It will come as no surprise to readers to learn that the GRB may not be all that it is being cracked up to be. With a government led by a Remainer, embracing Brexit without enthusiasm, it was never likely to be the clean break with the EU that we so desperately need.
We will need to study the Bill line by line when it is published but the picture is gradually emerging from the fog which is government thinking, if thinking is not too strong a word. Brexit is happening. We are leaving the EU at long last, but Theresa May wants to drag the process out until spring 2019, which is absurd.
We are also leaving the so-called Single Market, again at long last. The government has made no statement about when we are going to withdraw from the European Economic Area Agreement. It appears to assume that Article 50 covers both our membership of the EU and the EEA, even though the latter has its own denunciation provision (Article 127). The EU will probably go with the government’s view.
Uncontrolled labour dumping from the EU is politically unacceptable and the government knows it. That means that Single Market membership is out, as is contributing to the EU’s budget. That probably means no deal with the EU, as the Eastern European states will want to continue dumping their surplus labour on us and won’t agree to tariff-free access to the Single Market without labour dumping. Thank goodness! With the trade deficit with the EU27 spiralling out of control towards the £100 billion a year mark, the last thing we need is free trade with them. It just means exporting jobs, indeed jobs have been our biggest export to the EU for years.
The proposed GRB will retain the acquis communautaire even after 2019. True, it will be transposed into UK law, so that we can dump it at will, and the ECJ will no longer have a say (hooray!). This will however cost us around £75 billion a year, which our spendthrift Chancellor presumably proposes to fund by borrowing. That’s on top of the estimated £50-£75 billion a year which allowing EU workers already here to stay is going to cost us.
The problem is not that EU27 workers don’t pay tax and NI – most of them do -– nor even that the tax they pay is about equal to the welfare benefits they draw down and the cost of providing them with services, including free school places and the NHS. The problem is that they don’t pay enough in tax to cover the welfare costs of the British workers they are displacing. There are various ways of crunching the numbers, but £15-25,000 per displaced worker per year seems about right, including lost tax revenue, as not all EU workers pay tax and claim housing benefit.
The proposed GRB, which apparently will include transitional provisions protecting EU workers already here, will negate much of the economic benefit of leaving the EU. True, we will no longer be sending £365 million a week, before the rebate, to Brussels, but the direct costs of EU membership are dwarfed by the indirect costs. They have never been more than 10% of the total cost and are currently only about 5%.
My idea, say it softly, was a much better one: forget Article 50, use Vienna, give 12 months’ notice and treat that as a transitional period. If I were drafting the GRB I would make all UK regulations implementing EU directives fall at the end of the transitional period, with a general power to replace them with UK regulations. That would encourage Whitehall to get a move on – we all know how idle those Sir Humphreys can be – and give Parliament some control via the negative resolution procedure. I would convert EU workers’ treaty rights into 12 months’ leave to remain, extendible only with Home Office approval on application by an employer in cases where a British replacement genuinely cannot be found.
It cannot be emphasised too highly that those who are going around saying that Article 50 is the only route to withdrawal from the EU are wrong. The corollary is that there was no lawful means of leaving the EU, without a treaty amendment, prior to Lisbon. That is obvious nonsense, with respect to those taking the contrary view. Even the insanely pro-EEC Harold Wilson accepted in 1975 that the UK could lawfully withdraw had Phillip Allen not been able to rig the referendum count.
One thing the GRB will not do is to pull us out of the EU. Acts of Parliament operate solely in the domestic plane. Treaties operate in the international plane. Repeal of the ECA72 will not take us out of the EU. It would simply mean that EU law ceased to have domestic effect.
One thing the government is getting right, with respect, is its defence to the absurd judicial review proceedings arguing that there needs to be legislation before the government exercises its undoubted prerogative power to withdraw from the EU, either under Article 50 or the Vienna Convention on International Treaty Law. These proceedings are as misconceived, with respect, as the well-intentioned but doomed challenge by that nice man Stuart Wheeler to force a referendum on Lisbon. The courts cannot interfere with the workings of Parliament.
I have read the government’s response, drafted by an able legal team led by James Eadie QC, and respectfully agree with almost every word of it. The only thing they get wrong, with respect, is to treat Thoburn v. Sunderland City Council as rightly decided. It was not only wrongly decided, it is not binding, as the point on which we lost the case – the novel concept of super-statutes – was not put during argument. The correct approach, followed by that great judge Sir Robery Megarry in the Leary trade union case in 1971, is to relist the case for further argument.