As the EU finalises its negotiating guidelines, it's time for Brexiters to get real

The future of Britain is going to be shaped to a far greater extent by Saturday’s EU-27 Council meeting than it will be by the June general election. That is one of the many ironies of the Brexiter mantra of ‘taking back control’, because whilst the chain of coming events was begun not by the EU but by the British referendum, the shape of those events will be very much down to the EU.

So insular has the discussion in the UK been before and since the referendum that one might think that Brexit is simply a matter of the UK formulating its demands. The EU will then fall into line because ‘it’s in their interests’ or ‘it’s in Germany’s interests’ or even because ‘it’s in German’s car industry’s interests’; and anyway because ‘we’re the world’s fifth largest economy’. There are many versions of this wishful thinking, all of them completely devoid of any understanding whatsoever of how the EU – or the world in general – operates. If it was how they think, then Britain would never have left the EU, since doing so is so far at odds with both our national and business interests.

It’s true that in the immediate aftermath of the referendum Britain might have been able to pursue a soft Brexit of single market membership. That would have taken considerable diplomatic and political skill, but it might have been achievable. Instead, everything the government has done since then has had the effect of making goodwill and room for manoeuvre disappear. And not just the government. EU leaders (and their electorates) see and have disdain for the infantile headlines of the Brexit press, and they don’t simply laugh off Farage’s oafish rudeness, on the odd occasions he turns up at the European Parliament, or Johnson’s boorish buffoonery about ‘prison guards’ and ‘Prosecco exports’.

So whilst Britain has been engaging in an orgy of stupidity and insularity, the EU has, almost since the day after the referendum, been quietly and consistently developing its stance, as explained in this excellent three-part summary of the EU’s position by David Allen Green of the FT. It is a stance that has changed very little from what was indicated before the referendum, and every leave voter who cared to could have known in broad terms what it would be. None of them can say there was no warning.

The time for wishful thinking, gutter press headlines and vapid slogans ended when Article 50 was triggered. Since then, Brexit has come face to face with reality. Donald Tusk’s immediate response was polite in tone, but uncompromisingly plain in content. Primary issues to agree would be the rights of EU citizens in the UK, the (or at least the methodology for calculating the) British exit bill for commitments already made, and Northern Ireland. Exit terms would have to be, at least, progressed first to a degree acceptable to the EU (not the UK, the EU) and only then could there be the beginning of talks on future terms, including trade. Interestingly, almost immediately the British government accepted this definition of process, even though it was exactly the opposite of what they had set out in the A50 letter, and the implications for the time frame for a trade deal that went with it. Reality bites #1.

The European Council draft negotiation guidelines in full contained greater detail, but no surprises save for the mention of Gibraltar (which I have discussed elsewhere), including emphasis that no sector-by-sector single market membership would be envisaged and that no bilateral talks between members of the EU-27 and the UK would be allowed. Again, both of these had been hoped for and even expected by the government which, again, almost immediately accepted that it would not be so. Reality bites #2.

Unless Saturday’s meeting produced something unexpected (and reports of the Luxembourg pre-meeting today suggest not) we already know that it will be likely to endorse the draft guidelines, albeit that leaks suggest some hardening, especially on financial services and on the issue of EU nationals in the UK. On the latter, this is likely to include a requirement for a quicker and simpler citizenship process and the guarantee of their legal rights. There is a particular, and instructive, symbolic importance to this. The EU is negotiating for itself and its citizens. That should seem obvious, but it points up both the determination of the EU to negotiate en bloc, and the fact that this is not going to be like all the EU negotiations of past decades where the UK has been negotiating as a member state and, very often, able to shape the nature of the EU. Now, there are very clearly two sides across the table. Reality bites #3.

The fundamental underlying issue is one that almost every EU spokesperson has made clear before and since the referendum. There will be no deal agreed by the EU in which Britain has a better situation as a non-member than it would have as a member of the EU. That logic is simple and understandable. But that does not mean that Britain has nothing to negotiate for – there are better and worse versions of a 'less good' situation than membership.

There are two great dangers for Britain now. One is that key parts of economic and social activity simply pack up and go without waiting for the outcome of the negotiations, with long-term and serious consequences. There is already evidence of an academic brain drain, with all that that implies for British pre-eminence in research, especially scientific and medical research, and its very successful university ‘export business’. Likewise, plans to move financial services jobs out of London are proceeding apace, with all that that implies for the already very eroded and fragile UK tax base and, hence, for public services.

This first danger might be minimised if the second one is avoided. To put it bluntly, Britain – and Brexiters in particular – have got to get real, and quickly. The crazy reaction to the mention of Gibraltar in the draft guidelines is an object lesson in what needs to be avoided. In particular, the danger now and in the coming months is that Brexiters in politics and the press whip up the idea that the EU is ‘punishing’ Britain for leaving. That is nonsense, and as Tusk and others have repeatedly said there is no need for punishment: Brexit is punishment enough. Brexiters of course will disagree and see Brexit as no punishment at all. Fine, but in that case accept that leaving means leaving, and that the EU will pursue its own interests which do not, now, include us, and drop any talk of being punished for a decision that you made with all the facts available to you.

This is a big ask of Brexiters, because it goes against the victim mentality that propelled them to victory in the referendum. But they need to own that victory now. They frequently complain that ‘remoaners’ are talking down the country and seek viciously to silence them. But the real damage to the country comes from Brexiters refusing to deal in a detailed, pragmatic way with the consequences of the choice they have made. Every screaming headline and every bellicose punch-drunk interview from a Brexiter politician damages us more. Taking back control requires, first, a degree of self-control and, second, an acceptance that having, in their terms, done so by winning the referendum, they now have to face the realities of what it means.


Update (30 April 2017): Finalised guidelines did, indeed, change little apart from those areas expected. In the meantime, Theresa May's talk of the EU-27 'lining up' against UK indicative of exactly the 'punishment' rhetoric I warned of.

The Brexit election: where the opposition parties stand

It seems almost inevitable that the Tories will win the election and, probably, with an increased majority. But that is not certain. This is an election like no other, for many reasons. The scars of the referendum are not healed and, as happened in Scotland after the independence referendum, that can have big effects. Moreover, each of the main parties is positioning itself away from key elements of its core support: Tories by pursuing a Brexit agenda that liberal and pro-business Conservatives don’t endorse; Labour with a hard Left and apparently Brexit-acceptant agenda that centrists don’t want. The statistics are clear enough – 40% of 2015 Tory voters voted remain (and more than that will have envisaged soft Brexit); 65% of 2015 Labour voters voted remain.

There are many other factors in play. Party allegiance amongst voters has been breaking down for years. Some potential Tory voters will be upset by May’s reaffirmation of the overseas development budget and lack of reaffirmation of the pension triple-lock and the commitment not to raise taxes. Others will assume a Tory victory is inevitable, and so will not vote. Others still may find May’s socially awkward and distant campaigning style unappealing and, possibly, the prospect of a triumphalist win against the Labour underdog distasteful. Then again, many who voted leave are not habitual voters at all – some even believe that the referendum means that Britain has already left the EU - whereas many who voted remain are highly motivated to vote in this election, and will do so tactically to bolster their cause. It’s also unclear to what extent 2015 UKIP voters will switch to the Tories in support of hard Brexit, stick with UKIP out of mistrust of Tory Brexit credentials, or just not vote at all.

There are many possibilities and permutations, but my sense is that it is just possible that the result will not be the Tory landslide expected (we’ve certainly seen enough in recent months, from Brexit to Macron, to be wary of predictions). Whether this is true or not, what is the case is that those elected to the new parliament will be able to claim a mandate to argue for the policies they were elected on. This means that it matters what stance they take in their manifestos as it will shape what kind of freedom of action they have in the new parliament, whatever its composition.

For Tories – depending on what they say in their manifesto – that may mean being tied to the White Paper version of Brexit and make it more difficult for them to argue for a ‘no deal’ crash exit, as I argued in my previous post. Labour’s position is much less clear and – surprisingly, given the recent history of the Tory party – much more anguished. Today, their Brexit spokesman Keir Starmer has tried to clarify it, but it remains obscure and muddled (see this excellent analysis from Ian Dunt) except for offering an immediate guarantee of rights to remain for EU nationals in the UK and commitment to some of the non-market EU institutions such as Euratom.

Starmer appears to be saying that Labour would leave all negotiating options on the table, rather than following the government’s policy of ruling out single market and customs union membership. That is not unreasonable, but at the same time he is saying that Freedom of Movement of people must come to an end. If so, that makes single market membership impossible. It is just possible that what he has in mind is some negotiation of more stringent EEA emergency brake rules on immigration. That is a possibility that I outlined in an early post on this blog and, even now, it may have some mileage. Then again, the EU’s position is probably harder and less flexible than it was – partly because of the way the government has conducted itself, although a new government might have space to shift that. But Starmer isn’t, in any case, saying in terms that this is what a Labour government would seek and it’s only a possible reading of what he is implying.

Moreover, it remains very unclear whether Corbyn and McDonnell are on board with it. Corbyn says virtually nothing about Brexit and last week McDonnell was waffling on about seeking ‘tariff free access’ to the single market which goes nowhere near the issues that even the government seems, belatedly, to have understood about non-tariff barriers and regulatory harmonization. Starmer at least seems to understand what the issues are even if his articulation of them is so strangulated as to be all but incomprehensible – presumably precisely because his party leadership either does not endorse or does not understand those issues. The strong suspicion is that the leadership retain the traditional Bennite hostility of their wing of the Labour Party to the single market. And whatever their policy now, having voted to trigger A50 their anti-Brexit credentials are weak.

The LibDems Brexit policy is much clearer, but it has its own problems. They want a referendum on the final deal with the option not just of seeking a further negotiation but of reverting to EU membership. But this is less plausible than it seems. Firstly, because at the moment it is not clear whether A50 is reversible. And even if it turns out, legally, to be so, what would that mean politically? Could either the UK or the EU at the end of a long, complex and very likely acrimonious set of negotiations simply go back to the status quo ante of not just EU membership but all of the particular UK aspects of it (e.g. exemptions from Euro, Schengen)?  So even were there to be such a referendum, then assuming a Tory government the choice will be between the deal on offer or no deal at all. Since no deal at all would be catastrophic, the only viable option will be to vote for the deal on offer, no matter how bad for the UK it may be.

Thus a far more viable position to argue for would be a second referendum before negotiations get started. The argument would be something like this: ‘in June 2016 the British people voted to leave the EU. Even when you buy an insurance policy you are allowed a cooling-off period. The decision to leave the EU is a major one for our country. So we want to check that it is the decision you want and will hold a second and final referendum asking you again. But, also, last year's referendum did not ask you what you wanted to happen afterwards, so we are asking you that as well: specifically, do you want to stay in the single market or not?’

If that seems impossible given what the LibDems have already said about accepting the result of the 2016 vote then, at the very least, a more viable position than the current one would be to say: ‘in June 2016 the British people voted to leave the EU and this will be happen. But you were not asked what you wanted to government to negotiate for you after leaving, so we are asking you now whether you want to leave the single market or not?’

Clearly it is implausible that at this stage, when manifestos are being drawn up and their message has already been framed, the LibDems will change their policy in this way. Nevertheless, seeking an early vote on whether to pursue single market membership makes more sense than a late vote on exit terms. The same applies to the Greens, the SNP (although for them the issues involved are different and, in particular, bound up with the case for a second independence referendum) and other parties (such as Plaid Cymru, UUP, SDLP) which seems to want to retain single market membership on leaving the EU.

The tragedy in all this, as I have argued many times before on this blog, is that remaining in the single market and customs union would have been the most consensual and sensible way of responding to the very close referendum result whilst also honouring it. If David Cameron’s decision to call the referendum was the greatest strategic error of any modern British Prime Minister, Theresa May’s decision to interpret the result in such a partisan and damaging way must run it a close second. This election will - most likely - cement that decision, but the way that the other parties frame their stance now will shape what kind of opposition she faces.

The Brexit election: ultras beware?

Like most political surprises, the decision to call a general election already seems entirely predictable if not inevitable. It is not just the irresistible prospect of smashing the Labour Party whilst it is in chaos, it is also the possibility of killing off the UKIP threat that has haunted the Tory party for years. The latter, in fact, is one obvious dividend for Theresa May’s Damascene embrace of the hard Brexit cause. And of course a fresh election would free the government of the 2015 manifesto pledges which place so many constraints on fiscal policy.

What is less obvious is how the election relates to the Prime Minister’s overall Brexit strategy. Her stated aim of overcoming parliamentary opposition to Brexit is manifestly absurd. There has been very little such opposition and the government has easily overcome it. The sources of that opposition in the Commons, the SNP and the LibDems, will be likely to remain or even possibly to increase as a result of the election. The House of Lords might be slightly less willing to use what limited power it has in the aftermath of a general election, but as the Article 50 vote showed it was in any case reluctant to do so. As for Labour, their position insofar as it can be understood at all, seems to be identical to May’s in terms of leaving the single market and the customs union and, certainly, to present no challenge to the government at all.

Nevertheless, many Tory politicians as well as the Brexit press seem happy to parrot the line that what is in prospect is the crushing of Brexit ‘saboteurs’ and the ‘silencing’ of dissent. And, no doubt, this latest grotesque outbreak of what I have called elsewhere Brexit McCarthyism would appeal to the PM if it were likely to be successful. Her basilisk-like appearance during the House of Lords debate is testimony to that, as is the extraordinary and unnecessary length she went to in attempting to avoid an A50 vote. But she must be aware that the reasons she has given for the election don’t make any sense in terms of Brexit opposition. Instead, it’s the things that she can’t say that make her decision explicable.

As with so much else in the story of Brexit, what is at stake is the internal management of the Tory party’s longstanding splits on Europe. The smallness of the majority makes these, rather than the opposition parties, the problem. And that problem lies not with the Tory remainers, who have failed to win any concessions and been routed already, but with the ultra Brexiters. May has found, as did Cameron before her, that they cannot be appeased. Once, they just wanted to leave the EU but stay in the single market. But on winning the referendum that was not enough. Thus May embraced the hard Brexit of leaving the single market and seeking a trade deal but now finds that the ultras are pushing for no deal at all.

More specifically, ever since the White Paper was published I have thought that May’s Brexit strategy would in due course run into problems with the ultras. As I wrote at the time, the plan seems to be to re-create by different means (and at great expense) many features of the single market, and since then even the commitments on immigration seem to have been softened. Moreover, May now seems belatedly to have realised that there will have to be some form of transitional period between leaving the EU at the end of the two year A50 period and the beginning of any new deal, and to have accepted that the EU will not enter into parallel ‘exit and future’ talks. The ultras have been muted about this so far, but when the negotiations begin – especially as the first item is likely to be the exit bill – this will not last. They will then start pushing hard for the ‘no deal’ scenario that May once also entertained but has now apparently retreated from, presumably having realised that it would be an economic doomsday for Britain.

So the (for May and the Brexit press) unsayable explanation of the election is to undercut the ultras before they can undercut the government. Having campaigned and presumably won an election on the basis of the White Paper plan and not the ‘clean Brexit’ (aka ‘no deal’) which UKIP will campaign on, the ultras will find it harder to oppose May when she pursues that plan. And if, as expected, she has an increased majority then it will be difficult for them to succeed if they do try to oppose her. That assumes that the new Tory MPs are not also ultras but even if they are, junior and ambitious MPs are much easier to control than the old salt veterans of the Maastricht debates, especially by a newly installed, dominant and, reputedly, loyalty-obsessed PM.

This interpretation of what the election means is shared by many within the EU and also within financial markets, who believe it makes a softer Brexit more likely. These terms are relative, of course, in that ‘softer Brexit’ now means what used to be called hard Brexit, but it is softer than the ultra-Brexit position. This is why the pound, which has directly tracked every soft versus hard signal since last June, rose after the election was announced.

None of this is good news, except in the limited sense that indicates that May is trying to avoid the very worst case scenario that the ultra-Brexiters would force on her if they could. This seems consistent with the more general sense in recent weeks that May (and David Davis) are getting more realistic about the immense difficulties and dangers of Brexit. The plan – which the EU may or may not go along with – is a fudge which will leave both committed remainers and leavers dissatisfied but which may well be sufficient to keep the Tory party together and to satisfy enough of the electorate that Brexit is being pursued in a way which they can support or at least live with.

In that limited, tactical, sense May’s decision is an adroit one. But it may backfire. For one thing the outcome of the current election cannot be absolutely guaranteed – especially if the turnout is very low. In some ‘safe’ Tory seats where the remain vote was high, the LibDems might win and, more generally, it shouldn’t be forgotten that some 40% of those who voted Tory in 2015 also voted remain; nor that many leave voters are not habitual voters in general elections. That is highly unlikely to prevent the Tories winning but it’s certainly conceivable that the net result does not increase the government’s majority by very much. If so, May will have lost one very strong option in her arsenal as the negotiations progress, since it seems inconceivable that she could call another election within the A50 period. The ultras would then be in a strong position. On the other hand, if the outcome is a large increase in the Tory majority and if my analysis here is correct then it is a pleasing irony to think that the saboteurs May is seeking to crush are the ultra-Brexiters who are currently so enthusiastically supporting her.

How long will a Brexit trade deal take?

The most remarkable Brexit development this week has attracted surprisingly little attention. Interviewed by Faisal Islam of Sky News during her visit to Saudi Arabia, the Prime Minister revealed a key fact about the forthcoming negotiations. Namely, she indicated that there was no prospect of a trade deal with the EU being signed within two years, and that if and when it happened it would be with the UK as a third party (i.e. outside of the EU) rather than as part and parcel of the Article 50 negotiations. This means, in turn, that it will fall under a different process which requires unanimous ratification by EU member states, rather than the qualified majority of the Council (plus simple majority of the European Parliament) needed to agree the exit terms.

In one way, this is, indeed, not newsworthy. Anyone with any real familiarity with the issue already knew that this was how things would be, and it was heavily trailed by the EU during the referendum campaign and since. Article 50 only covers the exit terms (albeit “taking account of” the shape of future arrangements) and it would actually have been quite conceivable that no trade talks would even begin until after these had been settled. In fact, the EU position on this has turned out to be relatively soft, with the Council (and now the Parliament) agreeing to begin talks on future trade once they judge that ‘sufficient progress’ has been made on the exit terms negotiation.

However, what makes Theresa May’s interview remarkable is that hitherto she and the government had at the very least implied that exit and trade talks would be completed within two years, and certainly had asked in the Article 50 letter that they would occur in parallel from the beginning of the Article 50 period. It’s true, as Ian Dunt – one of the few journalists to have picked up on the full significance of the Sky interview – notes, that May had been rather ambiguous in the past. She had talked of ‘reaching an agreement’ within the two years which would then take longer to implement. That could, at a pinch, mean just the outlines of an agreement but, as Dunt points out, implementation could not begin until agreement had been completed. So the strong implication was undoubtedly that pretty much everything would be agreed within the two years. That is now ruled out, as are parallel talks from the outset of the process.

Whatever ambiguity there may have been in the government’s position until now, there is no doubt at all that Brexiters claimed – both before the referendum and since – that a trade deal, and moreover an advantageous trade deal, would be easy to achieve, and in less than two years. For example, last October Boris Johnson claimed that 18 months was “absolutely ample” to get a “great deal”. As recently as 30 March veteran Eurosceptic Peter Lilley said that “there’s no reason why it [a trade deal with the EU] should take more than ten minutes”. Even taken as a figure of speech that is clearly absurd. Similarly, as I have pointed out in another post, many leading Brexiters including Lord Lawson, David Davis and Peter Hargreaves all indicated during the campaign that a quick trade deal was not just possible but virtually guaranteed.

That this is now demonstrably untrue is extremely important. During the referendum campaign voters were repeatedly told that trade could be protected and that to say otherwise was ‘Project Fear’. Most mendaciously of all, the Vote Leave campaign actually promised voters that a new deal would be agreed before the legal process to exit was started. They were misled, as on many other things, and that matters in itself. It also matters because the length of time it will take and the uncertainty about the terms on which it will happen, if at all, directly affect companies’ willingness to invest and their decisions about relocation. In many cases, as is being seen in the financial sector, relocation processes take a long time and must therefore be decided on well before any completion of trade negotiations. With those relocations go jobs and taxes.

So now that May has acknowledged that there will not be a trade deal in two years, how long will it take? People are still being misled. The Daily Mail report of the PM’s comments was that there would be deal 'ready to sign' at the end of two years. But that is very clearly not what she said or implied. The best estimate would still seem to be the two to ten year period which Sir Ivan Rogers was hounded out of office for reporting in January. He has since suggested that a ratified deal by the mid-2020s is likely. It is worth noting that at the same time he predicted that the EU would not allow a sector-by-sector single market deal, and that has now been proved right by the EU Council’s draft guidelines.

Brexiters like Peter Lilley and Lord Lawson often argue that this deal can be much quicker than a normal trade deal because standards and regulations are already harmonized between the UK and the EU and it is this which takes the time in trade negotiations. But that misses the point that, precisely, this will not be a normal trade negotiation. Normally, the intention is to improve the ease of trade. This time, it is to erect barriers. If the Brexiters mean that the UK can in effect stay in the single market in every way except for freedom of movement of people and CJEU jurisdiction then they have misunderstood what the EU means by ‘no cherrypicking’. The points of long dispute will not be about current standards harmonization, they will be about, primarily, future standards harmonization, dispute resolution systems and possibly a preferential immigration system for EU citizens. Of course that could be shortened simply by agreeing to the existing system – which would mean staying in the single market! But that, of course, has been rejected by the government. Moreover, because this deal will need unanimity there will have to be votes in all national and some regional parliaments before ratification. That all takes time and can be unpredictable, as the recent CETA experience has shown.

So for all these reasons the Rogers’ estimate of timescale still looks reasonable. This, then, means – and May, again, seems to have conceded it is so – that there will be a long period during which the UK remains within the single market, under CJEU jurisdiction and with freedom of movement. It will not be a ‘no deal better than a bad deal’ WTO scenario, as talks will still be ongoing. An additional aspect of this is that it will also mean that the UK is still in the customs union and, therefore, that no new trade deals with non-EU countries can be signed in the interim. How long the interim will last is impossible to say. The EU Parliament this week suggested a maximum of three years. I suspect that that could be negotiated to be longer but even if not it still takes us to 2022.

If so, that is well beyond the 2020 General Election and it is by no means inconceivable that an interim period would even go beyond the 2025 General Election; some have suggested a seven-year EEA interim after completion of EU exit in 2019, taking us to 2026. The political consequences of that are very difficult to imagine or predict. One is that since the UK will have left in 2019 it will no longer have any representation within the EU and certainly no MEPs in the European Parliament (a strange and ironic way of ‘taking back control’).  How will Tory Eurosceptics react? Will the Tories even be in power, and if they are will Theresa May still be PM? What will British politics and attitudes to Brexit look like in 2020, let alone 2026?

To get a sense of how much things can change in such a time frame, just suppose that the interim period did go on until 2026, ten years after the referendum. Then consider what was happening in 2006, ten years before the referendum. That was when David Cameron in his first conference speech as Tory leader warned his party to stop “banging on about Europe”. O tempora! O mores!

Lessons from Gibraltar

The response in the UK to the EU Council’s draft negotiation guidelines has been instructive. Most attention has been focussed on the paragraph (22) relating to Gibraltar, to the effect that no UK-EU Brexit agreement will apply there without the agreement of Spain*. This gives Spain a powerful voice in the Brexit negotiations and calls into question the sovereignty of this disputed territory, as well as indicating that the EU is likely to side with Spain in that dispute. Gibraltar, which voted overwhelmingly to stay in the EU (and, in a previous referendum, to stay in the UK) is significant not least for being the only part of the UK other than Northern Ireland to have what on Brexit will be a land border with the EU. (Readers of the blog will have been alerted to this facet of Brexit, as I pointed it out in my post in last October; for a detailed briefing on the quite complex issues relating to Gibraltar and Brexit see this report by Joe Carberry and Jonathan Lis).

The first instructive point is that, although it was certainly not a major issue during the referendum, the dangers of Brexit for Gibraltar were pointed out by the Remain campaign. In May 2016 the then Foreign Secretary Philip Hammond said:

“I genuinely believe that the threat of leaving the European Union is as big a threat to Gibraltar's future security and Gibraltar's future sovereignty as the more traditional threats that we routinely talk about.”

The reaction from Brexiters was furious. Liam Fox, now the International Trade Secretary, was enraged that the possibility should even have been mentioned, saying “I think there are limits to what you can and cannot say in any campaign that goes way beyond acceptable limits” (sic). All this was reported in the Daily Express under the inevitable headline about ‘Project Fear’.

We can now see that Hammond’s concern was well-founded, and that it was perfectly legitimate to raise it. The same, of course, can be said of most of what was dismissed as project fear, as I pointed out in my post on the triggering of Article 50.

Moreover, and this is the second instructive point, whilst Brexiters may have shouted it down during the campaign they cannot do so now. As the slogans and false claims meet reality, reality wins out. The EU have, as a matter of fact, decided to take this line and now it has to be dealt with. No amount of bluster or outrage can change that. Screaming headlines in the British press are not just ineffective against the EU but, even, harden feeling against the UK. So this is, in microcosm, indicative of the entire shift that has occurred as a result of the triggering of Article 50. As I wrote in my most recent post, Brexiters now have to take responsibility for the consequences of their decision.

The EU’s stance on Gibraltar is a lesson in realpolitik. Of course both the EU and individual member states such as Spain are going to seek to pursue their own interests. On the Gibraltar issue, the UK did exactly the same thing at the time of Spain’s accession to the EU in 1986 (insisting on an open border). Brexiters can, and do, decry this as ‘bullying’ and even, in their hermetically sealed logic, as ‘proving’ that it is right to leave. But that doesn’t change anything: welcome to the real world of international relations (to which irresponsible and ludicrous implications by Brexiters of possible military action contribute nothing good).

In fact, although attracting less headlines, the EU Council’s statement in several other ways underscored the reality of the power plays which will now unfold. In particular, the UK’s desire, expressed in the Article 50 letter, for parallel talks on exit and on future trade has been rebuffed. The latter will only occur once the EU deems that sufficient progress has been made on the former, although that is a softer position than insisting on the complete conclusion of exit talks before future talks. Similarly, the Brexiter fantasy of sector-by-sector access to the single market was emphatically squashed, as was the possibility of bi-lateral negotiations between the UK and individual EU-27 states.

None of this, however, makes the EU’s stance ‘punitive’, as this piece by Vincenzo Scarpetto of Open Europe explains, and it should be understood in the context of a negotiation as discussed in this excellent analysis by Peter Ungphakhorn. It just means that the UK cannot dictate terms in a vacuum as Brexiters imagine. Moreover, completely undiscussed as far as I am aware, section five of the statement makes it very clear that whilst the UK remains in the EU it must “remain loyal to the Union’s interests”, something which I suspect in the months to come will become a matter of some significance.

There is another lesson from Gibraltar row. Brexiters always seem to think that dealing with the EU means, primarily, dealing with Germany and to a lesser extent France. But although these are indeed very significant, the EU is an association of member states and is not ruled from Berlin. The failure of Brexiters to understand this grows out of their narrative of how the UK lost sovereignty from EU membership whereas, in fact, the EU was an arena in which the UK (in particular, one might argue) could exercise and magnify its sovereignty. At all events, the coming negotiations will show that each country within the EU-27 will have some degree of influence.

Spain will be especially relevant not just because of Gibraltar but also because of the large numbers of British residents there and because of their stance towards Scottish independence, something, not coincidental to the Gibraltar row one assumes, revised just today. Ireland, for obvious reasons, will also be highly influential, but each member will to some extent have the opportunity to pursue its own agenda within the negotiations. All of the compromises and trade-offs that Brexiters bemoan about EU membership will not cease, but now the UK will face them alone across the negotiating table rather than as a powerful member, with powerful allies, within the EU. In a similar way, having for years mocked the EU Parliament as a ‘rubber stamp’, Brexiters now face the prospect that any exit deal will be subject to the approval of that body which is drafting its own red lines on what is acceptable.

We are going to have years, now, of Brexiter outrage at having to deal with the inevitable consequences of their policy, as if these were not both predictable and, in fact, predicted. Like a toddler’s tantrum, “it’s not fair” will be the repeated refrain when the world proves not to be amenable to their wishes. And this tantrum will not just be about the EU. Brexiters are excited by the possibility of regaining ‘our seat on the WTO’ but whether or not Brexit means ‘trading on WTO terms’ that is going to bring many more encounters with a reality that does not fit with Brexiter fantasies. An early indication of that came last week with a question from Indonesia to the WTO Agriculture Committee about post-Brexit trade issues. The US, Russia, China and Argentina have all “registered an interest” in this matter, which has potentially far-reaching implications for British agriculture. That may seem an arcane matter, but it shows how post-Brexit Britain will have to navigate a whole new world of complexities which will be as much, or more, political than economic. In this sense, too, the furore over Gibraltar is an instructive pointer to what the future holds.

*Note: there is some complexity in decoding what this means. The Sky News political editor Faisal Islam in a series of tweets today has raised the suggestion that its true meaning relates to any future trade deal under A218, rather than to A50 negotiations. This seems consistent with the wording of paragraph 22 of the Council guidelines which speaks of ‘after the UK leaves’ but is also puzzling (to me) in that A218 deals require unanimity anyway, so Spain would have had a veto already. No doubt more clarity will emerge, but at all events the explicit reference to Gibraltar in the guidelines is significant.

Update (4 April 2017): A comment below made me ask myself what the implications for Brexit are for the Channel Islands, something I don't recall having seen discussed. A quick search found this recent report: http://www.itv.com/news/channel/2017-03-23/brexit-to-have-significant-impact-on-channel-islands/

Brexiters are now responsible for whatever happens

The triggering of Article 50 marked, for Brexiters, a moment for rejoicing. It also marked something else: the moment from which Brexiters are entirely responsible for what happens to this country. There can be no equivocation about this. Brexiters can no longer play the victim card. Brexiters campaigned for years to leave the EU, they won the referendum and they now control the process of leaving. Often, they campaigned as if they were underdogs in opposition to the elite and the establishment. But by winning they became the elite and the establishment: it is Brexiters who now run things. The key Brexit posts in the government are filled by committed Brexiters: Johnson, Fox and Davis. So whether they are Alte Kameraden like Farage or March violets like May they are now accountable for whatever happens.

That is something they don’t like, which explains the calls from May for national unity and the more diffuse insistence from Brexiters that ‘we should all get behind Brexit’. They want us all to share responsibility. Well, tough; there is no reason why those of us who voted to remain should do so. Perhaps we might have done. If the Brexit government had pursued a consensual policy of soft Brexit (i.e. remaining in the single market) then there could have been some national unity. Leavers would have got exit from the EU, the ECJ, the CAP, the CFP and from any kind of EU military and foreign policy. Remainers would have got the single market and free movement. Some would have been completely happy, few would have been completely unhappy.

That consensual – perhaps characteristically British – compromise did not happen. So, now, Brexiters are on their own. They are now responsible for every single thing that happens. Every job loss, every company re-location, every price rise is down to Brexiters. And that extends, I’m afraid, to areas that voted to leave. So when, for example, Cornwall or Wales lose their EU funding or when the English regions see unemployment rising it will be no good looking for help. The areas, like London, and the educated group who voted remain won’t be there for you as they once might have been. You stuck two fingers up at them as the ‘liberal metropolitan elite’, remember? They’re not willingly going to bail you out for the decision you took, despite every warning about what it meant.

Perhaps that sounds harsh. But when Brexit goes pear-shaped it won’t just be remainers who abandon leave voters to their fate. Alexander Boris de Pfeffel Johnson (Eton and Oxford) won’t be joining the dole queue. Nor Michael Gove, with his £150,000 a year from the Times. And man of the people Nigel Farage has said that if Brexit is a disaster he will go to live abroad. That won’t be an option for the working-class leave voters he led, especially if they want to move to the EU.

But Brexiters won’t be able to walk away from their responsibilities just yet. With Article 50 triggered they are now in the spotlight. As Jay Elwes, writing in Prospect, put it:

The guesswork, the flim-flam, the nonsense, the evasion, the jingoism—all that ends today. With the handing over of a piece of paper triggering Article 50, the campaign is finally over. No longer are we drifting in a hypothetical space of promises and assertions about the nation’s future, about its bargaining power and ability to “take back control.” All of that is now gone. It’s done. There can be no more tub-thumping statements about what Britain’s future looks like. It’s too late for that now. Reality has returned—and no matter how well-financed your campaign operation, no matter how well-honed your lines of attack or persuasive your arguments, there can be no escape from its unforgiving glare.

We’ll never know now what would have happened if we had stayed in the EU. All we can know is what happens as a result of leaving. And all that will be the responsibility of the Brexiters. In the few hours since the Article 50 letter was delivered one of its key demands – that the exit negotiations run in parallel rather than precede negotiations on the future deal – has been rejected by Angela Merkel. That is not surprising – it was said throughout the referendum campaign that it would be so, but Brexiters dismissed it as part of ‘project Fear’. Now, it is a reality.

That is only the first reality check for Brexiters. In the years to come there will be many more. As they increase, it’s inevitable that Brexiters will try to depict the situation as being a national crisis, in the face of which all must unite. And they are right that it will be a national crisis, but it will be one that was self-inflicted on our country by Brexiters. The rest of us will have no responsibility for it, and no reason to unite. We are the victims, not you.

There will be many remainers today who are distraught, and many leavers who are overjoyed. But perhaps it should be the other way around. From today onwards every leaver is responsible for everything that now happens, and every remainer is entitled to hold them responsible. It has become a familiar trope that remainers must ‘move on’ and accept the result. But by the same token leavers must now move on, and accept the consequences of their victory. Every single leave voter is responsible for every single one of those consequences. Every single remain voter is absolved from responsibility and is entitled to criticise every single consequence of leaving.

Triggering Article 50: A bleak and bitter day for our country

The handing of the letter to Donald Tusk triggering Article 50 marks the end of the beginning of the self-inflicted national disaster that began with the referendum vote. Prior to the vote it had been understood that David Cameron would invoke Article 50 immediately, and it was on that basis that many of the economic forecasts were made. In fact, he resigned without doing so. This had the potential to buy some time for politicians – the majority of whom wanted to stay in the EU – to find some way of avoiding or at least mitigating the stark economic, political and strategic dangers of Brexit.

In fact, that has not happened. The speed with which Theresa May emerged from a chaotic leadership election process may have contributed to this, as she immediately made appointments that seemed to tie the UK into a hard Brexit. Even so, for many months the government’s position was ambiguous and there did seem to be a real possibility that Britain would at least remain in the single market, if not also the customs union. That possibility was rejected in the May’s Lancaster House speech in January and we are now entering a process about which little is known and with an outcome that is completely unknowable.

So this breathing space, which could have been used to build some kind of national consensus in which the divisions of the referendum were somewhat healed, has been irresponsibly squandered. There could have been a soft Brexit which gave most people some of what they wanted and some people all that they wanted. Instead, the most divisive form of Brexit possible is being pursued, one which differs from what leave voters were told would occur as well as being one which remain voters cannot tolerate. May calls for national unity whilst insisting on a policy that makes this impossible. Debate is deemed disloyalty, dissent is deemed treachery. Leading business people and senior statesmen are dismissed as ‘remoaners’, judges traduced as ‘enemies of the people’. The future of Scotland and Northern Ireland is up in the air and the dismemberment of the United Kingdom is a real possibility. Meanwhile, hostility to immigrants has increased and the many European citizens embedded in communities in the UK have been left traumatised and in limbo, as have UK citizens in the EU. So there is already a huge cultural cost, and it will grow.

During this period, too, the economic effects of Brexit have begun to emerge. This is most evident in the collapse of the pound – which at any other time would have been seen as a major crisis – and the beginnings of the effects of that in terms of inflation, with little or no dividend in increased exports from the devaluation of sterling. There are daily reports that whole swathes of the economy – farming, finance, science, care homes, healthcare, construction, car making and in fact just about every other sector – are in turmoil, with no idea of what their future will be. To take just one example – relatively small but strategically significant for the UK’s economic future – every financial technology (‘Fintech’) firm of any size is reported to be actively looking to leave the country. Longer-established and more familiar, Lloyds of London, the world’s largest insurance market, is reportedly set to announce the creation of a new base in Europe. As many of the links just given show, jobs are beginning to leach abroad whilst, at home, vacancies cannot be filled because of the deterrent effect on EU immigration, the NHS being one important example.

Investment plans have been deferred or abandoned and where they have gone ahead it has been despite but not because of the vote. I am not aware of a single case where a company has announced a new investment because of Brexit. The public finances have taken an additional hit, with the ‘punishment budget’ occurring in all but name: £59 billion, or half of the extra borrowing over the next five years, is already attributable to Brexit. Economic growth has continued, but only supported by even more consumer borrowing and that is now waning. Most of what was dismissed as ‘project fear’ is becoming true, if not in exactly the order or timescale of some of the predictions. There has already been a huge economic cost, but the full cost has hardly yet begun to be paid or even quantified.

Meanwhile, the shape of international relations has dramatically changed with the election of Donald Trump. This has huge implications for how the UK positions itself both with respect to the US but also China and Russia (£link). At the same time much goodwill with the rest of the EU has been eroded by the way the British government has conducted itself. Every major ally we have counselled against Brexit. Now we have to navigate a geo-politics in which the entire post-war order is getting re-negotiated from a position which is isolated and to much of the outside world simply incomprehensible. There has already been a strategic price to pay, and it will get bigger.

The domestic political arena has also been damaged. A heroic legal action in the face of disgusting abuse opened the possibility of parliament restraining an executive that wanted to act without scrutiny or accountability. The House of Lords at least attempted to make use of that opportunity, but the House of Commons shamefully refused to do so. The Labour opposition simply abdicated its responsibility and its principles under a leader who is manifestly incompetent. The LibDems have been staunch, and may well make significant electoral gains as a result, but for now have too few MPs to make a difference whilst the SNP are understandably primarily concerned with Scotland and Scottish independence. Tory MPs who backed remain – the majority - are too cowed by government whips and the Brexit press to make more than squeaks of concern. The consequence is that the government is free to pursue a policy which, to repeat, most elected politicians know to be highly damaging for the country. How ironic, after a campaign centrally concerned with parliamentary sovereignty. And how ironic to see a Tory government shredding its traditional commitments to business interests and to maintaining the union in the one-eyed pursuit of Brexit at any cost.

For there is no sign at all that the government understands the realities of what it is now embarking on, and there have been numerous warnings that the civil service lacks the administrative bandwidth to cope with it. May’s apparent political selling point of mature pragmatism has morphed into a cavalier disdain for anything remotely practical. Even as the negotiations begin, the government is talking blithely about the possibility of exiting without any deal in place. Having chosen a hard Brexit of a trade deal over the soft Brexit of the single market, hard Brexit is becoming the ‘moderate’ position with a no-deal ‘ultra-Brexit’ now being touted as a real option, possibly even the preferable option. That would be crazy in terms of trade, which is how it is mostly discussed, but no less so in terms of the myriad of other parts of the UK-EU relationship from policing to air travel to nuclear safety.

The shift towards ultra-Brexit is partly a consequence of the unappeasable nature of the Tory Eurosceptic hardcore, as I wrote in my previous post. But it also reflects the fact that each time the claims of the Brexiters meet reality they are exposed as nonsense. Right from the beginning of the campaign people like Peter Hargreaves, the largest individual donor to Leave who funded a mailshot to every UK household, were repeatedly saying that a quick and easy new trade arrangement would be ensured by German car manufacturers. Typical was David Davis, now the Brexit secretary, who wrote in February 2016 that:

“Within minutes of a vote for Brexit the CEOs of Mercedes, BMW, VW and Audi will be knocking down Chancellor Merkel’s door demanding that there be no barriers to German access to the British market.”

Within minutes! Well, we are not minutes but months since the vote and nothing remotely like that has happened. Nor will it, because it is not how trade policy works and it is not how the EU works and, in any case, it is not what German car makers think. But when confronted with realities that make a mockery of their predictions Brexiters refuse to backtrack and so have no alternative but to move to a harder and harder position ending, ultimately, in advocating a ‘no deal’ Brexit. Thus, for example, Lord Lawson, the French-domiciled former Chancellor, told people before the referendum that there would be no difficulty in having a post-Brexit trade deal with the EU. Now he says that leaving without a deal is by “far and away the most likely outcome”. That wouldn’t resemble anything that was put to the electorate by the Leave campaign.

It is important never to forget that campaign, since its outcome is, and will be, used to justify all that will now happen. It made three main promises to voters. The first was that Brexit would mean that there would be an extra £350 million a week for the NHS. That was an outright lie and was disowned by the leave campaign within hours of the result. The second was that Britain would regain sovereignty by leaving the EU. But the Brexit government’s White Paper (para 2.1) has since confirmed that sovereignty was never lost. The third was about reducing immigration, but since the referendum Brexit campaigners and indeed the Brexit secretary have admitted that it won’t necessarily be reduced.

These were just the headline claims. Beneath them were a myriad of others, not just in relation to trade but, to take just one example, that a new deal with the EU would be negotiated before the leave process started. But this is exactly the opposite of what Article 50 states, hence the prospect, now, of leaving without a deal. Or, to take another example, leading Brexiteer Michael Gove claimed that there was no prospect of Brexit leading to a second Scottish independence referendum. Yet this is, indeed, now in prospect. Every single claim made by the Leave campaign, without any exception, has now been discredited or disowned. But that does not stop new ones being made. Thus faced with the obvious fact that the UK will have to settle its outstanding financial commitments to the EU, estimated as being as high as £50 billion, John Redwood, another leading Brexiter, simply asserts that there will be nothing to pay.

It is impossible to overstate the sheer stupidity and terrible danger of what has happened since last June. Political leadership and institutions have failed. A narrow vote for an undefined outcome on the back of a mendacious campaign has been fetishized as it being the ‘will of the people’ to pursue a policy favoured only by a narrow section of the political right. That policy is being pursued without any regard whatsoever for the cultural, economic, geo-political or strategic damage it is already causing and with reckless disregard for that which will follow. A combination of unexpected or accidental factors have coalesced so as to turn what was already a disaster into a catastrophe. It remains to be seen whether it will prove to be even worse than that.

It may be that even at this eleventh hour some sanity will prevail. There is a long way to go from triggering Article 50 to an actual exit – possibly longer than the two year period. If recent months have taught us anything it is that politics is more unpredictable than it has ever been. If, as I think is inevitable, the huge costs and dangers of Brexit become even more tangible it is just possible that public opinion will shift decisively. The danger is that these costs and dangers will be blamed on the EU, ‘remoaners’, the ‘liberal elite’ and so on, as indeed has already been the case. So it will be the job of those of us who can to keep reminding our fellow citizens that they arise from a decision taken by the British electorate on the basis of lies, distortions and misinformation. They can change their minds, and given how close the vote was it does not need too many people to do so for the prospects to be brighter than they seem on a bleak and bitter day for our country.