PM Theresa May gives evidence before the Liaison Committee on matters relating to Brexit at Portcullis House in London, November 29, 2018. Press Association. All rights reserved.
For months
now – years, even – commentary on the Brexit negotiations has been almost
entirely negative. David Cameron threw in the towel as soon as the referendum
result revealed how badly he had misjudged the electorate. Theresa May – who had
campaigned alongside him for the UK to remain in the EU – was installed as
Prime Minister, once the leading Leave candidates for the Tory leadership had
comically self-destructed. She shouldered the task of negotiating an agreed
withdrawal from the EU within the timeframe – an unrealistic two years –
allowed by the Lisbon Treaty’s article 50.
Even though
she took many months to initiate the process – somewhat to the displeasure of
the most gung-ho Leavers – and appointed, within a cabinet of mixed Leavers and
Remainers, leading Leavers to the key outward-facing posts of Brexit Secretary
and Foreign Secretary, she chose to ignore the advice from “our man in
Brussels”, Sir Ivan Rogers, to delay triggering article 50 till she had sorted
out an agreed UK position (she fired him, instead). Perhaps instinctively, she
decided to avoid having a lengthy and draining domestic argument before
confronting the EU. Instead – and fulfilling her own leadership pledge, to
launch negotiations within the first year of becoming Prime Minister – she
started the process in March 2017, and then tried to bolster her internal
position by springing a surprise election.
This manoeuvre
backfired: the Conservative share of the vote actually rose, but as UKIP
(deprived of its key campaign issue) collapsed, Labour revived, and Mrs May
found herself unexpectedly running a minority government (given face-saving
majority status thanks to a deal with Northern Ireland’s DUP). Her early
attempts to set out her Brexit stall duly ran into the harsh realities of the task
facing her: that the EU could command near unanimity in its negotiating stance,
whilst her cabinet, her party and her nominal parliamentary majority were all
deeply fractured. The EU could command near
unanimity in its negotiating stance, whilst her cabinet, her party and her
nominal parliamentary majority were all deeply fractured.
Understandably,
the EU insisted that it was simply impossible to negotiate a new trading treaty
alongside a withdrawal agreement within the time period available: in trade
treaties, EU states have conflicting aims which need to be reconciled, which is
why they take so long to reach maturity. The best the EU could offer would be a
statement of intent for the future; but even this would require a settlement of
outstanding liabilities, clarity on the status of EU citizens living in the UK
(and vice versa) and a clear undertaking that any future relationship would
protect the Good Friday agreement of 1998, most notably by avoiding the
re-introduction of a hard border between the north and the south of Ireland.
None of that would have been changed if Mrs May had increased her majority in
the 2017 election.
Transition period
The notion
of a transition period (or “implementation period” as May preferred to term it)
was actually welcomed, albeit in muted fashion, by the vast majority of MPs, as
in itself it did not eliminate their preferred – but conflicting – outcomes,
and served to postpone some of the toughest decisions. Even so, a vocal
minority within the Conservative Party, in the form of a caucus that styled
itself the European Research Group, warned that they expected real dividends to
be reaped by Mrs May in exchange for agreeing to pay the £39 billion that the
EU calculated was owed by the UK on exit. The phrase “no deal is better than a
bad deal” joined the EU formulation, “nothing is agreed until everything is
agreed”, as mantras designed to keep everyone on board until hard choices
needed to be made.
Yet, insofar
as they accepted a transition in principle, the ERG also implicitly accepted
remaining in the EU single market and customs union for a minimum of 21 months,
and thereby accepting EU regulations without having any right to vote on them, within
either the Commission or the European Parliament (the so-called “vassal status”
so vociferously now denounced by Boris Johnson, despite his having acquiesced
in it when in the cabinet).
Brexiteer
hopes for resolving the Irish border issue, without binding the UK’s hands
indefinitely, rested with technological advances that had the potential to
render customs checks unnecessary for goods crossing in both directions. But
the EU declined to accept what it called “magical thinking”. If, at the end of
the transition, by the end of 2020, the system could be proved to work, well
and good: but if not, and if no new trade deal had by then been agreed by the
EU and the UK (a daunting prospect in a time period of just 21 months) then a
“backstop” would be required whereby Northern Ireland would remain inside the
customs union – and, because Mrs May, like virtually all her Westminster
colleagues, could not contemplate a sharp differentiation between the status of
Northern Ireland and that of “the rest of the UK”, so too would “the rest of the
UK”, for as long as it took to conclude a trade deal, or until both the EU and
the UK decided to give up the backstop.
Mrs May’s
insistence on keeping Northern Ireland visibly within the Union cut little ice
with the DUP (whose MPs are all Brexiteers, despite representing a part of the
UK markedly pro-Remain). This was because the EU required closer alignment by
Northern Ireland with the single market during the backstop than would be
allowed for the rest of the UK (Irish border issues, again) – a status that
actually seemed beneficial to Northern Ireland; but in DUP eyes, any variation
from the rest of the UK is impermissible (other than, say, laws relating to
abortion and same sex marriage: and the DUP’s memory also seems not to stretch
to the decades when successive renewals of the Prevention of Terrorism Act
allowed a UK Home Secretary to “exclude” certain UK citizens from the mainland,
and despatch them to Northern Ireland). The
pressures of campaigning in the context of an in/out decision left many people,
and most MPs, with an exaggerated sense of the benefits – or risks – of either
outcome.
Sadly, the
seeds of Britain’s present predicament were sown in the referendum campaign
itself. The pressures of campaigning in the context of an in/out decision left
many people, and most MPs, with an exaggerated sense of the benefits – or risks
– of either outcome. Once Leave had gained the majority of those voting, the EU
had only two choices: require the UK to respect the rules of its market as it
made its inevitably slow exit by negotiation, or accept the pain of an abrupt
departure.
Cardinal principles
Those
Brexiteers favouring an immediate exit, adopting World Trade Organisation
tariffs between the UK and the EU, and disputing or delaying the exit bill claimed
by the EU, were willing to face the inevitable disruption to many aspects of
life – not just trade – that such a course entailed, at least in the short
term. In truth, most people voting Leave must have at least contemplated such
an outcome, as there was no guarantee that the EU would offer acceptable – or
any – withdrawal terms. That such an outcome – as Barbara Spinelli has eloquently
explained to oD readers – risked leaving millions of EU and UK citizens in
limbo, without the protections carefully inscribed in the withdrawal agreement,
seemed of as little concern to the “no-deal on principle” group as the risk of
renewed friction in Northern Ireland.
Anthony
Barnett sees
this mind-set as being in thrall (or worse) to Trumpite US ardour for
deregulation: it is not a diagnosis I share, not least because Liam Fox, one of
the ideologues he name-checks, remains loyal to the May deal: but that does not
matter, because the exponents of no-deal Brexit were heavily outnumbered in
Parliament by more cautious MPs, Brexiteers and Remainers alike.
The
negotiation option, with all its hazards, found broad acceptance, and Mrs May’s
early pronouncement of her objectives, in her Trafalgar House speech and
elsewhere, kept virtually all her backbenchers onside, reluctantly or otherwise.
Yet those objectives necessarily had to be adjusted to accommodate the EU’s own
red lines, of which the most obvious was that non-members could not enjoy the
benefits of the single market without some loss of rights or access: “cake and
eat it” was not on the menu. Whether this stance was designed to “punish” the
UK or “deter” other potential exit-minded members was immaterial: it was simply
a cardinal principle of the EU. Non-members could
not enjoy the benefits of the single market without some loss of rights or
access: “cake and eat it” was not on the menu.
It was David
Davis, as Brexit Secretary, who most directly encountered the EU position. His
response was to protest against EU “intransigence”, or “bullying”, and
increasingly absent himself from the actual talks in Brussels (he was one of
those who encouraged May’s election stunt, thinking her likely triumph would
set the EU back on its heels). In turn, Mrs May, faute de mieux, looked to her
civil servants, most notably Olly Robbins, to keep the show on the road, and
make a detached judgment as to what was actually achievable.
By the time
of the fateful cabinet meeting at Chequers in July, it was clear that the only
deal that might be on offer lay at the outer edges of acceptability. Even
though the July document still envisaged a non-backstop solution to the Irish
border problem, Davis promptly resigned, swiftly followed by Boris Johnson; and
their vilification of “Chequers” as a sell-out led to a slew of more junior
ministerial departures. Yet when Mrs May took her Chequers proposal to the
Salzburg EU summit, she was severely and publicly snubbed, and was forced to
repeat her public threat about preferring no deal to a “bad” deal.
The last haggle
Mrs May
replaced Davis with Dominic Raab, a long-term Brexiteer, and he seemed willing
to plug on with a modified Chequers formula, provided it survived the final
round of negotiations. That last haggle, however, proved a step too far for
him, and he too resigned in protest when he discovered that Mrs May had
authorised Robbins to sign off on a convoluted backstop formula, which was the
only one that Ireland and the EU would – with reservations of their own –
contemplate.
Raab and
like-minded Brexiteer MPs had insisted that the UK must have the unilateral
right to end the backstop to avoid being locked into a customs union
indefinitely, and so unable to conclude any of the third-party trade deals so
often touted by the Leave campaign. Yet as Mrs May calmly pointed out, the
backstop was an insurance policy to avoid undermining the Good Friday agreement
by default if a UK-EU trade deal could not be completed by the end of 2020. An
insurance policy that the insurer could unilaterally rescind was not worth
much.
Instead, she
relied on language. The backstop would only be triggered if the 2020 deadline
was breached. Even so, both sides were required to show “best endeavours” to
complete the trade deal expeditiously (a higher legal standard than “reasonable
endeavours”, though still not entirely definable, and so “justiciable” with
legal certainty), and an arbitration mechanism was devised whereby either party
could argue that it was entitled to exit the backstop if the other party’s
endeavours were demonstrably falling short of the “best” standard. And, if both
parties agreed, the backstop could be ended even in the absence of a trade
deal: for instance, if the technological alternative to physical customs
barriers could be proved to be workable.
It is hard
to see what more the UK could have done to square this circle. One option not
canvassed was to hold a referendum in Northern Ireland to see if its population
wanted to unite with the South. The Good Friday agreement provides for the UK
Secretary of State for Northern Ireland to initiate such a poll if persuaded
there was evidence that a majority did so wish. As the EU referendum showed a
clear majority supporting “Remain” (the preference of the Irish government and
all Republican parties in the North) as opposed to “Leave” (backed by the DUP,
fierce defenders of the union with the UK), such a conclusion would not be
entirely malicious – though the Irish government would be strongly opposed to
such a vote, it has no say in the matter.
Perhaps
during the transition (if we ever get that far), and especially if the DUP reneges
on its deal to support the government in the Commons in protest at the EU deal,
such a poll might be triggered. A vote for irish unity would certainly solve the border issue!A vote for Irish unity would
certainly solve the border issue!
Meanwhile,
dozens of Conservative MPs, Leavers and Remainers, have publicly rejected Mrs
May’s deal because of the backstop formula, even though – as she sees it – the
alternatives are no-deal or no-Brexit. Some of this may be positioning in
advance of a possible leadership election, but essentially what we are
witnessing at Westminster is a throwback to the situation before the
referendum, where both main political parties were split over Brexit, such that
only a popular vote, with all its risks and frailties, could settle the matter,
and so avoid the potential advent to power of a single-issue party. The ticking
bomb, designed by David Cameron, and whose fuse was lit by the referendum
result, has now landed back in Westminster, with the potential to inflict
serious and lasting damage on our political system.
The ticking bomb
Those MPs
planning to vote against Mrs May’s deal have only three possible options in
mind. The first is that a defeat for her when the deal is put to the test on December
11 might persuade the EU to abandon the backstop; or that the clock will then
simply tick down to a no-deal outcome; or that somehow a second referendum can
be held, allowing “the people” to decide, because Parliament was unable to do
so.
The EU
cannot have made clearer that the backstop is integral to any agreed withdrawal
process: the prospect of it being abandoned is a fantasy (just as is the
official Labour Party position that it could somehow negotiate a better withdrawal
deal for the UK). Once that has become clear, it is open to Mrs May, if she is
defeated on December 11, to return to the Commons in January, with a slightly
re-worded resolution in support of her deal, and force every MP to accept that
the only two remaining alternatives were indeed no-deal or no-Brexit (and she
might twist the knife, by arranging for motions on both those options to be
voted on, confident that neither could win majority support in the House). That
will be the moment of truth. It is a little hard to
understand the logic of embracing all the downside of a sharp break, including
the erection of tariffs and customs barriers, only to advocate their removal a
few months later.
There are
those in the Conservative Party who believe that voting down the May deal, and
accepting a more or less messy no-deal exit in March, could be followed by a
free trade deal negotiation with the EU. However, it is a little hard to
understand the logic of embracing all the downside of a sharp break, including
the erection of tariffs and customs barriers, only to advocate their removal a
few months later.
The only way
such a course could be deemed superior to May’s route of staying in a customs
union until the free trade deal has been concluded would be that part of the
exit payment might be evaded or delayed (but that is a relatively modest amount
in the context of the UK’s economy and the likely negative impact on GDP of a
WTO exit, and is also a policy highly likely to poison the free trade
negotiations themselves); that EU regulations would cease to prevail in the UK
earlier than under May’s plan (even though, necessarily, such regulations would
still apply to all UK exports to the EU, constituting over 50% of total
exports); and that new free trade deals beyond the EU could begin to be
negotiated. This option – remote at best – seems less and less realistic as you
spend time examining it. The UK might stumble into such an outcome, but only a small
minority in the Commons would explicitly choose it.
There is an
even smaller group of Brexiteers who – perhaps with more consistency – advocate
abolition of all tariffs for all imports in due course. That would render a
free trade “deal” with the EU moot – after all, if EU exports to the UK were
already tariff-free, why would the EU bother to lower tariffs to imports from
the UK? The underlying idea is that there would be immediate benefits to UK
consumers from lower prices, even at the expense of undermining the viability
of much of UK manufacturing and agriculture. In theory, there would eventually
be compensation in the shape of boosting trade with other economies keen to
sign reciprocal tariff-free agreements. The tiny minority of Tory MPs who hold
this position are highly unlikely ever to be able to implement it.
Most
Brexiteers also seem unwilling to acknowledge the high likelihood that a
slowdown in trade with the EU arising from one form or other of exit from the
single market and customs union will lead to some foregone GDP growth over the
medium term. The scale of this foregone economic growth, and the way it might
be felt – if at all – by actual households, is open to plenty of conjecture,
but it seems pointless to argue that it could not happen at all. My
understanding of Brexit has always been that the potential social and political
benefits of leaving the EU should compensate for any possible financial
downside: but that does not mean that, after nearly five decades of membership
of the EU, it makes sense significantly to exacerbate that downside in order to
accelerate the timing of Brexit. The recent dire
warnings from the Bank of England that a “disorderly Brexit” would cause an
actual recession were dismissed by some Brexiteers as a re-run of what they
call “Project Fear”.
The recent
dire warnings from the Bank of England that a “disorderly Brexit” would cause
an actual recession were dismissed by some Brexiteers as a re-run of what they
call “Project Fear”. That is where political dogma overtakes political common
sense: and it should be noted that, in terms of forecasting a decline in the
rate of GDP growth and in the dollar value of sterling if Leave prevailed in
the referendum, the Bank proved correct (against which, not entirely relevantly,
Brexiteers point to the impressive rise in the number of jobs, and decline in
the rate of unemployment, since June 2016).
The “People’s Vote”
Finally, we
come to the “People’s Vote”, or a referendum on the outcome of the negotiation
with the EU. In principle, there is nothing wrong with this idea: we would be
able to measure support for “Brexit as negotiated” compared with the 17 million
votes for “Brexit as you imagine it”. We would be
able to measure support for “Brexit as negotiated” compared with the 17 million
votes for “Brexit as you imagine it”.
Yet the very
fact that “Brexit as negotiated” is abjured by so many Brexiteers strongly
argues for having more than two options on the ballot paper, using a
“transferable vote” method. Peter Emerson’s recent
dissection for oD of different voting systems should give everyone pause in
imagining that a second referendum would solve all our problems: but let’s look
at what is currently proposed.
The main
proponents argue that just three options should be put to the electorate: Mrs
May’s deal, no-deal, or no-Brexit; but that begs the question as to why other
options actively being canvassed at Westminster – “Norway”, “Canada” and
variations of those positions – should be excluded. That these other options
fail to solve some of the key issues – such as the Irish border, the nature of
a customs union, or the free movement of labour – seems not to deter their
supporters: nor do they address the practicality that such options could only
be implemented after an agreed withdrawal. They still all fall into the
category of “Brexit as you imagine it”. This does not stop people from
passionately advocating them, but arguably renders them less immediately
relevant than the three-way choice.
Virtually
all the advocates of a People’s Vote are Remainers; and although they accept
that a confirmation of the 2016 outcome should be binding, it is inescapable
that their real expectation is a reversal of that decision. Yet they cannot be
confident that such a result would settle the matter, and that Brexit would
simply disappear from UK politics. Millions of disappointed Leavers would argue
(as the German Army commanders did in 1918) that they had been “stabbed in the
back”, and would fiercely resent the way “the system” had betrayed them. They
might even revive UKIP for a one-off general election campaign: if even half of
them voted UKIP, it would become the largest single party in the Commons. If
they concluded that Labour was even more to blame than Mrs May for their
disappointment, we might find that, alongside remaining Tory Brexiteers, they
had enough votes to trigger article 50 once again, but this time spend the
two-year notice period simply planning for a no-deal exit.
That may all
seem far-fetched, not least because the biggest problem with the People’s Vote
is how we could ever get there. The legislation needed to enshrine a second referendum,
and the necessary campaigning time, would take any vote past the March 29
deadline for leaving the EU. Extending that deadline requires unanimous
approval from the EU states: yet it is hard to see why the EU would agree, as a
refusal would force Parliament to make the painful choice between no deal, the
May deal and collapse of the Brexit project, with the first option unable to
command a parliamentary majority, and the other two representing victory for
the EU.
In any case,
Mrs May has so far set her face against a second vote (as has, rather less than
convincingly, the Labour Party), so she would need to be removed as Prime
Minister to clear the way: yet it is hard to think of any candidate to replace
her who has subscribed to the People’s Vote, let alone imagine any such
candidate being chosen by the solidly Brexiteer Conservative Party membership
who would have the final say in selecting a new party leader. Perhaps the only route to a People’s Vote would be if Mrs
May found enough evidence in polling data showing her deal as the winner in a
transferable vote system.
Perhaps the
only route to a People’s Vote would be if Mrs May found enough evidence in
polling data showing her deal as the winner in a transferable vote system:
unloved and unwanted, but reluctantly endorsed in preference to both no-deal
and no-Brexit. That is what YouGov found in its most recent survey.
Yanis
Varoufakis has
proposed a 12-month pause in the Brexit process to allow a general election
to take place. Quite what an election could achieve is hard to see, given that
both main parties continue to be split between Leavers and Remainers, that
neither would therefore have a clear message for the electorate, and that – in
any case – it is extremely rare for a single issue to decide a general
election. Indeed, at the last election in 2017, there was just one national party
committed to reversing the article 50 process: the Liberal Democrats. In
theory, they should have appealed to all Remainers who placed staying in the EU
above all other issues. In practice, the LibDems had a poor campaign and a poor
result. It is therefore extremely hard to see on what basis the EU would agree
to the pause suggested by Yanis: the whole point of the 2-year limit in the
Lisbon Treaty was surely to put unbearable pressure on the departing state.
Logically,
the only realistic alternative to Mrs May’s approach (ignoring the stumbles,
sidesteps and convoluted progress she made in arriving at the only formula the
EU was likely to accept) would have been to plan for a no-deal. This would
clearly have scandalized the Irish, in effectively forcing them to create a
hard border in order to protect the EU’s single market; it would also have
risked so alienating the EU that even mutually advantageous agreements on air
travel within a no-deal outcome might have been jeopardized. A UKIP Prime Minister, of course, elected on a no-deal
platform, would be a different matter.
But one of
the reasons for the Bank of England predicting severe economic consequences
from a no-deal scenario is that so few private firms and public facilities have
prepared for such an outcome. If the two years had been spent solely targeting
no-deal, at least that risk might have been mitigated. However, such would have
been the outcry from nearly all business and manufacturing groups at a policy
of no-deal, it is hard to see how even a Prime Minister much more steely than
Theresa May could have withstood the pressure to change course. A UKIP Prime
Minister, of course, elected on a no-deal platform, would be a different
matter.
Depressing
It is
depressing to see so many MPs, in groups large and small, flailing around in
desperation, unable and unwilling to recognize the hard realities of the UK’s
position, yet too self-important to behave responsibly, let alone rationally. The
projected negative impact of Mrs May’s deal (essentially, a calculation that
there would be some slowdown in trading with the EU) is modest in the context
of likely overall UK economic performance.
What is far
more damaging to the UK’s standing in the world is the failure of the political
class to recognize that context, acknowledge the possibility that people might
willingly pay that price in exchange for other benefits, and instead continue
to fight the referendum campaign ad infinitum and ad nauseam. Now is the time
to get real.