Tuesday, 28 June 2016

We voted for it; but what – exactly – does Brexit mean?

Why did 52 percent of us vote for Brexit last Thursday?  Although most media attention has focused on immigration, according to a poll by Lord Ashcroft, this was only the second reason given by those who voted to leave.  More important was the belief that decisions about the UK should be taken by the UK.  The third most popular reason was that voting to remain entailed having little choice about how the EU expanded its membership and powers in the future.

Given these concerns, we might expect that the leaders of the Vote Leave campaign would have a blueprint for how these aims are to be achieved now that Britain has indeed voted for Brexit.  Unfortunately, it turns out that there was no such plan – Leave campaigners argued that it was up to 10 Downing Street to create one.  However, the Prime Minister has resigned and is reported to have asked colleagues “why should I stick around to do the hard stuff?”

A small Cabinet Office team (dubbed “the Brexit unit” by the media) has now been assembled to work under Oliver Letwin to sketch out the steps required to trigger an Article 50 notification that will officially inform the EU of Britain’s intention to leave, and will begin the process of establishing the terms under which Britain will leave – note that this is a very long way from a final exit from the EU, which some expect to take a decade or more.

Ideally, before Article 50 is officially triggered, the new Prime Minister will want at least a broad outline of the kind of relationship with the EU Britain will want to negotiate.  This is likely to require a general election to provide the new Prime Minister with the legitimacy to develop a negotiating stance.  The trouble is that unless Article 50 is triggered before a general election, the election is likely to end up being about whether or not to trigger Article 50 at all – if the opposition won on pro-EU manifestos, this would give them the necessary legitimation to overturn the result of the referendum itself.

So the new Prime Minister will have just weeks to decide what Britain’s relationship with the EU is to be after Brexit.  The three options on the table are some modification of:

  1. The Norwegian model in which Britain continues to participate in the single market through the European Economic Area. 
  2. The Swiss model in which Britain attempts to access the single market by negotiating new bi-lateral trade treaties with each of the remaining 27 EU member states.  The Swiss have been working on their unfinished version of this for the best part of seven decades.
  3. World Trade Organisation rules in which Britain effectively tears up all existing rules and seeks a preferred trading status similar to Turkey or Ukraine.

In practice, the first option is worse than ignoring the referendum result, since it entails operating by EU rules over which Britain will have ceded control, continuing to pay into the EU budget, and continuing to allow the free movement of people.  The second option may be little better, since an embittered EU has no incentive to ease Britain’s exit given that this may encourage others to consider referendums of their own.  It may well be that the free movement of people will be a red line issue for any of the EU member states Britain seeks treaties with.

In reality, then, the only option that guarantees that the result of the referendum is enacted is the one in which Britain tears up every agreement that it has entered into in the course of the last 40 years.  That option, unfortunately, is simply insane.

On the international stage, Britain is party to hundreds of international treaties signed by the EU.  Each of these would have to be renegotiated separately by Britain with each of the other signatories.  Nationally, conservative estimates suggest that parliament and the civil service could be tied up for a decade.  As Alex Barker and Alan Beattie in the Financial Times report:

“Senior officials see the untangling of 40 years of EU membership as something akin to a legal “revolution” that would dominate the Queen’s speech for the next five to 10 years.

“This includes deciding what to keep, amend or reject from thousands of EU related laws on the UK statute book and 12,295 regulations that have direct effect and would cease to apply the moment the UK leaves.”

Simply scrapping the European Communities Act 1972 – as suggested by some Vote Leave campaigners – without first updating all of the EU-based law first would leave every business in Britain trading illegally until such time as replacement British law was enacted.  For example:

“Agata Gostyńska-Jakubowska, a research fellow at the Centre for European Reform, points out that much of the trading done in the City of London would overnight become illegal unless new provision were made. The process of reviewing this legislation — working out what to keep, what to amend, and what to remove — would be lengthy, complex, and contested.”

Beyond this written legislation is all of the case law that has developed over four decades.  Philip Kolvin QC sets out the scope of the law related to leaving the EU:

“The consequences for our legal system have barely figured in [the debate on Brexit]. But EU-inspired or mandated legislation is part of the bedrock of societal protection. I speak of health and safety, town and country planning, ecological protection, freedom of information, data protection, competition, discrimination, public procurement, indeed the very concept of proportionality which governs much of our regulatory system. Are these protections to be thrown onto a bonfire of laws? If not, which are to survive and which are to be replaced, and if so by what?”

Presumably, the status quo will have to remain for the decade (or more likely decades) while all of this law is being re-written.  And any changes will have to go through the usual Parliamentary processes... hardly the "scrapping EU bureaucracy" that most Leave voters had in mind.

The effect on future law making is going to be disastrous if large numbers of civil servants have to be relocated to the Brexit Unit to carry out the nuts and bolts of renegotiating and redrafting Britain's legal framework.  Bear in mind that the Civil Service has been parred to the bone as part of the government’s austerity programme.  Trade negotiations will pose significant difficulties, since most of Britain's international trade specialists retired more than thirty years ago because EU membership meant that they were no longer needed.  It might be possible to bring in outside contractors to take on some of the extra work, but this also has its problems, since the multinational law and accountancy firms with the spare capacity to take on this work may prefer more lucrative contracts with the 27 EU member states that Britain is seeking to negotiate with.

Beyond having to spend an inordinate amount of money (perhaps no bad thing if it stimulates the wider economy) time and effort on unpicking and redrafting the best part of 40 years of International and British law, it is far from clear what, exactly, Brexit means.  Ironically for the large racist contingent among Brexit voters, the one thing it does not affect is the status of EU citizens already living in Britain.  Their rights are guaranteed by United Nations treaties that Britain entered into in the aftermath of World War Two.  Quite simply, unless the Brexit camp are prepared to turn Britain into a rogue state – with all the trade sanctions and the potential threat of military action that this would entail – nobody is being deported or forcibly removed.  Indeed, the likely consequence of Brexit is that even more people will obtain joint EU/UK citizenship.

It is far from clear what people thought they were voting for when they voted to leave.  It is even less clear what sort of settlement Britain will eventually reach many years from now.  What is clear is that most Leave voters are going to be sourly disappointed by the end result in any case.

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