Brexit Britain: Looking to the Commonwealth?

Ashley Prime Navigator Ltd.
Managing Director
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Posted on April 26, 2018

So, with less than a year to go before the UK leaves the EU, where are we?

Although the negotiations continue at a working level, the UK Government continues to face major headwinds as the country heads down the road to leaving the EU in March 2019.

The government has had a bad couple of weeks. It has found itself down from the excitement of both the Russian expulsions following the Skirpal poisonings and being part of the US-French bombing of chemical sites in Syria. Brexit was off the headlines for a few days during the Commonwealth Heads of Government meeting in London to be replaced by the ‘Windrush scandal,’ which simply won’t go away. The so-called ‘Windrush generation’ are British citizens who came predominately from the Caribbean in the 1970s on their parents’ passports, who have had their rights wrongly curtailed through loss of employment, access to healthcare, detention, and for some, the inability to return to the UK.

The crossover of this issue to Brexit is that the EU and EU nationals legally resident in the UK are now very nervous that they may well find down the road that they suffer a similar fate without the protection of the European Court of Justice (ECJ). The Home Secretary, Amber Rudd, has taken the flack for this absurd and damaging mess. Her future does hang in the balance, but she has managed to protect Prime Minister Theresa May, who was Home Secretary when the rules were changed leading to this present-day mess. It has been compounded by other Commonwealth nationals, including those from Canada, who have been caught out and threatened with deportation. This easily overshadowed the Commonwealth Heads of Government meeting, during which the Prime Minister had to give a number of cringeworthy apologies. This debacle still has legs. All at a time when the UK is trying to reach out to the Commonwealth in a post-Brexit Britain.

Parliament

The House of Lords in particular has made life difficult for Theresa May as have the divisions within her own party and Cabinet as Brexit legislation moves forward. It is now clear that Parliament will have a say on the final negotiated outcome of the Brexit deal, as of course will EU member states. The border with Northern Ireland remains so far one of the most intractable problems to solve with open hostility from within the May government towards the Irish Government. There has been no evidence of squaring the circle which allows the UK to leave the Single Market and Customs Union and have an open border between Northern Ireland and Ireland. On another front, it will be difficult for the UK to quickly replace the EU single market plus the 67 other bilateral EU trade deals, including CETA with Canada. The Democratic Union Party (DUP) from Northern Ireland, who are propping up the Tory government, are threatening to bring May down should there be any hint that Northern Ireland would have a different relationship to Europe than any other part of the UK.

What is being talked about is a ‘fudge deal,’ which takes the UK out, but provides a replacement for the customs union and single market. The risk with this solution is that this will not satisfy either side and the country will be outside the EU without meaningfully being better off. The hope from the UK Government is that a deal will be done, but that will be down to the wire. With an extension until the end of December 2020 in effect, the country may not notice too much difference in the short term.

The Economy

The UK economy continues to grow, but at a far lower rate than pre-Brexit.  Deals in the City of London have slowed with the uncertainty of Brexit. There is evidence of investment that may have been earmarked for the UK, but has flowed to both Europe and the faster growing markets in Asia as investors seek to spread their assets. The storm clouds haven’t so far appeared, but neither has the threat of choppy waters ahead gone away.

Photo Credit: UK Foreign and Commonwealth Office on Flickr

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