Brexit the situation as of march 19th 2017

Brexit - the situation as of

March 19th 2017Kitty Ussher

Structure

What happened?

What’s going on in Westminster?

What does this mean in the future?

The background

Theresa May January 2017:

“Unlike other European countries, we have no written constitution, but the principle

of Parliamentary Sovereignty is the basis of our unwritten constitutional

settlement….the public expect to be able to hold their governments to account

very directly, and as a result supranational institutions as strong as those created

by the European Union sit very uneasily in relation to our political history and way

of life.”

The background

Fundamentally Britain just never signed up to the idea of an “ever closer union”.

We joined the common market for two reasons.

● Good for jobs and trade.

● Sensible to cooperate for a generation influenced by the memories of war.

Trade benefits realised, but far more visible to the public was the hassle that went with it

There was a growing sense over time that the EU wasn’t following a British agenda. Not on our side.

In nobody’s interests to champion EU agenda.

Scaremongering by press but just really played into the sense that that whole thing wasn’t really worth it.

The campaign

Referendum campaign: those who had status (education, London, salaries) telling

those who didnt how they should vote.

But for those who didn’t have money, all they could see was the difference

between their own situation and that of the people who were asking for their vote.

They didn’t have the assets to become part of the elite, but could see how what

they did have was threatened by immigration some of which was visibly from

Europe’s Eastern expansion

The campaign

Exposed the class divisions in early 21st century Britain: there are now two main

groups, those who successfully move around, or have moved around, in search of

opportunity, and those who are in more settled communities, the latter mainly

outside London.

Analysis by the BBC at ward level showed that the variables of age and education

had the strongest explanatory power for voting patterns, and in fact that this

statistically explained the London result..

No wonder the Leave communities felt “left behind” - as well as having an

economic meaning, that phrase is also literally true.

Cameron’s tactics

The pro-Remain Conservatives in government identified an important group of voters who were concerned

about Europe, and particularly about immigration, but also accepted David Cameron’s leadership and

were prepared to listen to, and ultimately take his advice in terms of how they should vote.

This explained David Cameron’s tactics - to try and appeal directly to this group by negotiating a “deal for

Britain” at the summit this time last year that would make our continued membership of the European

Union palatable to these swing voters.

But the deal wasn’t good enough - left without a plan.

Everyone else

Labour campaign was fragmented and weak

Large businesses that benefited from the single market were fearful of

telling their staff directly for fear of being targeted by strident anti-European

campaigners on social media.

So everyone who wanted Remain waited for everyone else to do the hard work,

and nobody did.

The current situation

Britain and the European Union have stated their intention to divorce and have

instructed their lawyers to work on the details.

We’re getting to the end of the blame stage but not yet got to the level-headed

practical cooperation stage of who is turning up to which child’s school parents

evening.

But there the analogy ends. In most marriages, the details of the agreement don’t

have to go through the Council of Ministers and two separate parliaments, and

you don’t run the risk of losing an election if you get it wrong.

Things we know

First. there’s no going back - the number of people who signed a petition to

reverse the decision never came anywhere near the number of people who voted

to Leave.

And there has been no swing of public opinion. In fact there is a sense that people

instead want the government to get on with it.

We will leave the single market

● It became clear in the months following the referendum result, that free

movement of people was part of the single market deal, and that was

unacceptable to Britain.

● Some people are saying that because the Conservative manifesto for the

2015 election contained a commitment to remain in the single market

alongside as well as the commitment to a referendum, it means people were

misled. But this is just pro-Europeans clutching at straws.

Labour will not oppose Brexit

With the exception of a handful of individual MPs, they did not oppose the

triggering of article 50. They are conscious that due process has been followed

and many of their MPs represent seats that voted to Leave.

The substantive negotiation will take around a year

President Barnier has indicated that the package that is agreed needs to be put to the European

Parliament in the autumn of 2018.

Once article 50 is triggered next week the Commission will seek a mandate to negotiate from the Council

of Ministers. Then we have French and German elections that will mean there won’t be a mandate for any

compromises for a few months.

Theresa May has indicated that the deal should go to the UK parliament before the European Parliament.

So that suggests the deal will be in a form that it can be published in around September 2018.

Theresa May has the option of a general election

For as long as Labour is weak in the polls, Theresa May has the option if things

start going wrong for her, to call a quick election to refresh her mandate and

obtain public backing for her deal or her negotiating stance.

That’s about all we know.

Things we don’t know

● The terms of the deal

● The budgetary cost of exit

● The implications for Scotland

● The nature of any transitional arrangements or implementation period

What happens next?

The talks begin. No doubt there’ll be a lot of speculation and grandstanding.

The UK government will give periodic updates to the UK parliament that will serve both main political

parties well.

Labour will be able to demonstrate that it is holding the government to account, which given its current

position of weakness is the best it can hope for.

The Conservatives will be able to demonstrate leadership and, as the information that is produced

becomes ever-more technical, the public will continue to lose interest and believe that the government is

getting on with it.

What happens next?

The Liberal Democrats however will push for a “meaningful” vote in parliament at the end of the process

that is capable of triggering another referendum. They will not succeed.

The Scottish National Party will try and make Theresa May look unreasonable - for example by refusing

another independence referendum before the UK leaves the EU - in the hope of whipping up greater

nationalist fervour. We saw some of this last week. But with nationalism and pro-Europeanism not

necessarily overlapping amongst Scottish voters, they may also fail.

The European Union will - in parallel - draw up policy papers for a multispeed union to try and save face.

Parliament will get bogged down in the Great Repeal Bill that attempts to transcribe existing EU legislation

that is directly applicable into the body of UK law

The UK public will get bored.

Shape of the final deal

A total package, with the exit bill forming part of the overall negotiation, not preceding it.

A heads of agreement deal on market access that will not be as good as being in the EU, but it won’t be

as bad as some industries fear.

There will be a timescale for different elements of the overall deal.

For the markets, certainty will be as welcome as substance so sterling will regain some ground.

In terms of the substance, it won’t feel like any of the other third-party access arrangements that currently

exist, but it may set a precedent for them over time.

It will be piecemeal and different sectors will be affected in different ways.

Shape of the deal

On average the cost of doing business with the EU may rise a bit, but at the same time it may not be

prohibitive.

There will be no grand payment to a central budget but there may be fees to access specific pan-EU

initiatives, for example in Justice and Home Affairs.

The financial services settlement will be most closely watched by business, where the issue of so-called

“equivalence” of regulation between the UK and the EU will be key - but how is it policed?

The issue of EU citizens currently living in the UK, not to mention Brits abroad, will be prominent in the

media but the government will resist making any early commitments - as we saw last week when the

House of Lords attempted and failed to force the government’s hand.

ConclusionsThe government is in quite a strong position - at home at least. Their strength comes from the operation

of the democratic process.

The Conservatives said in their election manifesto they’d hold an in-out referendum on Britain’s

membership of the European Union.

They won an absolute majority.

The legislation was passed to hold the referendum.

The referendum campaign operated within the law. The result was undisputed. And the opinion polls

have not changed since then.

Conclusions

They say a week feels like a long time in politics, so a 12-18 month negotiation will feel like an eternity.

But as long as the final deal doesn’t feel as if it is against the mood of the referendum result, the public will

feel the job is done and start to move onto other issues.

The economy will keep motoring for the moment. The bad news has already happened.

The main risk to Theresa May comes from her own backbenchers in parliament, as we saw from her

willingness to U-turn on tax last week.

But if she gets into trouble she can appeal over their heads and put the deal to a confidence vote in a

general election.

There are lots of unknowns.