“A better deal and a better future” is the title of a paper written by the European Research Group (ERG) of Parliamentary MPs following the defeat on Tuesday of the Prime Minister’s Withdrawal Bill.

Written before Tuesday’s vote and released following it, the paper lays out the prospect of leaving the EU and trading under World Trade Organisation rules.  It is written by the deputy leader of the group, Steve Baker MP, with help from others.

It starts by laying down the history of our exit from the EU, from the referendum in June 2016, through the various Bills that have been passed by the House to the defeat on Tuesday.

But it warns:

“There is no democratic case for stopping or delaying the process of leaving the EU. It is a democratic and legal imperative that the Government and Parliament implement the decisions already taken. Any delay risks corroding trust in democratic politics and voters’ trust in politicians even further.”

The paper reiterates that the UK will leave the EU on 29 March this year and adds that the Government firstly will work towards an advanced free trade agreement with the EU and secondly will make preparations to leave on WTO rules if no agreement with the EU can be agreed.

The first thing should be to scrap the Northern Ireland ‘backstop’ arrangement and replace it with a customs-free border under either a new free trade agreement or WTO rules. In addition, rights of EU citizens will be maintained and the £39 billion ‘divorce bill’ will only become payable once progress has been made towards a free trade agreement.  There will be an implementation period on the terms but that will not extend beyond the end of 2020.

The paper goes on:

“The UK will have the status of an independent third country, enjoying mutually-beneficial, close cooperative and equal partnership with our neighbours.  The framework will be amended to match the offer made by the EU Council on 7 March 2018 to deliver a Free Trade Plus agreement.”

And outlines the areas in which our Government will wish to liaise and co-operate with the EU such as terrorism and international crime, research, innovation, education and culture.  Resolutions to any potential issues such as flights, data exchange, borders, driving licences and pet passports will be sought.

But it is free trade between the EU and the UK that is highlighted:

“The Government will propose an advanced FTA covering all sectors, with zero tariffs on goods, no quantitative restrictions, including services and full cumulation under rules of origin.”

It also states that if a free trade agreement can’t be reached:

“In default of such an agreement, the UK will take such measures on agri-food tariffs and quotas as are necessary to avoid inflation in the UK, including on agri-food products.”

And the paper goes on to say it will open agreements with agricultural exporters such as Canada, Australia and New Zealand.

The paper warns:

“The Government does not intend to harm EU agricultural exports into the UK market, but in the absence of an interim FTA to avoid tariffs, this would be the unavoidable consequence of our need to ensure that we do not suffer food price inflation on exit from the EU.”

It also lays out the UK’s determination to defend its fish:

“The UK will leave the Common Fisheries Policy and negotiate reciprocal access to EU and UK waters for EU and UK fishing fleets in the same way as other non-EU countries as an independent coastal state.”

But the paper lays out warnings:

“In the absence of a Withdrawal Agreement, the Government will not consider the UK to be liable for the estimated £39 billion payable to the EU under that Agreement, according to the doctrine that nothing is agreed until everything is agreed. This decision reflects the terms of Article 50, which make clear that the EU Treaties cease to apply to the exiting state after the expiry of the two year period. The decision also reflects the advice of the House of Lords European Union Committee Brexit and the EU budget, published on 4 March 2017, which concluded that in such circumstances, the UK would be subject to no enforceable obligation to make any financial contribution at all.”

In defence and security, the paper assures the EU that we will co-operate:

“but not in the direction envisaged in the White Paper or Political Declaration of participation in PESCO or EU Defence regulation.”

And assures the EU that immediately upon our withdrawal we will transfer into UK law all EU law and regulations.  However:

“If the EU unreasonably refuses to recognise on day one of our withdrawal the equivalence of UK regulations which are identical to the EU’s, and discrimination can be shown, the UK will take action in the WTO for violation of the WTO’s Agreements on Technical Barriers to Trade (TBT) and Sanitary and Phytosanitary Measures (SPS).”

If no free trade agreement is finalised and the UK leaves on WTO rules, the paper explains where the £39 billion pounds will be spent:

“The Government will apply a substantial part of the estimated £39 billion saved from cancellation of the Withdrawal Agreement on measures, including tax cuts, to mitigate the effects of leaving the EU on WTO terms, to compensate businesses and sectors for exceptional costs of adaptation, and on measures to increase business investment, training and research and development, and economic growth.”

“An additional £39 billion spent in the UK economy and not transferred to the EU over the next two years is expected to boost economic growth, alongside the immediate improvement in the UK balance of payments. The prospects for economic growth will also be enhanced by a shortening the period of uncertainty for business.”

And the paper ends with a further warning:

“As the UK leaves the EU, neither the EU nor its member states are entitled to seek to break apart the UK, nor to retain the power to direct how Parliament legislates or regulates the UK economy.”

With Mrs May now being forced to table a ministerial statement to the House of Commons setting out how the Government proposes to proceed, the ERG urges her to table its ‘alternative written ministerial statement under the terms of EUWA 2018 S13(4) 15 January 2019’.

The full text of the paper may be read here.

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