REPORT

Brexit Roundup: Where Are We Heading?

16 April 2018 Download Publication Download PDF Version

© 2017 SCER

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From the Report

Overview: UK Politics Adrift over Brexit

Dr Kirsty Hughes | Director of SCER

The Brexit process is moving forward. March saw the publication of the draft withdrawal agreement with substantial areas of agreement but also many tricky areas yet to solve, not least the Irish border and governance of the whole agreement. March also saw a provisional deal done on a transition period to the end of December 2020. And the EU27 finally issued their guidelines for the future relationship covering trade and security.

But the furore in the UK at the Commission’s draft protocol on Northern Ireland which, as a backstop, would keep Northern Ireland in the EU’s customs union and the single market for goods (as Katy Hayward describes), shows how challenging the issues that lie ahead are. The EU has set a goal of agreeing the protocol by its June summit – that will be tough.

Talks are now, finally, moving ahead onto the future relationship – not least trade. The EU guidelines take the UK’s red lines as their basis and so describe a comprehensive free trade agreement as the goal rather than anything more integrated (as Anton Muscatelli outlines). This, as business knows, will be very damaging – outside the single market and customs union, there will be a hard UK-EU border, one that will not allow frictionless trade and supply chains, and one that will hit services especially hard. Lower growth and less UK-EU trade beckons. And in any Brexit model, the UK will have lost its vote and influence over EU laws and regulations, and so be a rule-taker.

But even a comprehensive free trade agreement, from the EU’s point of view, depends on the UK committing to a level-playing field and not heading down a path of deregulation. As Annalisa Savaresi argues, both the potential for deregulation and the challenge of establishing a robust, independent regulatory framework in environmental policy are not to be underestimated – and there are substantial issues to be resolved over devolved powers (ones that could open up the possibility of Scotland having higher environmental standards in some areas than the rest of the UK).

The CBI has called both for the UK to stay in a customs union with the EU and to maintain close regulatory alignment – without quite coming out for staying in the EU’s single market. A House of Commons vote is also due, on an amendment to the trade bill, on whether to stay in the customs union. Such a move would not mean frictionless borders, outside the single market, but it would help. The fact that many business groups and MPs want, in effect, to be as close as possible to the EU membership we have now, but without the voice and vote we have now, would in normal times lead to a major political debate as to why Brexit is going ahead. But in these days of political fearfulness, that question is left to civil society and social media debates and a very small number of politicians.

Yet politically, if the customs union amendment passes, it could be explosive: ‘global Britain’ negotiating its own free trade deals round the world would no longer be possible (at least not for goods). Theresa May would find it almost impossible to get that past the Brexiters in her cabinet. Some argue that May could end up patching together an ‘almost customs union’ – and the EU has form in relabelling where helpful – but the Conservative politics of this look challenging.

Many of those new trade deals will anyway have to take third place behind the UK firstly negotiating its future EU-UK deal (only an outline framework of that is due for this autumn) and, secondly, renegotiating or negotiating the rolling over of the EU’s existing trade deals with over 60 countries (and many more other EU international treaties).

The UK will also be hard-pressed to agree any new EU-UK trade deal by the end of 2020. It’s most likely that transition will have to be extended – and the UK will have to pay for that, as Danuta Hübner makes clear. But for that to happen, the possibility of extension needs to be in the withdrawal agreement. As of now, it isn’t – though as the EU and UK negotiate down to the wire this autumn, it may go in (in return for what concessions from the UK remains to be seen). But, as Fabian Zuleeg argues, transition is not at all a done deal yet: the backstop deal of keeping Northern Ireland in the single market and customs union must be in the deal for the whole withdrawal agreement to go through, he emphasises.

As the process unfolds, the UK – and particularly England – has remained deeply divided over the question of proceeding with Brexit. Support for ‘Remain’ has moved a little ahead in the polls over the last several months, but not strongly enough for many passive and fearful politicians to come out and argue to halt Brexit or to hold a further EU referendum.

For now, the Lib Dems (and English and Welsh Greens) are the only ones supporting such a referendum on the autumn deal – although a number of polls now suggest such a vote would find favour amongst a majority of the public (some other polls contradict this – but find the majority against a further referendum shrinking). In Scotland, Nicola Sturgeon has declared such a referendum is ‘almost irresistible’ but has nonetheless not supported it, cautious of her ‘Yes/Leave’ supporters – as Iain Macwhirter argues. That caution too, he suggests, makes an early independence referendum also very unlikely.

Labour’s acceptance of Brexit has led to weak opposition to the slow, shambolic and damaging Brexit process, with Jeremy Corbyn mostly preferring to lead on domestic issues at Prime Minister’s questions each week. Labour has now come out in support of staying in a customs union with the EU, but, while it doesn’t support staying in the EU’s single market, it is not in a strong position to challenge Theresa May and her government over the economic damage a free trade deal will do. Consequently, the 48% who voted Remain (or the 52% who now support Remain in several polls) have little political voice or representation as the UK heads towards a major and damaging political, constitutional, economic and institutional upheaval that has little precedent.

This is true even in the two parts of the UK that voted Remain – Scotland and Northern Ireland. In Scotland, the Scottish government declares it would prefer the UK to stay in the EU, but focuses its political attention on pushing for a ‘soft’ Brexit of the UK staying in the EU’s customs union and single market (putting to one side the major democratic deficit that would entail). Northern Ireland lacks both an executive and any overarching Brexit policy – with the increased influence of the DUP, propping up the UK government, adding to the lack of proper and balanced representation of Northern Ireland’s views in the Brexit process.

Overall, the Scottish government – in its fight, together with the Welsh government, to avoid an undermining of the devolution settlement and a ‘power grab’ by Westminster in devolved areas – has in many ways played the role more of a devolved government (that it is) than one concerned with moving Scotland towards independence in the EU. But there have been many stand-offs with the UK government, as Anthony Salamone outlines – in particular through the ‘continuity’ bill but also through the push for a ‘soft’ Brexit. But the UK government has been reluctant to give the devolved administrations any serious role or influence in the Brexit talks – and is struggling anyway to maintain an agreed, sustainable position within the May cabinet.

Under Ruth Davidson, the Scottish Conservatives have found it challenging too to come to terms with the UK heading for the exit door, having backed Remain. But their stronger performance in the 2017 election and their focus on opposing any SNP move to a further independence referendum have helped them, argues David Torrance. Whether that will continue to be the case if the UK heads for a damaging or chaotic hard Brexit though is an open question.

The loss of free movement will be economically damaging across the UK and presents particular challenges to Scotland. As Sarah Kyambi argues, Scotland would benefit from having a differentiated migration policy compared to the rest of the UK. But with the UK’s future migration policy still unclear, though looking restrictive, and Theresa May reluctant to concede any differentiation, especially to Scotland, this looks unlikely.

There has been progress, in the withdrawal agreement, on establishing ‘settled status’ for EU citizens in the UK post-Brexit, as Niamh Nic Shuibhne sets out, and for UK citizens in the EU. But there is, as she argues, a major disconnect between the principles of EU citizenship and of free movement, and the UK moving to a new migration policy as a third country. What will happen, for instance, to the ability of UK citizens already living in the EU to travel freely across the EU remains uncertain.

More broadly, Brexit will affect human rights across the UK, argues Nicole Busby – and whether and how fundamental rights are protected, and whether they will be as well protected as now, after the transition period remains unclear. In this context, the extent of discretionary powers that ministers are awarding themselves is of substantial concern.

And while many have seen negotiating the security and foreign policy dimensions of the future UK-EU relationship as the easier task (compared to trade), many tough issues come into play here, including human rights, data protection regimes, and other issues of standards and information-sharing. Although the UK found some support recently in its stand-off with Russia, it won’t be in the room in future at EU summits or at Council of Ministers discussions to push its own concerns. Whatever consultation mechanisms are set up will not replace the intense partnership of EU membership.

Indeed, as Giles Merritt argues, the EU itself has been distracted by Brexit from some of its own pressing foreign policy challenges – including standing up to the US, China and Russia where needed. But, he argues, Brexit may help as a wake-up call to the rest of the EU on these big issues (even while the EU27 look on with disbelief as the UK goes ahead with such self-imposed damage). Juha Jokela, taking a Finnish perspective, emphasises too how Brexit is already leading to changing political dynamics amongst the EU27 – with Finland working with a group of northern EU member states (‘Hanseatic League 2.0’) to push their concerns on eurozone reform. Brexit remains a concern for Finland and other EU member states, but it’s one concern amongst many.

The UK could still change its mind – Article 50 could be withdrawn. Assuming that this autumn a withdrawal agreement and an accompanying political declaration on a framework for the future UK-EU relationship are agreed (the latter declaration referenced in the withdrawal agreement), the big political question ahead is whether this will be voted through or not in the House of Commons. And if it isn’t, there would then be a major political crisis – perhaps a general election, perhaps a further EU referendum (which given the timing might need EU27 agreement to extend the March 2019 deadline for Brexit, as allowed under Article 50).

How, and whether, public opinion moves in the coming month will be crucial too. But, for now, few politicians are willing to try to lead opinion towards halting Brexit – rather than passively watching to see if it changes. So, most probably, the UK is heading towards the exit door, and towards a free trade agreement and hard Brexit that will be damaging indeed. But there is much yet to agree both at home in the UK and between the UK and EU in the next six to nine months. And the politics of this crucial phase will be vital in determining where the UK ends up.