Sir Ivan Rogers was in conversation at the Institute for Government. This is an edited transcript of his thoughts on why no-deal isn't a sustainable outcome, whether there should be a public inquiry into Brexit – and why, when it comes to negotiations, the difficult bit is still to come:
Ivan Rogers: Once you get into the trade deal and the economic deal and then associated security and other deals, this is actually the complex bit still to come. It's much more complex and involves much more of Whitehall, and should involve Westminster a lot more than the exercise to date. I'm not disparaging the exercise to date, but that's solely about withdrawal terms and then a rather vague political declaration.
I said in the Spiegel interview that the political declaration is vague, primarily because the Brits wanted it vague, because it is still not terribly clear where we're going and there are obvious divisions within the government and across the House as to where we're going. We're really going to get to the debate about where we're going, and why, in the next stage. You have to view this as an extraordinarily important and complex trade negotiation. But it's more than just a trade negotiation. This is the first major trade negotiation I can think of between developed countries, or a developed country in a bloc, where you're in the process of trying to get further apart. So most trade negotiations I've ever worked on are a process of convergence and dismantling and ideally, over time, eliminating barriers to trade between two jurisdictions. This is a different trade deal because we're seeking to get further apart. Now the European Union would say – does say – and will carry on saying for the next several years: 'That's your choice; you chose to leave. You chose to leave the jurisdiction, the supranational legislation, the adjudication enforcement'. So this is a very different process from just a trade deal.
I was describing it to the media well before the referendum as a deaccession process, as well as a trade agreement. And what do I mean by deaccession? You know what the process of accession looks like for those seeking to join the European Union under Article 49 takes several years, and there's a huge and very lengthy and contorted and technical process of convergence across 35 different chapters of the acquis communautaire – the law book for the European Union. This is partly about the negotiation of a genuine new free trade deal. It's partly about the process of deaccession and disentangling ourselves in each of those areas but, of course, why is it more difficult?
Until we can specify where ultimately we want to go to – and the European Union side of the table is constantly going to say: 'Well, you chose to leave so you must want to diverge. What the hell are you leaving for unless you want to diverge in multiple areas and by some distance? You must want to do something with your sovereignty; please specify what you have in mind'.
And therefore we're diverging to an unknown destination. So I think for Whitehall this is more difficult than trade deals – it's more comprehensive, it will cover every department in Whitehall and in each area we're going to have to work through in our own negotiating mandate where we want to land up. While also recognising that, in the negotiation – in multiple areas – we aren't going to land up where we first specify where we want to land up. So this is a much bigger task for London, for Whitehall, and for Westminster, than the negotiation we've been through. It's going to involve every department of state in depth – on the top of those departments, and state, but also right down through the system. And then you're going to have to make choices and trade-offs and decide what really counts. And when the other side puts you up against it, under time pressure in 2020, 2021, 2022 – or whenever the deal is finalised.
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The relationship between the EU and UK is difficult. Trust has corroded and it is eroding further. This is going to get more bumpy and conflictual and contorted unless the EU27 think strategically about how they are going to deal with the British post-Brexit. And what does that relationship need to look like? What does it consist in and where do we want it to go? And for a while there was a lot of schadenfreude at British expense about these guys (that) can't get their act together (in) London. I do think that's actually a strategic mistake, because you're just sort of saying: "Well, until London sorts itself out and gets its act together and says something halfway intelligent (or) consistent with any destination we might ever agree (with) we don't need to bother." And the result is, two-and-a-half years later: this is the mess we're in.
Jill Rutter: So is there anything the British can do? If you were sitting there and the new prime minister had a rethink, saying: what can we do to reset the agenda? Is there anything the UK can be doing now, or in the next few months perhaps, after the withdrawal agreement goes through, to start actually laying the ground for a more positive thing?
Ivan Rogers: Well capitals obviously matter, but I think, having lived through this, with a number of different prime ministers in a number of different negotiations – and not just prime ministers, I think that reflects in the British system always to think: okay, we can deal direct with the organ grinders not the monkeys – (but) it never works like that and it didn't work like that in the Cameron renegotiation either.
What I tried to explain to David Cameron, as I've tried to explain to previous previous prime ministers – and this prime minister is: Look, when you visit other capitals, and maybe you're the first British prime minister or the first foreign secretary to go there for a long time, they're very pleased to see you. It's a big moment. They're not going to give you blunt and difficult messages face-to-face in those kind of meetings, and they didn't when Cameron was on his tour of Europe. That's what you have sherpas and permanent representatives for, and they deliver the difficult message to people like me in the belief that then it's my job to get through to my prime minister that there are various red lines that they have which they're not going to cross.
And that's how the system works. Therefore in the jargon of Brussels, on these kind of negotiations, you often have things called confessionals where the council presidency team and the commission team will call on member states and get a download of what their bosses really care about and what their bottom lines really are. That stuff is not done in the way British politics works, leader-to-leader. It's done via the bureaucrats and via the sherpas and the permanent representatives and the people at the top of the institutions. And the Brits constantly either misunderstand that, or just don't realise that circumventing that and thinking: 'Oh, we can go direct to Berlin or Paris or any other capital and square that off and that will be different from the orthodoxy we're getting out of the institutions' nearly always fails.
Now it is different in the trade negotiations. What I would say is that it's easier for the 27 to keep solidarity in the withdrawal negotiation than it will be in the trade negotiations. They'll have a more difficult job keeping together as a 27 because their interests diverge and their economic interests are not all the same. Everybody's job when you are the permanent representative, or the sherpa, is to ensure that key bottom lines for your member state get into that mandate at the outset so that you're not forgotten. But lots of member states will be worried that their interests will, in the end game, be subordinated to the big member states. And so certain member states, on specific issues, will be minded to be more helpful to the British than others. Nevertheless, as the Canadians found out, in the end when you are negotiating with the EU, you actually need quite a lot of coherence from the 27. And you do, in the end, have to rely on the Commission to enforce that coherence.
Jill Rutter: And there are some member states for whom the security relationship will matter hugely more than a trade relationship. So how closely should the UK try to link those two? We had that moment where we appeared to be threatening in the initial Article 50 notification and then had to clarify very quickly that we weren't trying to sort of, you know, threaten Europe security in order to get a decent relationship. But how would you play that into the linkage between security and trade?
Ivan Rogers: Well, there is clearly a linkage but I mean playing it in a sort of crass, you know, potentially threatening fashion isn't going to work. Nor do people really believe that, if it's in your own security interest and you care about it, you're going to withdraw intensive security cooperation because they've done you over in the trade deal.
Now there are people who have a tremendous kind of fondness and affection for the UK, for which I suppose my proposition is that buys you relatively limited amounts when it comes to the kind of trade and economic stuff that is run from the centre. But it counts for stuff. People don't want a dysfunctional and distant relationship with the UK after exit. They want to try and make it work. I think the job in the UK system will be to think: what's the win-win out of this negotiation. Because after all we will be approaching this negotiation from the baseline which the others won't be, and I think we need to think about this. We'll be approaching from the baseline of: there's an awful lot about the current relationship, including the current economic relationship that we want broadly the status quo on. You can see that littered through the UK documents.
But the other side of the table will say: 'Hang on you chose to leave. All the kinds of things that you like about the status quo are not automatically on offer. They're not going to be on offer to a non-member of the club'. So their baseline would say 'You have left. You chose to leave. We have a new FTA or whatever it turns out to be with you like any other third country. But the baseline is you chose to leave'. Whereas the Brits are still mentally thinking: 'Well in loads of areas we broadly like everything about the economics or the security relationship the status quo'. And that applies to plenty of economic domains where you see what the British government has written on things like the European Arrest Warrant, where we say: 'Well, we don't want to mess up extradition arrangements and the pace of those extradition arrangements, we simply want to leave the European Arrest Warrant system'. But the jurisdiction is central to it. So you can't just say: 'Well, we'll have all the substance and all the substance benefit with none of the jurisdictions'. It's not going to work.
Jill Rutter: So is there any bespoke (elements of a deal) that you actually think are there for the taking?
Ivan Rogers: I think when people get caught up on bespokery – and you know I had this discussion in 2016, where people thought I was just being too theological and saying: 'No you're either in or you're out. If you leave the single market, you leave the single market. If you leave the Customs Union, you leave the Customs Union'. But are there, as part of a trade deal that you negotiate with the European Union, ways of getting to an unprecedentedly deep trading relationship, which goes further than any FTA they've struck before? Yes, I think there will be. But you're going to have to go through these in depth, area by area, sector by sector, chapter by chapter, and there will be separate negotiations on everything from fish to audio visual, all of which will be extremely difficult and where the other side's baseline effectively is not our baseline.
We'll be saying: there's an awful lot about the status quo that we just want to replicate as far as possible and that must be in our joint economic interest. We had that endlessly from, you know, Boris Johnson and David Davis and all the others at the outset that it must be in their interest economically and their economic interests would override the theologians of the centre. It won't – and it won't happen in the trade deal any more than it happened in the withdrawal deal because they'll say: "No, you chose to leave and there are certain types of relationship in the economic sphere which only come with membership."
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We'll see whether anything happens this week or next. But it still seems to me that there's quite a big gap from everything one hears, and that expectations on both sides are not in the same place. Obviously reading the papers this week you can see where Geoffrey Cox is on unilateral rights to exit and end dates and whatever, so you can see potentially the landing zone. But what I can't judge is, politically, whether that sells it to enough people inside the Conservative Party to move it.
On services, I'm very worried about this. In my view, it's the worst part of the substance of the Prime Minister's deal in terms of where she's going with her version of the political declaration. She's prioritised goods over services. Let's be honest, even though it's a modest proportion of the economy. And you know the lobbying effort I would say from corporates in the goods world has been more effective inside Number 10, and elsewhere across the system, than from services.
The frustration I had is that the political class still obsessives about tariffs and tariff-rate quotas, and the number of politicians who ever mention key areas of services, in which we are extremely competitive, is very small. I believe when we are in a trade negotiation, then those service issues will come to the fore because departments and departmental secretaries of state will bring them to the fore. We're suddenly going to discover that we're going to end up in a very bad world on services. If you look at the UK compared with other major jurisdictions, a higher proportion of the UK's exports are of services than of any other major economy. That's one remarkable fact.
The other remarkable fact is that, for all that you hear from the eurosceptics that the single market's been a failure and it's not delivered anything on services, actually services liberalisation has gone further within the European Union than elsewhere by a mile.
There's a lot of things wrong with the services single market and a lot of areas that we haven't completed it, but our penetration of the services market in Europe is vastly greater than elsewhere because we go much further with deeper trade liberalisation. In the end, the economic interests of the country will start to play in a trade negotiation because they will come to the fore and it's going to be more and more obvious to economic players and businesses across the country that we're going to end up in a very bad place if politicians don't start fighting the corner. And then the trade off will come back to free movement of people questions, I guarantee you.
Jill Rutter: So what about managed no deal, and what about Malthouse plan B? Any appetite for that?
Ivan Rogers: In European capitals and in Brussels? Zero, I think. Look we have to be honest here. They've gone through a painful process and negotiated amongst themselves their own position, then agreed it with the Prime Minister, got the deal that the Prime Minister said she wanted on November the 25th. And she says to them on November the 25th, I'll now take it to a meaningful vote and I may not win first time round, but I'll get it through. And she is obviously exhorting them to back her up and saying it's the only deal in town. She's now gone back saying: you know after the Brady Amendment indicating that it isn't the only deal in town and she wants revisions to the deal and if that's a genuine reopening and some way overriding elements of the deal I don't think she'll get that.
How do they view no deal? Nobody views no deal as a permanent end state and nor does the British government incidentally. I think it's important as to why Liam Fox and his department is touting themselves around the world in order to get continuity on existing free trade deals which we have by dint of EU membership because WTO terms are not as good as FTA terms.
So the department is strenuously trying to replicate the effects of an existing FTA, because reverting to WTO terms is much worse than having the benefits of those FTAs. If that's true in global terms with the FTA, as we have by dint of EU membership, it's true with our relationship with the EU. So I'm afraid the other side has never believed for one minute that the Government is at all serious about a no-deal option because they don't think that no deal is sustainable for the UK economy. And they know that they look at the behaviour of UK ministers as opposed to what they say, and they know that UK ministers are acting as if WTO terms with anywhere else in the world where we don't operate on them are bad, and a reversion to something worse than they got at the moment.
No deal is therefore not a sustainable end state and they know it. And there are multiple sectors where WTO terms are essentially meaningless. So their view is: there no such thing as no deal being sustainable in the end. The Brits will want – and should want – a preferential trade deal with them. The question is the thickness of that preferential trade deal. Now there you've got the contortions about what does that mean. Is it a deal of the sort that the Prime Minister wants? Or a Canada style deal, which was much more mid-Atlantic and going further out? Everything I've ever had from opposite numbers there was: 'Look that's your sovereign choice. If you don't want a customs union in perpetuity and you don't want to be in the single market and you want a much more distant mid-Atlantic relationship, frankly, more fool you, but that's your sovereign choice. If that's your interpretation of what you wanted with Brexit, go ahead and do it. We're not going to stop you'.
This idea that the Europeans are obsessed with trapping us in perpetuity in the Customs Union doesn't bear any relationship to any discussion I've ever had with anybody. So I think it's an illusory fear. It's the depth of the FTA that you would be getting into that is the real question, and there there's still a choice to be made here. We know that a significant number of the cabinet would really like to go in a more Canadian direction and that the Prime Minister thinks that's damaging for the country, which is why she's ended up with a model she pursued at Chequers and has been pursuing ever since. That's the dynamic.
I can't judge whether the withdrawal agreement will go through. I think it might, it might not. I can't give you a percentage.
It's nice in this conversation to move it on, because regardless of whether we agree a withdrawal agreement, as I say no deal is not an end state. So there is not a state of the world in which we're going to end up with no deal. Even the no dealers talk about managed no deal, because, they say, the European Union will then come running and in multiple areas will want continuity with us, and therefore it'll all be fine and dandy and we'll pay less money and won't have a backstop. Dream on. What would the EU side do in circumstances where talks collapses, we walk away from the table and we say we're prepared to pay you half the money but not have the backstop? They'd say: 'Well, very best of luck with that. You know we're ceasing normal relations, we're not negotiating an FTA with you until you come back to the table with the full money and an agreement on the backstop'.
I can guarantee you that would happen the following morning. And my point therefore is this is all incredibly important. We've been obsessing about many of the wrong issues now for two-and-three-quarter years. The big issues are about where do we want to go post-Brexit? What does that look like and why? And we have to get onto that, and we're going to have to get onto that, whether or not we sign this withdrawal agreement in the UK in the next few days or not. It's not going to go away, and nor will the European Union go away. We can't live in glorious isolation. For the rest of the working lives of the Government and all parliamentarians, there is going to be an ongoing negotiation with the European Union on loads of very important issues. Talk to the Norwegians; they live in a state of permanent negotiation with the European Union. We aren't going to be able to avoid that. These sort of fantasies of release and liberation – they are fantasies. We are going to be negotiating on everything from aviation to energy to phytosanitary to financial services forever more with our biggest neighbour.
Question: There's an idea that, perhaps in a few years' time – or even a few decades – there will be a public inquiry into how the Government has handled Brexit. Do you think there will be? And do you think there ought to be, and why?
Ivan Rogers: Who knows whether there will be. We obviously have a bit of a British tradition of having these public inquiries years after the event and then producing voluminous tomes. And then I'm not quite sure what lessons are ever learnt from them.
Is it healthy? Would it be cathartic? I think there's an awful lot that one could go through and an awful lot that that could be looked at. I'm not sure it's going to be productive. And it's so raw at the moment. My worry now – given I'm only a punter and a citizen – is that the state of the country is more divided and more bitter than it seems to me than it was in 2016. If we're going to come through the Brexit crisis – and it is turning into a constitutional and political crisis, and may turn into an economic crisis – we're going to somehow need to be united behind some version of Brexit that works for a really rather large number of people across the spectrum. That's not where we're headed at the moment, which is why the divisions are getting worse. Does a public inquiry help with that or does it scratch away at very raw wounds on all sides of this? I'm not sure.
That doesn't mean to say that you shouldn't. The system I would say must be going through a hell of a lot of reflection as to how the hell we ended up here and have we really organised ourselves very effectively over the last 30 months? And the system is suffering. It's not just a Whitehall system, I think, but it's a broader political system crisis that we're going through. We shouldn't be surprised that you can't have a revolution without some revolutionary consequences, but has the system collectively – both in the Commons and the Lords, and in Whitehall – got a lot to think about about how we handle this and could we have done it better? Yes, I think it has.
Question: Assuming there is a Brexit, where do you think the main domestic political rubs will occur in the future? And if you were advising a future Prime Minister if we want to do better than the marked disunity we've experienced over recent years, how would you organise the political process to promote greater unity in the period ahead?
Ivan Rogers: It comes back to my point about transparency and openness. Let's say we get into this trade discussion; in practice, it will then be three or more years after the referendum before we even start. People think that Brexit is done. But we've got the other side of Brexit and therefore it's not going to be on the front page of every newspaper every day; people are bored rigid by it. We know that in big sectors of the economy, as well as on security and foreign policy and the internal security agenda, there are massively difficult controversial issues coming our way. We could write the best mandate in Whitehall, hundreds of pages long about everything that we want to achieve. We know that a significant proportion of it, with the best will in the world, we're not going to achieve because the other side won't want it and won't look at the world in same way.
And we know therefore at the end of the trade deal, that's three to five years down the track. (And I think it's more likely to be that than in two years' time). We will have some very difficult decisions to take inside the system. At government level: as to what counts most and what are we prepared to give in order to get it? And where are we on the trade off between sovereignty and market access? In particular, which is the core trade off? You can only persuade the majority of the public that you've come to a pretty good set of conclusions where the establishment hasn't again sold them down the river and betrayed their interests by being pretty open about what the trade-offs are and what the choices are.
The big difficulty in all trade negotiations I've ever done is you hear from the losers and you hear from the producer groups. You never hear from the beneficiaries and you never hear from the consumer groups. You never hear from the gainers and you're never thanked by the punters; you're always abused by the losers. So say we end up in a difficult world where, we decide in the end to privilege various kind of services interests and we're prepared to make concessions on free movement of people, and we're prepared to do things on the fisheries sector. Just imagine the politics of that, where fishing communities who think they were promised a hell of a lot in 2016 feel: "Here we go again. We've been sold down the river by the establishment. They told us they wouldn't do it." That's where we're headed by 2020 to 2021. Now there's no easy way through that. But the best way through it surely is to have a pretty open, serious honest debate about where we are going. Why are we going there? What are the choices facing us? What are we trying to do with the EU? What are we trying to do outside the EU? If you can't, as a leader and as a government articulate that in a way that cuts through to the public, they're going to be in a hell of a lot of trouble in three years' time.