Brexit’s Plan B Has a Fatal Flaw

(Bloomberg Opinion) -- When European Union leaders met in Brussels on Sunday to finalize the Brexit divorce agreement, they made one thing clear: There is no Plan B. But some Conservative lawmakers, skeptical the deal will get through parliament, are working hard on, yes, Plan B.

Their basic idea — the Norway option — isn’t new. Sometimes that rumpled piece of paper in the wastebasket deserves a second look. In this case, the revised idea has real merit, but it still looks doomed, both by electoral politics and the very sentiment that brought about the Brexit vote itself.

Its chief proponent is Tory lawmaker Nick Boles, a former minister with ties to Michael Gove, a key Brexiter inside Theresa May’s cabinet. The plan, referred to as Norway Plus, is being talked up as the best alternative to no deal at all, and reportedly has the support of a number of cabinet ministers.

The mechanics are simple; the politics less so. Norway is a member of the European Economic Area, which is made up of EU member states, plus Liechtenstein and Iceland. Britain will lose its EEA membership on leaving the EU; to keep it, the U.K. would need to reapply to join the European Free Trade Association, which it quit in 1972. That process is straightforward at least.

EEA-EFTA members enjoy the benefits of the EU’s single market but, crucially, are exempt from the bloc’s agricultural and fishing policies, both hated by Brexiters. EFTA members can also cut their own trade deals individually or as a bloc, another freedom leavers have demanded and which May has promised.

But access always comes with strings attached. The single market includes the free movement of labor. And if there was one motivating force in the Brexit referendum, it was the desire among voters to limit immigration. The issue remains totemic for most leave supporters.

Mindful of this, some Conservatives floated the idea of Norway “for now” — a way station that minimizes economic disruption, prevents a no-deal exit and allows the U.K. a better position from which to negotiate a trade deal with the EU. Their argument was that May’s own deal contains a transition period with single market access and free movement, which under the finalized agreement can last up until December 2022. So this option didn’t mean giving up much.

But the suggestion that a Norway option could work as a temporary parking place while Britain negotiated a long-term trade deal was always fanciful. Existing members made clear they don’t want the disruption of letting such a big economy, relatively speaking, into their small club for just a short period.

Nor would the EU be obliging. Temporary membership still wouldn’t satisfy the EU’s demand for a treaty guarantee that Northern Ireland will remain as integrated with the EU as necessary to keep the Irish border open, whatever the future trading relationship.

Boles has taken these objections on board, and now advocates an “indefinite commitment” to membership of the EEA and EFTA. After the transition period in the negotiated withdrawal agreement, or sooner, Britain would join EFTA and would enter into a customs arrangement with the EU, which would obviate the need for the so-called backstop guarantee for the Irish border in the EU-U.K. agreement. Meanwhile, it would still look for technological solutions that would keep the border open and allow Britain to pursue its own trade deals.

The EU could hardly complain, since it would mean keeping Britain tied to single market rules with little say over how they are made. Hardline Brexiters, however, would see it as a betrayal that would leave Britain in a worse position than remaining in the EU, where at least the country has a seat at the table.

That is no small obstacle, assuming May wants to keep her party together. Indeed, it’s hard to imagine the plan moving forward under her leadership.

Boles’s plan would therefore need the support of a large number of Labour lawmakers. While it would certainly meet the party’s tests for a good deal, the opposition has other priorities: It wants an election and, failing that, a second referendum.

Even if it enjoyed parliamentary support, a Norway option would face significant hurdles. It might require an extension to the current period for EU negotiations, which ends in March, to work out the details. As the Center for European Reform’s John Springford notes, the EU would be likely to impose additional demands in return, say changes to governance mechanisms. There would be opposition to the EFTA Court’s jurisdiction and to continued payments into the EU budget for market access. Most problematic, while the Boles plan envisages an “emergency brake” on immigration in special circumstances, this is a long way from taking back control over U.K. borders.

Ironically, Plan B may even make Plan A more likely to be defeated. Some lawmakers may see it as a crash-mat in the event that May’s deal is rejected. But that’s a false sense of comfort. Any plan that delays control of Britain’s borders indefinitely is likely to provoke a seismic electoral backlash.

Brexit and immigration control have become entwined in the minds of too many voters, for whom every crowded classroom or National Health Service waiting list is a reminder that Britain’s resources are constrained and its public services in high demand. Without economic growth, improved productivity and a sustained public relations effort that changes perceptions the EU, those attitudes will be hard to change. For that reason, Plan B is one many MPs can perhaps love, but they will have a hard time selling to voters as Brexit delivered.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Therese Raphael writes editorials on European politics and economics for Bloomberg Opinion. She was editorial page editor of the Wall Street Journal Europe.

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