Whose Brexit is it anyway?

Although last year’s Brexit referendum was initially proposed by the Conservatives, it was conducted across party political lines as MPs were allowed to vote with their conscience. And as we all know, the question on the ballot paper simply asked whether the UK should remain part of the EU or leave the EU. No thought was given to the form which Brexit should take. For a long time, Theresa May simply relied on the slogan “Brexit means Brexit” without giving any further indication of what that meant. By the time of her Lancaster House speech on 17 January, we finally got more insight when we were told that the government’s negotiating position would be based on the principle that “No deal is better than a bad deal for Britain.”

Most economists are horrified by that stance. It is simply not credible to assume that the rest of the EU is going to back down in the face of UK intransigence. What is more, this statement has made its way into the Conservative election manifesto. So either the Conservatives are committed to driving the UK economy over the edge of the cliff in the event they do not get the deal they want, or they will be forced to break the pledge upon which basis they were elected (assuming they win next week’s election).

But rather than treat the Brexit negotiations as a single party issue, there is a strong case for cross-party representation in the UK negotiating team. Indeed, if we accept the claims of those who believe Brexit is the biggest single issue facing the UK since World War II (maybe a slight exaggeration but you get the point), surely it deserves a similarly united national response. It would certainly help to assuage the 48.1% who voted against Brexit that their concerns will be listened to.

Whilst Labour believes the UK should continue down the path which their political opponents have already carved out, it does at least believe that “leaving the EU with ‘no deal’ is the worst possible deal”. It also makes the sensible suggestion that the UK should seek to remain part of organisations such as Horizon 2020, Euratom, the European Medicines Agency and Erasmus, and advocates protecting the rights of foreign nationals already in the UK. The Liberal Democrats are even more direct and parts of their manifesto sound like they wish to overturn the result. But at least the “aim for membership of the single market and customs union” sounds like a rational economic plan. The Scottish Nationalists have not yet released their manifesto, but you can be pretty sure that their aim will be to ensure that Scotland remains part of the EU.

On the basis of these varying degrees of support for the EU, my suggestion would be for the UK government to assemble a cross-party negotiating team, perhaps weighted by parliamentary representation. Based on the latest analysis by www.electoralcalculus.co.uk, this would imply giving the Conservatives a 60% weighting; Labour 32%; the SNP 8% and the Lib Dems 0%.  I do not expect this to happen, of course. As Philip Stephens noted in the FT four weeks ago, “Theresa May is dangerously disdainful of dissent” pointing out that “Mrs May assumes a monopoly of wisdom on setting Britain’s terms for EU exit. The record suggests she can claim anything but.” Ben Chu in today’s Independent suggests that the whole Conservative manifesto strategy is designed to bolster the prime minister’s position rather than looking after the UK’s best economic interest. In effect, we face a principal-agent problem whereby the agent (in this case the prime minister) has an incentive to work in her own interests rather than the principals who commissioned her (the electorate).

One solution to the principal-agent problem is to provide a high level of transparency – the prime minister’s insistence that she does not intend to reveal details of the discussions on a rolling basis surely adds fuel to Chu’s suspicion. Fortunately, we can rely on the rest of the EU to deliver that transparency. Giving the principal a stake in the outcome is also another useful solution. The issue (as noted above) is whether May’s objective is to secure her own or the national interest. A final check is thus to impose greater accountability. Packing off Conservative party representatives to Brussels for two years who then come back with a deal which is set to be rubber stamped by parliament is simply not enough. I thus maintain that at the very least other political parties should be represented during the negotiations, who are not bound by some form of parliamentary omerta. Some issues are too important to be left to politicians. This is one of them.