The Need for “Fair Governance”.

Why Democracy and Self-Government Are Crucial for Any Brexit Trade Deal

When I entered the House of Commons following the October 1974 election, I made my maiden speech on the subject of housing – it had been the topic most consistently raised with me at the free legal advice service I had provided in Southampton as the Labour candidate for Southampton Test.

But shortly after that, I made a speech on the topic that most concerned me. It was on the constitutional implications of our Common Market membership, and I argued, on the basis of the constitutional law I had taught in the Oxford law degree course, that the Common Market would significantly diminish British parliamentary sovereignty.

The speech went well, to the extent that it provoked interventions from our own front bench, contesting what I had to say – and I was gratified that Norman Buchan (who had also been in the Chamber and who became a good friend) went about telling colleagues that they must “listen to Bryan Gould on the subject of sovereignty”.

But I learnt a further lesson from that episode. While I may have been reasonably comfortable with the term “sovereignty”, for many of my colleagues it meant little. It had a fusty tone to it, and seemed more suited to the nineteenth century and the works of A.V. Dicey and Walter Bagehot, than to the exigencies of the modern day.

From then on, I tried to explore the issue in terms of democracy and self-government. These were concepts that my colleagues could understand and embrace – and if even the newest country or former colony could see that self-government was the essential condition of the independence that was sought, how could it be dismissed by the British, with their long history, as being of no account? And for the left, democracy and self-government fitted in easily as essential elements in a socialist programme.

As the Brexit process works its way to a conclusion, these elements remain at the heart of what might constitute a solution. It seems likely that – as an outcome of the May/Corbyn talks – there will be considerable interest in an arrangement that would see the UK remain as part of a customs union – which would inevitably also mean an acceptance of many elements of the single market. It might be hoped that this would avoid some of the complexities of an Irish backstop or of an extended transition period, and point the way to the longer-term trading arrangement which would benefit all parties.

But such a proposition would immediately raise for the British issues of democracy and self- government – or, if you prefer, of governance and sovereignty. Those issues would not directly arise if the exit process produced a clean break; the UK would then be in the same position as any other sovereign country, free to negotiate trade deals with the EU and to walk away from them if they were not satisfactory.

It is sometimes argued that even a free trade agreement would necessarily involve some loss of independence, so what would be the big deal if such a consequence arose from the customs union and single market? But this is to misunderstand the essential difference between a FTA and what would be involved in belonging to the customs union and the single market.

Yes, a trade agreement, like a contract voluntarily entered into by a private individual, commits the parties to a certain course of action and to that extent closes off some options for the duration of the contract – but that is very different from entrusting to another entity the ongoing power to decide for us what obligations might or might not be undertaken in the future.

If a significant loss to democracy and self-government is to be avoided, the outcome apparently being considered, in other words, could only work for the UK if some concept of “fair governance” or pooled sovereignty were to be jointly adopted by the EU and the UK. What are the chances of that being agreed?

There is little evidence, whatever encouraging noises may be made, that the EU will be ready to see any derogation from its usual rules as to who has the power to regulate and decide tariff levels, permissible state aids and so on. It is hard to see that the EU would re-vamp the Treaties to allow the UK an equal voice with the 27 ongoing member states. The UK would therefore struggle to have any significant influence over matters decided by the other twenty seven.

A further complicating factor is that the euro-zone is increasingly moving towards becoming one economic entity which will at some point vote and decide such matters with a single voice. Given the fact that the EU’s governance gives each eurozone state votes and voice, the aggregate impact of this means any divergence of view or interest between those states and the UK acting on its own could not easily be resolved.

Would that matter? Yes, without governance rights in any such arrangement, a British government would lose control over many of the most important factors governing British trade and economic development. This loss would extend further than the obvious consequences.

In respect of fixing tariffs, for example, it would not just be a matter of fixing (or raising) tariffs to keep out non-EU competition. A British government would also be denied the power to reduce tariffs, if it so wished, so as to encourage the import of essential non-EU goods, such as medicines, construction materials and other products that might benefit investment in British industry.

As a result, if a solution involving UK “membership” of the customs union and elements of the single market is to be sought, it will depend on the readiness of the EU to embrace some new mechanic for “fair governance” or pooled sovereignty to prevent the UK from being unfairly prejudiced by significant decisions over which, in practical terms, it would have no say. Without a fair say, its so-called membership would not end up as a magnifier nor provide an attractive trading arrangement, but would instead restrict UK interests and suppress UK growth and opportunities.

It remains to be seen whether the EU is prepared to accept fair governance as a possibility for the sake of avoiding a “no deal” exit. Without some assurance on this, the proposed solution should be rejected.

Bryan Gould
4 April 2019