STATEMENT

 FROM  HM  GOVERNMENT  

Chequers  |  6  July  2018  
 

The  United  Kingdom  will  leave  the  European  Union  on  29  March  2019,  and  begin  to  chart  a  new  
course  in  the  world.  After  a  time-­‐limited  implementation  period  that  will  conclude  at  the  end  of  2020,  
the  UK  and  the  EU  will   enter  into  a  new  relationship   –  one  that  must  work  for  both  sides,  underpinning  
shared   prosperity   and   security.   Today,   the   Cabinet   met   at   Chequers   to   discuss   and   collectively   agree  
the  UK’s  vision  for  this  relationship.  The  conclusions  we  reached  covered:  
I. a  substantial  evolution  in  our  proposals  for  the  UK’s  future  relationship  with  the  EU;  

II. agreement  on  the  benefits  of  the  model  that  should  result  from  this  position;  and  
III. the   need   to   step   up   preparedness   for   the   full   range   of   scenarios   that   might   result   from   the  
negotiations.  

 
I.   POSITION  ON  THE  FUTURE  RELATIONSHIP  
2.   We  reflected  on  the  position  on  the  future  relationship  that  the  Government  had  put  forward  
in   the   spring.   We   concluded   that   the   Government’s   vision   for   a   future   relationship   built   around   an  
economic  partnership  and  a  security  partnership  remained  fundamentally  sound,  but  that  the  position  
needed   to   evolve   in   order   to   provide   a   precise,   responsible   and   credible   basis   for   progressing  
negotiations,  achieving  the  best  outcome  in  the  UK  national  interest  and  for  our  future  prosperity  and  
security,  and  which  works  for  both  the  UK  and  the  EU.    
3.   We   therefore   agreed   to   a   more   developed   and   comprehensive   proposal   for   the   economic  
partnership.  At  the  core  of  this  proposal  is  the  establishment  by  the  UK  and  the  EU  of  a  free  trade  area  
for  goods.  This  would  avoid  friction  at  the  border,  protect  jobs  and  livelihoods,  and  ensure  both  sides  
meet  their  commitments  to  Northern  Ireland  and  Ireland  through  the  overall  future  relationship.      
4.   The   Government   will   publish   a   White   Paper   setting   out   this   proposal   in   detail   next   week,   but   in  
summary  we  agreed  its  four  main  elements.  
a. The   UK   and   the   EU  would   maintain  a  common   rulebook   for   all   goods   including   agri-­‐food,   with  
the  UK  making  an  upfront  choice  to  commit  by  treaty  to  ongoing  harmonisation  with  EU  rules  
on  goods,  covering  only  those  necessary  to  provide  for  frictionless  trade  at  the  border.  These  
rules  are  relatively  stable,  and  supported  by  a  large  share  of  our  manufacturing  businesses.  The  
UK  would  of  course  continue  to  play  a  strong  role  in  shaping  the  international  standards  that  
underpin   them,   and   Parliament   would   have   oversight   of   the   incorporation   of   these   rules   into  
the  UK’s  legal  order  –  with  the  ability  to  choose  not  to  do  so,  recognising  that  this  would  have  
consequences.   We   would   strike   different   arrangements   for   services,   where   it   is   in   our   interests  
to   have   regulatory   flexibility,   recognising   the   UK   and   the   EU   will   not   have   current   levels   of  
access  to  each  other’s  markets.  
b. The  UK  and  the  EU  would  ensure  a  fair  trading  environment  by  incorporating  strong  reciprocal  
commitments  related  to  open  and  fair  trade  into  the  legal  agreements  that  define  the  future  
relationship.   The   UK   would   commit   to   apply   a   common   rulebook   on   state   aid,   and   establish  
cooperative   arrangements   between   regulators   on   competition.   In   keeping   with   our  
commitments   to   uphold   international   standards,   the   UK   and   the   EU   would   also   agree   to  

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 maintain   high   regulatory   standards   for   the   environment,   climate   change,   social   and  
employment,  and  consumer  protection  –  meaning  we  would  not  let  standards  fall  below  their  
current  levels.      

c. The  UK  and  the  EU  would  establish  a  joint  institutional  framework  to  provide  for  the   consistent  
interpretation   and   application   of   UK-­‐EU   agreements   by   both   parties.   This   would   be   done   in  
the   UK   by   UK   courts,   and   in   the   EU   by   EU   courts   –   with   due   regard   paid   to   EU   case   law   in   areas  
where   the   UK   continued   to   apply   a   common   rulebook.   This   framework   would   also   include  
robust   and   appropriate   means   for   the   resolution   of   disputes,   including   through   a   Joint  
Committee   and   in   many   areas   through   binding   independent   arbitration   –   accommodating  
through   a   joint   reference   procedure   the   role   of   the   Court   of   Justice   of   the   European   Union  
(CJEU)  as  the  interpreter  of  EU  rules,  but  founded  on  the  principle  that  the  court  of  one  party  
cannot  resolve  disputes  between  the  two.    

d. The   UK   and   the   EU   would   work   together   on   the   phased   introduction   of   a   new   Facilitated  
Customs  Arrangement  that  would  remove  the  need  for  customs  checks  and  controls  between  
the  UK  and  the  EU  as  if  a  combined  customs  territory.  The  UK  would  apply  the  UK’s  tariffs  and  
trade   policy   for   goods   intended   for   the   UK,   and   the   EU’s   tariffs   and   trade   policy   for   goods  
intended   for   the   EU   -­‐   becoming   operational   in   stages   as   both   sides   complete   the   necessary  
preparations.  This  would  enable  the  UK  to  control  its  own  tariffs  for  trade  with  the  rest  of  the  
world  and  ensure  businesses  paid  the  right  or  no  tariff  -­‐  in  the  vast  majority  of  cases  upfront,  
and  otherwise  through  a  repayment  mechanism.  
5.   We   agreed   that   this   proposal   strikes   a   new   and   fair   balance   –   both   of   rights   and   obligations,  
and   of   continuity   and   change.   Taken   together,   we   noted   that   such   a   relationship   would   see   the   UK   and  
the   EU   meet   their   commitments   to   Northern   Ireland   and   Ireland   through   the   overall   future  
relationship:  preserving  the  constitutional  and  economic  integrity  of  the  UK;  honouring  the  letter  and  
the  spirit  of  the  Belfast  Agreement;  and  ensuring  that  the  operational  legal  text  the  UK  will  nonetheless  
agree  on  the  ‘backstop’  solution  as  part  of  the  Withdrawal  Agreement  would  not  need  to  be  brought  
into   effect.   In   this   context,   we   also   noted   that   this   proposal   should   allow   both   parties   to   resolve   the  
remaining  Withdrawal  Agreement  issues,  including  the  ‘backstop’.      
 

II.   BENEFITS  OF  THE  MODEL  

6.   We   concluded   that   the   position   described   above,   coupled   with   the   UK’s   wider   vision   for   the  
future   relationship   which   will   be   set   out   in   detail   in   the   White   Paper,   was   a   precise   and   responsible  
approach   to   the   final   stage   of   the   negotiations.   We   agreed   that   it   would   have   distinct   benefits   for   both  
the   UK   and   the   EU,   and   that   it   would   enable   both   sides   to   have   trust   and   confidence   in   each   other’s  
commitments  –  allowing  for  the  creation  of  an  ambitious  relationship  that  nonetheless  respected  the  
UK’s  sovereignty  and  the  EU’s  autonomy.  In  summary,  the  position  we  reached  today  would:  
a. ensure   that   the   UK   and   the   EU   have   frictionless   access   to   each   other's   markets   for   goods,  
including   agricultural,   food   and   fisheries   products,   protecting   the   uniquely   integrated   supply  
chains  and  just-­‐in-­‐time  processes  that  have  developed  across  the  UK  and  the  EU  over  the  last  
40  years,  and  the  jobs  and  livelihoods  dependent  on  them;  
b. provide  regulatory  flexibility  where  it  matters  most  for  the  UK’s  services-­‐based  economy,  and  
where  the  potential  trading  opportunities  outside  of  the  EU  are  the  largest,  recognising  that  the  
UK   and   the   EU   will   not   have   current   levels   of   access   to   each   other’s   markets   –   with  

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 arrangements  on  financial  services  that  preserve  the  mutual  benefits  of  integrated  markets  and  
protect  financial  stability,  noting  that  these  could  not  replicate  the  EU’s  passporting  regimes;  
c. enable   the   Government’s   commitments   to   Northern   Ireland   to   be   met   through   the   future  
relationship,   avoiding   the   need   for   a   border   between   Northern   Ireland   and   Ireland,   or   within  
the  UK;  
d. mean   that   the   UK   will   leave   the   Common   Agricultural   Policy   and   Common   Fisheries   Policy   –  
taking   back   control   of   UK   waters   as   an   independent   coastal   state   and   designing   a   domestic  
agricultural  policy  that  works  in  the  best  interests  of  the  UK;    
e. deliver  an  independent  trade  policy  –  the  UK  would  have  its  own  seat  at  the  WTO,  be  able  to  
set   tariffs   for   our   trade   with   the   rest   of   the   world,   and   have   the   ability   to   secure   trade   deals  
with   other   countries   –   including   potentially   seeking   accession   to   the   Comprehensive   and  
Progressive  Agreement  for  Trans-­‐Pacific  Partnership;  

f. ensure   that   in   the   future   all   laws   in   the   UK   would   be   legislated   for   by   Parliament   and   the  
Devolved  Administrations  and  subject  to  proper  oversight  and  scrutiny,  recognising  that  where  
the   UK   had   chosen   to   apply   a   common   rulebook   Parliament   would   still   have   a   lock   on  
incorporating   rules   into   the   UK   legal   order,   but   choosing   not   to   pass   the   relevant   legislation  
would  lead  to  consequences  for  market  access,  security  cooperation  or  the  frictionless  border;  
g. restore  the  supremacy  of  UK  courts,  ending  the  jurisdiction  of  the  CJEU  in  the  UK,  with  no  more  
preliminary   references   from   UK   courts,   but   committing   that   UK   courts   would   pay   due   regard  to  
the   CJEU’s   jurisprudence   where   the   UK   had   chosen   to   apply   a   common   rulebook   to   ensure  
consistent  interpretation;  
h. end  free  movement,  giving  the  UK  back  control  over  how  many  people  enter  the  country;  
i. include  a  mobility  framework  so  that  UK  and  EU  citizens  can  continue  to  travel  to  each  other’s  
territories,   and   apply   for   study   and   work   –   similar   to   what   the   UK   may   offer   other   close   trading  
partners  in  the  future;  
j. end  vast  annual  payments  to  the  EU  budget,  with  appropriate  contributions  for  joint  action  in  
specific   areas,   such   as   science   and   innovation,   releasing   funds   for   domestic   priorities   –   in  
particular  our  long-­‐term  plan  for  the  NHS;  and  
k. maintain   operational   capabilities   on   internal   security,   and   ensure   that   the   UK   has   an  
independent  foreign  policy,  with  suitable  arrangements  to  work  with  the  EU  as  required.  
 
III.   PREPAREDNESS  

7.   It  remains  our  firm  view  that  it  is  in  the  best  interests  of  both  sides  to  reach  agreement  on  a  
good   and   sustainable   future   relationship.   But   we   also   concluded   that   it   was   responsible   to   continue  
preparations   for   a   range   of   potential   outcomes,   including   the   possibility   of   ‘no   deal’.   Given   the   short  
period   remaining   before   the   necessary   conclusion   of   negotiations   this   autumn,   we   agreed   preparations  
should  be  stepped  up.  
 

HM  GOVERNMENT  
Chequers  |  6  July  2018  

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