June 30, 2017
Recurring Brexit myths
One of the reasons why EU membership did not work out for Britain was a chronic lack of knowledge of EU rules and procedures among British elites, pro- and anti-Europeans alike. The Labour Party’s latest rebellion, with 49 MPs supporting a motion for the UK to stay inside the market, is a case in point. Membership in the single market is not an option likely to be supported by the EU. The whole debate in the UK about soft Brexit vs. hard Brexit presupposes that there is the usual menu choice which the UK has been accustomed to within the EU. That is not the case as a third country. Theresa May’s Brexit mandate - exit from both customs union and single market - has been set, and the Article 50 negotiations are proceeding on the basis of this mandate. If the UK wanted to change this mandate, it would require the EU to produce a new set of negotiating guidelines. The European Council would not be keen on this. We have criticised Donald Tusk for banging on about Brexit reversal, on the grounds that it raises false hopes. But he is right that the only alternative to a Brexit on the basis of Theresa May’s mandate is no Brexit at all.
In other words, yesterday’s amendment by the Labour rebels was pointless. All it did was to remind us of the deep splits in the Labour Party, which is as fractured on this issue as the Tories.
There may be a majority in the UK parliament for a soft Brexit, but for practical purposes this majority is irrelevant. There are only two big decisions the current UK parliament will take. The first is on the Article 50 deal. Here, the choice is simply between accepting and rejecting - where rejecting means leaving without a deal. So it is not really a choice.
The second decision is more important: agreeing the nature and length of the transitional deal. The best result for the soft Brexiteers, and for the country at large, would be a long transition period, say three to five years, with a quasi-EEA status. But this would bring us invariably into the next parliament. It will be the next parliament that will have a say in the scope of the FTA/association agreement. The best strategy of the Remainers should thus be to support Philip Hammond in favour of a transitional deal that gets us past the next elections. It will be the next parliament, not this one, that will have the ability to shape the nature of the final settlements, or even to opt back into the EU on the basis of the Article 49 procedure.
The misjudgement about the actual Brexit process is compounded by misjudgement about UK politics itself. The UK is not used to minority governments since the 1980s. Just after the election, there was a near consensus among commentators that Theresa May would be out by now. Yesterday, the government won the vote on the Queen’s Speech by 323 to 309. This is not a large majority, and is very likely to shrink or even disappear during the five years of the UK parliament given the system of byelections. It is possible that the UK government will lose a working majority, but probably not before Brexit. In any case, the next elections will invariably be about the terms of the FTA.
Our presumption therefore is that Theresa May will stay in power during the entire Brexit process, that there will be a transitional period, with no fundamental changes to the current arrangements, long enough to extend beyond the date of the next elections. And that the nature of the FTA and/or association agreements will depend on two factors: the progress we see in the agenda to reform the eurozone and the EU, and the next UK elections.
We have noted before that the transitional agreement would defuse most of the disagreements on the financial settlement. And, as the next story shows, there is some tentative progress on the other big disagreement: the role of the ECJ.