May 302017
 

Former MEP Andrew Duff is credited with the formulation of “Article 50”. He has written a fascinating 4-page discussion paper entitled Brexit: Time for plan B for the Brussels-based European Policy Centre.

The likely disagreement

He analyses the diametrically opposed negotiating positions of the UK and the EU27 (links to which I included in my blog post yesterday). He reminds us of Theresa May’s vacuous ‘No deal is better than a bad deal’ soundbite, which is as uncosted as the Conservative party manifesto.

He concludes that the talks between the UK and the EU27 could break down before they reach the end of Phase 1 – namely “sufficient progress” being made on agreeing the principles of the three key issues regarding citizens’ rights, the financial settlement and maintaining a soft border between Ireland and Northern Ireland.

“No deal”

In that case, the UK would leave the EU at midnight on 29 March 2019 (2 years after Theresa May’s Article 50 notification letter) without any agreement or transitional arrangements. You only need to look at the trade data to realise that the UK would have a lot more to lose than the EU27 if this were indeed to happen.

In 2014, total exports of goods and services to the EU were £228,893 million and total exports of goods and services worldwide were £515,191 million. This made exports to the EU 44.4% of the total. The US is our next biggest export market, accounting for 17% of the total. – The Pink Book, Office for National Statistics, October 2015, Table 9.3.

From midnight on 29 March 2019, the UK would then trade with the EU under WTO rules. The implications of that were set out in the UK Government’s pre-Referendum paper Alternatives to membership: possible models for the UK outside the EU :

  • WTO rules represent a minimum threshold. It would be the most definitive break with the EU, offering no preferential access to the Single Market, no wider co-operation on crime or terrorism, no obligations for budgetary contributions or free movement of people.
  • If we did not manage to secure an agreement on better terms, we would be forced to revert to this model. This would cause a major economic shock to the UK, with serious consequences for companies, consumers, jobs and prices.
  • The UK would face immediate and heavy costs to our trading relationships, both with the EU and with the wider world. If reciprocal tariffs were introduced on imports from the EU, these goods would become more expensive.
  • UK nationals would not have the rights that they currently enjoy to live, work and travel in the EU.
  • Under WTO rules neither the UK nor the EU could offer each other better market access than that offered to all other WTO members.
  • Our privileged access to 53 markets outside the EU through the EU’s Free Trade Agreements would be terminated. We could seek to negotiate new agreements, but this would take years. It would be difficult to replicate the terms that we currently enjoy.

Moreover, the UK would no longer be a member of the European Investment Bank and, if it fails to pay what it owes to the EU, which other country is ever likely to trust it with a trade deal?

The rosy ambition of the Leave campaigners for the UK to negotiate trade agreements with its former colonies presumes that the latter have forgotten their past, usually-unhappy experiences under UK rule. Shashi Tharoor’s comments at the Oxford Union a couple of years ago (see the 15-minute video above) illustrate why these former colonies fought for their independence from the UK to “take back control”.

Even Brexit Minister David Davis has said that “If we fail, the consequences for working people will be dire.”

The only plan B which could save working people in the UK from Theresa May and Jeremy Corbyn

At a live event in Brussels earlier this month, Martin Selmayr, the Head of Cabinet of European Commission President Jean-Claude Juncker, was asked (see the video of the event from 43:15) whether a new UK Government could withdraw the Article 50 notification made by its predecessor. His reply was that it could not be withdrawn unilaterally without the agreement of the other Member States but that, if that situation were to arise, the other Member States would probably not insist that the notification could not be withdrawn.

For the UK, this would seem to be the only viable Plan B which would be in the best interests of the country. After a Referendum called in the best interests of the Conservative party (not the country) and a General Election called in the best interests of the Conservative party and Theresa May (not the country), this plan B could only happen if there is a majority of anti-Brexit MPs elected to the House of Commons on 8 June.

Come to think of it, since neither Theresa May nor Jeremy Corbyn seem to have much of a plan for Brexit, shouldn’t this be the UK’s plan A?

May 302017
 

I was born and grew up in London. I used to love it. I still love London’s theatres but many other aspects are no longer what they used to be – at least for me.

The beginning of the end

I think the decline started long ago, when both schools and parents stopped teaching children any values and focused instead on mechanical learning and testing. It accelerated when David Cameron decided to call a referendum on EU membership purely to try to settle a split within the Conservative party. More recently, Theresa May’s strong and stable promise to leave both the Single Market and the Custom’s Union with the sole objective of reducing immigration seems set to make the UK an even less pleasant place to live or even visit, let alone do business with.

UK Government – consistently clueless

All we know about the UK position comes from:

  • Theresa May’s Lancaster House speech (17 January 2017), setting out the UK’s negotiating objectives;
  • The UK Government’s White Paper (2 February 2017) on its “vision” for a new partnership with the EU; and
  • Theresa May’s letter to European Council President Donald Tusk (29 March 2017) triggering the start of negotiations under Article 50 of the Treaty on the Functioning of the European Union.

The two-line European Union (Notification of Withdrawal) Act 2017 does not say much, supposedly to avoid tying Theresa May’s hands in the Brexit negotiations. Apart from this, we had heard for six months that ‘Brexit means Brexit’ and lately that she wants to “make a success of Brexit”. The wishful thinking of the Leave campaign that a UK outside the EU would be able to have its cake and eat it was continued by David Davis, Boris Johnson and Liam Fox as Ministers. Personally, I found this extremely amateurish and clueless.

All this waffle has already caused a lot of uncertainty for anyone or any business based in the UK and for UK citizens based elsewhere in the EU. The pound is still worth 10% less against the euro than it was on the day of the Referendum. That is before any Brexit negotiations have even started.

The EU27 negotiating position

Unlike Theresa May, the EU27 (ie, the group of European Union Member States other than the UK) and the European Commission have decided to be completely transparent about the Brexit negotiations. Perhaps ironically, the UK Referendum result and the election of Donald Trump in the US have led to greater unity between the other EU Member States (as German Chancellor Angela Merkel noted yesterday).

Apart from the timeline, here is what we know so far about the EU27 negotiating position:

The clear line is that “sufficient progress” needs to have been made on agreeing these principles with the UK before discussions on other areas would begin.

The future of the UK?

The Leave campaigners claimed that the UK would be better off trading with countries other than the EU. In case you had forgotten what they told us, here is the leaflet put out by our local Conservative MP at the time of the UK Referendum last year.

The Leave campaigners conveniently failed to mention how long it might take or that the UK could not negotiate trade agreements with countries outside the EU until after the UK has left the EU. They also forgot to say that the UK would not be the 5th largest economy in the world without its EU trade. The UK already fell behind India soon after the Referendum because of the 10% drop in the value of the pound.

Another thing the Leave campaigners didn’t mention is that the UK would need to recruit a lot more civil servants to carry out the tasks currently carried out by the “unaccountable bureaucrats in Brussels”.

Could the General Election on 8 June change this?

From these UK and EU27 negotiating positions, you can already see where the areas of disagreement are likely to be if Theresa May wins the predicted landslide majority on 8 June. Given Labour’s plan to control immigration, the destiny of the UK probably would not be very different if they win either.

The Government had already predicted the economic consequences of a Leave vote in its pre-Referendum leaflet. It had not predicted the dramatic rise in hate crime fuelled by the anti-immigration rhetoric of populist politicians or the collapse of the NHS when its tens of thousands of non-British staff decide to leave the UK to work somewhere they feel welcome. If most people really vote for either Conservatives or Labour, as the opinion polls are predicting, all this seems likely to become the reality.

With this perspective, I don’t really see that the UK will have much of a future – or at least one that I would still want to be part of.

Of course, there are the consistently anti-Brexit political parties like the Lib Dems, Greens and SNP. For them to do well, a lot of people in the UK would need to vote as recommended by the ‘Best for Britain’ tactical voting campaign led by Gina Miller. I really hope they do. Otherwise, the UK will become a country where, as Tagore observed in his Nationalism in the West speech in 1917:

“… the people are hospitable but the nation has proved itself to be otherwise, making an Eastern guest feel humiliated to stand before you as a member of the humanity of his own motherland.”

%d bloggers like this: