Brexit Chaos: What Next?

Kirsty Hughes | 9 June 2017

10 Downing Street, Number 10, CC-BY-NC-ND-2.0

The election result has delivered a hung parliament with a wafer-thin majority that will struggle to get legislation through on Brexit or any other policy issue. Theresa May is so weakened at home – and ahead of EU Brexit talks due to start on 19 June – that she surely cannot survive for long.

Where does this leave Brexit? Can it and will it go ahead? And what about Scotland – with the SNP assessing its own election damage, did anyone imagine Scotland would ensure the Tories could hang on in there (for a while) with the DUP?

Can Brexit talks start on time?

If May, having rushed to get the support of the DUP, tries to show it’s business as usual by actually starting Brexit talks on time a week on Monday, is that at all plausible? Surely she should rethink her Brexit strategy first. But she doesn’t need a vote in parliament for her or David Davis to go to Brussels to set the ball rolling with Michel Barnier.

Still this ‘business as usual’ approach to Brexit looks likely to fall apart fairly quickly. If May and Davis (or his successor) try to have their ‘row of the summer’ – and walk away from talks – over whether trade talks should happen in parallel with the exit/divorce talks (on EU citizens, the bill, and Northern Ireland), might there be a vote of no confidence at Westminster? The sense of pervasive political crisis would surely deepen and deepen as Westminster debated what to do if Brexit talks had stalled.

Even if talks stay on track for a few weeks, the Great Repeal Bill will need to start its way through the House of Commons and House of Lords – and the devolved assemblies. And other new legislation – on migration, trade, agriculture, tax and more – must also be passed if the UK is to be ready for Brexit. What are the chances that May’s wafer-thin majority would survive this intense and complex legislative timetable? What about the Brexit bill (€50-100 billion) – how will that gain Westminster support (even if parliament doesn’t actually vote on the exit deal until autumn 2018)?

If, as must be highly likely, May starts to lose Westminster votes on vital (for her) Brexit legislation, then that will disrupt the Brexit timetable. If the Great Repeal Bill isn’t through on time, the UK will end up in various types of domestic legal limbo even if there is an EU deal. But much of the UK-EU27 talks will anyway depend on the UK knowing – and telling the EU27 – what its future policy plans, regulation and legislation will look like. The two parallel tracks of Brexit talks and major re-engineering of the UK’s regulatory and policy structures, as EU laws are brought back to the UK, are highly interdependent.

Where will Scotland fit in – and might a soft Brexit help?

All that is before even considering how the Scottish parliament, and the other devolved legislatures, will fit into – and probably disrupt – this process. Despite the SNP’s damaging result, Holyrood is unlikely to pass a legislative consent motion on the Great Repeal Bill. If Westminster overrules Holyrood, then constitutional and political crises will deepen further.

For now, the talk is of a second independence referendum being dead in the water. But the scale of the current political crisis in the UK means the political mood could potentially change again within months. The political and economic uncertainty created by the election is going to add to the growing gloom around UK economic prospects. Stalemate at Westminster – or Holyrood – and a wilting UK economy will impact on Scottish debates – on Brexit and on independence.

An optimistic scenario might have Westminster opting for a soft, European Economic Area (EEA) Brexit. In this scenario, Scotland gets to stay in the EU’s single market with the rest of the UK, and any independence demands recede into the distant future. But will the Tory/DUP government choose a soft EEA Brexit – and, with its narrowest of majorities, hard Brexiteers will still count? For now, it seems unlikely.

Of course, hard Tory Brexiteers could be outvoted by the opposition parties voting for a soft Brexit too – if that was what May (or her successor) proposed. But what about Labour under a strengthened Corbyn? Corbyn has always seemed well disposed to free movement of labour – one of the EU27 red lines for being in the single market – but he equally seems keen to push for an interventionist industrial strategy outside the EU’s single market rules. So a single market outcome does not look that likely even now. And it would also constitute an extraordinary act of self-demotion by the UK – obeying all the EU’s rules and laws while giving up its vote. The opposite of taking back control.

A soft Brexit in the EEA could turn out to be the answer even so for the transition deal, for 2-3 years, something that was already looking necessary to get from an exit deal to a future UK-EU27 trade deal. But for the UK to shift to the EEA by March 2019, it will still need to set up its own agriculture, fisheries, trade, customs, justice and home affairs policies amongst others – and agree those at Westminster and in the devolved assemblies. Can these go through at all – and in time? Again, it looks implausible given the hung parliament.

If there is a Tory leadership election or a second general election or both, the Brexit timetable will be in tatters. How will the Scottish debate develop in the face of Brexit chaos, constitutional and political standoffs with Westminster and a weak, fragile UK government? For now, that is quite unclear.

And if there is a second general election where are all the political parties going to stand on Brexit? Would the SNP for instance consider adopting the Lib Dems’ policy of a second EU referendum? That would seem logical in the face of political chaos and confusion, but it did not of course do the Lib Dems much good at the polls on Thursday. Perhaps both parties – and others – need to be much bolder and call for a second EU vote straight away to counter the political and economic chaos that Brexit is producing.

Of course, the problem is that for now neither Labour nor Tories are yet at all ready to concede on Brexit chaos – the UK remains divided on Brexit. And the SNP itself was in fact remarkably defensive on Brexit and the EU during the election campaign – preferring to talk about its compromise of Scotland staying in the EU’s single market and the UK, rather than independence in the EU. Having lost 21 seats, the SNP will certainly not be in confident mode now on how to deal with the UK’s ensuing Brexit crisis. Yet that crisis, as it unfolds, will lead to many shifting debates across the UK and in Scotland over what to do next.

Don’t forget the EU27

Even before the election, the UK’s Brexit debates were remarkably inward-looking. But the EU27 have not gone away. They are looking on aghast in many ways, but also doubtless wondering if there will come a point where the Brexit chaos could lead the UK to change its mind and return to the EU with its tail between its legs. In the meantime, do not expect any softening of EU positions.

The EU27 are clear (as I heard again in Brussels this week) – there is only a soft Brexit with all the four freedoms, including free movement of people, on offer. Otherwise, the UK can have a Canada-style trade deal – one that the National Institute of Economic and Social Research has estimated could lead to a drop of 35% in goods trade and 61% in services trade with the EU.

The EU does not want a chaotic Brexit of the UK crashing out with no deal, but talk, in the aftermath of the general election, of extending the Brexit timetable is likely to be rebuffed. The EU27 do not want this damaging farce to go on any longer than necessary – they have other challenges and goals (including closer defence and security cooperation) to deal with. And they have European Parliament elections in May 2019 – any extension of the timetable will mean the UK participating in those, not something Brussels would want to contemplate right now.

In the general election debate, the Tories talked of the risk of the opposition parties ending up in power as a ‘coalition of chaos’. The UK now has a coalition of chaos – but it is run by the Tories with the DUP. And it looks very chaotic indeed.

Kirsty HughesKirsty Hughes | Twitter

Scottish Centre on European Relations

Dr Kirsty Hughes is Director of the Scottish Centre on European Relations. She is a researcher, writer and commentator on European politics and policy, and she previously worked for a number of leading European think tanks.