Tuesday 17 January 2017

The end of ambiguity: May announces hard Brexit

After months of ambiguity, hints and counter-hints, Theresa May has given a clear statement about what the government seeks from Brexit. I had expected that the speech would retain some ambiguity and wriggle room. It did not. She came out unequivocally for hard Brexit and in particular clearly stated that Britain will leave the single market. Instead she will seek a free trade agreement with the EU. Regarding the customs union, she envisages some re-negotiated partial membership which would allow the UK to make trade deals but would keep point of origin rules. That, by the way, almost certainly explains why Nissan was persuaded to re-invest after last year’s secret deal. The only slight softening of hard Brexit was, first, to promise a parliamentary vote on the outcome of the negotiations (though what a ‘no’ vote would mean is unclear) and, second, that she would seek a phased transition to the new arrangements (already being criticised by UKIP and, anyway, dependent on EU agreement).

How this position, whilst clear in itself, will play out is another matter. What can actually be agreed with the EU and in what time frame, especially as regards a free trade agreement, will not be clear for many months if not years. All of the objections to and difficulties with this course of action remain. And although her speech struck a conciliatory vote as regards the EU it contained scarcely veiled threats to them as well, including the possibility of launching a corporation tax war and withdrawal of intelligence co-operation.

In effect May has decided that controlling immigration from the EU matters more than economic prosperity. It remains to be seen how the electorate will react to this when the effects become clear, as with rising inflation is now beginning to happen. And it is not just a matter of economic effects. By this decision, British people have today been definitively told that they will lose their rights to free movement and will soon find that living, studying or retiring in Europe have got much harder. Even holidaymakers may end up needing visas. In the meantime, those already living in other EU countries, like EU citizens here, are stuck in limbo.

Mrs May ended her speech with a call for national unity, regardless of how people voted but her speech made that a remote prospect. By now clarifying her position she has also clarified her complete contempt for those who voted to remain and indeed many who voted to leave. For it was never the case that voting to leave the EU necessarily meant voting to leave the single market. Many leave campaigners explicitly said that it did not, others fudged and obfuscated the issue.

So the government have chosen to interpret the vote to leave in the most extreme, disruptive and divisive manner possible, with no concession whatsoever to the almost half of voters who voted remain, to the majority who did so in Scotland and Northern Ireland, to the majority of people who favour staying in the single market ahead of immigration controls, or to the majority of MPs who also do. It is just about conceivable that the latter will derail the government’s plans, but that seems highly unlikely at the moment. Much depends on whether remainer MPs are willing to be as ruthless as their leave counterparts would certainly have been were the situation reversed, something made much more difficult by the lack of a coherent opposition policy (and, bizarrely, Labour Brexit spokesman Keir Starmer has said that May’s speech means she has “ruled out hard Brexit”!).

Instead of seeking any sort of conciliation, the Prime Minister has backed the hardline Eurosceptics in her own party and in UKIP. She has that right, of course, but in exercising it she cannot reasonably expect those she is treating with such disdain to support what she is doing.

[For more analysis of today’s speech, see excellent discussions by Steve Peers on the EU Law Analysis blog and by Ian Dunt on the Politics.co.uk site. The implications for trade, specifically, are explained by Billy Melo Araujo and The Conversation site.]

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