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Brexit means Brexit – but what does Brexit mean?

by Hugo Dixon | 14.07.2016

Theresa May is fond of saying “Brexit means Brexit”. But it’s far from clear what that means. Her cabinet appointments give a few clues. The two key ministers – David Davis, who will be in charge of the Brexit negotiations, and Liam Fox, who is tasked with cutting new trade deals with the rest of the world – are in for a baptism of fire.

The new prime minister has been wise to create these two special posts. Each is a humongous job. It is also sensible to give the task to Brexiteers, so nobody can turn around and say she sabotaged the will of the people.

May was also right to say she will not trigger Article 50, kicking off formal divorce negotiations, before the end of the year. There is, after all, no point in firing the starting gun on the two-year process until we know what Brexit means. Even though the EU says there can be no negotiation without notification under Article 50, the new PM will be able to find backdoor channels to sound out the other leaders about what sort of deals will be feasible.

Davis took the same line on triggering Article 50 in a column earlier this week before he was appointed, meaning that it will be hard to accuse May of dragging her feet. The new Brexit minister also called for a White Paper, setting out the government’s policy, and proposed that there should be widespread consultation before fixing the negotiating strategy. He mentioned the “Scots, Welsh, and Northern Irish governments” as well as “the City, CBI, TUC, small business bodies, the NFU, universities and research foundations and the like”.

A key body absent from Davis’s list was parliament. Hopefully, this was an oversight. MPs must authorise the triggering of Article 50. It would be an outrage not to, as well as possibly unconstitutional.

What about substance?

So much for process. On the substance of what Brexit means, things are even murkier. Most of the attention has focused on trade – and how much access to the single market we will lose if we stop the automatic right of EU citizens to come to Britain.

But it shouldn’t be forgotten that there are two other important dossiers: how we cooperate with the EU on fighting crime and terrorism; and how we work together in making our continent a safe place in the face of threats from Vladimir Putin and instability in North Africa and the Middle East.

In both cases, the challenge will be to find a way of having some input into decisions despite no longer being at the top table. The risk is that we move from being a policy-maker to being a policy-taker.

That said, the trade versus free movement challenge is probably the hardest. Here, despite the argument that one can’t be half in the single market any more than one can be half-pregnant, it is possible to envisage all sorts of middle positions. The IPPR has helpfully mapped out what a compromise might look like.

We could, for example, have full access for goods but not services. Or we could have tariff-free access but still be hampered by “non-tariff barriers” – the cat’s cradle of rules that are the biggest barriers to trade in the 21st century. Or, perhaps, we could have access for some of our services but not others, such as our key financial services.

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Equally, on free movement, we could still allow EU citizens to come to Britain if they already had a job lined up. Or perhaps we could permit free movement but apply an emergency brake if it exceeded a certain level. Or there could be a work permit system, but one that is more liberal than that we impose on non-EU citizens. Or maybe we would go the whole hog, introduce an Australian-style points system for EU citizens, require visas and close the Irish border too.

May has left herself some wiggle room on free movement, saying it can’t continue “as it has done up to now”.

Davis, though, is operating under a number of misconceptions. First, he seems to think that the only thing we need to do is secure tariff-free access. If that’s all we achieved, our economy would be badly knocked.

Second, the new Brexit minister thinks that by leaving the EU, we can escape a flood of regulation coming from Brussels. But we’d still have to follow the EU’s rules insofar as we exported to its market – and we’d no longer have any influence over those regulations. Again, we’d be a rule-taker not a rule-maker.

Third, Davis thinks the EU needs us so much that it will be willing to cut us a good deal even if we don’t abide by free movement. The other countries will certainly want to trade with us. But they have other interests too – making sure Brexit isn’t such an easy process that other countries are tempted to quit, and grabbing parts of our most lucrative industries, especially finance.

Fourth, the new Brexit minister says we’ll be able to cut a host of new deals with the rest of the world rapidly. But he ignores the fact that most of the existing 50-plus pacts the EU has negotiated on our behalf will lapse and that we are not officially allowed to start trade talks until we leave the club. It will, though, be up to Liam Fox to make the best of that particular mess.

More generally, May’s government now has a massive job first to define what it means by Brexit and then to secure its objectives in what will be the highest-stakes peacetime negotiations our country has known.

Edited by Alan Wheatley

One Response to “Brexit means Brexit – but what does Brexit mean?”

  • Scissors paper stone. That’s what Brexit means. It means delivering a mandate for a ceaseless parlour game in which the british electorate by a narrow margin prefer exit to remain, remain to Norway, and and Norway to exit, ad nauseam.

    Well might Merkel say that they have to wait for the Brits to work out what they want- we haven’t got the foggiest.