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Smith – European Council guidelines show Government’s rhetoric is colliding with reality

The European Council’s draft Brexit guidelines were released today by Council President Donald Tusk and Maltese Prime Minister Joseph Muscat. The guidelines represented a major setback for the Government. They made clear that:

  • The UK will be unable to have the same benefits of being in the Single Market outside of it, despite the Government’s commitment that we will have the “exact same benefits”
  • There will be no sector-by-sector approach, which was an objective of the Prime Minister’s outlined in her Lancaster House speech
  • The EU will insist, as a condition of a comprehensive Free Trade Agreement, which the Government are seeking, that there are equivalence agreements in state aid, fiscal, social and environmental rules. This means there will be no significant divergence between UK and EU regulatory frameworks
  • Any transitional arrangement will be time limited and will be based on continuing EU acquis – ie EU rules and regulations, including free movement – and will be subject to ECJ oversight
  • The EU expects a single financial settlement from the UK and outlines what it will cover
  • EU agencies based in the UK will be transferred to within the EU. This will cover the European Medical Agency (900 staff) and EBA (150 staff), currently based in London
  • There will be some flexibility in the phasing of negotiations, but this will be determined by the EU27, who will have the control to decide when “sufficient progress has been made” in the divorce agreement before moving on to the future framework 

Commenting, Owen Smith MP, leading supporter of Open Britain, said: 

“Two days into a two-year negotiation and the Government’s lofty rhetoric is colliding with hard reality. The Prime Minister’s plan for Britain is a pipedream.

“The European Council’s draft guidelines underline the difficulty the Government will have in keeping its Brexit promises. The Prime Minister promised the exact same benefits on trade, but this has been explicitly ruled out today.

“Ministers and Leave campaigners have presented Brexit as a cost-free option. It is not. There will be a cost to Brexit, we just do not know how deep it will be. It is time for the Government to start levelling with the British people.” 

/ends

Notes to editors:

The Government’s Brexit vision is a fantasy: 

  • The UK will be unable to have the same benefits of being in the Single Market outside of it, despite the Government’s commitment that we will have the “exact same benefits”

“A non-member of the Union, that does not live up to the same obligations as a member, cannot have the same rights and enjoy the same benefits as a member.” 

“Any free trade agreement should be balanced, ambitious and wide-ranging. It cannot, however, amount to participation in the Single Market or parts thereof, as this would undermine its integrity and proper functioning.” 

  • There will be no sector-by-sector approach, which was an objective of the Prime Minister’s outlined in her Lancaster House speech

“Preserving the integrity of the Single Market excludes participation based on a sector-by-sector approach.”

  • The EU will insist, as a condition of a comprehensive Free Trade Agreement, which the Government are seeking, that there are equivalence agreements in state aid, fiscal, social and environmental rules. This means there will be no significant divergence between UK and EU regulatory frameworks.

“It must ensure a level playing field in terms of competition and state aid, and must encompass safeguards against unfair competitive advantages through, inter alia, fiscal, social and environmental dumping.”

  • Any transitional arrangement will be time limited and will be based on continuing EU acquis – ie EU rules and regulations, including free movement – and will be subject to ECJ oversight

“Any such transitional arrangements must be clearly defined, limited in time, and subject to effective enforcement mechanisms. Should a time-limited prolongation of Union acquis be considered, this would require existing Union regulatory, budgetary, supervisory and enforcement instruments and structures to apply.”

  • The EU expects a single financial settlement from the UK and outlines what it will cover

“A single financial settlement should ensure that the Union and the United Kingdom both respect the obligations undertaken before the date of withdrawal. The settlement should cover all legal and budgetary commitments as well as liabilities, including contingent liabilities.” 

  • EU agencies based in the UK will be transferred to within the EU. This will cover the European Medical Agency (900 staff) and EBA (150 staff), currently based in London

“While the future location of the seats of EU agencies and facilities located in the United Kingdom is a matter for the 27 Member States, arrangements should be found to facilitate their transfer.”

  • There will be some flexibility in the phasing of negotiations, but this will be determined by the EU27, who will have the control to decide when “sufficient progress has been made” in the divorce agreement before moving on to the future framework 

“To this end, an overall understanding on the framework for the future relationship could be identified during a second phase of the negotiations under Article 50. The Union and its Member States stand ready to engage in preliminary and preparatory discussions to this end in the context of negotiations under Article 50 TEU, as soon as sufficient progress has been made in the first phase towards reaching a satisfactory agreement on the arrangements for an orderly withdrawal.”

  • Gibraltar’s future is at stake and power is given to Spain in determining its future 

“After the United Kingdom leaves the Union, no agreement between the EU and the United Kingdom may apply to the territory of Gibraltar without the agreement between the Kingdom of Spain and the United Kingdom.”

Welcome commitment from the EU to constructive negotiations

  • Welcome prioritising EU and UK citizens

“Agreeing reciprocal guarantees to settle the status and situations at the date of withdrawal of EU and UK citizens, and their families, affected by the United Kingdom's withdrawal from the Union will be a matter of priority for the negotiations.”  

  • Welcome determination to avoid a hard border 

“In view of the unique circumstances on the island of Ireland, flexible and imaginative solutions will be required, including with the aim of avoiding a hard border, while respecting the integrity of the Union legal order.”




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