Much Ado About Brexit

meIt’s more than 100 days since the UK voted to leave the EU, and finally some information is starting to emerge about how the government envisages such a process.

For NHS workers, car companies, financial services groups, telecoms companies, millions of Europeans in Britain, millions of Brits in Europe, scientists, farmers and more, it is a bleak situation. The government appears committed and “hard Brexit” looks an increasingly probably solution. But as is usual in politics, not everything is as it seems, and there are plenty of reasons for the 73% of the UK population that didn’t vote to leave to remain hopeful. This post outlines some of what is going on, and some reasons for optimism.

First, let’s tackle this hard Brexit nut. It is clear that leaving the EU would be very damaging to the UK economy. Even people who think it serves Britain’s interests can acknowledge that Brexit, and especially hard Brexit, involves a serious disruption to the macroeconomic situation. Leavers simply consider that the job losses and pain of leaving will be rewarded in the longer run. But recently, the ministers responsible for taking the UK out of the EU have been talking more and more about a hard Brexit, which involves leaving the Single Market and the customs union. Exporters – the only group of businesses that hoped to benefit from Brexiit – fear this would result in tariffs on their products. Farmers, scientists and all other groups that benefit from EU funding or cooperation fear this would lead to serious damage to their economic sustainability.

Why would the UK go for hard Brexit? It’s hard to make sense of a serious move to take such a dramatic exit path. But there is one reason that justifies it: Failure to leave the Single Market and customs union leaves the UK as a rule-taker, like Norway and Switzerland, which comply with reams of EU regulations but have no voice in their preparation. This “sovereignty” argument was a key motivation for many leave voters – probably second only to immigration. The Brexiteers know that a soft exit will satisfy neither the Remainers nor the Leavers. It is the only path that makes economic sensse, but Brexit has never been about economics. The decision to leave is a clear decision to compromise economic well being in exchange for something else.

But talk of hard Brexit is likely a red herring. Whilst there is a political argument in favour of hard Brexit, the idea of financial services losing passporting rights, scientists being stripped of all EU projects and funding, and possible WTO tariffs on UK exports is nuts. Simply impossible. So why do this? It makes sense to show the world that the UK is ready for the shock-therapy that is hard Brexit for one reason – to (try to) gain negotiating strength. The UK government still hopes to have its cake and eat it – controlled immigration coupled with free market access. Only by being prepared to sacrifice free market access can it hope to leverage a solution on migration.

The problem of course is that the EU won’t compromise on core principles, nor should it. This raises the possibility that hard Brexit could become reality. But here too the government has forged an “out,” in the form of a parliamentary vote to evoke the 1972 European Communities Act. The government is no longer pretending it can exit by simple use of the Royal prerogative, and will give MPs a chance to block economic suicide.

The Battle We Face
So, finally we can see the battlefield, and start to plan how to fight. MPs voting for hard Brexit would essentially be turkeys voting for Christmas. Chancellor Hammond can say that the government will support the UK economy through Brexit. But that would barely be possible under soft Brexit, under hard Brexit it is laughable.

So, now the path is reasonably clear: The government preps to negotiate soft Brexit, gaining control of migration, but not losing Single Market access, and makes clear that its best alternative is hard Brexit. The a-plan won’t fly, because the UK is far more dependent on the EU than vice-versa (trade 101, well understood by everyone except David Davies and Liam Fox the men responsible for EU and trade negotiations) and because EU sustainability depends on protecting core principles. Politicians need to be made aware that the b-plan won’t serve their careers any benefit either.

We have until the next Queen’s Speech to prepare. What to do?

There are two lines of battle the Lords and the Commons. The Tories only have a 16 man majority in parliament, and across the political spectrum, most MPs understood that Brexit was a bad idea. We need to go constituency by constituency, figuring out which MPs will vote on conscience against Brexit, and which might be persuaded to do so. Then work, one at a time, on each of those potential national heroes.

And we must work on the House of Lords too, here it should be easier. And it is equally important. If the government manages to squeeze its legislation through Commons by a sufficiently narrow majority, then the Lords will be confident to block and force a re-think. Just one return to the Commons would likely be enough to embolden nervous MPs into doing the right thing.

In short, these look like dark times. Winter appears to be looming before the UK, economically, socially and culturally. But not all is lost, the path ahead is at last becoming clear, and the chances of keeping the UK in the 21st century, as a world leading nation are great!