Theresa May spent the campaign avoiding the details of Brexit, despite saying that was what the election was about. She won’t be able to avoid the topic any longer, assuming she stays Tory leader. Her government will immediately be engulfed by the most important negotiations our country has had to face since World War Two.
Here’s our best guess of what lies ahead.
1. Time pressure
The EU treaty’s Article 50 gives us two years to complete our divorce. Even if negotiators first meet on June 19 or 20 as planned – something which has been thrown into doubt – we’ll have only 21 months left. What’s more, the period for talks will be more like 15 months as there needs to be perhaps six months at the end for the European Parliament and ours, to ratify what’s agreed. Given the huge number of complex issues to be discussed, there will be a race against the clock.
If more time-out is needed for a Tory leadership election – or perhaps another general election – the time pressure will be severe. There’s also a risk that the EU side won’t be willing to engage seriously in the talks until they are pretty sure that May is going to continue as prime minister.
2. Look, who’s talking?
The EU is pretty clear how it will conduct the talks. The leaders of the other 27 countries have given a negotiating mandate to the European Commission which, in turn, has appointed Michel Barnier as its chief negotiator. The Commission wants the talks to take place in four-week cycles: the first for internal preparation and consultation; the second for exchange of views between the two sides; the third for negotiation; and the final for progress reports which would be published.
It’s less clear who will be speaking for Britain, even if May stays prime minister. In the past, she suggested she’d be the lead negotiator, though this was reportedly rebuffed by EU leaders. Having kept his post as Brexit minister, David Davis will likely take the lead – although some people expect Olly Robbins, the civil servant advising May and Davis on Brexit, to be the point person.
But with the election result being interpreted as a vote against May’s Brexit policies, MPs and business leaders are now calling for more consensus, perhaps even a cross-party Brexit commission to lead the talks instead of the Tory government.
3. Top topics
The EU has made clear it has three priorities: people, money and the Irish border. These are the topics it wants tackled in phase one of the talks. None will be easy.
The Conservative Party’s manifesto set out plans to pull Britain out of the EU’s single market and customs union. It also had red lines – including ending free movement of people, not submitting to the jurisdiction of the EU’s courts and not paying “vast” annual sums to the EU. It’s unclear whether it will now soften any of these policies – given the lack of majority, the likely dependence on Northern Ireland’s Democratic Unionist Party (DUP) and the fact that many Scottish Tories (who did well in the election) want a softer Brexit.
Our parliament – both the House of Commons and the Lords – will also be more actively involved in the talks than seemed likely before the election. Then, the expectation was that they would pretty much rubber stamp what May put before them. Now, it is likely they will scrutinise policies and amend them.
4. Alimony
In March, European Commission president Jean-Claude Juncker suggested the cost to the UK of leaving the EU would be “around” £50 billion. Since then a hardening of positions in European capitals, particularly around farm subsidies and loans, has led some to push this up to €100 billion (£86 billion).
Disagreement over who owes what could be an early stumbling block in negotiations. Barnier refuses to put a price on Brexit, saying any bill is not a punishment but a “settling of accounts”. Davis told ITV: “We will not be paying €100 billion.” May reportedly told Juncker that Britain didn’t have to pay “a penny”.
5. Right to remain
Will the 3 million EU citizens living in the UK and the million Brits living in the rest of the EU be able to keep their rights after Brexit? May said Britain wanted to guarantee this “straight away”. The EU wants to sort this out too. The problem is they seem to have different ideas about which rights should be guaranteed.
This isn’t just a matter about who can live where. Healthcare, benefits payments, the rights of students and workers – all these need to be considered. The Commission’s opening bid caused consternation in the Tory press: it is demanding rights in perpetuity for EU citizens currently living in the UK – including for their family members.
It’s unclear whether the election has changed things. But there have been reports that the government is considering making a gesture on citizens’ rights early in the talks.
6. Hard border in Ireland
It won’t be easy to keep the border between Northern Ireland and the Republic of Ireland open if the Tories stick to plans to pull us out of the EU’s customs union. The fact that the government is likely to depend on DUP, which is opposed to a hard border, means that the whole question of the customs union may be reviewed.
7. When can we talk about trade?
The EU says it is only prepared to move onto discussing trade – a central part of the second phase of the talks, as it sees it – once there has been sufficient progress on these three issues. The UK disagrees. But if the EU doesn’t budge, the government faces a potential elephant trap: agreeing at least to a formula that could result in a giant alimony payment without knowing what access we’ll get to the EU market.
8. Cliff edge
May said she could complete our divorce and agree a comprehensive trade deal with the EU in the 21 months left under Article 50. But it’s hard to find anybody else who agrees. The best we’ll be able to do is agree a “framework” for our future trading arrangements.
So we’ll need a transitional deal making sure we don’t fall off a cliff. To get one, the government may have to swallow more bitter pills. The EU insists that during such an arrangement existing “regulatory, budgetary, supervisory, judiciary and enforcement instruments” would apply. Before the election, this would probably have contravened May’s red lines. But, again, now it’s uncertain whether there may be more flexibility on these matters.
9. Final trade deal
The EU took seven years to sign a trade deal with Canada. An EU-UK deal might take less time because our regulations and standards are already aligned with the EU – and both sides would have a strong interest in doing a deal given the volume of trade across the Channel. On the other hand, we’d be looking for something more ambitious than what Canada got. What’s more, if the talks descend into acrimony, reaching a final deal could take longer.
What we do know is that any trade deal won’t be as good as our current status inside the EU’s single market. A new free trade agreement might allow us to export our agricultural produce and manufactured goods without tariffs, but new restrictions are likely to be put on exports of services, which make up 80% of our economy. There are other thorny questions too, such as how to settle disputes should they arise. Again, there are now questions over whether the issue of leaving the single market may be reopened.
10. Not just trade
We will want a new relationship that doesn’t just cover trade. Other areas where we’ll want to cooperate include: fighting crime and terrorism, especially after the recent wave of attacks; sanctions against Russia; access to nuclear materials; environmental standards; and scientific research. If there’s no time to reach full deals in these areas, we’ll need transitional agreements for them too.
Before the election, May threatened to quit the EU with no deal at all if she didn’t get what she wants. This would be madness. But now that she has failed to secure a majority, the Tories probably lack the authority to carry out this threat. However, Barnier has urged that Britain must start talks “very quickly” or risk crashing out of the EU with no deal. The current political turmoil, plus the enormity and complexity of what’s ahead, suggests a “no deal” scenario cannot be completely discounted yet.