Sta Hungry Stay Foolish

Stay Hungry. Stay Foolish.

A blog by Leon Oudejans

At last, good news on Brexit: Britain is heading for Norway (Guardian)

24 March 2018


“Norway here we come. This is the good news on the Brexit front. It will take two years. The voyage will be stormy and the destination messy. But plus-or-minus Norway offers the only sensible way for Britain through the Brexit morass. Labour’s Jeremy Corbyn and Keir Starmer agree. Nick Clegg agrees. Most of the cabinet and the Tories’ remainers publicly or privately agree. So do those close to the Brussels negotiations. They still seem unable to shake hands on it, but they will soon.

The week has been full of hopeful signs. On Monday the EU’s Michel Barnier – a secret “Norwegian” – could not conceal his glee at his cobbled-together transition deal, nor could his British counterpart, David Davis.

The deal was a document of the most brutal realism. For now, the UK remains a non-participating member of the single market, with freedom of movement and right of settlement. Farmers and fishers are “as you were”. Britain can discuss “offshore” trade deals, but not agree them. Hard Brexiteers can go jump off a cliff.

The smart money in Brussels was always on the Norway option. The so-called European Economic Area was a simple “off-the-shelf” basis for a bespoke deal with the UK. The challenge lay not in negotiating it but in overcoming Theresa May’s belief that her fate depended on some 50 backbench leavers and the editors of the Sun and the Daily Mail. She was terrified of them.

Even so, the assumption was that, as the March 2019 deadline approached and the impossibility of a “frictionless” hard Brexit became ever clearer, Theresa May would be forced into a series of tactical retreats. The tough Lancaster Houseand Florence speeches, and Chequers last month, were dollops of fudge to keep hard Brexiteers on board. But this week’s transition deal would mark a parting of the ways. So it has appeared. The sight of Boris Johnson, Michael Gove and assorted friends shuffling miserably into line, whimpering over dead fish, was heart-warming. So in a sense has been May’s and Johnson’s distraction over Russian poison, hysterically comparing Vladimir Putin to Stalin and Hitler.

A detailed analysis of the Norway option in last month’s Economist was unequivocally favourable. Norway in 1994 went through the same referendum debate as Britain, with the same drift towards compromise. The country remained in the European Free Trade Association (Efta). It stayed open to a single European market in goods, capital and labour, but it held aloof from the common fisheries and agriculture policies. Norway also stayed outside the EU customs union, to secure its own trade deals elsewhere. It is hard to see what substantive argument a Brexiter could have against this.

Norway fiercely denies it is a “vassal state”. It is rated by the Economist Intelligence Unit as the “most democratic” in the world. It must abide by EU rules on trade in goods within the EU. But so must EU members, who can be overruled by majority voting. On matters of joint concern, such as energy, Norway is consulted and heard. Its lobbying office next to the Berlaymont building is more effective than any council vote. As for the European court, the Efta court liaises with it and is rarely in conflict.

Trade in services and finance is more crucial to the UK than in goods, and here both Europe and the world would remain its oyster, as this EU single market is in its infancy. As for migration, Efta arrangements embrace a register of EU nationals, controls on their citizenship and property ownership and expulsion if they are out of work for six months. A mere 20% of Norwegians regret their Efta status. Of course Norway is smaller than the UK. But the issue is whether its model is practicable. It is.

The one argument against the Norway option for Britain is that it would lie outside the customs union. How valuable this freedom is to Norway’s economy is moot. Efta has laboriously reached deals with 38 countries, including Canada. But it requires a hard border with Sweden to enforce country-of-origin controls. Since such a border is anathema in Northern Ireland, Norway plus customs union with the EU makes sense. I have seen no calculation that shows an advantage to UK trade in being outside one.

Yes, Britain would pay into the EU for all this, as does Norway. But Norway’s money is carefully earmarked for grants, scholarships and projects. Likewise there are disciplines with “regulatory alignment” within an EU single market. But they did not worry Thatcher when she co-invented the market in 1985. Leaving the EU would usefully repatriate some controls, as over farming, construction standards, procurement and the environment. Britain, like Norway, could opt out of fish quotas. But these are trading practicalities not issues of principle. They are about how to make the best of “the decision to leave”, not about following a neo-imperial will-o’-the-wisp.

What Britons thought they were “leaving” in 2016 remains opaque. No replacement question was asked. Britain will withdraw from the EU, but what takes its place must be a decision for parliament. Everything we read from polls and surveys suggests there is no majority for trade barriers at Calais or a ban on European care workers or plumbers. Public opinion wants soft Brexit. It wants Norway.

The last time Norway featured prominently in the Commons was in 1940. British failure against the Nazis cost Chamberlain his job, but these events formed the basis for victory and reconstruction. Sooner or later, the Commons will debate Norway again: whether the UK should remain within a single market and customs union, however camouflaged. When that happens, May will drive her hard Brexiters into sullen acceptance or resignation. But she can tell them her hands have been tied to a Norwegian mast. If so, history could regard her twisting and tacking, her softly, softly Brexit strategy as the most brilliant of political manoeuvres. But I am not holding my breath.”

This Guardian article was written by Simon Jenkins.


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