Anthony Hilton: Michel Barnier knows the real meaning of ‘taking back control’

The chairman of one of our larger financial institutions said privately the other day that he had no idea what “taking back control” really meant. He thought his confusion was shared by most of the loudest advocates of Brexit in the Conservative Party. They cannot not resist the slogan but never explain what it means.

Jeremy Corbyn on the other hand, though leading a party that wants to maintain the closest possible ties with the European Union, has a very positive vision of what taking back control means.

Part of the Labour Party agenda for government is the nationalisation of various public businesses and utilities, coupled with government doing more to foster research, development and investment and taking a much more interventionist stance.

The rules of the European Union are very much against state participation in business on the grounds that it creates unfair competition. The logic is simple enough — the state sector has almost unlimited resources and this allows it to outgun any private sector rival. This philosophy and the rigid application of these rules by the European Commission would severely curtail any Labour government’s freedom of action in pursuing its nationalisation agenda. Taking back control, therefore, has real meaning and real point for Corbyn.

It is ironic that those on the extreme Right who want to leave the EU will thereby demolish the biggest block to Corbyn’s economic policies. It is interesting, too, that the one politician who has a clear idea of the meaning of “take back control” is not British. Michel Barnier, the European Union’s chief negotiator in the Brexit talks, made this clear at a conference on Monday in Brussels, organised by the Centre for European Reform.

Barnier first demolished the idea that the UK should remain a member of some EU regulatory agencies, such as the nuclear industry regulator and the organisation that covers European airlines routes and landing rights. There is good reason for the UK to want these memberships to continue — leaving these agencies creates the strong possibility of severe problems in the supply and handing of nuclear fuel, isotopes and waste; it will complicate and make more fragile and costly the supply of drugs to the NHS; it means that cheap travel from British airports to virtually anywhere on the Continent might be massively curtailed.

But, as Barnier reminded us in his speech, we have decided to take back control so we are prisoners of its remorseless logic. In his words, “freedom implies responsibility for building new UK administrative capacity”.

To rub the point home, he added: “On our side, the 27 will continue to deepen the work of those agencies together. They will share the costs of running those agencies. Our businesses will benefit from their expertise.”

You can see why he thinks we are nuts. Around the time of the referendum, the CBI said that we would have to replicate the work of no fewer than 34 separate EU agencies covering everything from life sciences to food and drink. The UK aviation industry estimated that putting in its own regulators to replicate the work of the European Safety Agency would cost it at least £400 million over the next 10 years — that is for just one of the 34 agencies.

Meanwhile, Deloitte, the accounting firm, said that on its calculations, the UK would need at least another 30,000 bureaucrats, regulators and border control officers. All this cost to deliver something which cannot be better than what we already have. Taking back control does not come cheap.

Barnier also demolished again the ingrained British idea that there are bits of the single market we could remain part of. Instead, he said yet again that by ending the free movement of people, the UK will lose the benefits of the single market.

However, he then added that it should be possible to have access to the single market — a trade deal — “but this is different from being part of the single market”. It’s very difficult in the context of taking back control. “There will be no ambitious partnership without common ground in fair competition, state aid, tax dumping, food safety, our environmental and financial stability,” he said.

And he added: “It is not only about rules and laws. It is about societal choices — for health, food standards, our environment and financial stability.” But his most telling line was that, in stark contrast with normal trade negotiations, which were about regulatory convergence, the challenge in these would be about preventing divergence in the future.

It is worth thinking about those conditions again in the context of taking back control and the Brexiteers’ fantasy that Britain will be free to slash taxes, abolish pollution and climate laws, lock up strikers and take the axe to animal welfare standards.

If the EU and Britain have to share common ground in competition, state aid, tax, food safety and so on, it necessarily follows that the UK has not got a free hand to do what it likes in those areas.

It has not taken back control because whatever policies it puts in place will have to be compatible and aligned — and stay compatible and aligned — with those of the members of the single market, otherwise British companies would be able to compete unfairly with those on the Continent.

Most City firms think a trade deal with Europe is vital to our interests. Most think that in this way Brexit can be finessed into something acceptable. For a reality check, they should listen to Barnier rather than David Davis.