Towards a hard Brexit

hard-brexit

As Brexit dominates the headlines, everything is over-interpreted. A throwaway remark in the High Court led to a sterling rally. A frantic media scoured the body language at the recent European Council meeting for clues about a British deal. In vain.

No deal has yet been mooted because no firm positions have yet been adopted. Rhetorical foreplay – both here and on the continent – is just that.

No one – including, I suspect, Theresa May – has yet decided what they want. All that being said, however, structural factors provide some clues as to where we are headed. And the nature of politics both here and in continental Europe means that, whatever individual leaders may prefer, Brexit is most likely to be hard.

The term hard Brexit is used ubiquitously but defined infrequently. It is generally defined in terms of the relationship the UK will have with the EU’s single market.

A soft Brexit is commonly taken to mean continued membership of that market. The hardest hard Brexit implies the UK having no preferential relationship with the single market and relying only on World Trade Organisation (WTO) rules.

This implies not merely non-membership of the single market (meaning the potential for non-tariff barriers to be adopted) but also the imposition of tariffs on at least some trade in goods between the UK and the EU.

Following the aggressive rhetoric at the Tory party conference, many fear that the government has set course for the hard side of the spectrum. Yet this is assuming too much.

Yes, the rhetoric in Birmingham was aggressive, particularly on immigration and the notion of “taking back control” from Brussels. But party conferences are imperfect guides at best to governmental action and many of the more inflammatory announcements have turned out to be merely that.

Much can change between now and the start — let alone end — of the negotiations and divisions within the cabinet have yet to play out. Philip Hammond, for one, shows no signs of ending his quest to ensure some kind of single market membership. Meanwhile, warnings from business leaders about the economic harm non-membership of the market might wreak are becoming more urgent and promise to form an unceasing accompaniment to the discussions to come.

What transpires will be down not to the personal choices of our prime minister but to the constraints implied by politics both at home and abroad. And it is here that the picture becomes less congenial to soft Brexiters.

On the British side, if the government has its way then parliament will only be able to have a say on the Brexit deal at the end of the unforgiving two-year timetable laid down by Article 50, when the alternative to a hard Brexit deal would be crashing out of the EU to an even harder one. Even if parliament were to get a say earlier, it is doubtful whether it would vote against a government position.

Even opposition MPs who backed Remain will be sensitive to public opinion in their own constituencies — 421 of 574 English and Welsh constituencies voted to leave and polling suggests that significantly more than 50 per cent of Conservative and more than 30 per cent of Labour voters backed Leave. Labour MPs in the party’s traditional heartlands are vulnerable to the immigration-based challenge from UKIP, which came second to Labour in 44 seats in last year’s general election. Taking on public opinion and risking electoral defeat is not something MPs do lightly.

So what might the government be able to negotiate? Strikingly, public opinion has remained remarkably receptive to key messages of the Leave campaign. In his August polling, Lord Ashcroft found 81 per cent of respondents felt that paying into the EU budget was incompatible with Brexit.

Migration was of course another key issue. Despite recent – and unconvincing – attempts by so-called liberal leavers to argue that immigration was not a key reason behind the vote to leave, the polling shows otherwise. Almost 90 per cent of those who think immigration is bad for the economy voted to leave. Already, a number of Labour MPs, citing “experience on the doorstep”, have declared there is a need to limit free movement and reduce the number of migrants coming to the UK. The rhetoric from Birmingham will hardly serve to dampen such tendencies.

Moreover, the fact that the economy has performed relatively well since the referendum has hardened opinion amongst those who believe Brexit will make the UK better off – rising by about six points to 28 per cent. Certainly, a recession would reduce the likelihood of a hard Brexit. Yet it may be that any negative economic impact of a hard Brexit would come only after it takes place. Thus, the economic case against leaving the single market may lack credible evidence early enough to shift the mood.

So, in order to avoid a hard Brexit, Britain needs some sort of deal that combines market membership with an ability to respond to the abiding concerns of public opinion. Precedent does not offer many grounds for optimism. To date, market membership for non-EU states can be secured only through membership of the European Economic Area (EEA). While enjoying membership of the single market, non-EU EEA states also accept the constituent four freedoms, including freedom of movement. Non-EU states in the EEA also contribute financially towards EU support for less developed EU states and regions.

What chance, then, of our partners making an exception for Britain? Frankly, not much. This is not because there is no functional reason to do so. Whilst the claim that they need us more than we need them is dubious at best, it remains the case that the abrupt rupture a hard Brexit would represent would cause economic damage on both sides of the Channel.

Yet there is politics in Europe too. And any long term deal signed between the UK and EU will run headlong into this politics, as it will require parliamentary ratification in all member states. This, of course, means not only national but sometimes regional parliaments, a total of 38 votes. And just look at how the Wallonian parliament is currently threatening the EU’s hard fought trade deal with Canada.

A special deal for Britain which, say, gave us market access whilst restricting the ability of other Europeans to come and work here would not be an easy sell before the Polish parliament (amongst others). Nor would it obviously be acceptable to west European leaders anxious to persuade their publics of the benefits of full EU membership in the face of sometimes serious populist challengers.

It’s the politics, stupid. For all that the idea of a hard Brexit has galvanised cross-party resistance in the House of Commons; for all that it has caused consternation amongst senior business leaders; for all that many liberal Brexiters condemn the idea, the politics means that hard Brexit is probably where we will end up.

Anand Menon is director of UK in a Changing Europe and professor of European politics and foreign affairs at King’s College London

 

Disclaimer:
The views expressed in this analysis post are those of the authors and not necessarily those of the UK in a Changing Europe initiative.

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