Professor Steve Peers*

Prime Minister Theresa May’s recent speech was largely seen as an effort to jumpstart the Brexit negotiations, which have hit a roadblock, particularly regarding financial matters. The question is whether her speech will be successful, or if its underlying goal of appeasing Leave voters in the UK, especially those in the cabinet and the media, will undermine its effectiveness. Additionally, it prompts questions about the future relationship between the UK and the EU.

A key aspect of the talks is their sequential nature. The initial phase centers around three main issues: the rights of EU27 citizens in the UK and vice versa after Brexit, the extent of the UK’s remaining financial obligations to the EU, and the Irish border question. Only after the EU determines “sufficient progress” on these matters can the talks move on to the second phase: the future trade relationship and a transitional arrangement for the period between Brexit Day and the implementation of that future agreement.

Currently, the EU is unlikely to deem “sufficient progress” achieved by October. This is primarily due to the UK’s refusal to commit to specific financial obligations, though the lack of progress on the Irish border and the remaining disparities in stances on citizen rights also play a role.

Considering this, did May’s speech bring the UK closer to achieving “sufficient progress”? Regarding Northern Ireland, she merely acknowledged both sides’ desire to avoid a “hard border” without offering any new solutions. While acknowledging that the UK’s proposals on innovative customs approaches are “blue sky thinking,” she didn’t elaborate further.

On EU27 citizens, she pledged to incorporate the withdrawal agreement into UK domestic law, allowing UK courts to consider relevant ECJ case law. However, this doesn’t go beyond the existing draft EU Withdrawal Bill, which already presumes the incorporation of the withdrawal agreement into domestic law and stipulates that pre-Brexit ECJ case law is binding for lower courts. Notably, she did not address the recent controversy surrounding the Home Secretary’s refusal to comply with a court order. Consequently, the EU27 is likely to continue pushing for the ECJ’s involvement. Additionally, no concessions were made on the substance of the law itself.

Regarding financial matters, the Prime Minister essentially stated that the UK would contribute to EU funds until the end of the current EU budget cycle in 2020, including during a transitional period after Brexit Day in March 2019. While she affirmed the UK’s commitment to honoring obligations made during its EU membership, it remains unclear whether this encompasses the broader issue of the UK’s share of costs for commitments made in one year but financed in a later year. Other financial matters, such as off-budget funds, pensions, and the UK’s share of liability for potentially unpaid loans, also require clarification.

More broadly, the Prime Minister expressed support for a transitional period of approximately two years after Brexit Day. During this time, trade and security arrangements between the UK and the EU would remain unchanged. While the UK would officially cease to be an EU Member State on Brexit Day—withdrawing from EU political institutions—some role for the ECJ appears to be implicitly acknowledged. Notably, the EU27 is also open to a short transitional period, provided EU enforcement frameworks, including the ECJ, remain in effect. Therefore, there’s a general consensus on the concept of a transitional period, pending discussions on the specifics.

As for the details, Mrs. May offered little concrete information. She indicated that EU27 citizens could still come to the UK during the transitional period but would need to register, as currently allowed under the EU citizens’ Directive. A customs union between the UK and the EU during this period is implied, though she mentioned the UK would initiate trade negotiations with non-EU countries. The Prime Minister also hinted at the possibility of early termination of the transitional period for specific areas, such as dispute settlement, suggesting the UK’s desire to minimize involvement with the ECJ.

Comments

Despite the attention surrounding Mrs. May’s speech, the crucial question remains: have the specifics of the UK’s negotiating position changed? Notably, progress on unaddressed financial issues will be critical in determining whether talks advance to trade in October. However, the enforcement of EU27 citizens’ rights remains a potential obstacle. Furthermore, the EU is likely seeking clarification on the UK’s proposals regarding customs and the Irish border.

The Prime Minister’s tone may prove beneficial. It was civil and emphasized the significance of a future partnership between the UK and the EU. She steered clear of advocating for rushed reductions in UK regulatory standards and only briefly mentioned the discredited “no deal is better than a bad deal” stance.

Should talks progress to transitional issues, the immediate need to address the technicalities of unwinding UK/EU relations on Brexit Day diminishes. However, these issues would eventually require attention to facilitate substantive changes to the relationship. This implies that challenging, principle-related questions regarding the transitional period need to be addressed.

What exactly does the transition period aim to achieve? Which EU laws, if any, will cease to apply? What happens if the timeframe proves insufficient? Will new ECJ rulings during this period be binding for the UK? Will the UK implement new EU legislation? If so, will it be consulted in the process? Will EU law be applied in the same manner as during the UK’s membership? While the Prime Minister was keen to rule out a “Norway model” for UK/EU relations, the transitional period exhibits similarities to this model, with the UK potentially applying even more EU law than Norway.

In conclusion, the Florence speech marginally increases the likelihood of a successful outcome for the Brexit negotiations, albeit far from guaranteeing it. It suggests a lower probability of an immediate “cliff edge” scenario for both sides on Brexit Day. However, as always, the details will be crucial in determining the final outcome.

Barnard & Peers: chapter 27

Photo credit: The Telegraph

* *This blog post was supported by an ESRC Priority Brexit Grant on ‘Brexit and UK and EU Immigration Policy’