Thinking sensibly about Brexit, Part One: Brexit means Brexit

In this series of posts, I hope to try to think sensibly about Britain’s vote to leave the EU. Too much of the debate remains dominated by mad shrieking about ‘enemies of the people’, by a post-truth paranoia about elites undoing the referendum result that simply isn’t borne out by evidence or events. We can and must do better than this if we are to do justice to the competing demands of Britain’s divided voters, while delivering the best possible outcome for the Brexit process overall.

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Source: Daily Mail.

I want to begin today with a fundamental point. Brexit means Brexit, as Theresa May regularly says. It is true that May’s rather gnomic comments on the subject deliberately downplay the range of ways Britain could leave the EU, the complexity of doing so and a great deal of uncertainty about what happens next. But the critical dimension is crystal clear. Britain held a straightforward ‘in-out’ referendum on its continued EU membership, and the majority of voters voted ‘out’. Britain is going to leave the EU.

Much of the argument around the pending Supreme Court verdict on parliament’s involvement in triggering Article 50 centres around failures on both sides to accept this statement as true. Some ‘remain’ voters hope MPs, the majority of whom backed ‘remain’, will reverse the outcome of the referendum. Many ‘leave’ voters, who make up a majority of the constituents of a majority of MPs thanks to the clustering of ‘remain’ voters in the cities, fear exactly the same outcome, and cry foul. There are two points worth making here.

First, the Supreme Court is likely to rule in favour of Gina Miller’s challenge, upholding the High Court’s verdict that the government must allow some sort of parliamentary vote before notifying the rest of the EU that it intends to exercise the right enshrined in the Lisbon Treaty of member states to leave. Miller’s case is straightforward. Triggering Article 50 takes Britain out of the EU after two years whether a deal is done or not. Leaving the EU will deprive British citizens of a series of rights currently enshrined in British law but derived from Britain’s EU membership, including specifically the right to vote in European elections. Though an elegant solution in other ways, the government’s so-called ‘Great Repeal Act’, which rather than repealing anything will in fact transpose the entirety of EU law into UK law so parliament can choose which bits to keep and which to repeal rather than having to start from scratch, does not get the job done on this front. While the power to make and unmake treaties remains vested in the government through the ‘royal prerogative’, it is a principle of English law that royal prerogative cannot be used to remove statutory rights from citizens. That, to be clear, is probably a good thing. The government has argued that involving parliament necessarily restricts the operation of the prerogative in an area that falls very much within the usual ambit of prerogative powers, but realistically the court is likely to come down on the side of the citizenry in this case.

Second, MPs are unlikely to prevent the government from triggering Article 50. One thing we have learned from the gradual growth of parliamentary powers in the realm of military combat deployments is that MPs are actually willing to judge individual cases presented to them on their respective merits. Despite lingering (and justified) concerns about the merits of military intervention left over from the disaster of Iraq, they are still willing to approve the use of force to meet clear objectives, as part of a multinational coalition and without incurring unnecessary risks. MPs are acutely aware of the fact that most of their constituents voted to leave – Zac Goldsmith’s defeat by a pro-EU Liberal Democrat candidate in Richmond notwithstanding. They know they will be challenged by UKIP at the next election if they fail to respect that balance of views. But they also know that, as I have said, there are multiple ways of leaving the EU, the process is complex, and reaching an outcome acceptable to many, if not most, British people will be hard. They will vote for Article 50 provided the government sets out a reasonable plan, giving some indication of its preferred end result, negotiating priorities and approach.

This is not an unreasonable thing for MPs to request. Most ‘leave’ voters, if they think about it, are likely to agree that the government should come up with a plan, identifying desired outcomes and deciding which areas to prioritize. We can probably come up with a rough approximation of what the government’s negotiating objectives are likely to be. This is my best guess:

  • Britain would like to retain maximum access to the single market and is willing to accept that will mean following rules set by the other EU states and making a financial contribution to the EU budget. In practice this is likely to look more like a third-party free-trade deal than the so-called ‘Norway model’. That means it will involve sector-by-sector agreements rather than unfettered single market membership. EEA membership may offer an acceptable transitional model on the economic front, but will be acceptable only subject to the next point about immigration.
  • Britain must have the right to impose restrictions on immigration from within the EU, and will give up single market access if necessary in order to secure that right. It will accept the loss of British citizens’ rights to live and work freely elsewhere in the EU. It may explore the possibility of some sort of system of exemptions, perhaps allowing more liberal arrangements for people under the age of 26, or for a limited period of time (e.g. along the model of the Tier 5 Youth Mobility Scheme visa).
  • Britain will meet its share of its continuing liabilities to the EU, but will expect a fair deal off-setting these against its share of the EU’s assets. There will be some sort of ‘divorce settlement’, but it will not be as high as the more outlandish estimates banded about recently.
  • Britain would like British citizens resident elsewhere in the EU and EU citizens resident in the UK at the time of the referendum to retain their respective rights to live and work where they are. It would also like to minimize the costs associated with moving between the UK and EU for both work and pleasure in future.
  • Britain would like to continue to work in close partnership with the EU in areas of mutual interest, including trade, international development, environmental policy, counter-terrorism, policing and international security. It is more than willing to pay its way, and it has considerable expertise available to contribute.

There will be challenges associated with these objectives. Negotiating them will not be straightforward. Personally, I would push for an early reciprocal deal on citizens in situ at the time of the referendum, and a clear statement of continued co-operation in areas like security, as a way of re-establishing a degree of goodwill and getting the negotiations off to a positive start. I also like the idea of having different rules for young people, most of whom voted to ‘remain’ and who are disproportionately disadvantaged by the loss of the right to live, work and study freely elsewhere in Europe. Again, it may be possible to negotiate a more limited form of free movement on these terms provided it is seen as a truly reciprocal arrangement rather than a ‘special deal’ for Britain.

Stating objectives like these does not make negotiating them more difficult. In fact, securing parliamentary approval for triggering Article 50 on the basis of an explicitly stated set of negotiating objectives arguably strengthens the government’s hand. Firstly, it tells the rest of the EU what Britain wants. There has been a great deal of frustration in the other 27 capitals about Britain’s failure to clarify this point. Doing so should at least let everyone know where they stand, and help the EU27 to clarify their own objectives. This should shift the debate away from emotion and towards simple politics, where there is more scope for compromise. Secondly, it sends a signal that Britain wants to minimize the disruption caused to the rest of the EU by its departure, and to continue to work together positively in future. As Boris Johnson said in response to the referendum result, Britain will remain a European power after Brexit. Though the shock of departure, and the slap in the face the British electorate has given the rest of the EU, will make relations frosty for a period, there is no reason why Britain should not in time become a valued partner of the EU. Finally, it sets clear limits to what Britain can accept, especially in the area of immigration, while leaving open the possibility of favorable outcomes for the EU27 in other areas. A deal that met some of the government’s publicly-stated negotiating objectives while moving towards others would probably be acceptable in Britain. That would allow the government to make credible commitments in areas where the disagreements between London and the EU27 are fewer. None of this means a deal will actually emerge. Emotions continue to run high, and there are a number of areas where Britain’s interests conflict with those of the EU27, and where the EU27 are internally divided, with free movement chief among them. But it would establish a clear, coherent and legitimate set of objectives to get the process moving.

Brexit means Brexit. Britain is going to leave the EU. Involving MPs will force the government to come up with a sensible plan, will give it credibility in Brussels and should obviate the need for a referendum on the final Brexit terms that the government would struggle to win. It will also begin the process of restoring sovereignty to parliament that many ‘leave’ voters voted for, and will fit nicely into the ongoing trend towards MPs gaining a greater say over British foreign policy. Making the government’s objectives clear and transparent will neither prevent it achieving them nor ensure it can do so. But it is a necessary first step. It should not have been necessary for Gina Miller to go to court at all. The legal position is fairly clear, and the government is probably going to lose, with the added risk that it may wind up forced to consult the devolved administrations more directly. Ministers should never have tried to exclude MPs from the process. Getting them involved will not mean annulling the result of the referendum. It should, however, help ensure it is upheld properly.

What to look for from Chilcot

Building on comments quoted in the FT

Sir John Chilcot’s long-awaited Report finally appears today. His Inquiry has lasted longer than Britain’s part in the Iraq War. Trying to make sense of 2.6 million words of findings will be difficult. It will take time for what it all means to become clear. Some initial things to look for still stand out.

First, which individuals and institutions come in for criticism, and with what intensity? If Chilcot does not hammer Tony Blair we can expect widespread calls of ‘whitewash’. But if, like Lord Butler before him, Chilcot expresses severe criticism too reservedly, the effect will be the same. We can also expect difficult moments in the Report for the intelligence services, the military and Blair’s former Cabinet colleagues including Development Secretary Clare Short and Attorney General Lord Goldsmith.

Second, does Chilcot confront strategic and tactical issues simultaneously? Invading Iraq made little strategic sense. Even the worst estimates of the threat it posed did not justify regime change with all its attendant costs. There was no plan for what happened when Saddam fell, and far too little resource committed to the aftermath. Britain learned slowly, if at all, from mistakes and failures on the ground. It over-committed by stepping up the fight in Helmand before finishing the job in Iraq.

Finally, will the Report satisfy the public’s appetite for transparency? It may be too much to expect it to restore the country’s trust in elites. But given its duration it needs to demonstrate maximum openness, and to deliver some measure of accountability. Tony Blair isn’t going to wind up on trial. There is no court competent to try him and, in any event, he was too wily a politician to get caught clearly breaking any law. Chilcot has the evidence, though, and the scope to dismantle Blair’s remaining reputation. If he casts light on the dismal story of how Britain wound up fighting in Iraq, he might assuage at least some of the public’s anger, and allow the country to begin to move on.

Britain’s bargaining stance after Brexit

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Three related challenges await the new Prime Minister as he or she responds to last week’s referendum result.

First, the question of when to invoke Article 50. EU leaders want Britain to move quickly. Of course they do. Everyone wants certainty, because certainty breeds stability. In addition, once the clock starts running on Brexit, the rest of the EU holds most of the bargaining cards. Britain wants certainty, too, not least to calm troubled bond and stock markets. But it needs time. Time to choose a new prime minister and time to decide a bargaining stance. Britain holds the cards on timing, because there is no mechanism for the rest of the EU to trigger Brexit negotiations. Only Britain can do that. Once negotiations start, the power shifts.

Second, the question of what to bargain for. As I have written elsewhere, it remains uncertain what exactly the ‘leave’ camp voted for. To be more precise, it is certain that two groups of ‘leavers’ voted for contradictory things. One group wanted to cut immigration, the other to cut regulation and boost free trade. It is unclear what sort of deal with the remaining EU the country and the parliament would support. It will not be possible to sort this out before beginning negotiations. The new Prime Minister will have to get the best deal they can, then try to get through parliament and possibly a second referendum. If they fail, Britain will fall out of the EU completely, causing even greater economic harm.

Finally, there is the bigger picture to think about. Britain will need good relations with the EU and its remaining members after Brexit. It has already generated considerable bad blood, but states forget specific insults over time when their interests converge; look at Franco-US military co-operation thirteen years on from Iraq. Still, the longer Britain delays invoking Article 50, the more damage it does. The harder it drives a bargain in the subsequent negotiations, the more damage it does. It might be in Britain’s short-term interests to delay as long as possible, then push for access to the single market without free movement as Boris Johnson suggests. But if such a stance undermines continental relations further the effort will prove counter-productive over the longer term. David Cameron’s great mistake was adopting a transactional relationship with other EU members, looking to maximise Britain’s immediate advantage at every opportunity rather than trying to build enduring partnerships. When he really wanted something, other EU leaders bargained hard. Small victories, like the 2011 treaty veto, cost more than they were worth in the end. That may be the case here, too.

After Brexit: What comes next?

If Britain does vote to leave the EU today, what happens next looks remarkably unclear. David Cameron has said he will inform the European Council that Britain wishes to withdraw from the EU, in line with Article 50 of the Lisbon Treaty. Britain would then have two years to negotiate its future relationship with the remaining 27 member states. After two years its membership terminates automatically.

So far, so straightforward. But actually there are a number of imponderables at work.

Firstly, what if David Cameron resigns as Prime Minister? Boris Johnson has said he would not invoke Article 50 right away, pointing back towards his suggestion at the start of the campaign that Britain might yet be able to wring a better deal (e.g. further restrictions on freedom of movement) out of other EU states if the government already had a mandate to leave. Most EU leaders have ruled out this option. But that doesn’t mean they wouldn’t consider it if Britain actually did vote to leave. Remember, most didn’t take the prospect entirely seriously during the previous round of negotiations. And even if they did, it makes no sense from a bargaining perspective to admit that you are willing to offer more to a bargaining partner who does something you don’t want. We could see a successful second re-negotiation followed by a second referendum in which Prime Minister Johnson successfully campaigns for Remain, having achieved his main goal of becoming Prime Minister.

Secondly, what sort of mandate would a successful leave camp have? Two key concerns are driving the leave vote – fear of mass immigration and a desire to repatriate sovereign authority currently pooled with other EU states, for example the power to alter employment regulations or to negotiate new free trade deals. To an extent these concerns can both be resolved by leaving the EU. But many of those who argue for a leave vote on sovereignty grounds nevertheless still want Britain to have the best possible trading relationship with other EU states, which makes sense since most of our exports go to them. They say they would like Britain to stay in the European single market as far as possible. Both Norway and Switzerland are in the single market but not the EU, so there is precedent here. The problem is that the rest of the EU sees free movement of people as one of the fundamental pillars of the single market. In other words, the price of retaining access to the EU market is likely to be allowing free movement of people. There is a fundamental clash between the desire to remake Britain as a free-trading nation and the desire to restrict immigration (this is true conceptually as much as in practice). So what sort of deal would a post-leave government pursue? I suspect the answer is that it would be unable to negotiate a deal because it would be unable to concede on free movement, leaving Britain outside of the single market by default at the end of its two year withdrawal period.

Thirdly, and relatedly, what sort of deal would parliament approve? Most MPs favour remaining in the EU, but they will have to sign off on any post-Brexit agreement. Will they be willing to do so in principle? Probably, given most have more respect for the electorate than is often implied. But, again, what sort of deal will they have a mandate to approve? One that retains access to the single market at the cost of allowing free movement, or one that cuts off both? The differences are stark, and the reality is that the leave vote is split between the two broad approaches.

Fourthly, what happens if there is an early general election before the two years are up? This is entirely possible, though the Fixed Terms Parliament Act sets a high bar (assuming the government does not lose a confidence vote, which it probably wouldn’t, two-thirds of MPs have to vote for an early election, which means both Labour and the Conservatives have to be confident they’ll win). It could happen if the Conservative Party splits, which looks like a realistic possibility regardless of the outcome of the referendum. It could also happen if the worst economic predictions of the Remain camp come true. If Britain votes to leave the EU, the hit to business confidence will occur immediately. It won’t wait for the two year period to be up. That could mean an immediate recession, which in turn could undermine the government’s position. The prospect of an early election is interesting for this reason: What if the Labour Party campaigns on a pro-EU mandate, and wins? Could a new government withdraw the Article 50 notification before the two year period is up? Article 50 doesn’t say, which means presumably the possibility is there.

Just as a vote for Remain will leave the government needing to do a much better job on housing, healthcare, jobs and community cohesion, all issues that clash with its underlying commitment to fiscal austerity, so too a Leave vote will trigger a period of prolonged uncertainty and likely some sort of further vote. It doesn’t end at 10pm on 23 June, in other words.