Brexit beckons

Many choices, little time to agree


For Brexit, 2018 will be the crunch year. The procedure for leaving the European Union sets a two-year deadline from the day Theresa May triggered Article 50 last March. So Brexit is due to happen on March 30th 2019. European Union negotiators say this means a deal on the divorce terms must be agreed on by the autumn of 2018, to leave time for EU governments and the European Parliament to approve it. 

The shortage of time will make the early months of 2018 especially fraught. By then, Mrs May’s government should have struck an outline deal on the rights of EU citizens in Britain and British citizens in Europe, and also reached an understanding over roughly how much Britain must pay as an exit bill. However, nobody has come up with a way to avoid a hard border in Ireland once the United Kingdom leaves the club. And negotiations on the future relations between Britain and the EU will barely have started.

A first conclusion is that there must be early discussion of a transition after March 2019 to avoid a cliff-edge Brexit. The only one on offer will be based on the status quo, meaning that Britain must accept the obligations of membership without a commissioner, a vote or representatives in the European Parliament. Even that will be hard to agree on. The EU will not want to build a bridge until it knows where it is going, while Brexiteers will be suspicious of any wheeze that seems merely to keep Britain in the club longer.

As for the future, Mrs May insists that Britain must leave the single market and customs union and instead strike a bespoke deal and comprehensive partnership. The hope is that this will cover not only free trade, but also regulatory co-ordination, and co-operation on external and domestic security. It is true that the EU and Britain have much to gain from such a deal. Yet the EU is clear that Britain cannot be better off than it was as a full member. And experience suggests that an agreement will take years to reach—and even longer to ratify, since it will need the approval of all national and several regional parliaments.

Deal or no deal?

The tortuousness of the negotiations will create two more big headaches for Mrs May. The first is a potentially stroppy Parliament, which will insist on having a vote on any final Brexit deal. Mrs May’s Tories lost their Commons majority in the election in June 2017, and they are also in a minority in the Lords. Neither rebellious Tories nor the Northern Irish Democratic Unionists, who formally support Mrs May, have any interest in forcing a new election that risks putting Labour’s Jeremy Corbyn into power, but they can still make life hell for an already fragile government.

The second is that a mix of rebellious MPs, recalcitrant EU negotiators and the sheer complexity of Brexit will tempt Tory hardliners and even some ministers to fall back on the mantra that no deal is better than a bad deal. Boris Johnson, the foreign secretary, and Liam Fox, the international-trade secretary, have long believed that Britain has nothing to fear from walking out and trading with the EU on normal World Trade Organisation terms. Along with her chancellor, Philip Hammond, and most economists, Mrs May reckons this would be a terrible outcome. But the risk of its happening by default, either because time runs out or because the negotiations hit a road-block, remains large.

Brexit and its outcome will also be decisive for the future of Mrs May herself. The Labour Party and even many Conservatives expected her to quit soon after she had turned a Conservative majority into a minority in June. But she was given a new lease on life mainly because nobody else was trusted to deliver Brexit. The expectation remains that she will go soon afterwards, meaning at the latest during 2019. That would give a new leader a couple of years in which to regain credibility for the Tories before the next election in 2022.

The biggest obstacles to this scenario and to a smooth Brexit are growing fears over the economy, which slowed markedly in late 2017 even as other European economies picked up speed. The long-standing pro-Brexit claim that a dynamic Britain has been held back by being shackled to a European corpse will look discredited in 2018. That may not only make negotiating Brexit harder; it could also fatally undermine the pretensions to greater economic competence that have done so much to keep the Tories in power over the past seven years. Even if Mrs May departs relatively quickly, her party may find it difficult to win back voters’ trust, no matter how skilfully she manages to deliver Brexit. 

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Credit: Steve Carroll
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