Brexit: Weekly Update

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Posted on October 6, 2016

Prime Minister May’s Plan to Realign the United Kingdom
Now that the Conservative Party’s annual conference has come to a close, a much clearer picture of the UK approach to Brexit has emerged. Prime Minister Theresa May has now laid out in much clearer terms than previously outlined what ‘Brexit means Brexit’ actually means, while simultaneously shifting the positioning of her Conservative Party, ditching much of the work of her predecessor David Cameron and moving to a ‘one nation Toryism’ – that is, working for all hard-working Brits, not just for the elite.
On Brexit, she is clear that controlling immigration into the United Kingdom is a driving factor in taking back sovereignty. She knows that curbing the free movement of people is incompatible with the principles of the European free market and is prepared to sacrifice this for the sake of a “clean” Brexit. The Government are keen to control the message and no longer speak of a Hard or Soft Brexit but a Clean one. This populist speech has invigorated the centre-right of the Party and it was cheered by the Brexiters who favour a total cut from the European Union (EU), including the European Court of Justice, EU institutions and legislation.

Specifics provided by Mrs. May include: triggering Article 50 no later than March 2017; no second referendum; British control of UK immigration; no opt-outs for Scotland, Northern Ireland or Wales; continued guarantee of workers’ rights; and a repeal of the 1972 European Communities Act, thereby bringing in all European legislation with the ability to cut what is not deemed necessary. The visa process will be tightened for non-EU nationals coming to the UK, specifically students and workers, which will help to bring down the number of immigrants coming the UK. Employers who hire non-British workers will now be subject to a test that they tried to fill a job unsuccessfully with a British worker first.

The approach as outlined works for the PM for a number of reasons. It shows that the UK is going to be tough with the EU and is prepared to sacrifice the single market in favour of controlling immigration. It keeps Tory Brexit MPs on side and goes some way to unite the party behind her leadership. The clean break from the Cameron Toryism of the elite realigns the party as the champion of her vision for the UK and what will ultimately be her legacy. As an added bonus, she appears to be pushing further into disillusioned moderate Labour territory, therefore exploiting the diminishing popular support of the Labour Party.

On the negative side, she and her new Home Secretary Amber Rudd have received flak from both the left and UK business for some aspects of this approach, particularly the naming and shaming of UK companies that employ too many “foreign workers.” Interesting these employers are likely to include the majority of the Premier League Soccer teams, the UK’s major sport and a global UK brand. While the hard-edges of this policy may prove to be simply a trial-balloon that the government is flying, they risk drifting into xenophobia at a time when they profess to also want to be more open to the rest of the world.

Increasingly, there is a recognition too that “doing trade deals” is a time-consuming activity, requiring meticulous understanding of detail, shared levels of potential benefits between the parties, and the expertise of experienced trade negotiators. Some Tory MPs are grudgingly accepting that a trade deal with the US would likely be years away.

In the end,,, all of this rhetoric to keep the right on side and to ensure Brussels understands that the UK would leave the single market if necessary may be a negotiating tactic. The government will face strong criticism as overseas investments continue to slow or start to relocate. But many of the Brexiters feel that this short- to medium-term pain, is a price worth paying to ensure the UK’s full sovereignty. What remains uncertain are the known unknowns, including how the EU will deal with any fallout from the Italian referendum should Renzi fall, or the French or German elections next year. There have been three referenda recently in the UK, Colombia and Hungary. The governments lost all of them. Is Italy next?

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