16 April 2020

How likely is an extension to the Brexit negotiations?

With EU trade negotiations set to get back up and running next week, how likely is it that the UK will seek an extension to the transition period?

By George Grylls

European Union chief Brexit negotiator Michel Barnier (R) and the British Prime Minister's Europe adviser David Frost pose for a photograph at start of the first round of post-Brexit trade deal talks between the EU and the United Kingdom, in Brussels on March 2, 2020. (Photo by Olivier HOSLET / POOL / AFP) (Photo by OLIVIER HOSLET/POOL/AFP via Getty Images)

The UK government has to decide whether or not to extend the Brexit transition period by the 1st July.

At the moment, there is little to suggest that there will be an extension. Chief negotiators David Frost and Michel Barnier set out a timetable yesterday for talks to continue, beginning next week. Meanwhile briefings to the Spectator have sought to reassure Brexiteers that “the only way the transition period will be extended is if the EU requests it” (which Brussels will not do). Downing Street has categorically said it will neither seek nor accept an extension. Most importantly, the government would have to vote in the House of Commons to unpick its own amendment that forbids an extension — an unlikely and humiliating U-turn.

And yet, the chatter goes on among cautiously optimistic opposition MPs. There are three main theories doing the rounds to explain why the government might climb down.

Firstly, the economic damage wrought by coronavirus gives the government an excuse to request an extension. It is true that, in the public’s mind at least, “Brexit is done”. YouGov polling from earlier this month showed that only 27 per cent of the public oppose an extension — a sign that December’s election took the sting out of the debate. Given that the government can expect with reasonable confidence that there would be no great public uproar if it were to extend, the only significant opposition to an extension would come from the Eurosceptic wing of the Conservative party.

But it is worth remembering that the Eurosceptic wing of the Conservative party is the government. With the dismissal of Sajid Javid earlier this year, the four great offices of state are now held by Leavers. That’s not to mention the Cabinet secretary, the government’s chief adviser and the government’s chief negotiator. Besides, there is a perverse argument that, faced with the enormous economic damage of the coronavirus, the huge economic damage of rushed trade negotiations is neither here nor there. One could even argue there is no better time to hide the costs of leaving the single market and the customs union than during a downturn.

Secondly, there is the theory that the economic damage wrought by coronavirus gives the government an excuse to pursue a softer form of Brexit. But what exactly is a softer form of Brexit at this stage? If leaving the customs union and the single market is a sine qua non of any Brexit, then the parameters you have set yourself prevent you from going soft. You might sign up to continued participation in certain EU bodies and agree to dynamic alignment but, given that the whole point of Brexit is to free the UK from EU law, why would you do that?

As Stephen has written, the economic costs of Brexit come from the freedom to diverge, not the divergence itself. Now that the current definition of Brexit precludes membership of the customs union and the single market, the inevitable contraction can only be worsened by so much — a figure that could well be drowned out by the impact of coronavirus.

Thirdly, there is the theory that the Eurosceptics themselves will agitate for an extension in the hope that they will secure a hard Brexit down the line. In a re-run of the “Brexit in Name Only” arguments of last year, the belief among some Brexiteers is that the rushed negotiations will end up in compromise. It is therefore worth seeking an extension so that, when Brexit does finally happen, there is a firm break with the EU.

But, for this to actually happen, the government would need to look like it was softening its position. Given that, in the midst of a pandemic, the UK government refused to participate in an EU ventilator-buying scheme — arguably prioritising its Brexit principles over the health of the nation — you can rest assured that senior members of the cabinet do not look like mellowing any time soon.

Running through these scenarios, an extension appears unlikely at the moment. But the past few weeks have shown that events can move fast. The longer lockdown continues, the greater the economic costs, and the pressure on the government to seek an extension will only increase.