Expert Speak Atlantic Files
Published on Jan 31, 2019
Wither Brexit: Britain, Europe and the World

In the aftermath of the outright rejection of Prime Minister Theresa May’s withdrawal agreement one day, and the rejection of an opposition-tabled no-confidence motion the next, where Brexit is headed, and when, remains far from clear. Three broad options exist – leave with a deal, leave with no deal, don’t leave at all - none of which would at present garner a clear majority of support in the country – or it seems in parliament.

Theresa May’s plan respected the result of the referendum held in June 2016, and given the self-imposed red lines (notably regarding control of immigration) is what a consensual withdrawal agreement would look like. Unfortunately, it found few supporters: strong supporters of Brexit thought it did not go far enough, while those who wanted to remain felt it made the UK a rule-taker rather than rule-maker, forced to accept orders from Brussels for the foreseeable future.

Northern Ireland is a particular source of contention. The Conservative Party’s parliamentary allies – the Democratic Unionist Party (DUP) – are avidly opposed to Northern Ireland being treated differently from the rest of the UK (though on various social issues such as gay marriage they strongly support the province having a different status). However, the conditions of EU membership - common regulations, open borders and common citizens rights – helped create the conditions to advance the peace process, including through the Good Friday Agreement, which ended decades of conflict in Northern Ireland. It also helped blur questions of identity. A return to a “hard” border could undermine the political progress made towards reconciliation.

To get around this dilemma, May’s plan includes a “backstop”, a fallback arrangement to ensure the absence of a hard border. Following the UK’s withdrawal from the EU, trade talks would begin on the future relationship during a transition period.

If these talks fail to prevent a hard border between Northern Ireland and Eire (The Republic of Ireland), then the backstop would kick in: the UK would stay in the EU customs union, and Northern Ireland would have to follow the many of the rules of the EU’s internal market, unless and until an alternative arrangement was agreed. Conservatives don’t like that this arrangement has no end date and the DUP fear barriers between Northern Ireland and the rest of the UK. If this backstop can somehow be renegotiated, a combination of Brexiteers who opposed May’s plan in mid-January, others who believe that the referendum needs to be respected to give faith in democracy and those who fear the alternatives (in particular, that of “crashing out”), maybe she will be second time lucky.

“Crashing out” is another possibility, and the legal default. If no agreement is reached, then on March 29th the UK will leave the EU without a wider framework for its economic relations. The business minister thinks it would be a “disaster for business”, which seems highly probable (government planning includes the prospect of martial law to quell possible civil unrest). Many of those who suggest that this will be fine for the UK have already sensibly moved their hedge funds or head offices to other, more stable, jurisdictions.  While there may certainly be some brinksmanship going on, if the outcome is half as bad as some forecasts suggest, any party presiding over a no deal Brexit would probably lose power for a generation. Intuitively, therefore it will not happen. If it looked likely to happen, presumably steps would be taken to extend Article 50 (the two-year countdown to the UK leaving the EU). This would not fundamentally change any of the possible outcomes, but merely prolong the process of choosing.

“Staying in” is the third option, presumably as a result of another referendum. Some champions of Brexit view this as a betrayal of the original mandate, although some of them advocated two referenda when they thought they may lose the first, while others felt that a second pro-leave vote would encourage the EU to take more seriously demands to renegotiate the UK’s EU membership. But there is some truth in what they say. Had public opinion swung dramatically against leaving, another referendum would make sense politically. But opinion polls suggest that the shift to remain has been more gradual. A narrow victory for remain might spark widespread disillusionment with democracy, and some even fear a rise in far-right extremism.

If the UK government’s “red lines” shift, various fourth options come into play. For instance, a softer stance towards immigration could make the ‘Norway’ option – effective membership of the EU’s single market - become feasible. However, any alternative would likely face the same criticisms as Theresa May’s plan, incurring the wrath of those arguing “leave means leave” and of those that would argue that the national interest is better met with the UK as rule-maker rather than rule-taker.

Save for “crashing out” each of the other outcomes has arguments for and against. But many of the debates that are taking place now could (and should) have taken place two years ago. Which points, logically, to the process dragging on beyond the March deadline. That said, logic has been in scant supply of late.

What does this mean for Britain’s relations beyond Europe, in particular with India?

Many of the arguments for Brexit have been based on the conviction that the UK can rebalance its relations towards other parts of the world, rooted in an over-estimated view of the UK’s standing and influence.

Britain’s reputation can scarcely have been helped by the insularity and political chaos of the last two years. And simply calling for a “Global Britain” without fleshing out and clarifying exactly what role the UK could and should play is counterproductive.

And at the same time, the world has evolved: in particular, Trump’s America is more insular and unilateral while Xi Jinping’s China is more assertive. In the absence of the referendum result, now would be a good time for the UK to strengthen ties with like-minded European partners as a potentially more hostile and multipolar global order emerges. But unless the UK leaves with no deal or decides not to leave at all, the irony is that this is probably what London will be focussed on over the coming years; trying to sustain the UK’s economic, political and security ties with Europe while being outside of the EU’s institutions.

Once these questions are settled, perhaps the outlines of the “Global Britain” strategy will become clearer. For India, it is difficult to argue that much has changed. Regardless of being in or out of the EU, the UK wants to trade more with India and is doing so (while still a member of the EU). India’s foremost demand is for liberalised visa access to the UK, in particular for students to study and professionals to work. This may come, though given the current attitude towards immigration, not for some time. Those British Indians who supported Brexit in the belief that their Indian relatives may benefit, are likely to be disappointed in the short-term.

The UK’s openness to India is likely to be de determined by its future relationship with Europe and on the prevailing attitude towards immigration. If hostility towards immigration remains the default position, it is difficult to see some new and strengthened relationship being forged with India.

At the same time, the extent of economic damage is also likely to affect the UK’s external relationships. In the worst case, if the UK leaves with no deal, the shock and disruption could lead to a more desperate approach. The UK may become increasingly unscrupulous in pursuit of market access and investment. In such a case, the UK may face a trade-off between its desire for a rule-based order and its aspiration for Chinese investment.

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Gareth Price

Gareth Price

Gareth Price is a Senior Research Fellow at Chatham House leading research on South Asia. He was previously an analyst at the Economist Intelligence Unit ...

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