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Why Arlene and Martin's Brexit blueprint could dictate the UK agenda

The Foster-McGuinness plan, set out in their letter to the PM, would have wide-ranging implications

By James Greer

Published 24/08/2016

Arlene Foster and Martin McGuinness want the best Brexit deal possible for the province
Arlene Foster and Martin McGuinness want the best Brexit deal possible for the province
Martin McGuinness

Brexit means Brexit, has proven an effective mantra for Theresa May during her honeymoon as new Prime Minister. However, exit from the EU has many potential meanings for the future of the United Kingdom. Two months on from the referendum, the mantra will soon have to be supplemented with tough choices and a vision for what Brexit actually means.

The political chaos triggered by David Cameron's failure to emulate Harold Wilson's referendum success of 1975 remains difficult to fully digest. Cameron's resignation led to a circular firing-squad among Brexiteers chasing the Tory leadership.

The SNP and Sinn Fein saw the hand of history moving in their direction. Nigel Farage stepped off the stage - again. Labour disintegrated as a functioning opposition party. All unravelled at dizzying speed.

In response to this maelstrom of student union politics and geopolitical uncertainty, Theresa May's election by Conservative MPs was a search for stability. By appointing Boris Johnson, Liam Fox and David Davis to key Cabinet positions, May hopes Brexiteers will share responsibility - and blame - for the outcome of EU negotiations.

However, just as the steadying markets have not silenced fears for the long-term health of the economy, short-term management of Tory divisions cannot replace the statecraft required to define a new place in the world outside of the EU.

In deciding the real meaning of Brexit, the Government can compare templates for life outside the EU. First, is the Norway model of membership of the Single Market through the European Economic Area (EEA).

Attached to this option would be the cost of continuing approximately 83% of the contributions the UK currently pays to the EU budget and fully accepting EU rules - including freedom of movement within the bloc.

An alternative is Switzerland's position outside the EEA, but with access to the Single Market based upon bilateral deals with the EU. The Swiss contribute a smaller sum to the EU and have additional flexibility regarding some EU regulations.

However, the Swiss template does not cover sectors such as financial services, vital to the UK, and also currently accepts freedom of movement.

A third potential model is to reject membership of the Single Market and seek World Trade Organisation (WTO) "most favoured nation" status.

This would free the UK of any contributions to the EU budget and grant fuller national sovereignty.

However, this model opens up the possibility of substantial tariffs for British exports to the EU and the loss of right to access to the EU for British financial services.

UK-EU negotiations will not produce a replica of one of these models. Indeed, optimists insist a successful and unique British model will be found.

But the tension defining the UK's options is clear - between the desire to maintain benefits from the Single Market and the electorate's demand to take back control.

Polling evidence suggests the demand for stricter control of immigration was the main driver of the Leave vote, and a majority of Leave voters continue to prioritise this issue over future beneficial economic arrangements with Europe.

Any government which pursues Brexit, but fails to gain the ability to control EU migration, risks provoking political anger from all sides.

They will have overseen a costly realignment of UK trade and foreign policy without satisfying the key hope of Leave voters.

The potential economic cost of taking back control has been detailed by the respected Institute for Fiscal Studies (IFS). According to the IFS, continued membership of the Single Market - as opposed to WTO status - would, by 2030, boost the UK's GDP by 4%.

Life outside the Single Market, therefore, could have a price-tag of more than £70bn.

Will the Government risk economic pain by detaching from the Single Market, or political discomfort by failing to meet voters' expectations over sovereignty?

Smoke-signals from Downing Street suggest they are inclined to edge closer to the first option. The Norway model, favoured by much of industry and financial services, is increasingly viewed as politically unsustainable.

Such a decision could have profound implications for Northern Ireland. These are strikingly presented in Arlene Foster and Martin McGuinness's recent joint letter to the Prime Minister.

Noting May's intention to trigger Article 50 early in 2017, commencing the two-year window for negotiations to exit the EU, the letter raises concerns over Northern Ireland's unique position and future land border with the EU. It presents Northern Ireland's preferred settlement in terms similar to the Norwegian model.

The letter reads like a summary of key talking-points from the local Remain referendum campaign. It notes: "EU funds have been hugely important to our economy and the peace process" and funding withdrawal would be "a real concern."

A hard border on the island, they state, could "create an incentive for those who would wish to undermine the peace process".

Furthermore, Foster and McGuinness argue, the scale of EU agricultural payments to Northern Ireland, and the negative impact of potential trade tariffs, leaves "our agri-food sector and hence our whole economy ... uniquely vulnerable".

These are notable warnings when co-authored by the leader of the DUP - which embraced the take back control agenda and repeats "Brexit means Brexit".

Understandably, political opponents have struggled to resist the temptation to compare and contrast Foster's language before and after the referendum result.

Foster and McGuinness's shared aspiration is to maintain as much of the current trading relationship with the EU as possible.

They see a need for Northern Ireland to retain "access to unskilled as well as highly skilled labour", and the continuation of free movement of goods, services and people across the island.

When allied with similar priorities advocated by the devolved administrations in Cardiff and Edinburgh, the Foster-McGuinness agenda could influence UK policy. Indeed, many of the objectives of the "Celtic fringe" will find support from forces within Remain London. But this agenda is clearly at odds with the conceptions of Brexit most common in the Home Counties, Wales and post-industrial England.

The flexibility (or otherwise) of the EU's negotiating position is the vital unknown in the process. This position will emerge from the competing interests of 27 EU member states.

Will, for example, other EU states accept a soft Irish border as part of the final settlement?

Some have suggested opinion across Europe is moving towards increased emphasis on national sovereignty and, in turn, negotiating space for a successful British model may grow.

However, the EU's initial reiteration - "there will be no single market a la carte" - sets the scene for a tough battle to define Brexit.

Successfully balancing the competing priorities of a fractured UK with the negotiating position of the EU will require ingenuity and foresight - not apparent in much of recent British diplomacy.

It also will require the dedication of immense political capital and commitment, at the expense of other Government business.

Success or failure will define the constitutional and economic future of the UK for decades to come.

Dr James Greer is visiting research fellow at the School of Politics, International Studies and Philosophy at Queen's University, Belfast

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