Tag Archives: Theresa May

The Starting Gun is Fired on Brexit – it’s going to be HARD

Theresa May made no attempt yesterday in her speech to the Conservative party conference to dress up the fact that the United Kingdom is hurtling towards a ‘Hard Brexit’.  This means that the UK is likely to leave the European Single Market, giving up the free access to some 500 million consumers which it currently enjoys, and most likely heading towards a system of trade based on WTO rules, meaning the reintroduction of tariffs and other restrictions on imports and exports to and from the UK.  Her key Brexit Ministers, Liam Fox, David Davis and Boris Johnson have all indicated that the UK will not simply leave the Single Market, but also the customs union.

So what does all this mean?  There are a few issues which require some consideration, not least how we arrived at this extraordinary juncture.

In the aftermath of the UK’s vote on Brexit, I wrote about the stark reality that British voters had voted to leave on foot of three fairly clear premises – a desire for the UK  to ‘take back control of its borders’, a promise from Brexiteers that they would no longer be subject to EU regulations and bureaucracy and a commitment that the UK would no longer pay into the EU Budget.  Then, as now, it was glaringly obvious that in order to achieve these goals and honour the express will of the British people, the UK would have to leave the single market and engage in ‘Hard Brexit’.

Still, those of us concerned about the future of Britain, of Europe and of Anglo-Irish relations, hoped that some negotiation or accommodation on both sides would lead to a better outcome for all, which would involve the UK staying within the tent.  As of yesterday, this looks increasingly unlikely.

While Theresa May’s own instinct may be for a ‘Soft Brexit’- after all she was a committed Remainer until June 23rd – her overriding priority seems to be to maintain unity within her party, and of course to copper fasten her own leadership.   There is a clear Eurosceptic majority in the Conservative party and there is no doubt that she is pandering to it.

A distinct factor in all of this is, of course, the appalling black hole that is the official Opposition in the United Kingdom.  To all intents and purposes there is none.  The lack of a coherent, authoritative and moderate Labour Party, holding the Tories to account and counterbalancing the political discourse in the House of Commons and in British public opinion, actually weakens the Prime Minister and her more middle ground Ministers such as Philip Hammond, the Chancellor of the Exchequer. The absence of a serious voice articulating the enormous risks of a Hard Brexit allows the Tory hardliners dictate the pace.

May’s commitment to trigger Article 50 by March 2017 is an enormous gamble, designed to silence the Tory critics who want to race ahead in case the British public change their minds.  Unfortunately it is a gamble which, while giving the PM the upper hand within her own party, risks putting the UK at an enormous disadvantage in the tumultuous negotiations which lie ahead.  It certainly hands the first advantage to the large, experienced and focused EU negotiating side.

From a practical, logistical point of view the UK will not be ready to negotiate by March.  A third of the positions in the two new government Ministries, Trade and Brexit, have not yet been filled.  The Ministry of Trade only last week advertised for a brand new Permanent Secretary, and its staff were still meeting in Starbucks up to three weeks ago.

These practical problems might be surmountable if there were a clear vision, or clear direction for the UK in these negotiations.  There is is not.  Sound bites like “Brexit Means Brexit” do not make a strategy.  Theresa May may have put to bed the unrest in her ranks about the timeline and about her commitment to British ‘sovereignty’, but she certainly did not set out anything like a negotiating strategy or even a vision for what the UK will look like at the end of the Article 50 process.  During her speech she even made a rallying call about the UK now being empowered to set its own labelling standards, ignoring the reality that even outside of the EU, the UK will be bound by WTO labelling rules under the SPS Agreement.  This really is all about creating illusions rather than demonstrating facts.

Theresa May’s  key Ministers, Davis, Johnson and Fox have all, to varying degrees, set out a vision of a UK which exists in a sort of splendid isolation. They talk wistfully of a UK which is a global player, invoking nostalgic images of the Great Empire, looking to the Commonwealth and former colonies as their future trading partners.  All of this is nice and jingoistic, but it does not clarify how for example, they intend to deal with the stark reality of economic loss to the UK economy when its biggest industry sector, financial services, loses its passporting rights to every other EU member state.   Nor does it provide any plan as to how they will transform the share of UK exports to Australia from 1.6% to something much greater, as will be essential when they turn their backs on the European single market (which accounts for 44%).

One noticeable twist in Theresa May’s approach, evident in her Tory conference speech, was the dramatically hardened stance on the Devolved Assemblies of Scotland, Northern Ireland and Wales.  Just two months ago, after a cordial meeting with Scotland’s First Minister Nicola Sturgeon, Theresa May, spoke of her commitment to ensuring a unified and consensus based approach to Brexit.  On Sunday, instead she referred to opponents in the regions as “divisive nationalists” and explicitly committed to a single centralised negotiation approach, with no reference to involving the devolved governments in the process.

Mrs May and her Government risk utterly underestimating the chaos which is likely to ensue from this attitude.  Scotland, in particular, is likely to revolt against a London ‘like it or lump it’ approach.  The Prime Minister’s speech may well have stirred the independence referendum pot once again.  It is unlikely that Nicola Strugeon or the SNP will stand idly by as their future outside the EU and the Single Market is defined by Tory hardliners.  Expect a vote on Brexit in the Scottish assembly, and expect a rapid cranking up of rhetoric around a referendum. Once that genie is out of the bottle, expect the exact same demands from Northern Irish nationalists.

There is a long way to go in this Brexit saga.  In effect we are still reading the forward, not even having progressed to the introductory chapter.  There will be many twists and turns ahead.  So far all that is clear, is that the hard liners have the ear of the PM and are undoubtedly  setting the pace and the parameters.  This is bad news for all of us.