This blog entry is going to be like a red rag to a bull to some people. The focus, as readers who persevere beyond this first paragraph will see, is on the practicalities of why Brexit will not happen, not on whether Brexit is right or wrong, or what sort of Brexit is favourable. Please read it with that in mind. I have some experience working both in Whitehall and in the EU institutions and what I write is based on that. I am also not in denial, or some sort of Remainiac – I only voted for Remain with a heavy heart, I am professionally and personally sheltered from the effects of Brexit, and will get a German passport as an insurance policy anyway. Part of me would like to see the UK out of the EU as soon as possible. Anyway, I suspect haters will be haters, but if you’re not that then read on.
The first and most decisive decision to make Brexit not happen was David Cameron’s decision to not trigger Article 50 the day after the referendum, despite having said during the campaign that he would trigger it. So rather than launch the UK headlong into the process of leaving the EU, and setting the clock ticking on the two year period prescribed by Article 50, Cameron left the decision to his successor. Theresa May was installed in office just two weeks after the referendum, but even she was not ready to trigger Article 50 – despite her line that “Brexit means Brexit”, she has repeatedly stated that Scotland’s position on the EU needs to be taken into account, and is now talking of triggering sometime ‘not before the end of year’, something that has annoyed über-sceptic John Redwood. Andrew Grice in The Independent is right to point out that with a Commons majority of 12, May is not in a strong position to face down backbenchers like Redwood, but her other problems might mount to make this immaterial, as I explain below. Meanwhile bookmakers have narrowed the odds that Article 50 will only be triggered after 2018, or never.
One of the reasons Article 50 has not yet been triggered is because the UK government does not know what it wants from the negotiations – indeed it does not know what sort of Brexit it wants more generally. The Sunday Times (summarised by Reuters here) has more on this, and even cites a government source who reckons Article 50 might slip until autumn 2017 – also sensible as it would also be after the French and German elections. The Independent has more on these internal issues here. So while May might be under pressure to work towards Brexit, she has to answer what Brexit can command the support of her party.
Part of the reason that the government does not know what it wants is due to the people May has put in charge of the process; Johnson (Foreign Minister), Davis (Brexit Minister) and Fox (International Trade Minister) were all in favour of Brexit and have basically been charged with trying to make it happen – but they cannot agree amongst themselves yet as Fox has been trying to muscle in on Johnson’s department (more on that from Politics Home here), Davis’s efforts to explain how Brexit could work are legally incoherent, and Fox’s department had to delete its statement about how the UK could fall back to the WTO rules if it needed to. Immediately after Johnson was appointed I thought this could have been a master stroke by May, and I stand by that position – it is not a question of if the three Brexiteers fail, but a matter of when.
Even if the broad political direction can be sorted out, there are big questions about whether the staff can be found to actually make Brexit negotiations happen – at least in the short term. Huffington Post has a detailed article explaining how difficult it even is to get staff to fill Davis’s DExEU Department, and these issues have been confirmed to me by former colleagues of mine still working in the Civil Service. If you set a direction for civil servants they can work towards an end, but at the moment – as David Allen Green points out in an excellent blog entry for the FT – it’s not that the UK government does not have a plan for Brexit, but more that they do not even know what to put in such a plan. The Flipchart Fairytales blog has an excellent post about how just stating that Brexit will happen will not make it happen – this is not the time for David Brent, but this is serious.
In other words, it might have been handy for the Brexit side to trash the role of experts during the referendum campaign, but it’s not so handy when you need to rely on them to actually make your policy happen.
The behaviour of the main Brexit advocates since the referendum is also rather peculiar. While Johnson, Fox and Davis have been bound up in government, the other advocates of Brexit have run for the hills – Farage has resigned as leader of UKIP (properly it seems this time), Gove has been relegated to the back benches, and Daniel Hannan seems to have nothing more substantive to talk about than bringing back blue UK passports (even though there’s no EU law on passport colour – the UK could, within the EU, have blue passports if it wanted). Meanwhile Gisela Stuart is – without a hint of irony – worrying about EU citizens in the UK (while her own campaign vilified them a few short months ago) while Brexiteer Andrea Leadsom is now defending farm subsidies as Defra minister.
So, as things currently stand, the Brexiteers have no more of a clear plan now than they had before the referendum, and – as this accurate yet depressing FT comment so eloquently details – are still at the stage of sniping at the Remainers and demanding Brexit happens, rather than actually seeking ways to make it practically happen.
But what about the next couple of months? As I write it’s still summertime, Brussels is on holiday, and everyone is thinking about the Olympics and not about Brexit. When everything cranks up to speed again in the EU institutions again in September, the UK is going to be put under a lot of pressure – in a number of different ways. EU leaders were happy to give May the benefit of the doubt initially, to give her some time to work out how Brexit can work. But there is very little appetite in other national capitals for further delay – not least with French and German elections on the horizon in 2017. Also there is little tolerance for the UK delaying simply because it does not know what it wants – such self-inflicted foolishness is hard for the UK to defend vis à vis the other 27 EU Member States.
While the costs of Brexit, and the economic damage of it (and indeed the economic incoherency of the Brexiteers is astounding), will fall predominantly on the UK, as one of the EU’s major economies, a slowdown in the UK will have an impact on the rest of the EU. Political and economic uncertainty is not what the EU wants. As Jonathan Freedland rightly points out, the views of the rest of the EU now need to be taken into account – something that was largely absent from the referendum campaign prior to the vote. Connecting this to the point above about Tory backbenchers, Theresa May cannot simply afford to ignore what the rest of the EU thinks about this – even she will fear being painted as politically and economically irresponsible by leaving the Brexit issue in a state of permanent limbo.
So this autumn, sooner rather than later, we are going to have to come back to Article 50, whether May likes it or not. Its timetable is not in her hands alone. The EU line has basically been this: we will respect your referendum, UK, and happily let the UK go, but you have to respect our process – and that process is Article 50. The problem for the UK of course is embarking on this process without knowing how the negotiations might end seems very risky. As Andrew Duff explains (and The Express fears), Article 50 can be un-invoked – but that would only happen if the UK legitimately chose to not leave the European Union. Here I disagree with David Allen Green’s piece for The Evening Standard – some alternative treaty arrangement may suit the UK, but it will not gain favour within the EU that will maintain that Article 50 is its process, and the UK must respect it.
The way out of this impasse might just be – and whisper this quietly – the promise of another referendum, with the deal negotiated to leave the EU as one option, and remaining in the EU as the other option. This is the line that Labour leadership contender Owen Smith is pushing. Essentially the original Leave campaign was an impossible combination of utopias – some voted Leave to restrict migration, some did so thinking there would be no economic cost to leaving (and even that so-called Norway option now seems questionable), and others thought leaving would save the NHS, but as this infographic outlines, a trade-off between these different Brexit options is necessary. Robert Peston’s Facebook note explains this further. I’m pretty sure that no negotiable Brexit option would be adequately appealing enough to make it more appealing that remaining in the European Union. And that is before taking into account all of the rest of the EU Member States’ demands towards the UK.
Now it pains me somewhat to come to this conclusion. I am no fan of referendums, and having another one about the EU fills me with dread. But I think the alternatives are worse – and even a pro-Brexit person ought to see it this way. An ongoing, grinding impasse is not in the UK’s nor in the EU’s interests – and the EU has an exit procedure (Article 50) that both EU politicians and UK Brexiteers acknowledge is the way for a country to leave the EU. Likewise Parliament (or the House of Lords) delaying Brexit (as Patience Wheatcroft argues) would rightly be labelled illegitimate, as no parliament or government has attracted the scale of public support that the Brexit vote attracted. But while Britain voted for Brexit, we do not know what Brexit it voted for. So a further referendum is a sad necessity, and I cannot see how any single, clearly defined, vision of Brexit would ever possibly defeat Remain. Such a second referendum might actually end up with a clearer, narrower, more realistic debate. It will be a painful and economically damaging path to get to such a second referendum, but it has to be the least worst option.
In an earlier comment I said it was Joe Biden who said that Brexit would be “walked back”. I should have said “John Kerry”. (Many Youtubes on this!)
Brexit won’t happen because the Yanks don’t want it. In a loose moment on TV Joe Biden said that “Brexit will be walked back”. If Hillary Clinton is elected, Mrs. May will be summoned to the White House and told what to do. Suez revisited!
I note that John Redwood says Brexit means an immediate and substantial reduction in our balance of payments deficit. Clearly he is reckoning without the internal institutional transition cost of implementing Brexit, which one can calculate on the basis of person-hours, payroll cost rates and so on. It comes out at minimum £5 billion, central estimate around £8 billion and worst case at around £13 billion. Let the Brexiteers pour scorn on those numbers. I couldn’t care less. They will be among the ones that have to finance that from increased taxes, because our balance of payments will take an immediate hit from decreased overseas trade until and if we can put in place alternative arrangements.
So here it is: you ‘leavers’ had no idea what you were REALLY voting for, because you’re a bit lacking upstairs aren’t you, you poor things?! But not to worry: now that we’ve negotiated what you no doubt agree is a really rubbish Brexit deal, would you possibly be kind enough to vote again, and vote to remain this time? Please? And by the way, we promise to respect the result, whatever it is, even if you’re silly enough to vote ‘no’ twice! Because we believe that your vote counts! Honest! Is that OK? If you’re still not sure, me and my colleagues from the Paternalist Party would be happy to discuss it further. At the farmers’ market, perhaps? You can always find us there on a Saturday! Cheerio!
A very thoughtful analysis but I’m going to disagree on the main premise – Brexit will happen because even if there is a second referendum on the future relationship negotiated, it will only happen after Brexit has actually taken effect. Why?
Well as Charles Grant points out here (http://www.cer.org.uk/insights/theresa-may-and-her-six-pack-difficult-deals) there won’t be a single set of negotiations but multiple ones. The very first one will be the Article 50 negotiations themselves which will only deal with the UK’s withdrawal from the EU, but cannot deal with the ultimate relationship between the newly separated UK and the EU (under EU law it would be illegal for the UK to negotiate trade agreements with other EU members and with third countries; it would also be illegal for the EU collective to negotiate a trade agreement with the UK under EU law). At best it would seem that the withdrawal negotiations can only “take account of the framework of the future relationship of the exiting State with the Union” (to paraphrase Article 50). It doesn’t say anything about the withdrawal agreement also being the full future relationship. Rather it seems to suggest that perhaps the withdrawal agreement can include transitional arrangements (as Charles Grant foresees) or that Article 50 can allow for parallel negotiations on transitional arrangements if the negotiations on the withdrawal agreement agree to such parallel negotiations early enough.
But it seems highly doubtful that we will see a negotiated agreement on a UK-EU FTA or UK entry into the EEA before the withdrawal agreement actually takes effect and the UK is already outside of the EU.
The way things are likely to occur seems to be thus:
1. The UK delays Article 50 invocation until sometime between March 2017 and October 2017 (after French and German elections).
2. Article 50 is invoked and negotiations begin on the withdrawal agreement (which as Grant points out will likely concern properties, institutions, budget payments, pensions and pension rights, and cover the rights of UK citizens in the EU and vice versa).
3. The withdrawal agreement negotiations will probably include transitional arrangements for the UK from EU member to third country status (the default status as a state without any trading agreement with the EU and thus under WTO rules) and probably set a timeframe for such – perhaps 5-9 years. These arrangements will probably be along the lines of a progressive increase in tariffs from zero to that of the EU’s common external tariff. So we wouldn’t see a 10% tariff on cars overnight, but perhaps an increase of 2% each year or every 2 years. It would probably also include the loss of passporting rights after perhaps a year and the implementation of customs procedures to keep the physical flow of trade and people as smooth as possible across borders (so electronic procedures so that when British lorries go into Ireland or France or vice versa they can be go through having been pre-checked and pre-paid for customs). These would probably be the most difficult part of the negotiations and likely to eat up the 2 year period that Article 50 allows for. Most of the haggling will probably be on the time frame of the transitional arrangements with the UK wanting the longest possible time and the rest of the EU perhaps wanting a shorter time. Compromise will be achieved though.
4. There will likely be parallel negotiations with the Irish to maintain the Common Travel Area and continue to allow for the free movement of British and Irish citizens among the UK, the Crown Dependencies and the Republic of Ireland. This would not contradict any EU law or EEA law since it is possible for such arrangements to exist between EU/EEA members and non-EU/EEA members (see Switzerland and Liechtenstein; Switzerland and Norway; and particularly Iceland and the Faroe Islands as examples but also the current arrangements involving the Crown Dependencies which are not considered part of the EU for many purposes). These negotiations should also be fairly straightforward and should be concluded within 2 years.
5. Either the parties agree that the withdrawal agreement should take effect by May 2019 or all of the UK’s potential MEPs agree not to stand for the June 2019 European Parliament election. This results in there being no UK MEPs by June 2019 for the European Parliament and avoids the need for UK MEPs elected in June 2019 to have to vacate their seats soon thereafter.
6. In May 2019 (assuming that the withdrawal agreement is set to be concluded by then), the UK exits the EU and the transitional arrangements take effect simultaneously. The UK also begins negotiations on separate WTO membership and on it’s future trading relationship with the EU. It also begins negotiations on FTAs with third countries such as Switzerland, South Korea, Mexico, South Africa, various Caribbean states, Ukraine, Norway, Turkey, etc to replace the ones currently obtained through the EU. It also begins negotiations with the EU on cooperation in defence and security (which the UK will probably try to link with negotiations on its trading relationship).
7. In 2024-2029 the UK and the EU finally conclude the negotiations on the future trading relationship. Only then might there be a second referendum as only then will there likely be a deal inspired by one of the many Brexit visions for people to actually vote on. By then of course the progressive increase in tariffs and non-tariff barriers might make British public opinion swing back towards EU membership or at least towards EFTA/EEA membership. Long before that though it should have been clear if Norway or any other EFTA state was going to veto a British application to join EFTA and rejoin the EEA and most likely the deal that the UK will end up being able to even try to negotiate on will be a CETA-style deal but one with a services component. Whatever deal is negotiated though will likely fall far short of the current benefits enjoyed by the UK. The option on the referendum then will simply be to accept the deal or no (in which case the default WTO relationship will be the result).
An interesting piece. However, I think the Governing Conservative Party (and also probably the opposition Labour Party) will it seems to me be in no position to propose a coherent exit package to which remaining in the EU on current terms (assuming they were still available) would be the alternative in a second referendum, within the time constraints of Art 50, or even outside them. Only a General Election pitting a new pro-EU coalition against the rest, whether Conservative, UKIP, or Corbynesque Labour, which is won by the former, will meet the case. Putting that together should be the priority of all pro-Europeans now. Given the current party political incoherence and the Fixed Term Parliament Act, I believe we have until 2020 for this difficult but patriotically essential task,
As much as I hate the thought of another referendum, I tend to agree with your conclusion. But kinda reckon the best outcome in the long term would be for Brexit to mean out to fend for ourselves for real. The hypothetical deal on offer is still hypothetical – to really make up our minds, I reckon we may need to experience the reality.
Meanwhile, Justine (like a lot of Brexiteers) appears not to understand what democracy is. The people speak. The people change their minds. The people speak again. A democracy in which the people’s decision is binding for all time is, by definition, not a democracy. And if a referendum vote *is* binding for all time (even when the facts – or our understanding of the facts – change), then the Brexit referendum itself is invalid, as the 1975 referendum had a clear result to stay in.
So you’re suggesting that before we hold a second referendum, we negotiate our terms of exit first, with the EU knowing that these terms will be used to fight the campaign for Remain during the 2nd Referendum?!
The EU will have every incentive to offer us absolutely the worst terms possible. The fear and scaremongering tactics used in the first Referendum will take on a whole new level and our position in a 2nd Referendum will be weaker than the 1st. It will be pointless and unworkable. Are you really saying that once you join the EU it is impossible to leave? For anyone?
Brexit will happen, and there may well be some pain to go through before it does and maybe after. But it will happen.
The presupposition to this logic is the 27 member states agreeing to negotiate a new treaty before Article 50 is triggered. I find this highly unlikely. To suffrage any concrete negotiation results the UK must invoke Article 50 beforehand, otherwise it will be simply putting up a wish list for a referendum.
I know as good as anybody else how will this unfold. However, a negotiation with 27 other states (plus the EFTA) is unlikely to succeed outside the formal mechanisms. The only straightforward way for Brexit to happen without Article 50 is for the UK to unilaterally repel the EU treaties.
Hi Jon, good article and full of insights!
Whether there will be a second referendum or not, is not necessarily my main concern. the more pressing concern is for the British government to agree on what they want, and find the right moment to trigger Article 50. You seem to say that it will be triggered this Autumn, which would leave the deadline for agreement in 2019. Will this be possible?
How do you evaluate the chances of a snap election in the next 6 months?
How do you see the EU’s and the Member States’ reactions to years of negotiation which then would again be subject to an unpredictable referendum? Would this second referendum have to be announced now or could the announcement wait until the deal is done?
Thanks in advance for your reply!
A second referendum with a specific proposition, well explained so practically everyone knows the consequenses, makes sense. v 1.0 was no way to make a decision, at all. The likelihood of it happening or of a remain result has to be tempered by the relevant politicians making decisions that are logical or make sense. Let’s not take that for granted. May’s appointment of Brexiteers to make it happen has yet to prove that their being in positions of power will turn them from self interested delinquents to adults who see a bigger picture. Nor can an increase in the public being jaded by all things political be discounted.
@Justine – thanks for trying to put thoughts in my mind. As I state above I was very reluctantly for Remain, and I also think the EU might do better with the UK out. And this blog is about what I think will happen, not what I want to happen. There are loads of competing ideas of what people who voted for Brexit thought it was (as I quickly summarise above). When confronted with one Brexit vision, versus Remain, then I think Remain will win. This is not about wanting a further stab at the original referendum, but an acknowledgement of the realpolitik of the situation.
If the UK holds elections for MEPs in 2019, as this article effectively predicts, and which will basically be overt taking of the mickey out of the British public’s vote, then I think tanks will be needed in the streets.
Knowing this we can track back from 2019 and work out article 50 will be triggered in 2017.
Issue for Brexit supporters is that while they are sunning themselves commercial and banking organisations are looking to move their operations due to the potential loss of EU market access.
Even normally conservative German regional government institutions are looking at strategies to coax new start ups away from UK.
Personally the optimum outcome would be rUK exit EU and Scotland gets to retain access to single market. This opens do to reverse investment out of rUK into Scotland and rUK uses cover of Scotland to somehow keep a toe in the EU.
Not sure how it could be made to work 100% but given Scotland would have no land border with EU it is physically possible to do something….
Whole Brexit premis now more than ever just to be about immigration…….
You posit a second referendum as a rational, logical thing to do, but I think you give the game away here:
“…I cannot see how any single, clearly defined, vision of Brexit would ever possibly defeat Remain”
What you really want is a second stab at the original referendum, in the hope, and apparently some confidence, that the vote will go the way you’d like it to this time.
This is profoundly anti-democratic, any way you try to dress it up.
I have no doubt that a second referendum against the likely hard out will result in a stay in. The question is how to place the options with sufficient certainty that there is no optimism for “we can get what we want”, but before experimenting with the reversibility of article 50 too.
@Fiona – I agree such an about-turn would be hard, but there are no easy options here. I also think that pinning hope on political parties is not a good idea here – they are all too weak, divided, or poorly led to be counted upon I think.
@Nick – I fear normalising referendums as well, but – as I state above – all other options are worse here I think! As for the Norway now, full-out later plan – negotiating one exit is a horribly hard task, let alone putting some sort of staggered exit component in it! And anyway if the economic situation worsens further that ought to focus minds further too.
I agree with nearly all of this analysis, with some nuances.
First, I don’t think appointing the three Brexiteers to Brexit offices (Davis, Johnson, Fox) was a master stroke. Rather, May is indifferent to the outcome either way; her approach, like Cameron is purely transactional. Let those keenest and most invested in Brexit find a solution. If not, she will go to another plan. May does not care much about membership politically, she was always a RINO (Remain In Name Only).
Which gets to the heart of the matter- what did the 17.1 m voters vote for? And what does Brexit ‘mean’ in terms of EU membership/ relationship? My sense after the vote was that May could not hold a Norway position, such was the virulence of her right wing and the UKIP vote (note:we have a de facto Tory-UKIP coalition in power now.) Having calmed down a bit, I now feel that the ‘cunning plan’ (also being sedulously promoted by those shysters at OpenEurope) is to to go for an initial Norway position, as a holding pattern, before going further out in the later 2019 onwards. So Article 50 in 2017 (I agree now slipping until after key elections) whilst full out is prepared for.
Last point on the referendum: I am very concerned about normalising it. It was a democratic obscenity and should have no part in our representative system; secondly, Farage himself said 48:52 would settle nothing; three, it was gerrymandered and conducted in a climate of lies and fear; and fourthly, whilst 17.1m voted for something (yes, a high vote), 16m voted for the status quo (the second hightest popular vote ever for anything.) So I argue that one should respect the referendum for what is was- a cunning stunt that failed- and no more. I do not argue for ignoring, but interpreting it.
And in interpreting it, I agree that the next decision (whether referendum and/or full parliamentary vote- ideally both) will be between the status quo v some form of Norway option. That is the only basis for a referendum with a meaningful alternative, as opposed to the absurdity offered in June.
My thoughts are similar, but the UK gov, and press, would surely struggle with that about turn and it will be a hard sell with divisions that have been unleashed. Another issue is whether Labour and some from the centre – lib dems, and, some Tories could stand in a general election on a remain mandate