July 19, 2018
Business

It’s Brussels’ intransigence that’s really endangering Brexit now

The government did not handle the launch of its much-delayed Brexit white paper well, its safe to say.

In Westminster, MPs were so outraged by the lack of transparency it led to the House of Commons being suspended to give them time to read the 98-page document in order to quiz the new Brexit secretary. There were questions asked about lack of scrutiny and suggestions Dominic Raab should resign – four days into the role.

Out in the real world, its publication was greeted similarly. City groups who have engaged with officials and members of the government for months were left gobsmacked as the Department for Exiting the EU pulled the carpet out from under their feet. Many of them were expecting mutual recognition to remain an intrinsic part of the UKs negotiating position. Instead, just weeks after chancellor Philip Hammond had made an impassioned defence of the model, it was gone.

It certainly didnt help that political blog ConservativeHome had the alternative white paper, written under David Davis and Steve Baker, showing how prominently mutual recognition had featured prior to Chequers and the pair's resignations.

The City is angry that Number 10 has backed down before formal talks on the future relationship have even started. We are frequently told that what is said in the UK is heard in Brussels. In that case folding before the cards were even dealt sends a resounding message.

But it is not just the Prime Minister who is the object of the Citys ire: Michel Barnier and the others at the European Commission are arguably the source of the problem.

If they had shown any sign of being minded to drop their outright rejection of sensible, mutually beneficial approaches, we could be in a position to really strike a deal that works for everyone. Instead we have endured months of being told something cant be done simply because it hasnt been done.

Indeed, City A.M. understands one factor in dropping mutual recognition was the UKs acceptance that the time does not exist to achieve it. Having spent months on the Irish backstop, there is no time left to grind Brussels on a new model. But the halfway house created by this “reciprocal recognition of equivalence” could provide workable results – if the EU gets on board.

Everyone has had enough of Theresa Mays dithering. But it is clear that business groups and City figures are also over Barniers obstinate approach. Any failure to move forward at this stage will not be seen as an indictment of the UKs position, but of Brussels inability to move on from punishing the county for the Brexit vote.

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