The political turbulence surrounding our membership of the European Union has continued. A major problem is the lack of clear strategic thinking on what the Government wants to get from the negotiations when they begin formally after the invocation of Article 50.
The statements arising from the Cabinet meeting this week appears to indicate that the Government’s ideal scenario would be having full access to the Single Market without either paying into the EU budget, allowing the Free Movement of people or subscribing to its rules. This is completely unrealistic, the most obvious comparison is with Norway which pays more per capita than the UK does into the EU budget, allows the free movement of people and is bound by the rules of the Common Market. The Norwegians have made it clear that they would try and block the UK from joining the European Free Trade Area on terms that were significantly better than Norway’s.
More broadly a “bespoke” deal of the type that the Government is angling for would require tweaking of rules and potentially the Treaties to work, and either of these would require the consent of the 27 other Member States and the European Parliament. The positions of the 27 will be clearer after their meeting on the 16th of September. But in my view the European Parliament and the main political groupings, (our own Socialists and Democrats Group and the centre-right European People’s Party) are not in any mood to cut the United Kingdom any special favours. This is especially true after the behaviour of the poster-boy for the new United Kingdom Nigel Farage in the first plenary session after the vote. However, with European elections coming up in 2018 it may not be this Parliament which votes on the issue depending on when the United Kingdom sends notice of the activation of Article 50.
The European Commission will also play an important role in the negotiations, again the United Kingdom has little goodwill stored and the Commission is refusing to formally discuss anything with the UK or devolved Governments until the notification of the activation of Article 50 has been sent. This means that all of the current structural funds and agricultural subsidies that massively benefit the Welsh economy are currently facing massive uncertainty. The UK Government has pledged to underwrite all funding until 2020, but how smaller projects will ensure they get the money and how this will be administered is unclear. In view of this I will be having a private dinner with the Commissioner for Regional Development Corina Cretu, this will be a chance to get around the embargo on formal talks to discuss the current structural funding programmes, changes to it and possibilities for the future. I will make sure to liaise with the Welsh Government before the dinner about these issues.
Looking at the Member States, the Parliament and the Commission it therefore seems unlikely then that the Prime Minister will get the deal she wants. The key coming choice will be whether the Prime Minister will be willing to keep the free movement (at least in principle) as the price for retaining full access to the Single Market. If she is not then losing access to the Single Market is inevitable with all of the consequences that we, as the Labour Party, and major economic institutes have warned of. I know from the personal conversations that I have had with representatives from various companies that their continued presence relies on having tariff free access to the European market, which we will lose if we leave the Single Market. I am maintaining a dialogue with various companies which I continued this week in a useful and productive meeting with Ford.
Therefore, it is good to see that the First Minister has been taking material steps to prepare for the consequences of the exit of the United Kingdom from the European Union and I am pleased to be part of the advisory group of experts that has been appointed to offer advice to the Welsh Assembly Government.