The UK must be fully prepared to walk away with nothing to have any credibility in the negotiations to come

The UK must be fully prepared to walk away with nothing to have any credibility in the negotiations to come

Saturday 20th February 2016 was in many ways the beginning of the end for David Cameron. Yes, it was the day that he officially announced the date for the EU referendum which would ultimately be his downfall, and the day when six of his Cabinet ministers declared that they would be campaigning against him, before Boris followed suit the day after.

But above all, it was the day that he returned from Brussels and had to attempt to sell the British people a renegotiation which had accomplished the sum total of more-or-less precisely nothing.

Not only did Cameron “under-bid” and lack ambition in his negotiations, according to his former Europe adviser, Mats Persson, but more crucially, the EU was fully aware that there was no possibility whatsoever of Cameron walking away and campaigning for Leave if he failed to secure a substantive deal.

Ultimately, all of Cameron’s attempts to give some credence to his negotiating position served only to fatally undermine his own position in the referendum, as voters were unsurprisingly more than a little sceptical of someone who in a matter of weeks could go from declaring that “of course Britain can survive outside the EU” to prophesying economic Armageddon if they voted to Leave, having apparently changed his mind on the basis of a few rounding errors to the vast corpus of EU laws and obligations.

For all of Cameron’s protestations that he “ruled nothing out” and could even campaign to leave if he failed to secure a good deal, the EU’s leaders were well aware that this was nothing more than spin – Cameron was fully committed to remaining. They rightly judged that they could offer nothing but the most superficial, token concessions, and captive Cameron would inevitably kowtow to them and scuttle off home with whatever “thin gruel” he was served with.

Theresa May cannot afford to make the same mistake as David Cameron when dealing with the EU.

A comprehensive free trade deal in goods and services is undoubtedly the best option for both the UK and the rest of the EU. This is fundamentally the point of free trade deals – they are almost always a win-win for both sides.

Theresa May’s overall negotiating strategy is actually remarkably clear: to secure the most comprehensive access to the European market that is compatible with controls on free movement of people, an end to the jurisdiction of the European Court of Justice, and the ability to make our own free trade deals across the globe. Strategic industries like financial services will naturally have more strategic importance attached to them.

Any and all further details are subject to negotiations with the EU and its 27 other member states. It is painfully obvious that it is not in the gift of the Government to start making unilateral declarations about what concessions it needs the other 27 member states to grant it.

That is why the repeated attempts to try to force the Government to do just that are so absurd. The “Planners” have failed to grasp the fundamental fact that the Brexit negotiations are going to be conducted with the EU, not with Remainer MPs and a handful of Liberal Democrat peers. If Theresa May is forced to reveal her hand in full, it will not be MPs holding the Government to ransom, but the EU’s negotiators.

This is cloud cuckoo diplomacy. There could not be a better way of throwing away all of our leverage and handing the EU all the cards in the negotiations.

If the EU senses any weakness or desperation on the Government’s part, it will quickly recognise that there is no incentive for it to be at all forthcoming with what it offers on its side of the bargain. The EU will have free rein to extort unreasonable concessions in certain areas, knowing the Government’s hands have been tied in others to accept a deal whatever the cost.

Forget a white paper spilling the beans on all of the Government’s preparations prior to the negotiations. The white paper we need is one spelling out exactly how Britain will continue to flourish on the day we leave the EU, outside the single market, outside the customs union, and trading with the EU under WTO rules.

Paradoxically, in order to get the best deal, the UK must show the EU that it is fully prepared to walk away with no deal at all, if the EU is not willing to play ball.

This must be our baseline scenario. Any free trade agreement on top of this must be seen as a bonus, not a given. It is the only way the UK can have any real credibility in the negotiations.

Fortunately for the Government, a substantial amount of work has been done on this already. Dr Lee Rotherham has been revisiting the comprehensive study, Change, or go, in which Business for Britain did precisely this, undertaking a sector-by-sector analysis of how the UK could prosper under WTO rules outside the EU, while Barnabas Reynolds has been developing some of the most detailed plans for the post-Brexit financial sector to date, considering scenarios both with and without free trade in services with the EU.

We must turn the negotiations on their head if the UK is to have any real leverage. The Government must make it plain to the EU that its Brexit strategy is not dependent on the goodwill of the EU, or lack thereof, but on a comprehensive economic plan that is fully prepared for the worst possible outcome from the negotiations, should the EU truly wish to inflict damage on itself by going down that route.

Rather than Britain obsequiously begging for a deal the EU does not want to give, it will place the onus firmly on the EU to make us an offer we cannot refuse – to stop the UK walking away and leaving them with nothing. They would be mad not to.