Last Friday, after an all-day summit at Chequers Mrs May and her cabinet reached an agreement on how they saw UK’s future relationship with the EU after Brexit.
It proposed a common rulebook for trade in goods with the EU, including agricultural products, after Brexit. This would create a UK-EU free trade area, in which the UK would commit to “continued harmonisation” with EU rules. It would avoid friction at the UK-EU border between Northern Ireland and the Republic.
The UK would apply domestic tariffs and trade policies for goods intended for the UK, but charge EU tariffs and their equivalents for goods which will end up heading into the EU. This should mean that the UK would be able to regain control of trade with the rest of the world without causing border disruption.
Crucially, there would be different arrangements for services, which could provide an important safeguard for the UK’s financial sector.
Ending the supremacy of the European Court of Justice
The UK courts would work alongside, rather than under EU courts, and free movement would end, although a “mobility framework” would allow UK and EU citizens to travel to each other’s territories for study and work.
According to the government, the plan would give the UK an independent trade policy, and let the nation set its own non-EU tariffs and reach separate trade deals. It would also end annual payments to the EU budget but allow appropriate contributions for joint action in specific areas.
It was inevitably a compromise, which meant that it delighted neither hard-core Brexiteers or Remainers. However, it looked as though it might at least provide a workable solution for what has seemed to many as an insoluble problem.
But trouble started immediately.
By Saturday night, more than 100 entrepreneurs and founders of UK businesses had dismissed the plan as unworkable in a letter released by the co-founder of Innocent Drinks, Richard Reed. They saw the customs proposal as costly and bureaucratic for UK firms and called for full customs union membership. Hardline anti-EU Tory MPs led by Jacob Rees-Mogg, saw it as worse than a “no deal” departure and questioned whether it would amount to Brexit at all.
More than 100 entrepreneurs and founders of UK businesses had dismissed the plan as unworkable in a letter released by the co-founder of Innocent Drinks, Richard Reed.
There were also signs that Brussels was unimpressed.
What happens now?
Far from creating the unity Mrs May was hoping for, the proposal seems to have shown up the divisions in her party.
Some MPs were positive. Michael Gove urged Tory MPs to back the compromise – but others voiced dissent. Backbencher Brexiteer Andrea Jenkyns said that the proposals would mean British business would continue to follow EU rules and suggested a leadership challenge. Remainer Tory MP Phillip Lee described the offer as the “worst of all worlds” and called for a second referendum.
Sensationally, Boris Johnson has quit as Foreign Secretary and David Davis quit as Brexit Secretary, indicating that the proposal meant closer ties to the EU than he thought acceptable. It looks as though Mrs May’s problems are far from over.
How will this affect your money?
As the 24 months since the referendum have showed, it’s impossible to predict the economic effect of anything to do with Brexit. If the proposals go forward, they may make leaving Europe painless, but may also restrict the scope for new international deals.
It’s impossible to predict the economic effect of anything to do with Brexit. If the proposals go forward, they may restrict the scope for new international deals.
It might be time to look at your investments with uncertainty in mind. At Continuum we would be happy to look with you.
The value of investments can fall as well as rise and you may get back less than you invested.
msn.com – Theresa May’s EU deal under fire from hardline Brexiters – 8th July 2018
bbc.com – At-a-glance: The new UK Brexit plan agreed at Chequers – 7th July 2018
bbc.com – Brexit: Michael Gove urges Tories to back Theresa May’s plan – 8th July 2018