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Brexit talks will descend into fist-fighting, warns Sir Ivan Rogers Brexit talks will descend into fist-fighting, warns Sir Ivan Rogers
(about 4 hours later)
The UK’s former ambassador to the EU has told MPs the Brexit talks will inevitably descend into “name-calling” and “fist-fighting” before any agreement can be found, adding there will be serious consequences for the UK economy if the negotiations are mishandled. The UK’s former ambassador to the European Union has told MPs the Brexit talks will inevitably descend into “name-calling” and “fist-fighting” before any agreement can be found, adding there will be serious consequences for the UK economy if the negotiations are mishandled.
Sir Ivan Rogers, who resigned from the post this month, also challenged the centrepiece of Theresa May’s withdrawal strategy by saying the EU had no appetite to give the UK an interim free trade deal. Sir Ivan Rogers, who unexpectedly resigned from the post last month, challenged the centrepiece of Theresa May’s withdrawal strategy by saying the EU had no appetite to give the UK an interim free trade deal.
Insisting he was not seeking to be “spine-chilling”, Rogers urged the government to make “a stone-cold sober analysis” of the consequences of abruptly falling out of the EU without a deal, which would mean falling back on the standard terms set by the World Trade Organisation (WTO). He warned that if UK negotiators unilaterally or abruptly walk out of Brexit talks without an agreement on future relations with the EU then British business would lose preferential access to the European single market for several years.
Rogers quit in January after telling Theresa May that Brussels diplomats thought it might take 10 years to reach a deal. On Wednesday he said he had resigned because he felt the head of the UK negotiating team in Brussels needed to see through the “humongous negotiations” right to the end, and not because he was fundamentally opposed to the government’s free trade objectives. Insisting he was not seeking to be “spine-chilling”, Rogers urged the government to make a “stone-cold sober analysis” of the consequences of crashing out of the EU without a deal, which would mean falling back on terms set by the World Trade Organisation (WTO).
Giving evidence to the Commons European scrutiny select committee, Rogers said that without agreement on a future free trade deal, UK businesses, including financial services, had no guarantee of subsequent access to the EU single market. He also revealed that the EU believes that Brexit has blown a hole in its budget, and will demand as much as €60bn (£51bn) to fill the hole left by the UK departure.
His lengthy evidence session lifted the lid on the details of Whitehall’s Brexit negotiation thinking, providing the most informed public insight into the many pitfalls and trade-offs ahead in the next two years. Rogers resigned in January after telling Theresa May that Brussels diplomats thought it might take 10 years to reach a deal. On Wednesday he said he had resigned because he felt the head of the UK negotiating team in Brussels needed to see through the “humongous negotiations” right to the end, and not because he was fundamentally opposed to the government’s free trade objectives.
He said David Cameron was right to conclude last February that he would gain no further concessions on free movement of people across Europe, so triggering the referendum on the terms offered. The lengthy evidence session to the European scrutiny select committee on Wednesday was the first time Rogers has spoken publicly since he quit, and it provided a rare informed insight into Whitehall’s Brexit negotiation thinking and the many pitfalls and trade-offs to come.
Rogers revealed there were serious doubts about the option of the UK simply falling out of the EU without either a clear transitional arrangement or a new free trade agreement in place, a proposal pushed by many leading Eurosceptics as quick and painless. He indicated the talks were so vast, and cut into every aspect of UK economic life that a deal could not be reached within the two-year timeframe required by article 50, thus requiring the two sides to look for an interim deal.
He said he understood the public impatience to leave the EU quickly, but the UK had to look at “the real-world consequences” of leaving without a deal. “It will involve disentangling yourself from 43 years when EU law has got into every nook and cranny of UK social and economic life. Rogers said he did not think the EU would concede the UK an interim bespoke deal, and suggested one option instead would be for the UK to join the existing European Economic Area as a Brexit antechamber before a final deal was negotiated. The opinion among Brussels insiders is that a final deal would take 10 years to complete.
“You have to work through every area: what does the default to the WTO option entail and where does it take you? It’s not just a matter of changing our own legislation. Access to the single market automatically lapses.” Warning that the EU thought it was holding the best cards, Rogers said: “The view of many will be that the implications for the UK of walking away without any deal on the economic side and without any preferential arrangement and walking into a WTO–only world are, from their perspective – which may be a misreading of us – so unpalatable that we won’t do it.
He said he did not believe, for instance, that the EU would allow financial passporting for the City of London to operate in the EU, and said the less ambitious goal of agreeing equivalence – a means of ensuring privileged access to the single market for services – was problematic. “If you walk away you have to be clear that we will be living for several years in a WTO-deal-only world and then you have to understand the implications of the WTO in micro detail.”
He said equivalence was “quite capricious, political and incomplete. It can be withdrawn at relatively short notice by the 27”. That represented “a huge business problem” for financial institutions. He said the EU demand for a €40-€60bn exit fee was genuine, and although each of the 27 states would have its own interests and priorities in negotiations, “one thing they can all agree on is that we are the rogues who have ceased to pay our dues”.
Warning that the EU thought it was holding the best cards, Rogers said: “The view of many will be that the implications for the UK of walking away without any deal on the economic side and without any preferential arrangement and walking into a World Trade Organisation–only world are, from their perspective – which may be a misreading of us – so unpalatable that we won’t do it.” If no agreement was reached on the exit fee, the EU would probably go to the European court of justice (ECJ) to seek redress, he said.
He said the UK needed to seek “a mutual recognition agreement balanced between the two sides providing predictability certainty and dual control over the arrangements. We would be seeking in any deal something unprecedented for the EU.” The UK is leaving the EU in large part to extricate itself from ECJ rulings and a dispute is likely about the appropriate legal arbitrator.
Rogers said part of the task involved persuading the 27 “not to cut their own noses off. We are going to have persuade them that it is in their interest to do an unprecedented deal with us in terms of marked access.” Rogers said he understood the public impatience to leave the EU quickly, but the UK had to look at “the real-world consequences” of leaving without a deal. “It will involve disentangling yourself from 43 years when EU law has got into every nook and cranny of UK social and economic life.
He said he did not believe such a deal could be negoitated within two years, and thought the EU would not give the UK a bespoke interim deal. He suggested instead that the UK should look at the option of the European Economic Area (EEA) as an “antechamber” from which the final terms of Brexit, including a free trade deal, could be negotiated. He said the EEA was a readymade departure lounge. “You have to work through every area: what does the default to the WTO option entail and where does it take you? At the point where we cease to be a member state access to the single market in certain areas automatically lapses unless a replacement legal agreement has been drawn up.”
He said the EU would seek between €40bn to €60bn in unpaid liabilities as part of a Brexit cheque, adding: “The UK by leaving the EU has blown a massive hole in the EU budget.” He said he did not believe, for instance, that the EU would allow financial passporting for the City of London to operate in the EU, and said the less ambitious goal of agreeing equivalence – a means of ensuring privileged access to the single market for UK services – was problematic.
Although each of the 27 states would have its own interests and priorities in negotiations, “one thing they can all agree on is that we are the rogues who have ceased to pay our dues”, he said. Equivalence was “quite capricious, political and incomplete. It can be withdrawn at relatively short notice by the 27”. That represented a huge business problem for financial institutions, Rogers said.
Rogers said Whitehall was already overwhelmed by the scale of Brexit. Saying he did not wish to wash dirty linen in public, he warned: “Whitehall has a hell of a lot to do on Brexit and at speed. People are being run off their feet. Speaking as the ex-permanent representative at the EU, I saw a diminution of effort”. The goal of the talks must be to persuade the 27 states “not to cut their own noses off”.
“We are going to have persuade them that it is in their interest to do an unprecedented deal with us in terms of marked access,” Rogers said.
Rogers said Whitehall was already overwhelmed by the scale of the problem: “Whitehall has a hell of a lot to do on Brexit and at speed. People are being run off their feet.”
UK officials in Brussels were trying to deal with day-to-day dossiers, he said, but not receiving instructions from Whitehall. Such officials told him: “I am not clear what I am saying or what our position us.”UK officials in Brussels were trying to deal with day-to-day dossiers, he said, but not receiving instructions from Whitehall. Such officials told him: “I am not clear what I am saying or what our position us.”
Rogers said: “That is not good enough. We have to walk and chew gum at the same time. We have to deal with the day-to-day dossiers.”Rogers said: “That is not good enough. We have to walk and chew gum at the same time. We have to deal with the day-to-day dossiers.”