The Government’s long-awaited White Paper on Brexit has finally been published, following on from the Chequers Statement released after the Cabinet meeting last Friday. The Chequers Statement marked a dramatic softening in the Government’s position on Brexit, triggering the resignation of key Brexiteers including David Davis, Boris Johnson and Steve Baker and sparking significant unrest amongst Leave supporters in Parliament and the country as a whole. There were hopes amongst some Brexiteers that the Government might reconsider aspects of its position in light of the widespread unhappiness with their proposals. The emergence of an alternative draft of the White Paper prepared by David Davis at the Department for Exiting the European Union demonstrated that different options were available. But the White Paper as published is a clear indication that the Government has no intention of doing any such thing. Jacob Rees-Mogg has called the it “the greatest vassalage since King John paid homage to Philip II at Le Goulet in 1200” while saying that it has “not needed to age to turn yellow.” He points out that, under the paper, the UK “will be subject to EU laws while having no say in their creation,” concluding that “taken as a whole this recreates many of the worst aspects of the EU the British people voted to leave” and that it “does not respect the referendum result.” So is he right? Here we examine the key aspects of the White Paper and discuss whether they really deliver what it says on the tin. Common Rulebook or EU Rulebook? The White Paper confirms that the UK will seek to cherry-pick partial single market membership by applying a “common rulebook” for goods and agri-foods. Of course, this rulebook is not actually a “common” rulebook but is in fact an EU rulebook. As the White Paper spells out (p.8): The UK would make an upfront choice to commit by treaty to ongoing harmonisation with the relevant EU rules. In that sense the UK would not meaningfully have left the EU, as it would continue to be treaty-bound to apply new EU rules in much the same way as it does now, but without even the small say over them that it had before. All that the White Paper has to offer is that the UK will be able to “share its views with the EU as those EU rules are developed” (p.89 §.22) along with “formal consultation between experts on regulatory issues and legislative changes” (p.87 §.11). When people voted to take back control of their laws, it is doubtful that they had in mind the UK continuing to accept existing and future EU laws, with the proviso that a few British civil servants and technocrats will be scuttling back and forth between Brussels and London in the desperate hope of lobbying the European Commission not to impose damaging new laws on the UK. The White Paper goes on to talk about Parliamentary scrutiny of new or modified EU laws that are put onto the statute book, but this is meaningless in practice. As the UK would be treaty-bound to accept harmonisation with EU laws, the Act of Parliament implementing the treaty in domestic law (as referenced in p.95 §.53) would simply become the new conduit bringing EU laws into UK law in place of the European Communities Act 1972, even if it was in a slightly more roundabout way. Parliament has nominally “scrutinised” EU laws for the last 45 years but it has not been able to block them or change them in any meaningful sense. The White Paper describes the creation of a new institutional framework which would theoretically give the UK the freedom to diverge if it chose to, but in practice this freedom is an illusion. According to the paper this would take the form of an Association Agreement with the EU (p.84 §.4), similar to what the EU currently has with Ukraine or Moldova. It would consist of a Governing Body – essentially a glorification of summits between the political leaders of the EU and the UK – and a Joint Committee which would oversee the implementation and enforcement of the agreement. There would also be provisions for mechanisms to resolve disputes between the UK and the EU, including an arbitration panel which would be bound to rule in line with the Court of Justice of the European Union. According to the paper, these new arrangements would mean that (p.84 §.3): The EU institutions, including the Court of Justice of the European Union (CJEU), will no longer have the power to make laws for the UK and the principles of direct effect and of the supremacy of EU law will no longer apply in the UK. This is all very well in theory, but in practice, even though the direct effect of EU law would end in its current form, these mechanisms would still preserve the supremacy of the Court of Justice, while leaving the UK unable to diverge from EU law. The consequences of the UK trying to diverge are set out as follows (p.90 §.30): If the UK and the EU could not agree, the Joint Committee should consider all other possibilities and endeavour to maintain the functioning of the relevant agreement, including the possibility to recognise the equivalence of legislation. If this was not possible after a defined period and an imbalance was created, proportionate and where possible localised rebalancing measures could be proposed, for instance, requesting financial compensation. Where there was no agreement over these measures, or they were not possible, the relevant part of the future relationship could be suspended. So as a minimum, the UK is already offering to pay fines to the EU as the price of diverging. (There is no need to ask whether any fines are likely to be coming the other way.) Either that or “the relevant part of the future relationship could be suspended.” The same rationale is deployed in the case of Parliament refusing to vote through further primary legislation required by the agreement (p.90 §.31): The UK Parliament could decide not to give effect to the change in domestic law, but this would be in the knowledge that it would breach the UK’s international obligations, and the EU could raise a dispute and ultimately impose non-compliance measures. This leads to the argument, still clung to by a number of Brexiteers, that this arrangement would allow the UK to diverge from the EU at some point in the future, in return for proportionate sanctions such a partial loss of market access in those areas. This is hinted at in the White Paper in the section on dispute resolution mechanisms (p.94 §.40): Consideration should also be given to whether defined consequences could be included within the agreements, such as predetermined reductions in market access where the UK relied on a provision in the agreements allowing it not to apply every aspect of EU rules. However, this argument is fatally undermined when one remembers the ostensible reason that May has chosen to go down the of regulatory harmonisation, as the following paragraph reminds (p.90 §.32): In deciding whether and how to deal with differences as they arise, the UK would of course be conscious of a number of factors, including its commitments to Northern Ireland. The UK’s entire rationale for having a “common rulebook” in the first place is to satisfy the EU’s supposed logic that it is impossible to maintain a soft Irish border without the UK, or at least Northern Ireland, staying in (most of) the single market and the customs union. So either it is false that a common rulebook is require to keep the border open, or it is false that the UK can diverge and keep the border open. The fact that the Government has already accepted the EU’s flawed logic on the issue indicates that they are taking the position that it is impossible to keep the border open if the UK diverges. Indeed, the early signs from Brussels are that, despite the monumental concessions already made by the UK, the EU will still try to force some sort of backstop protocol into the deal. If the UK tried to diverge, this would kick in and either force Northern Ireland to be separated from the rest of the UK or force regulatory harmonisation on the whole UK – right back where we started. It is a textbook example of a catch-22. Taking back control or giving it away? Meanwhile, the dispute resolution mechanisms would keep the UK subject to the jurisdiction of the CJEU by the back door. As Martin Howe QC of Lawyers for Britain has noted, the mechanism proposed by the Government to resolve disputes is essentially equivalent to the model in the EU-Moldova Association Agreement, in which Moldova is forced to follow rulings from the CJEU. The White Paper states (p.93 §.42): Where the UK and the EU had agreed to retain a common rulebook, it is possible that a dispute could relate to whether these rules had been interpreted correctly. The UK recognises that only the CJEU can bind the EU on the interpretation of EU law, and therefore in these instances, there should be the option for a referral to the CJEU for an interpretation, either by mutual consent from the Joint Committee, or from the arbitration panel. The CJEU would only have a role in relation to the interpretation of those EU rules to which the UK had agreed to adhere as a matter of international law. The Joint Committee or arbitration panel would have to resolve the dispute in a way that was consistent with this interpretation. This would respect the principle that the court of one party cannot resolve disputes between the two. By comparison, Article 403(2) of the Moldova Association Agreement reads: Where a dispute raises a question of interpretation of a provision of Union law referred to in paragraph 1, the arbitration panel shall not decide the question, but request the Court of Justice of the European Union to give a ruling on the question. In such cases, the deadlines applying to the rulings of the arbitration panel shall be suspended until the Court of Justice of the European Union has given its ruling. The ruling of the Court of Justice of the European Union shall be binding on the arbitration panel. The UK’s version has fudged the language, but its effect is the same. The Joint Committee or arbitration panel would be forced to rule in line with any decisions of the Court of Justice. Even though UK courts would no longer be able to make direct reference to the CJEU, this mechanism effectively replicates the existing mechanism by which the Commission takes direct action against member states through the Court. The supposedly independent arbitration panel would simply be acting as a “postbox” for the Court of Justice, as Martin Howe explains: “While it appears that direct references from UK courts to Luxembourg would end, this procedure matches by a slightly different route the current procedure where the Commission can take a direct action against the UK as a Member State for failing to apply or interpret EU law correctly. “The claim in the final sentence of para 42 that this procedure “would respect the principle that the court of one party cannot resolve disputes between the two” is therefore clearly wrong and it is quite absurd to make this claim. In cases where the dispute is about the interpretation of the EU rules that we must follow, the arbitration panel would merely act as a postbox and the decision of substance would be taken by the court of one party, the ECJ. The panel would then just pronounce a formal judgment in accordance with the ECJ ruling. “This procedure would compel us not just to follow EU rules as they stand today, but to follow future changes in the scope of those rules caused by ECJ “interpretations” of them.” Moreover, other areas of the White Paper suggest that ECJ influence would not be limited solely to the so-called “common rulebook” of single market rules for goods and agri-foods, but could also extend to other areas such as the environment and social and employment laws. The UK has already conceded – unprompted – that it will match the EU’s rules in these areas, with the likelihood that a formal commitment will be included as part of any deal. Again, this means any dispute is likely to end up in the lap of the CJEU. This level of legal asymmetry in a deal would be unprecedented in a deal between two jurisdictions of this size. Howe points out that “even tiny Andorra and San Marino have conventional balanced international arbitration clauses with no binding role for the ECJ.” Somehow, the UK has managed to come up with an opening offer that is worse than this. This would render the Government’s commitment that UK courts would only have to “pay due regard to CJEU case law” and would not “be able to make preliminary references to the CJEU” (p.92 §.35) meaningless, as Howe explains: “The existence of the above procedure will influence the interpretation by the UK courts of the proposed obligation to “pay due regard to” ECJ judgments. Since the ECJ will ultimately prevail, UK courts will see little point in departing from ECJ judgments even if they think that they are wrong. If they do decide to depart from the ECJ, they will then be over-ridden via the joint reference procedure if the Commission takes action.” His conclusion is a damning indictment of the Government’s claims that this plan restores the supremacy of UK courts: “The repeated claims made by the government and the Prime Minister over the last few days that the Chequers proposals would result in “Restoring the supremacy of British courts by ending the jurisdiction of the European Court of Justice in the UK”… are therefore not true. The supremacy of British courts is certainly not restored. The jurisdiction of the ECJ “in” the UK is only ended in the sense that the route by which the ECJ will continue to exercise its supremacy over British courts is via the international joint reference procedure rather than by direct references from British courts.” An independent trading nation? Clearly, the White Paper fails the test of taking back control of the UK’s laws and ending the supremacy of EU law and the Court of Justice. Does it perform any better on the UK’s ability to have a meaningful independent trade policy? As revealed last week, May’s desired customs policy is a “Facilitated Customs Arrangement” (FCA). This is a little more than a rehash of the much-criticised “New Customs Partnership” with its lengthy list of serious flaws. First and foremost, it involves the UK remaining a part of the EU’s customs territory, as the White Paper explains (p.16 §.14): The UK’s proposal is to agree a new FCA with the EU. As if in a combined customs territory with the EU, the UK would apply the EU’s tariffs and trade policy for goods intended for the EU. The UK would also apply its own tariffs and trade policy for goods intended for consumption in the UK. There is no “as if” about it: the UK would be in a combined customs territory with the EU. However, the UK would supposedly also be able to apply separate tariffs of its own for goods only intended for the UK market, in order to sign trade deals with other countries around the world. Given the lack of border controls between the UK and the EU27, it is not clear what would prevent someone from importing goods into the UK and paying a lower rate for the UK domestic market, before selling them on in the EU27 anyway, or vice versa. In fact, the Government argues that some elements of ‘max fac’ such as trusted trader schemes and checks behind the border could be used to ensure fidelity of the system (p.17 §.17): The UK and the EU should agree a new trusted trader scheme to allow firms to pay the correct tariff at the UK border without needing to engage with the repayment mechanism. This is most likely to be relevant to finished goods. For months, Brexiteers trying to offer constructive solutions for the Irish border using technology have been ridiculed and told that it would be completely impossible to monitor the tiny volume of trade that crosses the Irish border every day using ‘max fac’ in case there is a marginal increase in petty smuggling. Now they are being told that ‘max fac’ is a perfectly plausible way to monitor the entire volume of UK-EU trade while preventing arbitrage on an industrial scale. If – as the White Paper admits – ‘max fac’ is indeed an acceptable way to monitor trade, then why is it not being applied for the purposes of solving the relatively straightforward border issues arising from the UK being a normal, independent customs territory like the vast majority of other countries around the world, rather than as a desperate attempt to try to make an impossibly complex customs partnership function? The answer is because it has suited a great many people to allow the Irish border issue to blow up, as it has provided a pretext for the Government to gradually shift its position into remaining in all the substantial elements of the single market and the customs union. The chief executive of HMRC and his Irish counterpart both said it could be done, but for political reasons, their superiors did not want it to be done. Hence we are left with the Frankenstein Customs Abomination the Government has proposed today. As for one of the biggest problems with the New Customs Partnership – that every single EU state would also have to set up a double tariff system for goods coming to the UK via EU27 countries, which the EU is obviously incredibly reluctant to agree to – the Government’s new solution in the FCA is to simply tell the EU not to bother with it (p.17 §.17): The UK and the EU should agree a mechanism for the remittance of relevant tariff revenue. On the basis that this is likely to be the most robust approach, the UK proposes a tariff revenue formula, taking account of goods destined for the UK entering via the EU and goods destined for the EU entering via the UK. However, the UK is not proposing that the EU applies the UK’s tariffs and trade policy at its border for goods intended for the UK. It is almost embarrassing that a proposal as unworkable as this is being put on the table at this stage in the negotiations. May is twisting herself into a contorted mess by trying to contrive a policy that allows her to say that the UK is not in a customs union with the EU, while in fact retaining all the significant elements of a customs union with the EU. It is so convoluted that many businesses may end up concluding that it is easier to simply pay the EU’s tariff instead, and even if it could somehow be made to work logistically, why would the EU tolerate a direct attempt to undercut it like this? Perhaps the only reason it has even been put on the table is that May can say that she tried, before the EU inevitably rejects it and forces the UK into a full customs union instead. A better way of trying would have been to actually make serious preparations for the UK to become an independent trading nation, but that has simply not happened. Even if the UK somehow manages to reach an arrangement that allows it to set its own tariffs in the future, the prospects for deep and meaningful free trade deals will still be heavily curtailed by May’s decision to adopt a “common rulebook”. The vast body of EU law – the acquis communautaire – is one of the biggest non-tariff barriers to trade ever created, and the UK will be powerless to mitigate it if the Chequers plan goes ahead. Conclusion These are far from the only concerns in the White Paper. The UK’s unqualified commitments in the security section risk the country sleepwalking into a Common Defence Union, while the proposals on migration, particularly around ongoing social security payments, have also sparked serious concerns amongst Leave supporters. Totemic issues like the ability to ban live animal exports are very much in doubt, while the language is unduly weak in areas like fisheries. In sum, the White Paper is little more than an incredibly convoluted way of repackaging the status quo. Its effect is largely cosmetic – the UK will leave the EU institutions but there will be little opportunity for real change. The few avenues of opportunity that have not already been closed off – services and tariffs – are unlikely to survive contact with the EU negotiators. Past experience has shown them that all Michel Barnier needs to do is keep saying “non” and May’s red lines will vanish one by one. As a negotiating document, it is utterly unambitious. It would be bad enough if it was the final deal that Theresa May was returning from Brussels with after months of hard-fought negotiations. But it is not even that – it is the UK’s opening offer. It is a sad indictment of a Government which has convinced itself that the Brexit process is nothing more than an exercise in damage limitation, rather than an opportunity for the country to genuinely do something different. As Boris Johnson’s former Parliamentary Private Secretary, Conor Burns, puts it: “The biggest problem we have faced since the referendum is that Government have approached the Leave vote as some disaster that needs to be mitigated against not as an amazing opportunity that should be embraced. That’s how we have ended up where we are now.” The point of leaving the single market and customs union is not to appease Eurosceptics, but to actually enable the opportunities and change that Brexit promised, and which membership of them prevented. Instead, they have been reduced to mere box-ticking exercises, as technocratic sophistry is employed to an unprecedented degree to ensure that the status quo does not change to any meaningful extent. It is a Remainer’s Brexit, an exercise in paying lip service to the referendum result rather than implementing it with any conviction, and the country knows it. The public reaction has been overwhelmingly negative. Electoral disaster looms for May and the Tories if they do not address it. It is not too late to change course, but it soon will be.