The EFTA/EEA Norway model provides some scope to lessen the pain of Brexit, while increasing control over immigration

One of the legacies of the Leave’s irresponsible, hotch-botched campaign is that, in the public mind, leaving the EU has become inextricably intertwined with leaving the single market and eschewing free movement of goods, services, capital and people. We need to move beyond this binary thinking, which is bordering on the moronic.

Though we should, once options have been analysed by our politicians, have an early general election, I don’t think that is likely this side of hell freezing over. The Tory party is not that keen on self-destruction.

So, we’re left with our system of representative parliamentary democracy as (half) elected in 2015. The government and parliament should debate the options and decide on the course forward. I believe they should choose, with promptness, an option, at least in the short to medium term, based on the EFTA/EEA Norway model. The referendum question covered membership of the European Union. It did not cover membership of the single market and immigration. The government and parliament are entitled, indeed duty-bound, to now move us forward using their chosen best route for the good of the country.

One of the reasons for choosing the EFTA/EEA route, is that it is what has been suggested (albeit amongst other options), in detail, by members of the Brexit community for months, if not years.

In particular, I bring forward Christopher Booker, one of the founders of Private Eye, and a regular columnist of the Sunday Telegraph on the subject of the EU. With writer Richard North he co-authored Flexcit, which proposed the UK rejoining the European Free Trade Association EFTA and staying in (or at least exiting and then re-entering) the European Economic Area as a way of coming out of the EU framework with less disruption to the economy, while allowing further phased evolution later.

According to an uncited statement on Wikipedia, this policy was adopted by the Leave.EU campaign. So the mantra “The Leave campaign didn’t have a plan for Brexit” is false. They did (at least before digressing onto queues of Syrian migrants and scare stories about 80 million Turks suddenly descending on Budleigh Salterton) and it is there in the Flexcit document. That said, the document proposes EFTA/EEA as a stepping stone to a multi-phased wider solution. It could, presumably, equally be used as a stepping stone back into the EU (via either a general election or a second referendum, which may be legally required, coupled with rescinding Article 50 notification before end of the two year post-notification period, which is arguably possible).

Under EFTA/EEA we’d still be part of the single market and we’d have an “emergency brake” on immigration, via the Article 112 “Safeguard measures” of the EEA agreement, which can be invoked “unilaterally” and have been used for 18 years by an EFTA member country, Liechtenstein, to impose immigration quotas.

Christopher Booker wrote on 2nd July in the Telegraph:

On invoking Article 50 we should begin our negotiations mindful that we are already in the EEA where, outside the EU, we intend to remain. This, along with an application to rejoin the European Free Trade Area, gives us an immediate, off-the-shelf solution to the trading problem. Furthermore, under Article 112 of the EEA Agreement, we would also have the unilateral right to claim a partial opt-out from the EU’s freedom of movement rules, allowing us to set up an (albeit generous) quota system to control immigration from other countries in the EU.

(This EFTA/EEA option, by the way, has been backed up by an Adam Smith Institute document. I also note that it finds favour from a City point of view.)

Even outside the EEA agreement Article 112 provision, there appears to be scope for flexibility in “controlling” immigration. Jonathan Portes at the National Institute of Economic and Social Research suggests this:

The obvious way to implement a quota, then, would be to restrict the issuance of new National Insurance numbers to EEA nationals, with a monthly or annual ceiling. Once that ceiling was hit, any further EEA nationals seeking to work in the UK would have to apply through the system that currently applies to non-EU nationals.

Portes concludes:

…given the political will, outside of the EU we could indeed restrict free movement without ending it.

Just last Wednesday, The Leave Alliance was singing the praises of the idea of the UK building on a Norway model:

On immigration the respective situations of Norway and the UK are very different. Norway is party to the Schengen Agreement; it is a voluntary signatory and Schengen is separate from the EEA agreement. Being in the EEA does not require membership of Schengen. Norway also has land borders with the EU (sic – so does the UK, in Ireland) so the situation is not really comparable to the UK. We do have border controls and far more scope to manage immigration though good domestic policy, which has been sorely lacking.

Also, along the lines suggested by LDV commenter David Allen on June 29th, could we not have a more sophisticated employers’ migrants levy system focussed on labour sectors where we do not have shortages? Such a levy could flow money into a re-established Migrants Impact Fund, which could focus resources on areas most impacted by migration in the UK, as advocated by the late Jo Cox.

Another advantage of the EFTA/EEA Norway basis is that it could well reduce the enthusiasm in Scotland for another independence referendum.

As an old boss of mine used to say: “There is more than one way of skinning a cat”. This country does not have to play Russian Roulette with our economy (i.e by leaving the single market) in order to be able to say we have regained some control over immigration from EU countries. We don’t need to sacrifice the UK Union. We need to get creative and ditch the binary thinking.

* Paul Walter is a Liberal Democrat activist. He is one of the Liberal Democrat Voice team. He blogs at Liberal Burblings.

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40 Comments

  • “Being in the EEA does not require membership of Schengen”.

    But all EEA members apart from the UK and Ireland are party to the Schengen Treaty, and EFTA will almost certainly demand the UK sign up to the acquis as a pre-condition of joining.

  • Bill le Breton 11th Jul '16 - 10:46am

    Obviously I welcome this well researched piece by Paul and his other recent contributions on the advantages of EEA non-EU membership.

    This LDV forum has, until his arrival, been a lonely place for EEA enthusiasts like myself. As is usual here, pioneering radicals get a fair amount of ridicule and abuse.

    One of the many advantages of this option is the speed in which its adoption can create stability. Let’s get on with it.

  • “This country does not have to play Russian Roulette with our economy”

    Russian Roulette only has one bullet, I think in a “full leave” option there would be a few more bullets than that…

  • This is very interesting. If what you are saying is correct, then the Remain campaign was not being accurate when it spent months telling us that it would be impossible to leave the EU, retain access to the free market, and have more control over immigration than we do now.

  • Bill: I do not see ridicule and abuse being heaped on any one and being a strong remain supporter, I am happy to have a discussion in our party to determine a negotiating stance which could form a base line for our party. I would prefer this to a subservience to the tory right cobbling a position together that satisfies the right(if indeed there is such a position without full exit from everything european)

  • Stuart, “If what you are saying is correct…”

    That’s the trouble with the “EEA option”. We don’t know what it is yet.

    Does it mean joining Schengen? Sarah Noble says “probably”. Does it mean we can control EU immigration? Well, Paul Walter has found out that little Liechtenstein has been allowed to do that, which is interesting. But then again, the EU’s recent dealings with Switzerland suggest that once a bigger country comes along, that door slams shut. Do we still have to pay £350M although we will no longer get any of that money back? Probably….

    I fear that the Leave.EU campaign may very well have adopted proposals like “Flexcit” with the aim of suckering people into going along with an ill-defined idea, which starts off by looking like EU-membership-lite, and ends up by turning into Brexit-heavy.

    Let’s not race into offering all the concessions up front, and telling everyone we are happy to sign up for a slippery slope.

  • In case anyone is wondering, this is said Article 112:

    Article 112
    1. If serious economic, societal or environmental difficulties of a sectorial or regional nature liable to persist are arising, a Contracting Party may unilaterally take appropriate measures under the conditions and procedures laid down in Article 113.

    2. Such safeguard measures shall be restricted with regard to their scope and duration to what is strictly necessary in order to remedy the situation. Priority shall be given to such measures as will least disturb the functioning of this Agreement.

    3. The safeguard measures shall apply with regard to all Contracting Parties.

  • And Article 113:

    Article 113
    1. A Contracting Party which is considering taking safeguard measures under Article 112 shall, without delay, notify the other Contracting Parties through the EEA Joint Committee and shall provide all relevant information.

    2. The Contracting Parties shall immediately enter into consultations in the EEA Joint Committee with a view to finding a commonly acceptable solution.

    3. The Contracting Party concerned may not take safeguard measures until one month has elapsed after the date of notification under paragraph 1, unless the consultation procedure under paragraph 2 has been concluded before the expiration of the stated time limit. When exceptional circumstances requiring immediate action exclude prior examination, the Contracting Party concerned may apply forthwith the protective measures strictly necessary to remedy the situation.
    For the Community, the safeguard measures shall be taken by the EC Commission.

    4. The Contracting Party concerned shall, without delay, notify the measures taken to the EEA Joint Committee and shall provide all relevant information.

    5. The safeguard measures taken shall be the subject of consultations in the EEA Joint Committee every three months from the date of their adoption with a view to their abolition before the date of expiry envisaged, or to the limitation of their scope of application.
    Each Contracting Party may at any time request the EEA Joint Committee to review such measures.

  • And finally:

    Article 114
    1. If a safeguard measure taken by a Contracting Party creates an imbalance between the rights and obligations under this Agreement, any other Contracting Party may towards that Contracting Party take such proportionate rebalancing measures as are strictly necessary to remedy the imbalance. Priority shall be given to such measures as will least disturb the functioning of the EEA.

    2. The procedure under Article 113 shall apply.

    So this intended to be a temporary response to an emergency situation, and you are required to advise every 3 months on your progress in resolving the emergency with a view to reducing or abolishing the Safeguard Measures. Also, Article 114 allows other EEA countries to take action if they believe they are being disadvantaged by your Safeguard Measure. Not sure how Lichtenstein got away with it for so long – probably by being so small that no one cares. So it could cover an “emergency brake” but should not allow a permanent restriction on free movement.

  • Neil Sandison 11th Jul '16 - 12:38pm

    Sounds like a plan to me EFTA/EEA would help stabilise current situation and invoking article 112 limiting free movement to employment has advantages .Where does it stand on taking up educational opportunities and maintaining science and research activities?
    This would not prevent us in 2020 reapplying to join a reformed EU along Liberal Democrat lines .The currently configured commission is a stumbling block to public acceptance of re-engaging with the EU.

  • Can i ask why the Lib Dems are so othodoxically obsessed with FMOP? It’s not a normal centre-party position as it’s peculiar to the EU – for example Liberals Trudeau and Clinton would never accept it. Also EFTA/EEA can be a stepping stone to be able to liberally control our borders.

  • John Samuel 11th Jul '16 - 1:27pm

    Any EEA member could veto the UK’s application. Norway isn’t convinced.

  • On invoking Article 50 we should begin our negotiations mindful that we are already in the EEA where, outside the EU, we intend to remain.

    Any reliable evidence for the UK being in the EEA in it’s own right? my understanding is that the UK gave up its membership of various European trading blocs when it because a member of the EEC. Currently, my understanding is that the UK is a member of the EEA because the EU is a member of the EEA. Which is why Article 50 can be so precise that on exit the only rules governing UK trade with the EU are WTO rules…

  • jedibeeftrix 11th Jul '16 - 3:04pm

    @ sarah noble – “and EFTA will almost certainly demand the UK sign up to the acquis as a pre-condition of joining”

    Really, why ever would they want to be so insistent on something of so little importance?

  • David Allen 11th Jul '16 - 3:35pm

    Paul Walter,

    Yes, the Brexiteer blog you cite explains how the EEA agreement has been modified to allow Liechtenstein to impose permanent immigration restrictions. Just two points. First, the amendment to the EEA agreement is specific to Liechtenstein. Second, it is explained in the article that the EU / EEA came to the view that Liechtenstein had exceptional concerns with regard to immigration, by virtue of its very small size, that would not generally apply to any other country.

    The Brexiteers grasp at this straw and express totally unwarranted optimism that the EU / EEA can be persuaded to do the same for the UK. No doubt when it doesn’t happen, it will give them one more verbal brickbat to sling at the perfidious EU. Don’t let them con us!

  • David Allen 11th Jul '16 - 4:02pm

    “Why ever would they (EEA / EU) want to be so insistent on something (the UK signing up to the acquis) of so little importance?”

    Because when a capable negotiator holds a bargaining chip, that negotiator uses it.

    The Eastern countries of the EU will demand continued free movement into Britain. The EU negotiators will therefore force the UK to choose between continued free movement and painful trade tariffs – if, that is, they decide to be soft enough even to allow that choice. Hollande will want Britain to be taught the harshest of lessons, simply because Marine le Pen stands for Frexit, and Hollande wants to scare France away from Marine le Pen.

    The EU hold all the cards. They don’t have to offer us a good exit, and they won’t do. The Brexiteers would love us to kid ourselves that Brexit is OK provided we label it “Norway”. Once we start the process, we shall learn that the label is simply false.

    This party has a distinctive position, a belief in UK membership of the EU, which has gained us a new role in British politics. To join the Tories and Labour in “going for a Brexit which will be something a bit like Norway”, and then finding out the hard way that it isn’t, would be to throw away both political principle and political opportunity.

  • Tim Stevens 11th Jul '16 - 4:09pm

    Some very interesting ideas here, Paul. I agree that Britain needs to move on from the stark “in/out” straitjacket of the referendum debate. An EFTA/EEA arrangement could be the best solution, and is likely to satisfy much of the “middle ground” opinion in the country. The die-hard “In” or “Out” purists would just have to accept the situation.

    On its eastern flank, some countries are becoming increasingly critical of the EU’s direction. So perhaps we will end up with a two-tier arrangement in Europe: a core group of Eurozone countries remaining in the EU, encircled by a group of countries that have chosen to go down the EFTA/EEA road?

  • @Paul Walter
    “They “got away with it for so long” because it has been effectively made permanent through the relevant bits of the EEA agreement you haven’t quoted: Protocol 15, Annex VIII and Annex V. See:

    http://eureferendum.com/blogview.aspx?blogno=86122

    It’s actually reviewed every 5 years:

    http://www.efta.int/media/documents/legal-texts/eea/the-eea-agreement/Annexes%20to%20the%20Agreement/annex8.pdf

  • Paul – I’m just concerned that your article makes it sound like there is an easy and automatic solution to “square the circle” of retaining free market access whilst curtailing freedom of movement. I don’t think this is the case. Article 112 provides for limited, temporary emergency measures which could provide an “emergency brake” but not a long term restriction.

    Annex VIII applies to Lichtenstein only, not to us or anyone else, and still needs to be reviewed every 5 years.

    I suggest we may struggle to persuade other European countries that tiny little Lichtenstein’s issues are the same as ours.

  • Little Jackie Paper 11th Jul '16 - 6:43pm

    A few thoughts, in no order.

    1 – There seems to be this idea doing the rounds should become a sort of prison, where members dare not exercise their (treaty rights) out of fear. I’m not sure that’s really what the EU should be.

    2 – Spain has applied emergency restrictions on freedom of movement in the past. Like Liechtenstein the principles and precedents are there. http://europa.eu/rapid/press-release_MEMO-11-554_en.htm

    3 – Norway had some free movement via the Nordic Council so Schengen was not a totally radical departure. As it is Schengen countries can’t make Schengen stick at the moment – the more starry eyed might want to dwell on that.

    For me Norway is an excellent model

  • Little Jackie Paper 11th Jul '16 - 6:46pm

    Sorry, that should read:

    There seems to be this idea doing the rounds THAT THE EU should become a sort of prison,

  • Little Jackie Paper 11th Jul '16 - 6:59pm

    Tim Stevens – ‘On its eastern flank, some countries are becoming increasingly critical of the EU’s direction.’

    I don’t think this is quite right. I travel around Eastern Europe a lot (my wife is Eastern European) and whilst there is some criticism, the bigger feeling in Eastern Europe I sense is that the EU and associated are not permanent. They look at Schengen and see fences, the look at the Euro and South Europe and they look at very real exit movements (not just in the UK).

    There are very, very mixed opinions that I find in Eastern Europe – it’s complicated and probably not consistent.

  • “There seems to be this idea doing the rounds that the EU should become a sort of prison”

    It’s not a question of “should”. Rightly or wrongly, the EU recognised that any country which chose to leave would cause the rest of the EU considerable harm. They therefore agreed – and we all agreed – rules which put any country opting to leave at a considerable disadvantage.

    Like it or don’t like it, that’s what we are up against. We won’t get what we want.

    When May claims to be a leftist who will give power to the workers and cut the tax dodgers down to size, she’s kidding (in much the same way as Maggie used the words of Francis of Assisi as a smokescreen when she took office). When May promises that Brexit will be smooth and painless, she’s kidding there too.

  • Mark Goodrich 12th Jul '16 - 2:55am

    @Paul

    Lots of food for thought and my first comment attempt was too long so trying again.

    1. I think we can all agree EU/EFTA is the best Brexit option.

    2. Article 112 is not the “solution” on migration you suggest. Indeed, with the exception of the Flexcit piece (which sees it as a step on the way to fuller exit), all of the articles accept that free movement would basically still exist. Incidentally, an attempt to us the unilateral trigger might end up getting reviewed by the EFTA Court (majority of judges appointed by the EU). Can you see that going well with the Tory right / UKIP supporters?

    3. The JD Portes piece you cite above concerns options for controlling migration in a Norway minus deal. It would not apply in a straight EEA/EFTA deal.

    4. A Norway-minus deal ain’t going to happen. See the latest Wolfgang Munchau article here. http://www.ft.com/cms/s/0/1a8c803e-452c-11e6-9b66-0712b3873ae1.html#axzz4E9XxrIxU

    5. If we really want to save the Union (outside of the EU), the “reverse Greenland” is probably the only option. https://www.opendemocracy.net/uk/adam-ramsay/reverse-greenland-letting-scotland-stay It would mean a federated state with Scotland, Gibralter and probably Northern Ireland inside. It would also have the benefit of allowing people to actually compare the two options and see which works out best.

  • Mark Goodrich 12th Jul '16 - 2:57am

    PS The article that you cite in your comment is more comprehensive and realistic than the rather Panglossian Brexit articles cited in the main article!

  • Graham Jones 12th Jul '16 - 8:36am

    For a democratic party to argue that we should continue to accept EU rules while abandoning our votes in the decision-making process would seem distinctly odd.

    And to what end? Why ‘control migration’ when migration has been key to our economic success – full employment, growing GDP, etc? The Migration Pressures Fund was cut by our government, not the EU.

    We are the European party. The world needs us to stay in the EU. How we achieve that is a matter for discussion.

  • David Allen 12th Jul '16 - 9:36am

    Jedibeeftrix says “Freedom of movement remains entirely separate from Schengen membership.”. Yes, but look at it the other way round. If the EU/EEA impose Schengen on Britain, then that will make freedom of movement almost impossible to avoid. It will ensure that the “emergency brake” of Article 112 cannot be used except in absolute and temporary emergency. That will therefore ensure that the Eastern countries get what they want, and that will be why the EU/EEA will insist on it. Unless, of course, British negotiators come up with some other painful concessions, and “buy their way out” of Schengen.

  • David Allen 12th Jul '16 - 9:52am

    Paul Walter,

    So where we’ve got to is that Article 112 provides a kind of figleaf answer on immigration, much like Cameron’s benefit curbs. It won’t actually cut migration, but it will enable a government to claim that it is trying, insofar as anyone believes them. Meanwhile, our new points system will help business import more cheap migrants from beyond Europe.

    Let’s leave it to the Tories to brandish that figleaf, if they so choose, shall we? I see no reason why we should endorse it. Yes, they may well get their way. But let’s not talk about compromises until we get to the sticking point, and we can best apply leverage where it might actually achieve something. Preserving a federal UK with EU membership for Scotland, Gibraltar and perhaps Northern Ireland (Mark Goodrich’s post above) sounds like a good number one objective in that situation.

    As to immigration – It’s complicated! Free movement (two-way) by professionals is an unqualified good thing. Business recruiting of cheap low-skill foreign labour to drive down wages and throw the weak onto the benefits scrapheap is often a very bad thing. We must develop policies which recognise and deal with that difference.

  • Bill le Breton 13th Jul '16 - 7:54am

    Another great advantage of joining the EEA non-EU countries is that this ‘bloc’ becomes, with our inclusion, the 5th largest trading bloc in the world. Its strength and bargaining position increases viz a viz the EU bloc, the EMU grouping, and other countries.

    As a landing area for other countries wishing to leave the EMU (and therefore the EU) the EEA non-EU bloc becomes more attractive – hastening the break-up of the EMU – releasing those economies like the Spanish, Italian and French from the depressive nature of using a currency orientated towards the German economy.

    Judging the attractions of the EEA non-EU grouping on its present advantages alone is to ignore its potential as a new and powerful economic community.

  • Joining the Schengen acquis is mandatory for any accession to the European Union.

    As any accession to EFTA requires a change to the EEA Agreement, the EU 27 can block British accession until certain pre-requisites are fulfilled. Poland, Germany, and France will certainly drive an incredibly hard bargain on free movement in exchange for passporting for the City of London.

    At that point, they only need one member state under Lisbon rules to block a treaty change (four countries comprising 35% of the population). Which they’ll almost certainly get.

    And if Britain wants to keep the peace in Ireland, we’ll probably take Schengen.

  • Mark Goodrich 14th Jul '16 - 2:42am

    @Bill – I don’t want to curb your enthusiasm but this is exactly what was said when we first joined EFTA as an alternative to the EEC. Never took off and I doubt it will this time either.

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