Brexit Update: All Eventualities?

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Posted on August 20, 2018

Even though the UK is still on it’s summer holidays and Parliament is in recess, Brexit continues to dominate with end March 2019 just over seven months away.

The Government’s Position

While the Prime Minister remains committed to her Chequers Agreement as a meaningful starting point for negotiations with Brussels, it has taken over two years to reach this point. The Government will also be starting to publish 84 papers, intended to demonstrate, issues by issue, the impact of a ’no deal’ Brexit on the UK economy. This will not please the Brexit camp who will see this, rightly, as an opportunity to demonstrate what it actually means to leave the EU. It will not make pleasant reading for them, but the Government has dressed it up as ensuring the public, and industry in particular, are prepared for the impact of a no deal scenario.

A public say on the final deal?

This is now gaining traction, but as yet pressure on the Government to give in and in effect re-run the referendum has been unsuccessful. At the moment, we do not believe a second referendum is likely, however, this remains subject to prevailing sentiment as practically no one, even on the Brexit side is now saying that Brexit will be immediately good for the UK. Rees Mogg MP, one of the zealots of Brexit, has already said that it will be 50 years before the UK sees the benefits. Patience required.

Dysfunction at the wheel

The Brexit lobby is doubling down and pushing ahead. Rees Mogg continues to attempt to unsettle the PM and her ‘Chequers’ strategy by promoting his version of Brexit – a clean and clear break and a move to WTO trading rules. He knows however, he is unlikely to get the support he needs from the Labour Party if that party is able to sort themselves out and move beyond their Brexit policy of sitting on the fence.

The Labour leadership has not done itself any favours of late, opposing the Government without offering solutions whilst being embroiled in it’s own inability to stamp out anti-Semitism within the party. Meanwhile the Tories have not covered themselves in glory either as they have failed to properly censure or kick out Boris Johnson for his inflammatory comments on the use of the burka. Johnson’s calculated comment on burka-clad women looking like ‘letterboxes’ may not have had the impact he wanted, it has further incensed the Prime Minister and demonstrated yet again her inability to do much with him. Destabilizing Mrs. May and her Government may be detrimental to broader UK interests during these tense Brexit moments, but from Boris’ perspective, it helps him achieve his objective of assuming the keys to No10 Downing Street. Finally, Nigel Farage, former UKIP leader, has indicated that he will return to front line politics. He has said the UK must be ’self governing’ and has rejected suggestions that he ever said people would be better off. His return to the public spotlight, and scrutiny, isn’t seen as entirely negative by those who continue to push for the UK to remain within the EU.

Preparation for Brexit

What the Government have failed to do is adequately prepare for a no-deal scenario, with the shutters coming down on EU migration, a move to WTO rules and a host of other issues. The Northern Ireland border issue remains in the ’too difficult to deal with in-tray’. The best guess is that the Government would like to extend the ‘2 year’ Article 50 period further out to give more time for adequate preparations. The EU may be open to such an arrangement, potentially extending the Brexit timeline to December 2021. EU states, including those with land/main sea borders (Ireland, mainly France and Belgium) equally have to put in place the necessary immigration and customs checks and will need time to properly prepare.

So where does this leave the UK?

The release of the Government’s individual papers on a ‘no deal’ scenario is a gamble. The intention is to demonstrate clearly what it means to leave the EU, the outcome of which is intended to bolster a fudge deal where the UK is outside the EU, but inside for free movement, trade, investment etc. In effect, a kind of Norway model. Whether the EU and its remaining member states will support eventuality is unclear and will require more nifty diplomacy than has been on offer to date. As the Luxembourg PM has said, “Britain had long been an EU member with lots of ‘opt-outs’ and wanted to become a non-EU member with lots of ‘opt-ins’”. The new Brexit Minister, Dominic Raab will have his work cut out persuading other Member States that it is in their interests to support the Chequers position. He knows that a no deal fall out for the UK will be damaging for the EU, but more so for the UK. And in whose interests is that? Neither the UK’s nor the EU’s.

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