed the Prime Minister's backbench critics. It was the EU.

Brussels said the interim period should end at a time that was administratively convenient for them, at the end of their seven-year funding cycle. But no doubt they felt that a cliff-edge in the middle distance would be a helpful tool in forcing concessions from the UK in future relationship talks as the deadline loomed.

21 months is very unlikely to be enough to negotiate the kind of Brexit the UK is pursuing

It doesn’t matter if the UK opts for Chequers, Canada +++, Super Canada or SuperChequers +++, the reality is that 21-months is not long enough to conclude the talks. The UK and EU would need to reach agreement on trade, security and cross-cutting issues like data, all in a shorter period than the EU takes to negotiate less ambitious deals.

Time taken for the EU to conclude FTAs compared to length of transition period

Yes, you can argue that Brexit is ‘unprecedented’ – the UK is starting from complete convergence with EU rules. But it’s also ‘unprecedented’ in plenty of less helpful ways, in that Brexit is about two sides moving apart. It also has a fall-back position of significant disruption rather than the status quo. That makes the threat of walking away much harder to make credibly.

But the negotiators won’t even be able to bank the full 21 months. In a case of very bad timing, the European Parliament elections in May means that nothing will happen until they’re back before the summer. But then there will need to be a new Commission and new Commission president. That could mean technical talks but not much more until October/November 2019. That doesn’t even take account of the time needed to complete a ratification process far more complex than for the withdrawal agreement.

The systems and processes needed for a new relationship won’t be ready by December 2020

You can’t implement a new relationship until you know what it’s going to be. The UK and EU may agree a political declaration on the future relationship in the coming weeks, but that’s subject to change and likely to be pretty fluffy in pretty important places.

When it comes to designing new border systems or regulatory structures, that kind of detail matters. But so does time. Even if the UK had the necessary detail by next week, a 21-month transition would be heroic to get the systems in place. If it’s not agreed until mid-late 2020, it’s impossible.

Time spent on major government projects compared to length of transition

Securing an extra year is sensible, but it doesn’t solve the Prime Minister’s Irish problem

Some EU lawyers think that without an extension clause in the withdrawal agreement, there would be no possibility of avoiding that deadline. At the very least, the UK would be the demandeur, and forced to “buy” a concession from the EU during the talks.

Brexiteers may object to another year of “vassalage” and “vast sums of money” being paid to the EU, but the reality is that a 21-month transition was never going to be enough and the bill for extending it – ensuring a smooth Brexit – is unavoidable. It’s much more sensible to secure an extension now.

But all this applies only if the PM gets a withdrawal agreement. Her problem now is how she gets to March 2019 and comes out the other side into any transition. The hope is that bolting on 12-months will assure the UK Cabinet and Parliament that the EU’s ‘Irish backstop’ – politically toxic to many in Westminster - would never be used. It might marginally reduce the possibility – but on its own it can’t offer a guarantee.

For many in Westminster, the problem with the EU’s proposal is not how likely it is to come into force, but the principle. It is hard to imagine them being mollified by an extended transition, but while it won’t fix the Prime Minister’s big problem, now it’s on offer, it’s worth having.

Comments

Thanks, Joe. Your chart on the major government programmes sparks the interesting question as to what might be an equivalent programme to Brexit? Y2K took 7 years from 1992-1999, and only involved big companies plus the government. Margaret Thatcher's privatisation programme involved privatising just one company at first (the 'Tell Sid' British Gas campaign in 1986) and even that was planned and executed over 18 months; decimalisation (perhaps the nearest parallel) began in 1961, with decisions being finalised on a cross-party basis in 1966 and implementation taking place only in 1971 (and after a mammoth public information campaign) - and it was still chaos for months afterwards. Whereas Brexit is potentially taking place in under 6 months, with no cross-party agreement and with nobody knowing exactly what it might involve. Paul

Think also about some of the much simpler projects that have gone wrong although there was probably greater commitment to their success. Think of the recent train timetable changes, TSB's new IT systems, the failures in the prison system, the Grenfell Tower disaster, Windrush, the Carillion colapse and many more like them. All of them involved people trying to successfully manage projects far smaller than Brexit and failing. If we are not to have chaos, proper time needs to be allowed for the complexities to dealt with and implemented.

an interesting read however to me a longer transition does not help the fact that nothing is in place regarding freight coming in or out of the UK IF a 'Hard Brexit' is affective from March 2019.
I remember a time pre 1992 when customs entries were submitted whereby Importers paid VAT Duties on goods arriving from EU countries. These EU goods coming mainly via unaccompanied trailers through the ports were still scrutinized by Customs (document checks , examinations and the production of physical paperwork at locals customs officers.) as they are today from imports from countries outside the EU. Due to the free movement of goods after 1992 the space given for trailers at ports have been reduced and therefore the customs officers checking docs etc.. have also been reduced . In my opinion it was a process by which was in use before 1992 and therefore can work again. The quantity of freight arriving into the UK has gone up which could cause the delays at ports but the technology has also improved. We no longer need to rush customs entries and original docs to local customs to be checked and then cleared and released to leave the port, as it is now all done electronically ,i would hope the intelligence due to IT that HM Customs receive also is better than it was pre 1992 therefore decreasing the amount of document checks and physical checks required on cargo arriving into the UK. I would hope this would alleviate the 'delays' feared by transport companies operating mainly from the EU . However the ports ,customs have not committed to what would happen if a hard Brexit takes place and March 2019 arrives with no plan in place. Then the disaster of trucks queuing somewhere is a reality at the moment.
On another note I feel it would be a better scenario where by only VAT was paid for cargo on a postponed accounting service arriving into the UK via the EU rather than also the DUTY, however again if the EU decides to charge UK exporters DUTY ,the UK would in turn charge UK importers companies duty for goods arriving into the UK as we do with third countries.

All these Brexit freight scenarios are also mixed with the confusion imposed by HM Customs and the new CSD system being currently implemented.

Add new comment

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.