Hard Brexit, for me, I still try and use that
principally to talk about if the UK leaves
the single market, leaves the EU single market and agrees on some sort of free trade deal
with the EU 27. That might be a Canada-style, a Japan-style, free trade deal, and that's
quite hard Brexit, because although you probably wouldn't have many or even any tariffs on
goods, you'd have a lot of regulatory barriers, and you wouldn't have much access for services.
Some economists have estimated in that sort of trade deal, you could have as much as a
60% fall in services trade between the UK
and the EU 27. For me, that's a hard Brexit,
but it's increasingly used now to talk about a no-deal Brexit, a cliff-edge Brexit, so
it's almost as if there are types of hard
Brexit, or if a free trade deal perhaps is
no longer 'hard'. Now, I think a no-deal Brexit, depending on how it emerged, would it emerge
as no trade deal but you did do a divorce
deal with the EU 27, or even, talks fell apart
so acrimoniously there was no divorce deal.
There might be legal things flying, as well
as a lot of economic and political uncertainty. So we certainly see hard Brexit used now to
cover both those broad spectrum, but I would for the moment try and keep saying hard Brexit
is a trade deal that doesn't keep us in the
single market. And then on soft Brexit, I
think, has been predominantly used to talk about the UK staying in the single market,
so a sort of Norway option, a European Economic Area option. Now, of course, in the case of
Norway, you've got single market but you're not part of the Customs Union. You have your
own trade policy but you're also signed up
to EFTA, just to complicate things further,
so you can set your own trade policy, except
as a big Norway, except where you're part
of the European free trade area and you've
got joint EFTA trade deals. So, some people
say it's a single market. Some people say
it's the single market and Customs Union,
and some people suggest, if you just had a
Custom's Union deal but you weren't in the
single market ... and Keir Starmer, the Brexit
shadow minister, has talked about this occasionally,
though that's not Labour's current policy,
Labour's policy is not entirely clear on Brexit
you could say. So I'm not sure I would really
call a Custom's Union only 'soft' but it does
tend to get referred to that way.
Obviously, Turkey had a Custom's Union with
the European Union, but it's not the same
as the EU's own Custom's Union, no-one outside,
no country outside the EU has ever been a
full part of the EU's Custom's Union, as such.
So I think this term is used quite glibly,
in a sense. It's not obvious to me how or
whether you could be a full member of the
EU's Custom's Union from outside. But I think
normally at the heart of soft Brexit is the
single market, except, as I say, for the Custom's Union only people.
My preference when we talk about soft Brexit
would be a Norway model, so we'd remain a
part of the single market. I have served in
Norway, Iceland, Swiss, Lichtenstein delegation
for almost 15 years. I think the option that
is open through the EEA EFTA option that we
have gives us the opportunity to still be
part of the single market, so important to
jobs, so important to our economy, but respect
the result and no longer be part of the European
Union. The trouble we have with having that
option is that we lose all influence. We have
no say over decisions that we will have to
abide by because if we want to trade with
our most important trading block with the
27 countries, we will have to abide by the
rules or set by the European Union. the British
government need to get real and be honest
with people what is at stake. And what is
at stake are British people's livelihoods,
jobs, and our economic prosperity. It's a
sad day to see Britain leaving the European
Union. It really is. I think we'll come out,
and then spend the next 20, 25 years wanting
to get back into the European Union on terms
and conditions that will be nowhere near as
good as what we have at the moment. I wouldn't
describe it as a hard or a soft Brexit, I
think a deal will be done because it's in
the interest of everybody for a deal to be
done. There will be aspects of the deal that
might not be great from our point of view,
and there will be aspects of the deal that
might not be great from the EU point of view.
The whole point is when you're in a negotiation
of this importance, there has to be a compromise
on both sides. Neither side is going to get
a 100% of what they want, because the other
side will never agree to it. I think some
of the concessions already announced by Theresa
May, or seen by her as concessions, was a
way of trying to get the EU to respond accordingly,
and I think we've seen that at the recent
council meeting, where the EU I think recognised
that they really needed to change the language
as the UK government did, and they also needed
to be a bit more flexible in their approach.
I think a deal will be done, but who knows?
The reality may be that the deal that we eventually
strike is somewhere in the middle, so it's
probably best not to see these as either we
have a very hard Brexit or a very soft Brexit,
but on a scale I think they're probably the
most useful ways of thinking about the two
extremes of the position that we may end up
with in March 2019. The position as we speak
now in late 2017, so about 15/16 months before
the UK actually formally leaves the European
Union is that we don't know. Within the UK
government, so even within the cabinet of
the UK government there are ministers, very
influential people in this negotiation process
who have almost diametrically apposed opinions
to what the deal or lack of deal should look
like, so there are politicians like Amber
Rudd, who's currently the Home Secretary,
who says that leaving the EU without a deal
is "unthinkable" and there are others in the
same cabinet, in the same government like
Liam Fox who is the International Trade Secretary
who is very comfortable about leaving the
EU without any deal. I think we're going to
see a shift in the early part of 2018 in the
economics and politics of the debate. Given
that we've got a minority government propped
up by the DUP, I don't see a smooth landing path if you like through to next autumn when
there's a deal and then Westminster votes
on it or rejects it or the lib dems succeed
in their call for a second EU referendum.
I think it's going to be very unstable partly
because of the economics. You couldn't rule out there being suddenly a snap general election
if the government falls.
I think at this point in autumn 2017, we're
more likely to get to a deal by next autumn
that to the catastrophic no deal scenario.
There's people who say no deal is more likely.
I think a deal is more likely in the sense
of an exit deal and an outline of the desire
to trade deal. But it won't be a trade deal
that will take several years. I also think
there's a chance still of no Brexit, I'd put
that at the kind of 10 to 20% level at the
moment. That's going to depend on if there's
a snap general election, how bad the economics
gets, what happens to Labour's position. It
doesn't look at the moment like Jeremy Corbin's
going to change that. But if it got into a
period of considerable economic and political
turmoil, mighty change of public opinion change.
So I think we're heading into a year of uncertainty.
