Three years on

It is now three years since the British electorate narrowly voted in favour of leaving the EU, and despite the best efforts of the government the UK remains an EU member. The longer the saga drags on, the more vociferous are the Brexiteers who believe they are being denied the victory that is rightfully theirs. When David Cameron first mooted the idea of a referendum, it was to lance the boil of Euroscepticism within the Conservative Party. This strategy could not have been less successful if he had tried. Britain remains more polarised than at any time in living memory and Brexit has consumed politicians to such a degree that they have no time for anything else. Historians argue that the 1956 Suez Crisis was a defining moment in British post-war history, yet three years after the event the scars were at least beginning to heal. Not so with Brexit. 

There has been a lot of revisionism over the past three years, with Brexit supporting politicians making the case that people knew what they were voting for and that “the will of the people” must be respected. The argument is simple and convincing – and profoundly wrong. In the modern argot, Brexiteers are engaging in heavy “gaslighting.” Admittedly David Cameron did point out prior to the referendum that a vote for Brexit would be “to leave the EU and leave the single market. We’d then have to negotiate a trade deal from outside with the European Union.” But Brexit supporters reassured the electorate that the UK would retain access to the single market (“absolutely nobody is talking about threatening our place in the single market”) and the customs union was barely even mentioned. For anyone who doubts my take on events, look at analysis conducted by the charity Full Fact.

The pamphlet sent to all households ahead of the referendum certainly did not suggest that leaving the EU would mean leaving the single market let alone the customs union. Instead, it pointed out that “Voting to leave the EU would create years of uncertainty and potential economic disruption … Some argue that we could strike a good deal quickly with the EU because they want to keep access to our market. But the Government’s judgement is that it would be much harder than that” (here is a link to the pamphlet if you want to check for yourself).

Whatever Remainers and Leavers may disagree about, it is indisputably the case that the difficulties inherent in leaving the EU were clearly pointed out prior to the referendum. The events of the past three years have borne out this assessment and it is the issue of leaving the EU on terms that would not crash the economy that has always been at the centre of my disagreement with those who wish to leave at any price. Millionaires like Jacob Rees-Mogg or Boris Johnson may be able to survive the hit in the event of a no-deal Brexit but it will be a lot harder for those far lower down the income scale. And for all the fact that the apparent foot-dragging has been blamed on the Remainers in government who have tried their best to thwart the project, the simple truth is that MPs do have a duty to look out for the interests of their constituents, and these will not be served by a no-deal Brexit. 

Who will drive the car towards the cliff edge? 

The next four months will be critical in this regard. It is has long been assumed that Boris Johnson is a near-certainty to be chosen as the next Tory party leader (his recent domestic issues notwithstanding). However, the bookmakers put him at 1-6 odds-on compared to 1-16 on Friday, whilst the odds against his challenger Jeremy Hunt have narrowed from 12-1 to 4-1. Neither candidate fills me with any confidence. 

Johnson maintains that the EU would not have to levy tariffs on UK imports in the event of a no-deal Brexit because the UK could rely on Article 24 of GATT. This is untrue. Article 24 only applies if an agreement has been reached, not if it has been decided not to have an agreement or the two parties are unable to come to an agreement. If the EU were to drop tariffs against the UK in the event of no-deal, it would have to do so against all other countries under the WTO’s Most Favoured Nation rules and that is not going to happen. Meanwhile Jeremy Hunt said at a Tory leadership hustings event yesterday that he had “visited an amazing company … that employs about 350 people; their margins are around 4%. A 10% tariff would wipe them out. So there would be an economic impact of no-deal. If that was the only way to deliver Brexit then I’m afraid we have to do that because that’s what people have voted for. We are a democracy first and foremost.” Yes folks, you read that right. The party of business is prepared to throw small businesses under the bus to deliver Brexit (check the link).

But assuming Johnson does get the gig, he will have a lot of hard work to do. He will come into office on the back of a track record of disloyalty during Theresa May’s tenure and a reputation as one of the worst foreign secretaries ever to grace the post. He is widely distrusted at home based on his famously loose relationship with the truth, and is even less respected across Europe where he is regarded as the face of Brexit. Johnson has insisted that the UK should leave the EU on 31 October: If he holds to that pledge, it will be without any new deal with the EU which has said it will not reopen negotiations, and certainly not with him. But parliament has already expressed its opposition to a no-deal Brexit so if he pushes ahead with this option MPs are unlikely to work with him on other issues (remember the Conservatives form a minority government), which raises the prospect of a general election.

One option that should not be ruled out is that Johnson may be forced to put the Brexit question back to the electorate at some point when it becomes clear that the EU is not prepared to negotiate and the alternative is a hard Brexit. For one thing, it would spike the Labour Party’s attempts to put a second referendum on the table, and if the Conservatives stand for anything it is to keep Jeremy Corbyn out of 10 Downing Street. Nor is Johnson a Brexit ideologue, like many on the lunatic fringe of his party, and he far more ideologically flexible than Theresa May. If any politician can sell the idea of a second referendum, it is him.

Whilst I would attach only a small probability to this outcome, it is evident that as we head into a fourth year of political impasse, something has got to give. Let us also not forget that the EU has been remarkably tolerant of the UK’s position so far. We can debate whether the EU’s stance is right but it has always been open to discussion. That might change in future as senior positions at the European Commission come up for grabs. Jean-Claude Juncker and Donald Tusk are about to ride off into the sunset and their successors may wish to move the EU debate forward rather than having to be tied up by Brexit. We know that President Macron is opposed to a further Brexit extension, and he is unlikely to grant Johnson any favours.

A year ago, I refrained from offering any predictions as to where we would be in the Brexit debate in June 2019, largely because I suspected that an Article 50 extension would preserve the status quo. I do not want to offer any hostages to fortune this time either. But I do not think we will be in the same waiting room in 12 months’ time. In order to properly confront the issue, the next prime minister will have to either risk crashing the economy or going where Theresa May did not dare, by offering a referendum or in an extreme case withdrawing the Article 50 notice. The time for talking is over. We need to move on.