What could be saved from the shipwreck?

by David Hannay | 02.07.2016

Anyone who doubted that Brexit would be a leap in the dark and that those who claimed it was were simply scaremongering must surely by now have lost any such illusions. Neither the government nor the leading figures in the Vote Leave campaign seem to have the faintest clue about what they want to happen next, about when they want it to happen, nor about what the shape and content of Britain’s new external relationship with the EU should be.

It clearly is sensible, even if there was not a leadership turmoil in both main parties, to take a bit of time to fill that policy vacuum. But that pause will only make sense if it is used to conduct a hard-headed, evidence-based analysis of the various options, and then to make a choice which is not just a string of slogans like “take back control” and unattainable objectives like getting immigration down to the “tens of thousands”. Here are three areas which will surely need to be covered – trade, foreign policy and crime.

The trade relationship is clearly going to be fundamental. The first step will be to give a crash course to the new Prime Minister and incoming ministers on the difference between continuing to be a part of the Single Market and merely having a limited free trade agreement with the EU along the lines of the one Canada has.

So far the debate over this has been infantile. Slippery and ambiguous phrases like “access to the Single Market” are bandied around as if they were absolute truths.

Of course, the US has access to the Single Market. But they do not sell many cars there; and their banks (the Swiss ones too) have massive establishments in London so as to obtain that crucial Single Market passport. Of course, Japan has access to the Single Market. But their car companies have made huge investments in Britain because we are a gateway into the Single Market and provide tariff and barrier-free involvement in the complex trade in components. If the outcome of that analysis is that it is strongly in the national interest to remain a part of the Single Market, then at least we will know where to start the negotiation.

On foreign policy issues ranging from economic sanctions to global climate change negotiations, the risk is that Britain will become a “me too” country, waiting outside the door until the EU has made up its mind on a particular course of action, or until the EU, the US and China have cut a deal, and then just falling into line.

It will not be easy to avoid that major loss of influence; and it will not be possible at all if we nurture the illusion that we can remain part of the EU’s decision-making structure while being outside the organisation. There will need to be a good deal of goodwill and flexibility shown by both sides; which is one reason for stopping loose talk about encouraging a revolution in the EU or even its break up.

And thirdly there is the need to strengthen, and not to scrap, our cooperation in the fight against international crime, whether it be terrorism, cyber crime or human trafficking. It was only two years ago that our own parliament voted by overwhelming majorities in both houses that it was in the national interest to retain our full involvement in the European Arrest Warrant, in Europol and in many other law enforcement activities of the EU.

Once again, as with foreign policy cooperation, it will not be straightforward to maintain those policy commitments when we cease to be a member; but it should not be impossible given the mutual interest in doing so between the EU and ourselves.

The gap between the benefits from full EU membership and those from an external relationship with those three components will still be wide. But without them it will be a yawning one.

5 Responses to “What could be saved from the shipwreck?”

  • I urge you and all your subscribers to read David Hare’s article in the Guardian today.

    We do NOT need to accept the Leave vote as democratic & thus to be respected at all costs.

    The vote was gerrymandered and a perversion of democracy.

    The only way forward – think about it, Hugo – is to find a way NOT to leave the EU at all.

    We all need to show more anger, fight & guts to overturn the biggest political con trick of our lifetimes.

  • David Hannay suggests that rational analysis and policy advice can lead us to a better place. But I think the political goal should be to remain in the EU not to adjust to the new reality. At the moment the referendum result looks like a resounding statement of the will of the people, not to be questioned. But that may not be the case for ever. In two years time, things will have moved on. There are two factors that will influence the debate: firstly the state of the UK economy, which may experience a sharp slowdown, or even a recession, with job losses and a collapse in public support for Brexit; secondly, the course of negotiations with the EU. As the unpalatable alternatives to EU membership become apparent and the political and eonomic disadvantages of leaving grow, there will be a clear choice to put to the electorate in a second referendum, perhaps in 2018. Two years is a long time in politics.

  • Im sorry people here don’t like the way most of the UK public voted to leave the EU. (By most I mean more than voted to remain), anyone who suggests the result is un-democratic and somehow void, should look up the word majority in the dictionary. I doubt those same people crying foul because they lost, would Be making the same claims about legitimacy of the vote had been 52% remain. Whilst Your looking up majority, check out hypocrisy at the same time.

    By the way, some of us voted leave because the EC is corrupt, wasteful and ignorant to the wishes of the European citizens they pretend to support but in reality try to rule.

  • “So far the debate over this has been infantile. Slippery and ambiguous phrases like “access to the Single Market” are bandied around as if they were absolute truths.”

    Yes, it is most frustrating. The issues should be simplified as much as possible but not oversimplified. Nor should they be confused with each other, especially free trade and free movement.

    Free trade is easy to resolve. We want access to the single market and the UK should be prepared to pay for that. In the same way European business want access to the British market and the EU should be prepared to pay for that. The Treasury and Brussels can settle up every so often on the basis of trade figures. That means all businesses can trade as before.

    The same principle can apply to the movement of people for work. European citizens want to work in the UK and our younger generation want to work in Europe. Either side incurs a liability when a person moves from one to the other. Thus movement of people resolves into a corresponding cash flow between governments.

    That principle allows for national governments and the EU to make whatever arrangements they may agree in future. Thus a process which will take many years should not affect the Brexit negotiations of a new relationship between the UK and Europe.