An argument as to why a “hard Brexit” will be the natural and direct consequence of an Article 50 notification

12th January 2017

This post sets out in summary form an argument I have set out at the FT (here and here) and on Twitter.

My argument is that, regardless of the express statements of the prime minister and her government, the UK is bound to have a “hard Brexit”.

By “bound” I mean that it will be the natural and direct consequence of an Article 50 notification.

By “hard Brexit” I mean that, once the United Kingdom leaves the European Union (either at the end of the Article 50 period of two years (or as extended) or at the end of any transitional/adjustment period) the United Kingdom will not be part of the “single market”.

For the reasons set out below, I contend that once the Article 50 notification is given, a “hard Brexit” will ultimately follow.  I would say that, if the reasons remain sound, that the “hard Brexit” is as good as inevitable, in that (a) it is the the natural and direct consequence of an Article 50 notification and (b) there seems nothing to prevent that consequence.

The first reason is that “hard Brexit” is the default position.  This will be what will happen, unless something happens to prevent it happening.  The question then becomes what could prevent it happening.

The second reason is that “hard Brexit” is also the settled and unanimous position of the remaining 27 member states.  As long as this remains the case, then nothing will come from the EU27 to prevent the default position being the case.

The third reason is that “hard Brexit” is also the necessary and logical position of the UK government.  Even though this is not explicitly admitted (for some reason), it is the only possible implication of five of the UK government’s stated objectives.

Those objectives, in turn, comprise two precise objectives and three general objectives.

The first precise objective is, of course, that UK is no longer to be a member of the EU.   As I set out at the FT:

“this at a stroke will mean, as a matter of international law, Britain is no longer obliged to accept the “four freedoms” (of movement of goods, services, labour and capital) prescribed by the treaties, nor comply with any of the regulations and directives that set out the common standards of the single market.

“It will also not have any formal role in any of the EU institutions — the council, the commission and the parliament — charged with the formulation and implementation of the rules of the single market. Membership of the Union is a binary matter, and once Britain is outside, a great deal falls away.”

The second precise objective is that the UK will no longer be subject to the jurisdiction of the European Court of Justice, another binary matter (you either are or you are not).  As I again set out at the FT:

“The UK would therefore be removed from the formal mechanism for dealing with disputes about the interpretation and enforceability of the rules of the single market.

“And without such a mechanism, the rules of the single market are polite fictions and aspirations. (Some would say that they are anyway.)”

The three less precise demands also point to the UK leaving the single market.   These demands are that the UK will take control of:

(a) its borders,

(b) its laws; and

(c) its money.

If these demands are also achieved then it is hard to see how the country can also remain part of the single market.  Also from me at the FT:

Control over borders undermines the freedom of movement of people (or of labour)…

“…control over laws means not accepting the qualified-majority-based deference to much of the rule-making for the single market;

“…and refusal to make compulsory contributions to the EU budget means that one can hardly participate in (or even influence) the formulation of single market rules that will affect the UK.”

The combination of these two precise demands and three general demands make it impossible for the UK to remain as part of the single market.

The UK will still, of course, have “access” to the single market.  As I explained at the FT, even the Clangers would have access to the single market if they condescended to trade their soup and blue string pudding surpluses with us mere earthlings.

The question is on what terms that access is given.

The UK remaining a member of the single market could be possible, on some sort of EEA or Norweigian model, but I cannot see how that could be done if the five demands are met.

For completeness, the issue of whether Article 50 process is revocable does not in my view directly affect the argument above for, even if it is revocable, the UK government has said it will not revoke it.

And also for completeness, I note the government has asserted that it will negotiate the best possible deal regarding the single market.  But insofar as such a statement has any meaning, I do not think it affects the argument above.

I am happy to be corrected (and use comments below), but on the basis of the argument set out above, a “hard Brexit” must be the natural and direct consequence of an Article 50 notification.

**

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164 thoughts on “An argument as to why a “hard Brexit” will be the natural and direct consequence of an Article 50 notification”

  1. Your analysis is perfectly correct and a logical consequence of the PM’s insistance that “she” will control immigration to the UK. One assumes that the government is privy to a similar analysis and cognisant of the economic harm that such a decision will provoke. What is at issue is why they continue to pretend that they can get a “good” deal with the EU and why they are prepared to give up so much for so very little – given that even they expect immigration to continue apace and are already contemplating exemptions for fruit pickers (jobs which, surely, British people could do…).

    It is temping to speculate that HMG is hopeful that the Supreme Court will grant the pleas of the devolved parliaments to have to grant their assent over a national issue which patently deeply affects citizens living in their countries. If so, that nice Ms. Sturgeon could be blamed for derailing the Brexit train before it hits the wall of economic reality which will prove to be much less forgiving!

  2. I think the reason the government is not as explicit as you about the inevitability of a ‘hard’ brexit is they cling to a deluded hope that the EU27 will cave in with a compromise (esp. on free movement) allowing the proverbial cake to to be had and eaten. The member states wont, of course, as this would break apart the EU. It feels painful to me as the referendum was about EU membership rather than whether to be in the single market or not which, lest we forget, is a commitment in the current Tory manifesto. I expect a ‘hard’ brexit will be hard economically on all of us for the foreseeable future. As someone wisely stated after the result, ‘no-one voted to be poorer’, yet this will likely be the case for many.

    1. The electorate did vote to become poorer. They accepted the economic price was worth paying for a vain expression of “identity” – nationalism.

      The reason why Hard Brexit is not admitted by the government as an inevitability?

      If they did so, it is conceivable the market reaction would prevent A50 from ever being initiated.

      By telling the world the deal after the button is pushed, there is likely to be no going back.

      1. Completely agree. It is sophistry for (particularly Labour) MPs to claim people didn’t vote to become poorer. That’s precisely what they did and mostly they thought it a price worth paying for whatever it is they wanted and still do. It’s frankly a bit patronising to claim people didn’t vote to become poorer.

        1. Wrong I’m afraid. The leave campaign managed to convince sufficient numbers of people that leaving would have zero cost. There cannot be £350 million for the NHS or anything else if Brexit carried any kind of penalty.

          It may seem ludicrous now that anyone believed that we could have a pain free exit from the EU but that was the consistent message, no financial impact other than a (clearly fictious) brexit dividend.

          I don’t understand why everyone is so keen on rewriting history or on believing that the UK population understood the pain of brexit when they voted leave. Perhaps 15% did, the rest believed that we’d repatriate £350 M and that 27 countries needed us more than we needed them.

          1. Tony’s right IMV. People generally speaking didn’t vote themselves poorer. Polls as early as July 2016 showed people who voted Leave were less likely to think their lives or finances would be impacted. More recently, when members of the public were surveyed about reducing immigration, only a small number were willing to see immigration controls that entailed household level financial sacrifice.

          2. I will qualify it. People voted to make the country poorer (and well knew it) but as individuals, generally believed (and probably still do) that this meant somebody else being poorer rather than themselves.

            Ideally, that somebody else would be a banker, but let’s not get tied up with details.

          3. I think that Leavers thought that they would suffer a bit, but that immigrants named Lech and Adnan would suffer far more than they would.

            A very similar dynamic, with a similar amount of buyer’s remorse, has already obtained in the U.S. in the wake of the presidential election. It’s hard to take seriously the idea that white votes for Trump were driven by economics alone when he kept telling Americans that their wages were too high. The non white portion of the working class was singularly unimpressed by his arguments.

          4. Hundreds of economists, many nobels, the IFS, BoE, Treasury, IMF, Investment Banks, Ratings Agencies, the Government all told the electorate they would become poorer. There was total consensus the pound would fall in value sharply. It should have been no shock when it happened. It was no shock to me.

            The people were told the risk. They accepted the risk they would become poorer and voted leave anyway. That’s fact.

          5. I agree with those who say people did not vote to be poorer. Or at least, not intentionally, and not themselves. I think there are some leavers who voted to make other people poorer, in a ‘them’ and ‘us’ way. ‘Them’ being people more prosperous, the South, bankers, professionals, Poles, you name it. They may think that impacting these parts of the economy won’t actually affect them, but this ‘them’ constitutes the engine room of the economy, and in turn will like lead to lower public spend on the NHS, welfare, pensions etc.

          6. I disagree Dasv. People didn’t vote to be poorer. Whilst the experts might well have given the warnings time and again, each time they did the public were told by the likes of Gove, Johnson and Farage that experts know nothing and that the UK would be better off out. And the tabloids repeatedly published the Leave rhetoric.

            So whilst the electorate were warned by largely faceless experts in the field, two senior politicians who ought to have been trustworthy (ha!) and populist shouty scrotebag Farage kept on telling them that experts were idiots.

            The fact is the British public seemed to lap up rhetoric to support their very linited knowledge, prejudices and fears, and ignore evidence-based warnings and predictions.

            I despair.

          7. Also the demographics: a group with a certain triple-lock guarantee on their incomes might have given the ‘you’ll be poorer’ argument less credence.

      2. Indeed the people were told the risk. The problem for your argument dsv is that they were also told that those experts were the EU subsidised elite that had consistently been proved wrong in the past, that German car manufacturers will be banging on Merkel’s door within hours and they need us more than we need them etc etc. Essentially that Brexit can be achieved at zero economic cost.

        You cannot therefore make the assertion that the economic argument that everyone believed in was not that of Leave but by the side that lost.

        1. “You cannot therefore make the assertion that the economic argument that everyone believed in was not that of Leave but by the side that lost.”

          I wasn’t aware that Leave actually made a positive economic argument (joke).

          I agree Leave cast doubt on Remain’s claims – calling them all “Project Fear”. But the debate was framed not in terms of how do we optimise our wealth, or how can we all become richer, but in terms of whether leaving will have any negative economic impacts.

          Here the electorate was presented by expert advice from the Remain campaign, and independent institutions, think tanks, economists and claims from the Leave campaign that these experts are wrong.

          If the campaign could be compared to a court case: the electorate were the jury and were given two accounts of the truth.

          I am arguing that they were aware of the economic risk of their vote and placed non-tangible (nationalistic) values ahead of that economic risk. They weighed up the cost of this expression of nationalism, and thought it was worth the cost. They voted to become poorer to express their national identity (which of course is a fictitious construct, but that’s another story).

          1. DASV I’m afraid that I should add a couple of points in support of others,

            Those that voted to leave were in many cases confident that the economic damage would not affect their own households negatively. In view of the age Leave voter age profiles, the triple lock meant that many pensioners or nearly retired felt they could reasonably safely ignore the warnings about the economy, if they heard them and did not instinctively believe Gove et al.

            It is possible that the lower levels of formal educational attainment may have affected people’s critical thinking abilities to sift through the large volume of information available. With a sceptical and critical enough eye for the misleading and mendacious, those with university and post graduate degrees may have found it easier to dismiss and discount Leave’s nonsense.

            Others if they did understand expect economic cost from #Brexit thought it would fall on others not affect them .

            it is also worth recalling an aspects of the EU Referendum campaign. Voters of all persuasions were subject to a barrage of propaganda through the tabloid populist press and to a degree the radio and television media. The Leave side’s saturation media coverage meant that even if StrongerIn’s message was better, such as on the economy, voters never even heard it, or at least not convincingly and clearly enough. Apart from the odd intervention it seems that the mediavand press stage was just left almost entirely vacant and to the Leavers. Quite simply the message on the economy just never got through to vital swing voters in particular.

  3. I think there is a further reason suporting a hard Brexit. A soft Brexit will be mostly the same arrangement as we have now but without any say in how the EU is managed. That would not make any sense at all.

    Also, I agree with your comment on whether the Article 50 process is revocable except that only applies to the current government and the current circumstances. A lot could change in the next two years.

    1. Article 50 actually has a “get out” clause in it. Though, I can’t see May using that considering her resistance against involving MPs in triggering it…

  4. I wonder whether you may have overlooked a possibility in your analysis of why the PM cannot complain about the media characterising her negotiation position as inevitably leading to Great Britain leaving the single market. I agree that you would be correct in saying that this is inevitable if the requirement for single market membership remain as they are set today. However, there remains a possibility that the EU will change the criteria on this during the course of the negotiations and thus the PM can be correct in saying that a hard Brexit is not inevitable. It is possible to disagree on the likelihood of the EU adjusting its stance from that set out before negotiations have even commenced but it may be incorrect to say that an EU adjustment is beyond the possible.

      1. Any deal that changes the 4 freedoms (e.g. free movement) will require ratification in all EU27 countries and in the EU Parliament.
        All 27 PMs supports the 4 freedoms. The EU council president Donald Tusk has stated “Hard Brexit or no Brexit”
        The four Visegrad countries will not ratify any such deal.
        In many more EU27 countries a ratification is very, very unlikely both in the parliaments and in the populations.
        The Germany industry (bdi.de) has publicly stated support for free movement and pointed to a focus on their 92-93% of nonUK export.

        But most of all the EU can easily leave the negotiation table and lose maybe 2-3% export (25-33% of current EU->UK export)

        The UK will lose maybe 25-33% (or more) of its UK->EU export plus the all important passport financial services. This will add up to be very ugly for the UKs ability to finance import and honour payments in other currencies.
        Here “ugly means UGLY”!

        Pigs will fly long before the UK is better off outside the EU.

        Lars :)

      2. If, two years ago, someone had forecast Jeremy Corbyn (yes) as Labour leader, a Tory majority with Theresa May as PM and Donald Trump in the White House they would have been deafened by the sound of flying pigs. Who knows what the EU will look like by the end of next year?

    1. It is also possible to win millions from the National Lottery, but to plan for ones financial future by relying on winning millions from the national lottery would be considered by most to be foolhardy.

    2. An “adjustment” of the 4 EU principles would require a long legal EU internal process that A) we don’t have time for, nornthe EU, and B) is likely to be vetoed by at least one nation because of its consequences, I.e. others wanting to follow suit. So, overall, the likelyhood of this happening is pretty much zero in my view.

    1. EFTA membership means signing up to the EFTA court. The EFTA court plays the role of enforcing the rules of the single market for EFTA nations, just as the European Court of Justice does for EU member states. I can’t see the EFTA court being any more politically acceptable than the ECJ.

      The problem is that single market membership comes with most of the obligations of EU membership. The EFTA court ensures these obligations are upheld for EFTA nations and adjudicates on disputes in just the same way as the ECJ. Would this be politically acceptable to the present Government? I doubt it. That’s why they ruled out the Norway solution (EFTA and EEA) and the Switzerland solution (EFTA, bi-lateral treaties).

      1. There is no guarantee the EFTA nations would let the UK join, anyway. The largest EFTA nation is Switzerland with a population of 8 million. Would you want a country 8x as large joining your club? Would you want the UK with its history of European disharmony joining your club?

        1. More worryingly, WTO membership (as promoted and promised by Rees-Mogg, Jenkins and other buffoons) on any kind of terms favourable to us is not a shoe in either.

          There are many WTO members with whom we have to negotiate who do not rely on us for any kind of significant trade, but with whom we do have considerable political friction, and there are others who are gasping for the opportunity to take some trade advantage over us.

          1. Yes – although the UK is a founding member of the WTO, its current WTO membership is via the EU’s membership of the WTO.

    2. I’ll put this a little more explicitly. Given that the EEA is a separate agreement and requires Art127 to be invoked for a Contracting Party of which the UK is explicitly written in [ and not just the “EU members”] to trigger a 12 month leaving process by invoking art 50 does this:

      a) automatically invoke Art127 at the same time
      b) invoke Art 127 once the UK has withdrawn from the EU giving the UK a further 12 months in the EEA
      or
      c) it does not follow that invoking art50 starts any EEA Art127 withdrawal process.

      1. I am with you on this one. I also belief we remain a member of the EEA unless we invoke Art 127. Since the referendum was done on the question “ should remain a member of the European Union” , withdrawal from the EEA would require parliament involvement (independently from what the Supreme Court will decide).

        1. I’m not sure the question asked in the referendum makes a difference as to whether Parliament would need to be involved – I would think the outcome of the Supreme Court case will determine that, given it’s a question of Royal Prerogative vs Parliamentary Sovereignty

        2. I’m actually not so sure. It is true that, in addition to the EU as a whole, all its member states individually are signatories to the EEA agreement, and therefore the UK will remain a signatory even if it leaves the EU until it withdraws from the EEA as well using Art. 127.

          But that may be a membership in name only. Art. 126 EEA specifies its territorial applicability as, paraphrasing, the EU, Iceland, Lichtenstein, and Norway. Reading that article literally, this means that the EEA Agreement will no longer be applicable in the UK once the UK leaves the EU.

          This could lead to the paradoxical situation where the UK is a member of the EEA Joint Committee and thus participates in taking certain decisions pertaining to the EEA, but is not subject to applicability of these decisions in its territory.

          I do not think the drafters of the EEA Agreement envisioned there ever being a situation where a EU member state would withdraw from the Union.

    3. If UK wants to join EFTA, I am certain UK will be admitted, but pls note that the that EEA Agreement formulated homogeneity rules essentially
      bind the EFTA Court to follow relevant ECJ case law. By joining EFTA UK will continue paying to EU, obey EU rules but no vote when the rules are adopted. EFTA is essentially a waiting room to become a EU member where countries such as Norway and Switzerland have gotten stuck. I dont see any benefits in leaving the EU for EFTA.

        1. Agreed. A hard Brexit with no EU treaty in place, our largest trading area by far, looks like complete folly to me.

    4. EFTA/EEA membership means agreeing to freedom of movement…It is a requirement for being a member, which is against May’s priority of immigration reduction

    5. See this:

      “Is it possible to become a party to the EEA Agreement without being a member of the EU or EFTA?

      Article 126 of the Agreement on the EEA makes it clear that the EEA Agreement only applies to the territories of the EU, in addition to Iceland, Liechtenstein and Norway. Under the present wording of the EEA Agreement, it is therefore impossible to be a party to the EEA Agreement without being a member of either the EU or EFTA.”

      http://www.efta.int/faq

      And see Professor Michael Dougan, here:

      “In a purely formal and technical sense, it is indeed correct to say that the UK is a contracting party to the European Economic Area (EEA) agreement and will remain so even after the UK has left the EU – unless the UK gives notification of its intention also to quit the EEA under Article 127 of the agreement.

      However, it is not credible to equate that formal and technical position with the idea that (post withdrawal from the EU) the UK would retain membership of the EEA, or the Single Market, in any meaningful sense.”

      “Moreover, there would need to be extensive adaptions to the legal and institutional framework of the EEA system so as to accommodate the UK within the EEA’s very particular political, administrative and judicial authorities – as well as extensive adaptions to the secondary legal instruments which make up the vast bulk of rights and obligations under the EEA agreement for the contracting parties which are not Member States of the EU.

      So, whatever the formal or technical position, it is being taken for granted – right across Europe – that the UK will either have to give notification of its intention to withdraw from not only the EU but also the EEA agreement; or instead, seek to become a fully functioning member of the EEA system, based on the unanimous consent of all the other contracting parties, together with a detailed programme of negotiations to secure the necessary legal and institutional adjustments.

      It should be said: the latter possibility does not feel very likely. From the UK’s perspective, membership of the EEA may well be the economic next-best-thing to full membership of the Single Market itself – but it would come at a significant political cost. After all, the EEA involves very extensive commitments to implement and enforce many of the same rules as a full Member State of the EU, but without having any significant influence over their adoption and development. In addition, the EEA contains a regime on free movement of persons closely aligned to that of the EU itself (and those who argue that Liechtenstein has a special deal on free movement, so the UK can get one too, come across as, frankly, rather silly).”

      https://news.liverpool.ac.uk/2016/11/28/liverpool-view-can-uk-leave-eu-automatically-remain-european-economic-area/

      There is, therefore, no default position of continuing functional membership of the EEA, nor automatic admission to EFTA, and through it, re-admission to the EEA.

      1. You misunderstood me. Of course remaining a member of the EEA after we left the EU doesnt mean anything. Apart from the fact that we have to give notice to leave.
        But this is IMHO a very important point. I expect the Supreme Court to the appeal out. I then assume very strongly that parliament will vote on giving notice on Art.50 (they cant ignore “the will of the people”). But if it comes to leave the EEA (even if it is only a technical membership) parliament will need to vote on this, too. And thats where the knives will come out because it was not the referendum question. So in an ideal world May could be forced to start negotations on the terms of the EEA membership.

      2. If it is any consolation the WTO Members also require unanimity to accept new states.

        The UK would need to convince 160 other individual and collective nations to be admitted.

        1. The UK is already a WTO member

          https://www.wto.org/english/thewto_e/countries_e/united_kingdom_e.htm

          What it needs to do is to re-establish its WTO commitments on tariffs, “tariff quotas”, agricultural subsidies and opening services markets, independently from those of the EU. Will this require all WTO members to agree? Not necessarily. Much of this can be copied and pasted from the EU’s commitments. Around 100 tariff-quotas will be problematic and will therefore take time, maybe longer than two years. If the UK does its homework, and drafts its commitments to minimise objections from other members (having listened to them carefully), the UK’s trade can continue with minimal disruption even if those commitments are not certified by consensus by the WTO’s 164 members. A big “if”.

          https://tradebetablog.wordpress.com/2017/01/09/six-things-since-referendum/

  5. If this is what in fact happens, ‘take back control’ will in fact mean handing control to a small cabal of ideologues who have never won an election, and allowing them to impose a massively destructive outcome that only a minority of voters actually want. So much for acting on the wishes of the British people. The tragedy is that Labour seems to be offering no effective resistance to this hard-right fantasy of walls and purity.

    1. Frankly, I think there’s quite a bit too much of the walls and purity on the Labour side too – and not from the right wing of Labour, but from the exact left wing that was supposed to offer real opposition. Walling off Britain from the capitalist world, and imposing a socialist workers purity, seems to be the goal.

      1. Don’t discount actual ethnic bigotry here, dressed up under Socialist camouflage. The Sanders camp – which holds the same “no struggle but class struggle” views as Cornyn and has equal if not greater difficulty in relationships with nonwhites – was and still is full of racist and/or sexist dimwits.

        1. For me, Corbyn’s relationship is more unsettling than simply bad – I see, via twitter and facebook, many people (young, often women, often people of colour, all committed to the needs of those groups – the BLM+, LGBTQ+, millenial community) who were firmly supportive of Corbyn, and who Corbyn’s social media approach directly targeted, realising that they supported a man who really doesn’t consider those issues as of great importance as those of the white male ‘worker’ (worker defined in the same sense as it was in 1965). It’s frustrating, and sort of sad.

    2. I think this is correct. ‘A cabal of ideologues’ accurately describes this group for whom Brexit is merely Part 1 of the plan. Part 2 involves a slashed corporate tax rate to tax haven status, an attack on ‘red tape’ which actually means employment, safety and environmental standards, and a ‘smaller state’ – i.e. reduced public spending. This is perfectly articulated by this economist:
      http://www.cityam.com/256040/all-want-christmas-ultra-hard-brexit-and-nine-other-pro
      It seems unlikely this is what the average Leave voter was voting for.

  6. I came to pretty much the same conclusion. If we leave the EU, we leave the Customs Union and single market. We could negotiate a CU agreement if we and the EU wished. We could gain access to the single market through signing up to the EEA agreement, although I am not sure this is as straightforward as some imply (e.g. ‘simply’ joining EFTA). So I think you are right, the default is hard Brexit, but a ‘softer’ version could be negotiated (if if there is willingness on both sides). Importantly, I think that the EEA rules on free movement of persons are subtly different to those required for EU MS – EEA members have a possibility to derrogate from the EU’s free movement of people rules in the event of a serious economic, societal or environmental ‘difficulties’. However, any suggestion by the UK that it was aiming for the ‘Lichtenstein solution’ would probably generate more ridicule among the EU27 than serious consideration.

    1. Such restrictions also apply to EU membership.

      Indeed, if Tony Blair had done what many other EU countries did when Poland etc joined, and restricted in the influx of new workers for some years, we might not be where we are now.

      1. This is so true, and often overlooked. We could have mitigated the negative impacts of free movement, hell we could have managed it so much better. But governments of both persuasions decided it wasn’t necessary. So we had an extra couple of million people on the move with no idea where they were going, if their kids needed schools, anything. Other countries managed it differently. We are paying the price, economically and socially, for an extreme form of laissez faire.

    2. It is correct that deferral rights exist for current countries on freedom of movement for New Nember State accessions both within the EU and EEA. Criminals could be and were refused entry to U.K. under current rules.

      None of these existing restrictions on free movement, or the further changes secured by David Cameron on free movement of people during his fateful EU Renegotiation mattered one bit. Child benefit payments indexation to country of origin and deferral of social security benefits were secured. As his last ditch attempts to wring yet further concessions from Frau Merkel during the final days of the referendum period show, the campaign was being lost on the conflated issues of immigration, migration and refugees as well as the £350m per week NHS pledge according to Vote Leave supreme Dominic Cummings . Earlier breaks and existing controls were not enough to satisfy baying anti-EU, anti-immigration populist press, or Leave supporters. Non-EU immigrants currently living in U.K. outnumber EU Citizens by about two to one. More permanent migrants still come from those non EU countries each year. No matter. As Leave campaigns were told by their advisers before the EU Referendum in political campaigns “facts do not matter.” Emotions matter.

      Probably the most likely reason that a WTO or even no international agreement will happen is less due to Theresa May and her current political dark alley, but more to do with Dominic Cummings. Whether he is in charge of Change Britain or not, its advocacy of and blind determination to force a U.K. outside the SEM is the single factor most likely to lead to that final outcome. Unless something fairly significant is done about it and very soon.

  7. I disagree with you about the significance of Article 50 being revocable. It is crucially important. Apart from Maverick’s point that there could be a new government before the agreement is concluded I would be very happy for Article 50 to be invoked now if revocation were possible. Once the negotiations start it will become clear that leaving the EU really is state suicide and there are no valid reasons to exit. At that point we need to be able to write a letter withdrawing the Article 50 notice and get on with being a full member of a shaken EU in which all 28 members will learn some lessons.

    1. That’s something many of us hope for, but it doesn’t make article 50 any more revocable.

      In the end it’s probably politics rather than legality. If we conduct ourselves well but cannot reach an agreement then the 27 may find a way for A50 to be revocable.

      However the likelyhood is we won’t conduct ourselves well at all but instead will act like spoilt brats and be kicked out at the end of 2 years.

    2. A comment from Italy. I feel somewhat doubtful about the concrete possibility of invoking and then revoking Art 50 – not that it may not legally feasible, but I believe at a stratospheric political cost.

      With its history of European scepticism, the concessions obtained by Cameron, the outcome of the Brexit referendum and finally the triggering of Art 50, the UK is already seen as a sort of foreign body within the EU. Then, revoking Art 50 after having invoked it would mean a final and total loss of face probably not worth paying.

      1. Even if A50 can be revoked that doesn’t mean that the EU27 will accept its revocation. Even if left to QMV rather than a veto, there are no guarantees they would agree to anything at that point. Individual nations can gain a lot from the UK leaving the EU. They might not be happy to see A50 revoked if they think they’ll lose out on the relocation of car factories and pension providers.

        This feels like one of those situations where politics moves much faster than the law. Even if the EU27 were legally obliged to accept the revocation that would take years to sort out if the political decision was to reject it.

        1. Unilateral revocation – if it is allowed under Treaty law – is a legal act and has nothing to do with the EU27 nor with QMV. If it is legally permissible and the UK does it we are back to status quo ante.

          There will be more or less bad feeling between various countries and the UK but the EU cannot eject a member state because it wants to.

          If a member state says it is not leaving and Treaty law is behind it, that’s it.

      2. The issue there is that, while that is certainly true, it as nothing compared to if we either have to go cap in hand to request a political revocation or if we ask to rejoin.

        Effectively, if the EU27 call our bluff and our cards prove insufficient, being able to legally back out based on a change of government is the least embarrassing solution.

        If the vote had not been close or if the demographics had suggested that the vote was going to move further Leave, I would agree wholeheartedly.

        But as neither of those are the case, this is less “loss of face” and more “lesson for the future”. On both sides of the debate, to be honest.

  8. I suspect that the “something might turn up” philosophy is what drives the PM’s stance. Slim chance but the only actual hope. Britain may remain competitive after hard Brexit, but only by means of further devaluation. So leaving everyone poorer in terms of purchasing power.

    1. I’m afraid I can’t see Mrs May as Ms Micawber. According to Mr. Ganesh’s excellent column in the FT, May and her familiars (Timothy, Hill) fully understand the cost of Brexit, they just don’t care. This gives matters a decidedly grimmer cast.

  9. Perhaps this stark reality is the signal needed. Perhaps now is the time for Liberal Leave and Single Marketeers to work in coalition with the 48% and the disenfranchised British citizens who were denied a vote because the changes to residency requirements also in the Tory Manifesto did not come into force before the EU Referendum. Such a coalition can support the court cases examining whether Art 50 is revocable and whether HMG has a mandate to take Britain out of the EEA; ensure that all those who have turned 18 since June 23 are registered to vote in elections (at term-time and permanent home addresses, where relevant). Just yesterday, Geraint Davis MP from Swansea West launched a movement within Parliament, very much like Represent-Us in the grassroots, to impose conditions on how Article 50 is triggered.

    David, I appreciate that you have always been neutral about the existential question (should Britain be a member or not) but as you know, many of your regular readers are not.

    The Act of Referendum was “silent” on next steps, and as you clearly outline (with a stamina worthy of a St George’s Cross) HMG has “no clue” how to implement effectively their intention to exit. So let’s stall.

    #NoDust
    @NoDustEU

    1. One less vote: Because of the Brexit decision I am resolved not actually to vote in Britain any more. I think the 1975 referendum was my first. The 2016 referendum was my last.

      1. And another one less here: on June 23rd I had not quite been outside the UK for 15 years so was able to vote in the EU Referendum. Now, my time is up. UK emigrants in EU countries need to be given back the vote asap as we will be among the hardest hit in the case of a “hard Brexit”.

        1. You have been given back the right to vote. Just after the referendum. Sickening for those unable to vote! They deserve another chance to have their say.

  10. In the last two year Greece leaving the Euro and Switzerland leaving EFTA looked like the default option after their referendums. I both cases the EU core countries remained firm on their demands and the other country folded in the face of an economic downturn. Something similar could happen this time with May getting fudges on courts and immigration in return for a downgraded single market membership.

    1. Switzerland hasn’t yet had its fudge accepted by the EU. Watch this space!

      The Swiss fudge was a tiny technical change that makes no practical difference whatsoever. EU workers will be just as able to apply for work in Switzerland as they are today. I just can’t see a fudge so minuscule being politically acceptable to the UK Government.

  11. There is also very very limited scope of what a transitional arrangement can plausibly be. When the treaties no longer apply to us, we are out. We could do some kind of bilateral treaty with the EU that says “lets pretend between us that it never happened and act accordingly” (it would be impossible to ratify and probably illegal but lets say we did it anyway). The next day Israel ships a crate of tasty avocados to the UK. They are not a party to our cosy little transition, and we are no longer a member of the EU. There is no way that Israel can be seen as having a treaty with us. We must apply tariffs on their trade and they must apply tariffs on our trade in accordance with the published schedule of commitments (the tariff might be zero, but we have to treat it as a third country import outside of any trade agreement). All our trade with all the countries the EU has an agreement with will fall off a cliff on day 1 of Brexit.
    The other issue with transitions is that there is nowhere to write it down. Transitions in trade agreements go in the agreed and ratified destination agreement, so various provisions in CETA will turn on at different times, tariffs might fall progressively, quotas might expand or get removed. It is all written down in the destination. If we go to WTO rules then there is no destination treaty and there can be no destination treaty. WTO rules is unilateral fair trade. There can not be an on-ramp to it. There *could* be an off-ramp written into a modified EU treaty, however that change requires 28 member approval and in 2 years that treaty will no longer apply to us, so the off-ramp would not apply to us unless all 28 let us stay a party to it to allow us to use the off ramp. Needless to say, that route is a spectacularly unlikely political achievement to pull off.

  12. Having worked for the civil service (and escaped) one thing I am 100% certain of is that 2 years is not nearly enough time for the UK to leave the EU, single market and customs union. Things move at a glacial pace in the public sector. This is a 5, 7, maybe 10 year project.

    If I’m correct about this, that inevitably means an interim deal or an extension to the A50 clock being the first point of negotiation. An interim deal would likely be “Norway”. Leaving the EU in name only.

    If the final destination for the UK – EU relationship is actually 7 – 10 years away, that’s a lot of time for governments and public sentiment to change.

    1. The A50 may be revoked for 2 years. But it may mean some or all of the current UK benefits e.g. the very significant rebate will go.
      It will almost surely be the case if the UK gets an A50 extension beyond 2 years.
      Note the UK has – by far – the best membership conditions of any EU member.

      The EU will not give any ‘gifts’ or any more benefits to the UK. The UK is effectively in a race to keep as much of what it already has.

      Lars :)

    2. Agree re the impossibility of doing this in 2 years (in reality, 14 months minus summer holidays). But disagree about the likelihood of a 5-10 year transitional deal(which would be the responsible thing to do), because politics will prevail. The Tories want rid of eg free movement by GE2020 as they fear the EEA prison. Can you see May campaigning in the build up to that election with the UK accepting the four freedoms,ECJ jurisdiction etc? I just don’t see it.

    3. I commend your foresight in leaving the civil service before stating that Brexit will be a 10 year process. Sir Ivan Rogers just conclusively demonstrated the downside of doing it the other way round.

  13. I am no legal expert so please feel free to shoot me down in flames but could I put forward the following for your opinion:

    Article 50 says the decision to withdraw is to be made in accordance with our constitutional requirements. Therefore, if constitutionally, we decide to withdraw, subject to conditions, can we not include those conditions in the article 50 notice?

    For example, if an act of parliament is required to trigger Article 50, and that act includes certain conditions that will reflect our constitutional decision to withdraw which is than carried over into the notice.

    I understand the interpretation of EU law may only be definitively resolved by the ECJ and so the question of revoking an article 50 notice is an EU law question. In this instance could one argue that because the wording of article 50 says a decision to withdraw is made in accordance with our constitutional requirements this means, in effect, that EU law is providing an opening for national constitutional law to make a conditional decision to withdraw – which can then be reflected in an article 50 notice. That is to say it becomes a matter of national, not EU, law.

    So can we not (via an act of Parliament) make a condition of our withdrawal that we can revoke our decision?

    1. Also not a legal expert, so I could be wrong, but my understanding is that the “in accordance with constitutional requirements” refers to how a specific country decides whether or not to invoke Article 50. Once Article 50 is invoke, the process is laid down in the relevant EU treaties – two years to sort out a new deal or we’re out without any deal at all, unless the EU grants us an extention on the negotiations.

    2. “In accordance with its own constitutional requirements” (Art. 50(1) TEU) refers to the procedure of arriving at the decision to withdraw. Each Member State shall follow its own constitutional procedure in making that decision; it is an internal matter, not regulated by the Treaties.
      Notification (Art. 50(2) TEU), on the other hand, is the simple unilateral act of communicating that decision to the Council once it has been made. It is the letter in which HMG writes “We have decided that we want to leave”. If you put conditions into that letter (“We kinda want to leave, but reserve the right to change our mind later”), it is not a “decision to leave”.

      Hope this helps

  14. Should we expect tensions to flare up when negotiations begin?

    I note that May’s insistence that the ‘best deal for the UK’ will also be ‘the best deal for the the EU’ provides her with another scapegoat for when things go wrong.

    David Davis hints at his own adversarial view when he suggests he can accept a scorched earth outcome for the financial services industry if most of the jobs lost go to America and not Europe.

    Unfortunately it’s difficult to see how a challenge to the madness can be effectively mounted until Corbyn is removed.

    1. It’s difficult to see how a hard Brexit can lead to a good outcome for a number of industries that are very ‘hard-wired’ in to the EU. Financial services is a very obvious one, providing 12% of GDP and a tax contribution of around 70 billion (more than half NHS budget). Other industries, such as pharma, aerospace and auto, are also major contributors who look on hard Brexit with great concern.
      The government’s attitude to this is a puzzle. They must equally understand it, they have been told by each of these industries, but seem to be relying on a strategy of playing ‘chicken’ with the EU, on the basis that BMW want to sell us cars.

  15. Irrespective of outcome, Brexit is a massive and unnecessary distraction for the UK. With Trump in the White House, European democracies are no longer well-protected against Kremlin aggression and intervention. At this moment the UK should be working to strengthen liberal democracy in Europe, not break things apart.

    In fact, one could easily suspect that the Leave campaign was funded by the Kremlin (through one of Arron Banks’ many shell companies, and on the suggestion of Ekaterina Paderina) for exactly this purpose.

    1. Regardless of whether Mr Putin directly tried influence Brexit, the broad advance of right wing nativism amounts to the same thing.

  16. I agree with you that a Hard Brexit is the likely end point, because of (a) the politics in the Conservative party and how May stands in relation to that; and (b) because it is the only thing that all – UK and EU27 can agree on. And I would argue that has been the case since May was elected. We are deluding ourselves if we think otherwise.

    Where I differ, and would follow on from Nick H, is that I think agreeing a transitional deal, and its time period, is almost as important and is where the deal is to be done between the UK and the EU. Hard Brexit – for all concerned on both sides of the Channel – cannot happen overnight i.e. 1st April 2019. There are too many practical issues about customs procedures, mutual recognition etc etc (etc…). I think the arguments should be over the nature of any transitional deal and its timespan. Which I know, in turn, depends on what our Brexit end state will be. But if the latter is clear (outside of the EU for ECJ, immigration and trade), then the key negotiation is over the interim package. And that is where the UK will still need all the goodwill it can from the EU27. And I think the only practical approach would be joining the EEA as an EFTA member.

    So yes, I agree with JackofKent about the end state, but I am more interested in how we negotiate the best interim proposal.

    1. What interest will the EU27 have in this ?
      It could create the UK as a kind of zombie member moving very slowly or not moving at all.

      Defence and Europol membership are the only two (small) cards on the UKs hand – as I see it.

      Lars :)

  17. The other reason there will be a hard Brexit is that in its confused way, Labour wants one too [no free movement]. So hard Brexit will also happen as there is no substantial opposition argument either.

    What seems bizarre is the pretence (it must just be a pantomime by now) that the EU 27 won’t do what they have said for almost every day during the last six months about the inviolability of the four freedoms. Conservatives, Leavers of all stripes and much of the Labour party keep peddling this they-need–us nonsense but to what end?

    1. The tragedy is that things like immigration breaks, job-conditional movement and further restrictions to benefits to EA nationals are all very possible if the right atmosphere for it would be created. But there’s no political leadership savvy enough in the UK to generate that atmosphere.

      According to trade expert Shankar Singham, who coincidentally is perhaps the most convincing and credible of all ‘experts’ on the economic opportunities available outside the Single Market and the Customs Union, once negotiations start political rhetoric starts to make way for pragmatism down the line. If he’s to be believed, there should also be a more flexible EU to meet the UK’s desire for a more control over immigration. It need not affect the 4 principles either.

      But I’m half convinced the May has an end game in mind that rids the UK from oversight the ECJ/EFTA and eventually the European Court of Human Rights, which frees up the real control she desires for government, which is desire of control *over* its population, not *for* its citizens. Consider for example the IP Act which she has championed, it stands to be watered down on behest of a ECJ ruling. I think she’s more than a little invested in avoiding pesky European interference, giving her added motivation to pursue the hardest of brexits. After all, she’ll be able to spread the blame elsewhere for any short term economic fallout.

      1. “there should also be a more flexible EU to meet the UK’s desire for a more control over immigration.”

        This seems a big gamble. The EU does not look in a mood to ‘reward’ the UK for Brexit, it seems more concerned with protecting the single market principles and the 4 freedoms. It is also the case that business plans for certainty and stability, not on a ‘what if’ basis. If and when a hard Brext outcome becomes more apparent, then contingency plans will be triggered in the City and elsewhere to ensure continued access to the single market.

    2. To give themselves courage perhaps? I am continually struck by Brexiters’ strenuous confidence and unrealistic self image. Their insistence that the referendum, rather than the triggering of Article 50, was the watershed event makes the simplicity and high-coloured imagineering of their scenario seem more plausible to them. Why would one worry about complex negotiations to mitigate Brexit when to them Brexit is a liberation that doesn’t need mitigating?

  18. I agree with your conclusions, if for no other reasons than chaos and confusion reign and time is in short supply.

    However, I wonder if May has left herself some wiggle room in three areas. Firstly, contributions. Norway officially does not contribute to the general EU budget per se, but contributes money to specific areas, e.g. Erasmus, Horizons, economic development fund, justice etc. I wonder if this is a fiction, in the same way as our road tax does not fund roads but rather goes into general taxation. Still, wiggle room here for May to claim that we’re only paying into programmes of our choice.

    Secondly, courts. Other people will know better, but my impression is that May has only referred to the ECJ and not the EFTA Court. Wiggle room as she can claim that she has delivered on leaving the jurisdiction of the ECJ.

    Thirdly, immigration. Many ways forward on this issue: (i) the oft-mentioned emergency brake available to EFTA members, (ii) enforcement of current EU laws requiring medical insurance and employment for citizens within 3 months and/or (iii) the Swiss fudge whereby Swiss citizens must be prioritised over EU citizens. In combination, May could claim that she has taken back control of immigration.

    None of these points negate DAG’s conclusion, of course, but perhaps they provide a potential insight into how careful political parsing may enable us to inch towards a future agreement.

    However, overall, the issue will continue to rear its ugly head for years as no-one will be satisfied with any outcome.

    1. I wondered if this would be the end result for the reasons you articulate very well. However, it seems to me that this would be a difficult pill for the Tory right to swallow and they are in no mood to compromise. If May had been a little more inclusive in her rhetoric since day 1 I could see this as an outcome. But after being so dogmatic it would now look like an almighty climb down.

      BTW I think there are real differences between the EFTA and ECJ Courts especially re the obligation to refer cases and the direct effect of their judgments. If the political will had been there I think the option could have been sold, but I fear it is too late.

    2. That makes sense. Any trade deal we do will involve a court of some kind to arbitrate disputes, and you only have to look at the furore in Europe over the dispute settlement procedures in CETA to realise that it will be very hard to sell any deal to the 27 that does not involve enforcement of human rights. Many goods nowadays come with an app and its associated cloud service; how can EU nationals be happy with UK good/service exports if the treatment of their personal data isn’t up to scratch, and if there’s no comeback against vendors who sell all their data to the spammers or give it to GCHQ?

      In addition, the electorate may realise that any trade deal with the USA will be even less satisfactory than NAFTA, which Trump has repeatedly denounced for not putting America first. I’d bet he’ll offer us a dispute resolution mechanism even less satisfactory than the one proposed with TTIP.

  19. I agree with the two comments above which point out with regard to revocation that the government may change. However the refusal of the EU to contemplate negotiation before article 50 is invoked implies that it is an irrevocable leap. If so, that scuppers a second referendum. In my view the government’s policy is very simple: it wishes to avoid the responsibility for any decision. It currently holds itself obligated to the decision of the referendum but it may hope that parliament or legal action will delay any decision until the mood of the country shifts. If it accepts that article 50 will bring severe detriment then it is in its interests to delay. Alternatively, if the Supreme Court places the responsibility on parliament, is there any possibility of May choosing a free vote?

    1. I draw no such implication as to the revocability of Article 50 and in particular the most probable answer that it is unilaterally revocable.

      We shall see.

      I concur, however that it is internally *politically* irrevocable which is not quite the same thing.

      I seem to be in a minority when people advocate a second referendum. I abhor referendums and have seen nothing to change that view. The only way this should be stopped is by Parliament.

      1. Yes – if the current Government was defeated and one of the two scenarios specified in S2 of the Fixed-term Parliaments Act 2011 then arose, there would, in my view, legally and politically have to be General Election. That is why the outcome of the Irish High Court Proceedings which are about to be commenced by Jolyon Maugham QC will be of such relevance. See this Press Release: https://waitingfortax.com/2017/01/12/dublin-case-press-release/

  20. “nor comply with any of the regulations and directives that set out the common standards of the single market. ”
    Only a small point. This is not true in the sense that all goods exported to the EU by UK would have to comply with safety and other regulations applicable in th EU. Otherwise:no exports
    e.g next EU directive re cars construction and use requires cars to have automated devices to call emergency services in the event of an accident.

  21. Whether we can revoke Article 50 is certainly an important topic. Another is what circumstances could result in such a revocation.

    As suggested, no other political party is in a position to win a General Election (short of complete TM/Con Govnt implosion).
    Linked to this is the fact that most MPs, whatever their initial views, are coming behind the idea that the people have spoken, that democracy must be served, and that scrutiny, oversight and influence over the final details of Brexit are the best that can be hoped for. The toxic risk of Parliament overturning the referendum is too great, however poor the final Brexit deal begins to look.

    The only political party that could conceivably push a Remain agenda and win a General Election is the Conservatives. And this is almost inconceivable.

    A wholly unsuitable binary referendum has got us to this place. A 2nd referendum, or the equivalent, is the only way that the UK can realistically get to a position of revoking A50.

    The only way to force a 2nd quasi-referendum (allowing the UK people to review the best Brexit deal on offer against the current in-EU status quo) is to provide the people with a new single policy Political Party to stand in each and every constituency at the next general election.

    The 650 new Party candidates must have no profile, with no need to campaign or to ‘sell’ the EU. I’m thinking housewives and similar. The press, academics and the current political parties will critique the final best Brexit deal – all the UK needs is a mechanism to capture the democratic answer to ‘best Brexit deal’ on offer’ vs ‘current status quo’.

    If no majority is achieved for this new Party, any of its successful MPs would resign within 24 hours, triggering by-elections in each of the seats in question.

    If a majority is achieved by the new Party, the current political parties are ‘charged’ to revoke A50, or indeed re-apply to join the EU depending on the timing of the General Election. The people would have truly spoken, this time after far more details and facts are known, and the true detail of the best Brexit option is clear to all.

    Again, all the new Party MPs would resign within 24 hours, allowing by-elections to provide once more our normal spread of political party MPs. The new Political Party is dissolved.

    This new Party provides an unstoppable mechanism to measure whether the UK population like what is finally offered after the work is done. If we do, no problem, lets Brexit.

    Such a mechanism allows a focus for pro-EU sentiment and detail, allows the EU27 to explore further changes that would make the UK’s position in the EU more palatable, and actually reduces the pressure on current MPs to focus on anything other than trying to find the best route for the UK.

    Of course a 2nd Referendum would be simpler. But it won’t happen.
    A single policy political party winning power (for 24 hours) in a modern liberal democracy – unlikely. But these days, it could happen.

    @patrickcherry

    1. The concept of a new single-issue, one-General-Election-only Political Party is an innovative and interesting one – maybe that is what a new political movement such as Mainstay might become. Crowdfunding makes organisations like that and More United a much more viable proposition – for any JoK readers who have not heard of Mainstay, here is a link to the website: http://www.mainstay.uk.net/

  22. I am very concerned that such seismic steps are to be taken without absolute certainty as to whether article 50 is irrevocable.

    I have no doubt that either the High Court or the Supreme Court would have made a referral to European Court of Justice but for the vitriolic reaction it would have caused.

      1. Assuming it gets off the ground, it only works if the Irish court makes the reference. Needs to be quick if TM is serious about giving notice in March.

  23. maybe the government aims to contrive a situation so bad that the demands to revoke Article 50 notification will be overwhelming…

    …no, I don’t really think so either although maybe that outcome remains a possibility.

  24. No disagreement on the main thrust of the Article but I do disagree with the following statement:

    “”hard Brexit” is also the settled and unanimous position of the remaining 27 member states.”

    As far as I am aware, no single EU Member State has declared this to be their official position, much less all 27 acting in unanimity. I accept that several have stated that the UK’s goals are inconsistent with SM membership. However, that is not quite the same as claiming they are determined to force the UK down this route.

    Until the UK actually triggers Article 50 and the EU negotiating team are in receipt of their demands, it is not possible to establish what the collective EU position will be.

    Indeed, there may never be a unanimous EU position. Perhaps this in itself increases the liklihood of a hard Brexit?

    Notwithstanding the above and for many other reasons, including those that you mention, I would agree that a hard Brexit remains the most likely outcome.

    1. This past autumn all #EU27 PM’s fully supported the 4 freedoms.
      Michel Barnier (@MichelBarnier) the EU27 negotiator has since tweeted about his visits to the EU27 countries and the full support for the 4 freedoms – e.g.
      https://twitter.com/MichelBarnier/status/811211021721473024
      https://twitter.com/MichelBarnier/status/799298766989918208
      https://twitter.com/MichelBarnier/status/796696704972156929

      It has been said again and again no deal without free movement – or super hard Brexit (WTO-go-to-hell and no passport).

      Lars :)

  25. Speaking of reversals what kind of a deal could we expect if, after completion of brexit, we changed our minds?

    If, for example, the Norway model was implemented as a transitional arrangement but a government sought to rejoin would we be looking what has been jokingly referred to as a ‘hard remain’? (Schengen, the Euro and closer political integration.) Difficult to see how such a package could be sold to the public in a future referendum so would it put an end to the ‘remain in the EU by the back door’ complaints?

    1. The hard Brexit will likely be very ugly to the UK – not least for the poor and those who depends on public support in some form.
      The current NHS problems is likely nothing compared to what may come ( after Brexit is effective).
      The UK will miss a large part of its income in foreign currency and this will limit the UK’s ability to pay for import and send pensions abroad.
      The conditions of a ‘harder remain’ will – IMHO – be nothing compared to the hardship of a full hard Brexit.

      The UK currently has the very best EU membership conditions of any EU28 country. It may be possible for the the UK to revoke A50, but keeping the special UK conditions is not a sure thing. Should the UK get an extension to the 2 years limit in A50, then – I think – at least the rebate will have to go.
      The UK may need to join the Schengen and the Euro too, but likely only after a decade long period.

      Lars :)

  26. Correct analysis given the governments position. So the misleading part is if article 50 is invoked hard BREXIT is certain, no it is political position after that the rest falls on what they have said. However there seems very little chance the politics will change before ART 50 is invoked so you are correct. As much as i don’t want it to be.

  27. The value in democracy is not that it elects good governments; it is that it provides a civilised mechanism for removing bad governments (the typical alternative is a coup d’état). The Brexit referendum was an abuse of democracy: it allowed people to express dissatisfaction, in this case with the EU, but failed to offer a viable alternative (the equivalent of a new government).

    The sad thing is that the EU became the object of blame for a whole range of UK government failures – and not just by the Cameron/Osborne government, but more seriously by the Blair/Brown governments. The latter accepted immigration to the UK (on a scale even greater than they forecast) because it generated economic growth. Migrants from Poland suited Britain well, providing highly productive workers for the building trades and arable farming in particular. Our health service has long depended heavily on immigrants from the EU (as well as India and the Philippines).

    But Blair, Brown, Darling, Cameron and Osborne all missed one stunningly obvious (with hindsight maybe) point: net immigration means a greater demand on housing, transport, education and health. When Labour under Blair was elected in 1997, the country was already severely underinvested in transport infrastructure, health and education. In its first term in government, it took steps to remedy those, but neglected housing until 2003.

    Immigration took off almost immediately after Labour was elected, initially from non-EU countries, but the accession of Eastern European countries to the EU shifted the balance. Labour governments took the bonus of increased tax revenue resulting from economic growth and banked it (running budget surpluses from 1998 to 2001).

    After the banking crash in 2008, government investment was diverted towards bailing out banks and fire-fighting an economy in recession that threatened to turn into depression. Investment in housing, health, education and other local government services all took a back seat. But net immigration was still high and rising, so demands on housing, health, education and other local government services also continued to rise.

    It was inevitable that people would cry foul. They voted Labour out in 2010, but the Conservatives offered no relief. In fact they tightened the screws and meddled with, without fixing, the NHS and education. They did however start to address the burgeoning housing crisis, but too slowly to catch up with demand.

    The vote for Brexit was a natural and (in hindsight) predictable outcome after years of under-investment by successive governments in housing, transport infrastructure, education, health, social care and other local government services. UKIP and the larger part of Labour and the Conservatives all scapegoated the EU rather than admit that the blame lay with UK governments.

    It is therefore no wonder that the other 27 nations of the EU feel little sympathy with the UK. We have reaped benefits of EU membership, and now we are blaming the EU for our own governments’ mismanagement.

    The law (British or EU) might provide a let-out from invoking Article 50 irreversibly. But people (and most of the media) would cry double-foul if Theresa May (or a successor) tried to play that card.

    A proportion of those who voted Brexit believe that the EU is a bloated bureaucracy that we can do better without. Most people would agree with the first part of this assertion. The real point of disagreement though is over the consequences of Brexit, which are necessarily unprovable. Hence no argument is likely to change the mind of a principled Brexiteer.

    A larger proportion of those who voted Brexit believe that leaving the EU will reduce the pressure in the UK on housing, employment, health, education and other local government services. It may do in the short term, but the loss of labour will create a crisis in the construction industry, farming, health and social care, academia, and other parts of the UK economy. The loss of tax revenue, from a smaller population and a shrinking economy, will put even greater strain on central and local government finances.

    If there is an alternative to Brexit, it is not a legal loophole that annuls or blocks the referendum. It would need to be a credible commitment by government to embark immediately on a massive programme of investment in housing, transport, health, energy, policing, education, social care and other local government services. That would mean increasing the national debt at a time when it is becoming more expensive to service and/or increasing taxes.

    No-one will vote for a large increase in income or sales taxes, so that government would also need to raise taxes on, for instance, multinational corporate earnings, land, intellectual property, financial transactions, commodities, CO2 emissions and infrastructure usage (including roads and airports).

    Business as usual is not an option: something has to change. If the UK government doesn’t offer a radical alternative to Brexit, then hard/clean but painful Brexit is inevitable. The law does not provide a let-out from politics.

    References:
    Government borrowing: http://www.economicshelp.org/blog/7568/debt/government-debt-under-labour-1997-2010/
    Migration: https://fullfact.org/immigration/eu-migration-and-uk/
    Housing: http://www.tradingeconomics.com/united-kingdom/housing-starts
    Healthcare: https://www.compas.ox.ac.uk/media/PR-2015-WORKINT-Background-Report.pdf

    1. You’ve navigated to what is perhaps the single most infuriating part of the debate around the EU. Freedom of movement has been cast as some external measure that was done to the UK begrudgingly, rather than a measure that UK government has sought to exploit for its own interests, this is most evident in the case of Poland’s accession, when the UK could have put in some limits to the sheer to the sheer numbers as other members did.

      It is not evident to most all voters the degree to which politicians have eschewed assuming responsibility on this. At the same time politicians have been happy to lay the blame at a supposedly unreformable EU, when the negative perception around immigration is directly tied to UK greedy policies, policies that involved underinvesting in housing, education and healthcare while happily building an economy increasingly dependent on the advantages of labour from the EU.

      It’s the EU and EU nationals who’ve been cast as the source of the problem, not the politicians at Westminster. And it’s the most infuriating part of the debate, because Brexit is ultimately the result of UK politicians not taking responsibility, not being honest about how we got here and not having the discipline in the past to use freedom of movement responsibly as an economic advantage.

      Instead, we have MPs both in Labour and the Conservative Party who joined the chorus in vilifying freedom of movement, painting it as a source of unfairness in society and laughably calling it discriminatory.

      It’s all added to a debate where immigrants are increasingly talked about as discardable and problematic elements that we now want to rid of. Many voters prefer to weigh each immigrant in terms of their immediate utility and the degree to which they possess pleasing preferential qualities, (for some that means being white and having English as a first language) while fitting a high enough income bracket. And even those immigrants fitting the criteria they will live here with no real representation, no national voting power, no 1st or even 2nd class citizen status. When people say they are not racist, or that they are not against immigration but just for control, what they are often really implying is that they endorse treating immigrants as discardable economic contributors that should only be accepted if they meet criteria that please us.

      Freedom of Movement has been a nice equaliser, it gave all EU citizens an elevated status beyond a 3rd class citizen that migrants normally have, it’s treating humans like humans instead. And now it’s being attacked even by moderate politicians because it’s become politically convenient to do so.

      This is yet another reason why Hard Brexit is all the more likely, because Labour and the Conservative largely prefer attacking freedom of movement over taking responsibility over past policy decisions.

      1. Excellent post – I agree whole-heartedly with it. The key point being UK politicians willing to accept responsibility (and thereby to having made mistakes) previously. The only blame they ever cast is on the previous administration and not their own failings and shortsighted policies. Can we ever expect this to change ?

      2. Excellent point. The coalition government reduced funding and places to train nurses in the U.K., for example, and pursued a conscious policy of recruiting NHS staff from abroad. But after the referendum, Jeremy Hunt leapt like a gazelle to declare in the media the desirability and achievability of “all-British” medical staff, as though the government had no role in formulating the previous policy.

    2. Whilst i agree with your analysis’s in general i still think you miss some important points,1 if people stay in there own countries in general & are allowed & able build there own economies up,this benefits us more in the long run than concentrated wealth does! 2 Yes the blame has been apportioned sometimes unfairly on the EU,Brexit stops this, it leaves no place for politicians to hide & easier to change! 3 baring two regions London & the South East no recovery has taken place at all(back to No1 even within Britain) so if you are poor & tide to a oppressive regime(& financial tyranny is rampant these days) better be poor or even poorer & in a position to free yourself,than continue being poor for ever! (& that is what is on offer under this economic system),Like the Wiemar of Germany the people are telling them to change,people like me who is pro EU in principal but not has it has become,but first we must change Britain,change is coming our rights including our rights of humans are under threat from our own government. All that the terrorist want is being implemented by the government,workers rights being attacked but know there is no hiding place,we can clearly see who is implement what & why.
      Brexit may make things worse,but at least now the tyrants have nowhere or one to hide behind.
      Globalisation could have been the greatest achievement of mankind,if it wasn’t for the fact it wasn’t done for the benefit of humanity,but out of greed/profiteering which was banned by witch dunkers because of the damage it did to economies & humanity,now the stakes are even higher & humanities very existence is at stake!

  28. Hard Brexit is not “the settled and unanimous position of the remaining 27 member states.” The position, currently, of the heads of the council, commission and Parliament is that the four freedoms are inviolable (which does not in any case represent the imposition of a hard Brexit, but rather the provision of choice. None of the three heads has stated that membership of the single market would not be available for the UK to avail itself of). But there is evidence from EU27 members that a less hardline position on freedom of movement does exist among EU27.

    Even from Mrs Merkel here:

    http://www.independent.co.uk/news/uk/politics/brexit-latest-immigration-single-market-angela-merkel-freedom-movement-comments-theresa-may-a7418981.html

    and the French finance minister here:

    https://www.politicshome.com/news/europe/eu-policy-agenda/brexit/news/76764/french-minister-says-free-movement-table-brexit-deal

    Furthermore, membership of the EEA via EFTA, would bring with it ‘safeguard clauses’, which may be utilised to curb free movement in an emergency (control) and the jurisdiction of the EFTA court not the ECJ.

    It is too early to regard the Brexit statements of European politicians as having been cast in stone in the same way as we should not regard the statements of UK politicians to have been similarly cast. Nothing about Brexit is easily predictable. The fast changing political and economic climate is sensitive to new events. Carney now regards Brexit as a greater risk to EU27 than to the UK and May is still keen to placate city worries. It is possible that the results of European elections over the next 12 months will serve to move the EU closer to the UK position on freedom of movement together with greater competence for national Parliaments on contentious matters.

    Whilst your argument is a compelling one from the current standpoint, it is likely that compromise will emerge, though it is unclear as yet what the precise mechanisms permitting it will be, at this stage.

    Indeed, it is also possible that the EU will naturally reform itself in such a way that the UK may not actually leave or a secondary associate track will be fashioned for us and others to run on.

  29. Some really interesting comments. So I’ll raise some issues not addressed.
    There is a desire to destroy the European project. This is largely lead by the right wing Nationalist press and the right wing of the Tory party. For years the public has been told we do not benefit from membership. And successsive Governments (since Thatcher) have blamed all failure on Europe.
    Added to the established notion that Capitalism is good and Socialism needed to be irradiated (throughout the world)
    To allow neoliberal globalisation to work any organised Unions, working conditions, fair pay, paid holidays, pensions, publically owned utilities, fair taxation and state regulations had to go. To allow global corporations to exploit cheap/slave labour and yield maximum profit.
    The four freedoms of the EU and the ECHR + ECJ curtailed rampant free market corporate capitalism. Where politicians are required to be managers of the system.
    Oil and War drive this economy.
    Wars in ME and N Africa caused the current migrant crisis. This is the driver necessary to destabilise the European Union. The fear of terrorists and Islamic invasion created the weapon needed. Farage Johnson Gove et al and the press lit the fuse.
    Cameron and Osborne ( and Blair/Brown) had neglected everyone outside London and SE. They had paid for the banking crisis and austerity. Labour had lost Scotland to SNP.
    Make no mistake it was the Tories that voted out + the left behind + toxic mix of Nazi Farage xenophobes ( until these were whipped up remain was always ahead)
    1) Corbyns centre left socialism supports freedom of movement, passporting, single market, ECHR + ECJ. And controls on non EU immigration
    2) Resist calls for early GE from Blairites. They intend to lose and oust Corbyn.
    3) If May implements A50 its leave or withdraw.
    4) Our only hope is to let her do this and the Tory Brexieers are held responsible by public for the economic catastrophe that results.
    NB unless WW3 breaks out before

  30. I agree entirely with your contention that a “hard” Brexit would be a “natural and direct” consequence of A50 notification, given the Government’s various statements. This has been clear for some time.

    However, I disagree with your statement that hard Brexit “is as good as inevitable”. Hard Brexit will almost certainly be the Government’s approach, but will it work? That’s the question.

    As you would agree, there are numerous reasons why this approach won’t work (eg your excellent hurdles blog). More generally, the overall situation is so complex, we should assume a considerable degree of outcome uncertainty.

    If the Government’s “hard” Brexit approach doesn’t work, then the current prevailing assumption is that the UK will experience a disorderly exit from the EU. The very hardest Brexit.

    However, my view is that much of current opinion (and indeed your blog) is underestimating the likelihood of an alternative outcome to the failure of a “hard” Brexit approach — a reverse to a softer Brexit or indeed a second referendum. Hence, my disagreement with “hard” Brexit being “as good as inevitable”.

  31. In order to impose a hard Brexit – no deal at all when the two years are up – all that the EU 27 have to to do is fail to agree.

    Any one of the 27 can veto the final terms.

    If they even have an agreement, of any sort, at the end of the Article 50 period.

    1. EU and UK gov will find a way to extend Art 50 and/or make it reversable.

      Also, “transitional arrangements” buy lots of time to test the arguments.

      And re-rhink the whole thing.

    2. Your belief that any one of the EU27 can veto final terms is mistaken. Although the EU Parliament can and very likely will. As for the rest, it’s a QMV decision so no veto.

      Any subsequent trade deal (consecutive and not concurrent) is by unanimity and any state can veto.

      This is why there will be hard Brexit unless it is stopped but likely a decade of haggling over any trade deal.

      So we have disastrous Brexit.

  32. I can’t see Hard Brexit ever happening as the political will isn’t there. 1.9% margin not even close enough to deliver constitutional changes on this scale.

    Parliament won’t stop leaving the EU, but everything else will be a big political bun fight that the PM and the cabinet don’t want to win.

    Add to that the EU, business, the city, civil servants, judicuary, military top brass, etc etc etc …

    Nope, can’t see Hard brexit ever happening.

    1. I admire your optimism, but don’t share it. I think you underestimate the extent to which the outcome of the referendum, as well as just about every step HMG has made afterwards, has destroyed the UK’s political capital in Europe. This had already been substantially damaged by prevarication and the flippancy in the run-up to the referendum. As already indicated in earlier comments, many of the phenomena driving the leave vote were the result of Westminster action, not Brussels, and that’s how it was perceived at EU HQ.

      The result is that the overwhelming view in Brussels is that: (1) the UK acted like a spoiled brat: it already enjoyed T&Cs that no other member would ever be able to obtain, and it still wasn’t good enough, (2) the British government dropped yet another crisis (and assorted workload) onto the EU civil service for perceived party-political reasons, out of sheer amateurism, at a time where the EU had already enough to be getting on with and (3) few constructive signals, if any, have emerged from Westminster post-referendum concerning a common future forward.

      Moreover, every single one of the Other 27 has a veto even on the extension of the Art. 50 period, which means any government will be able to play the Art. 50 process off as leverage in any other ongoing political process. It is not unimaginable that, say, Slovenia would withhold consent for an extension as a result of not getting its way in another dossier, for reasons that have little or nothing to do with the UK.

      In short: there is only a small path leading to a Soft Brexit, many more trajectories lead to a hard rupture.

      1. @Rogier – Thank for the clarification, and for expanding on the point I made.

        There is not a single point in your comment that I could contradict; and much that we could reinforce with citations of the law and unequivocal quotations from the participants in Brussels and the capitals of Europe.

        None of it would to dent the blithe optimism of the Brexiteer; and, disturbingly, our ministers and architects of policy appear to be impervious to fact.

        I am well aware that there are political reasons to project positivity and a particular point of view, and that this is often at odds with the facts; but we have long passed the point at which our politicians’ skill in maintaining the façade ceases to be admirable and diminishes their credibility.

        Some are less skilled – likewise many commentators and a large proportion of the public – but I think it best to be polite about that.

        This being a legal blog, we would do well to throw a question to our learned audience: what tactics are effective when advising a litigant or a defendant whose blithe optimism renders them impervious to hard advice?

      2. “…were the result of Westminster action, not Brussels, and that’s how it was perceived at EU HQ”

        And by the larger part of #EU27 voters – I may add.

        Lars :)

  33. I think the wording of the referendum has caused this problem, it was a binary question when in fact it should have had multiple responses. The government seems to be stalling until they gauge what leave means to the people. I wanted the UK to remain (with some necessary reforms) but this needs to play out as a hard BREXIT, if you deny the populist vote they will not see the positive or negative consequence.

    What makes me laugh is that leaving the EU is seen as a one time event, at some point in the future (after the 10 years it will take to negotiate new rules trade deals) there will be discussions on whether to rejoin.

  34. It may be rude to offer a second point, but there is an uncomfortable economic fact in play: the Sterling crisis.

    There is no reason for the Pound to trade at the current over-valued rate, based on our current balance of trade.

    Yes, you read that correctly: Sterling is overvalued, and has been for some time: we have a structural trade deficit, even when you include ‘invisibles’, and it all keeps going because of market sentiment and inward investment.

    I would point out that the last decade’s inward investment was mostly rent-seeking in the property market: very little of it added to our country’s productivity. Worse, much of it was speculation, feeding the property bubble; and there is a point at which devaluation of these assets will lead to a rush for the exit.

    Good luck with the next Gilt Auction while that’s in progress.

    Even if we avoid that, somehow, the prospects are not good. We are not well-placed to take advantage of a weak currency by import substitution and an export boom, because of structural skills shortages and a near-total inability to invest in industry.

    Indeed, a severe drop in Sterling will lead to an investment drought, with a liquidity crunch from banks in distress in the Sterling crisis.

    The companies who are best placed to take advantage of an export boom are the large foreign investors – Nissan, especially – and they are leaving.

    So, too, are the banks.

    The ‘tech’ sector has a more invidious problem: buyouts by overseas investors attracted by Sterling getting cheaper have turned major currency earners, like ARM, into a substantial net outflow. This will be mitigated by the redirection of their cashflows (licensing fees, mostly) to their owners’ domiciles; but this is not a ‘win’ for Britain.

    Ditto the public sector, with all of our utilities functioning as cash cows for their overseas owners.

    These overseas owners will eventually sell out: but who will be able to buy, at any price on offer?

    So the Article 50 negotiations will take place against a backdrop of economic chaos in the UK, with our trading partners looking to defend their interests against a Pound that trades at seventy cents or less.

    It may well be that our best hope is that the 27 will fail to agree, and spare us a punitive regime of panic-stricken protectionism.

    Brexit has barely begun, and the Article 50 cutoff will seem the least of our problems. Our stated aim is to assert that we are no longer European, and so be it: we are South Americans, without the commodity exports.

    1. Totally agree. The UK economy is structurally in a very poor position to lose markets for its services, particularly when it is reliant on domestic consumption, property price appreciation, imports and is financed by the kindness of strangers. The UK has effectively deindustrialised (accelerating this process post GFC/2008).

      And should Scotland leave the union, along with its remaining oil and gas reserves, I’d expect the £ to collapse further.

    2. Is our balance of trade and economic outlook really worse than the 70s which was the last time rates were close to this low? The 30 year average against the dollar has been $1.50ish with occasion forays up to $2. I realise our deficit is a problem, but outside of the significant damage to our economy from Brexit I simply don’t buy that Sterling is so over valued compared to historic norms.

  35. Agree with the analysis but I’d note that hard Brexit is not the settled position of at least one EU27 member state: Ireland. Should the UK seek to push back against the consensus, it would have sympathy and even allies. Of course Ireland is not generally hugely influential in the EU, but it has a massive stake in this debate, and it could exert real influence over the rest of the EU27, if only it had any clue as to what the UK’s negotiating strategy was.

  36. Agree with your article – a hard brexit is the reality and has been for some time. In Brussels and in many other EU capitals, they are bemused by the idea that the UK will be able to somehow negotiate a special “have cake and eat it” deal, sector by sector. Our EU partners believe the UK already had a bespoke arrangement – which it has just chosen to walk away from. Many commentators have suggested that the UK’s leverage is defence – I don’t see this. Are we really going to threaten to withdraw 300 UK troops from Poland unless they give us preferential market access? This will not go down well. The leverage we do have, and it’s not positive, is the threat to turn the UK into an offshore tax haven. I hear the Dutch want to extract a commitment that the UK will not lower corporation tax post Brexit – this could be a red line for them.(and they were one of our closest allies). Imagine May signing a promise to the EU re our ability to set our own tax rates – never going to happen. I think there is a real possibility that the talks collapse, or take so long – become so complicated – that HMG simply decides to walk away and roll the WTO dice. May has no room to negotiate with her own hardliners – party will come before country. The response of the British press to EU politicians saying “non” to our exceptionalism will be ugly – will Theresa May stand up to rampant EU baiting? I doubt it.

  37. There is one reason I’d like to add why I think a Hard Brexit is inescapable for the UK (while concurring fully with DAGs analysis), and that does not get enough “publicity” in the discussions:

    These discussions and analyses tend to focus on the need of unanimity of the 27 remaining EU member states for an exit deal. But there is also – and, as it seems, often overlooked – the requirement for the EU Parliament to consent to such a treaty. And in my experience, EU parlamentarians are much more “hardline” regarding questions of EU principles than the member states’ governments (that is at least the matter for German EU Parlamentarians, across all major parties), and, therefore, much less open for political horse trading in such matters.
    So, even if the EU27 would agree with the UK on a substantial deal concerning the problematic issues (which seems quite remote, as already mentioned in other comments), I would expect such an agreement to be shot down by the EU Parliament if it contains any more-than-negligible divergence from the established EU principles in favor of a compromise with the UK. One should remember that the EU Parliament does not has anything to loose by taking a hard position in the talks. They are – by definition – only concerned with the interests of the EU as a whole and not with any particular interest of a member state – so there should be an even less inclination to any sort of compromise in the Parliament than in the Council.

    1. Agree. And the EU Parliament’s consent vote on the A50 deal likely to take place 12 weeks before European elections – the vote will be highly politicised – especially if it includes UK favourable transitional arrangements/lays the ground for a future trade agreement. The EP will soon vote on CETA – one to watch.

  38. A useful thinking experiment could be the pre-mortem: envisage a future outcome and discuss the scenario that led to them.

    Soft Brexit example: it is 1 January 2020. The United Kingdom and the European Union have signed an agreement that maintains British membership in the Single Market. What needs to have happened for this to occur?

  39. I no longer think May is tactically inept. For the sake of argument, credit her for recognising the implications of her objectives, and also recognising the only constituency that she needs to please at the moment. On becoming PM, she presumably wanted a couple of months to plan without discussing or justifying the plans that are forming. There is nothing to gain during that period by being transparent with the electorate. Even if there must be a debate in parliament at some point, well, there’s no rush for that.

    “The will of the people” is the highest mandate one could have. So, attempting to use the Royal Prerogative was justified (to the constituency that counts) in principle. May knew the outcome of the legal challenge might well succeed. Nevertheless, the risk was certainly worth taking. Losing – with honour – is actually no bad thing. She hasn’t lost much: probably the Prerogative won’t be needed again by her, and weakening it therefore doesn’t much matter to her. Miller and Co. won’t disrupt the timetable much. Perhaps it’s even better to flush the problems out in the open and deal with them. And, if a consequence is that the judiciary have to play an unpopular “check and balance” role, well, that’s not her problem.

    You and I might think that’s a divisive game plan which denies proper process to people who care about such things. Perhaps we might worry about whether the Prerogative, proper process, and indeed the judiciary are being abused. But, like the football manager who criticises his opponents for “parking the bus”, we should recognise the difference between us not liking it and assuming it’s a consequence of opponents not knowing how to play.

  40. If the article 50 notice is indeed given and is not revocable/revoked then a hard Brexit will be the only outcome unless of course the UK’s stated objectives change materially.

    The EU has been clear that the single market and four freedoms are indivisible and there is no middle ground with the UK’s stated position.

    The UK currently has the best deal with the EU of all the member states.

    If the UK leaves, the EU and remaining 27 Member States will not agree a deal that gives the UK a better deal than it has now and which effectively goes from being “In with opt outs” to “Out with opt ins”.

    Even if the united front presented by the EU and remaining 27 Member States crumbles such that the EU is reformed (whether or not in a manner that the UK government may consider remaining), that will take more than the 2 year time frame set out by the Article 50 process and will not help the UK as regards agreeing future terms.

    I raise this because the 2 year negotiating period covers the exit terms only and does not address the future terms that may govern our relationship with the EU (so more than access to the single market). The only way this would change is if the EU agreed to include discussions on future terms (which they are not required to but which the UK government seems to think they will do). In such a scenario future terms would still need approval by the remaining Member States, and as we have seen with CETA, it seems highly unlikely that we can be confident of agreeing future terms simply and quickly. After all, you cannot control what issues the other Member States may bring up for their own good reasons.

    So if we give notice, we are effectively only negotiating the terms of our exit without any certainty of our future terms. The government position of “no running commentary” to protect its negotiating position is actually a sham because the only negotiating position relates to exit terms – and that surely is a more straight forward task of allocating assets/liabilities etc. It does not go to any future terms.

    The government talks about giving parliament the right to vote on the negotiated deal but that is a red herring. The right to vote will be on the terms of our exit only. Whether it approves or rejects that deal, the UK falls out of the EU in any case.

    So my question to any MPs reading this is: while (some of) you wish to respect the referendum result (and I don’t challenge that), will you vote to trigger Article 50 knowing it only deals with exit terms and so knowing we will be leaving the EU without any certainty on future terms with our largest trading partner?

    If so, in my view, given the potential economic and other consequences, the MPs would be being negligent to the economic well-being of its constituents and its country.

  41. “If there is an alternative to Brexit, it is not a legal loophole that annuls or blocks the referendum. It would need to be a credible commitment by government to embark immediately on a massive programme of investment in housing, transport, health, energy, policing, education, social care and other local government services.”

    This to my mind was key point that has been virtually overlooked since the Referendum. Overlooking the causes of the vote in favour or appeasing the ‘will of the people’ when the campaigns and feedback from voters made it abundantly clear that most did not know what they were actually voting for (cf Trump voters expecting ACA to remain having voted to end ‘Obamacare’). This should have been what was grasped on by David Cameron, but instead he fell on his sword.

    I believe David Cameron should have said something like this on the morning of June 24th – “British public, we’ve noted how you’ve voted and why, and for the next four years this Government will seek to address the issues the debate around the referendum has raised both within our domestic policy and our relationship with the EU, but we will not invoke Article 50. At the end of this period, we will hold another more detailed (non-binding) referendum as a prelude to the 2020 general election that will allow you to determine the course of action the next Government should take in respect of the UK’s relationship with the EU.”

    But now we have gone down the ‘Brexit is Brexit’ path, sadly, the logic in David’s argument is sound. There is no political will to attempt to stop Article 50 from within Parliament and with the EU27 unwilling to compromise unanimously on removing any of the four freedoms, ‘Hard Brexit’ is the inevitable outcome.

    1. Very much agree with this, particularly around the unfortunate closing of options by Cameron and May following the referendum.
      I also agree re Parliament and its likely reluctance to seriously challenge the Brexit is Brexit, ‘people have spoken’ mantra.
      The only chance to challenge this is through the General Election, and with no chance of any current party being able to win on a Remain ticket, a new Party is needed. 24 Hours, single policy to Remain, Party that allows the General Election to capture the will of the party a 2nd time (in very much the way you suggest Cameron should have suggested) when we know much more about Brexit and the pros and cons of the route that May is suggesting. Allows the decision to be divorced from party politics, and I think the only chance of stopping Brexit, if the people so decide.

  42. John Redwood and Michael Gove suggest that leaving is very straigforward, that our position is strong in negotiations because “the things we want do not require consent from the EU and are achieved by simply leaving” (Redwood) and that our WTO most favoured nation status (see this and the subsequent tweet from Redwood https://twitter.com/johnredwood/status/819554794297761792 ) will provide a viable basis for our trading relationship with the EU? Are they correct? Does the inevitability of a “hard brexit” really mean that there’s little to negotiate? If they’re not correct are they deluded or deliberately misleading the public?

    I was, incidentally, a don’t know at the time of the referendum but voted to remain on the basis that we at least knew what being in the EU was like, we could decide to leave later if we wanted and that taking a massively important decision without knowing its consequences if generally a bad idea . The appalling campaigns run by both remain and leave certainly didn’t help me to make a decision.

    The more I hear from both sides post-referendum the less certain I am.

    1. John Redwood misses the ball completely on the WTO point. The MFN principle is a simple one: WTO members must treat each other equally, or in other words, preferential treatment to one member must be extended to all members. Free trade areas such as the EU, NAFTA, etc. are permissible exceptions to this rule. It would seem to follow from this that the EU cannot “punish” the United Kingdom by treating it worse than the WTO baseline (a list of agreements on tariffs, quota, non-tariff barriers and procedural arrangements).

      Moreover, the UK is a member of the WTO in its own right, as well as through its EU membership. As a result, it will not be necessary for the UK to join the WTO under its laborious accession procedures (which involve, amongst others, compiling a comprehensive list of commitments and schedules on trade in goods, services, procedural arrangements, etc.)

      Beyond that, however, we are faced with a legal quandary.
      Delegation of trade-related powers to the EU means that no accommodation is made in this list of agreements for UK autonomy. In tariffs (for some reason, a fetish for Brexiteers), matters is relatively easy – at least where trade with third countries is concerned: the UK can simply continue to apply the same percentages it already does. Quota are going to be atrocious, non-tariff barriers are going to be pure hell. With quota, would UK quota come out of EU quota (difficult to accept for EU) or would it get its own (creation of quota by stealth would be difficult to accept for third countries). With non-tariff barriers, does the UK have the regulatory capacity not only to set standards in areas the EU historically did, as well as the litigation capacity to deal with disputes that will invariably come up? (Here’s a thought: what would the dynamics in the WTO DSB be between EU27 and UK post-Brexit?) The costs are clear: either the British taxpayer pays good money to rebuild these capacities, or accepts continued regulatory consistence with Brussels, including ECJ jurisdiction on regulatory activities – politically unacceptable to Brexiteers.

    2. John Redwood and Michael Give are making a dangerous assumption that a). we can join the WTO and b). most favoured nation status actually means anything useful for us. So long as the WTO schedules are satisfied then the requirements of membership and most favoured nation status are met– this in now way implies that these schedules will actually be of any use to us or indeed easy to negotiate.

  43. At the beginning of last year I was minded to vote Leave. This is because of the UK attitude (very well explained in the FT by Philip Stephens https://www.ft.com/content/4434bb14-d275-11e6-b06b-680c49b4b4c0) and it’s overall effect on the EU of the European ideal.

    I was dissuaded and worked on the Remain campaign when it started.

    As a European first and foremost. I paradoxically favour DAG’s predicted hard Brexit and indeed am now on the side of a disastrous Brexit. I go along with DAG and believe this very worst case (for the UK) is coming to pass. It’s probably still the best for the European dream I hold dear. If the UK were to re-enter the EU it would be on different terms and chastened. In any case changes would have to be made to the current Treaty obligation to join the Euro.

    I doubt any Brexit deal will ever be reached and then confirmed – so the UK will drop out with nothing. I doubt any subsequent trade deal will be concluded within ten years.

    Yesterday I picked up my new German passport under Article 116b of German basic code and am thus more sanguine despite still living in Britain.

    Despite the fervent predictions of senior Brexiteers for many years that the EU will break up after Brexit, I am certain it won’t and the European ideal goes on – strengthened and without the UK spanner in the works.

    Born and living in England for over 60 years, whether I now keep my British nationality may be a matter of convenience rather than any remaining loyalty to or fondness for the new British state.

    In parallel, I do not expect the UK itself to survive as one country before ten years are up. Scotland will be first and a united Ireland after that. Scottish polls do not currently favour independence but the reality of disastrous Brexit will do the job in due course.

  44. I would like to offer a little thought experiment here.

    Imagine it is December 1991 and John Major’s team has arrived in Maastricht for the European Council meeting to negotiate the Treaty on European Union. In this alternative universe, they fail to achieve the opt-outs that were agreed in our universe.

    Further to that, the UK finds itself as the sole objector as the other eleven members of the European Community want to press ahead with the treaty. The UK wants to continue its economic relationships through the recently negotiated Single Market and the Customs Union.

    Major goes to the country on a Brexit platform that the UK would continue to be part of the economic systems of the EC but not the political systems as defined in the TEU. He wins in this alternative universe also.

    The withdrawal occurs over the course of the Parliament with Black Wednesday re-enforcing the public’s mood that the UK needs a less political relationship with the soon to be EU.

    In 1994 a new European Parliament is elected without any UK representatives. UKIP as a concept is still-born.

    The UK continues to integrate financially with the EU members through the Customs Union and the Single Market. Successive UK administrations agree to joining European institutions to regulate economic activity albeit less success at locating them in the UK.

    Immigration into the UK continues reflecting the demographic issues of an aging population and the need for growth in the economy.

    The 2008 Credit Crunch occurs crashing the world economy.

    The UK goes into austerity mode. A growing resentment of immigration is feeding far-right domestic political groups far nastier than UKIP is in this universe.

    Given this thought-experience, would the answer for a 2017 Tory administration in this alternative universe be withdrawing from the Single Market and Customs Union? I rather doubt it would be my answer.

    This is at the heart of the conflict within the May administration now. The biggest problem that the 2016 referendum vote has is the conflating process between economic objections and political objections to the EU.

    My suspicion is that some of the Tory headbangers never got past Black Wednesday (16th September 1992) and the damage it did to the public perspective of the Tory party in the name of closer European union.

    Yet economically, the process of joining first the Customs Union and then more importantly the Single Market has integrated our economy with the EU significantly. It is a natural response to free trade conditions.

    While I would agree with DAG that the political implications of notifying Article 50 is a Hard Brexit, there isn’t the evidence that the May administration is willing to accept the economic consequences of that political decision. Hence why we are seeing kite-flying for various trade carve-ups that don’t recognise the implications of Article 50.

    I therefore suggest it is still reasonable to think that a Hard Brexit won’t necessarily occur as a result of Article 50 being notified due to the political ramifications from the economic consequences. It may come down to what the Tories fear most? Their headbangers or the electorate.

    As we have been taught recently, what seems an obvious consequence of events repeatedly gets swerved into a more chaotic state. Why expect anything different from Article 50 being notified?

    1. For an example of why they should fear the headbangers more than the electorate just look across the pond to Ireland. After getting clobbered in 2008 and enduring years of IMF imposed austerity Ireland tossed out Fianna Fail in the 2011 general election. (Even then although FF lost two thirds of its seats it only lost approximately a quarter of their vote.) FF recovered significantly in the 2016 general election and finished second and current polls put them back in front where they had been for decades before 2008.

      Electorates forgive and forget – headbangers never do.

      1. “For an example of why they should fear the headbangers more than the electorate just look across the pond to Ireland.”

        I should have really said *might* fear the headbangers more than the electorate as I’d rather they feared the electorate myself.

  45. If article 50 is invoked, hard Brexit is basically the only option. The alternative (soft Brexit) would mean EEA membership without EU member benefits but with current obligations kept (FoM, budget contributions, ECJ etc.) which would be lunatic in and of itself (although not as lunatic as deliberately heading into hard Brexit…)

    What I am still wondering is whether the article 50 notification will ever be sent. From my point of view, it is either sent in the now moment or never. The rhetoric of doing it in the future does not amount to any benefits as no negotiations are possible prior to such notification. Any talk of ‘internal planning and preparations’ have for the last seven months resulted in nothing. I do wonder if the February plan mentioned by the Brexit Minister will amount to anything spectacularly new, my bets are that it won’t.

    The fact that the High Court decided that Parliament was the only legitimate invoker of art 50 threw additional spanners in the works. Perhaps an MP might feel obliged to respect the referendum result as such. But there was no referendum to leave the Single Market membership. Perhaps the same MP might feel more secure in not invoking art. 50 on the basis that the Single Market membership must be maintained and if the notification is sent, that membership is in danger of being revoked.

    Which has been mentioned by DAG, and what also had me thinking was the extremely peculiar act by the Government of appealing the High Court decision to the Supreme Court. If Parliament is to invoke art. 50, why not just initiate the work in early November? Instead it was treated as a proxy-Remain victory judging by the fury from the Leave-side.

    I do not know if the government case was any stronger in the SC, but the HC verdict did seem very solid. If Parliament again is ruled to be the only legitimate invoker, the notification is put in question again in my opinion.

    This does not include the devolved parliament case. Scotland admits to not having a veto, but what if Holyrood simply refuses to accept the Westminster legislation? It will be not a veto but a veto ‘in a sense’.

    Northern Ireland however claims that they do possess an actual veto to this process via the Belfast Agreement. Remains to be seen how that argument ends up in the SC.

    To sum it up: My point is that article 50 will not be invoked due to parliamentary amendments which will not allow it to ever be invoked. Should it be forced through by party whips and also ignoring the voices of Scotland and Northern Ireland, hard Brexit will be the only option.

    My five eurocents/pennies
    I am from Sweden so if my wording did not make it out right I hope the meaning came through anyway. Best wishes.

  46. While I agree that it seems there will be a hard Brexit, here are some thoughts on reconciling free movement and membership of the single market.

    There has been much discussion that the UK government interprets the result of the EU referendum as a call to control immigration.

    That is only one interpretation as there was no such question on the ballot paper. I know many people who voted to leave because they thought, in their view, it was the best way to prevent TTIP coming to the UK – so in fact it was a vote to protest against the free trade that the UK government insists should now be its goal.

    I also find it dispiriting that most of the UK government and much of the opposition fail to publicly champion the positive impact immigration has, not just economically. By all means have a debate about our immigration policy but at least be honest enough to admit that immigration has positive impacts and the UK itself could do more to manage the concerns of some rather than blaming it solely on the EU. It seems to me that previous governments wanted all the economic benefits of immigration but without the responsibility or cost of overseeing such immigration.

    For example, it is clear that non-EU immigration and illegal immigration is in the control of the UK government already.
    EU freedom of movement is not an unlimited right but successive UK governments have failed to apply the rules correctly and indeed the Labour Government waived the temporary controls permitted by the EU (no doubt because it advantaged our economy).

    In my view leaving the single market would cause significant economic harm to the UK as well as depriving many UK citizens of the ability to live, study and work across the EU. Indeed of EU citizens wishing to take advantage of free movement rules, UK citizens are close to the top of the list of countries making most use of that opportunity.

    The EU has made clear that the four freedoms are indivisible in relation to being a member of the single market.

    Assuming we leave the EU, I set out below several ideas for finding a solution that could satisfy Leavers, Remainers and the EU to ensure continued single market membership without undermining the pillar of free movement. It pains me to put these in writing because I am strongly in the Remain camp but it is my own small attempt to offer solutions for the benefit of the UK, the EU and the wider world. I also think the UK needs to make EU wide proposals to show it is a serious partner rather than just being seen to cherry pick.

    I put these forward as my own small attempt to offer progressive solutions bearing mind that the EU will not change its position on free movement so an EU wide arrangement will need to be found.

    – the UK government must enforce the rules on free movement (and the right to reside) properly – for example, require EU nationals to register with local authorities on arrival and keep their information up to date as to their employment status/resources. I find it amazing that the government admitted it has done no research as to what other member states are doing and whether it can implement their “best practices”.

    – allow the UK to implement a temporary break or cap on EU freedom of movement for 3 years or should EU immigration exceed a set threshold in any 12 month period – previous UK governments waived this option with new EU accession countries. Might there be a possibility to have a short term limit which in reality should have been applied originally as new states joined the EU.

    – apply the benefits limitation of 4 years that the EU previously agreed with Cameron;

    – the UK government must properly seek reimbursement from other Member States whose citizens use the NHS;

    – agree an EU wide fund (similar to regional aid) to support areas that experience high levels of immigration (or indeed population growth) in a short space of time. The fund would be used to support local services and assist with community integration;

    – agree that any EU member state can welcome non-EU citizens to live in its country (as Germany did) but the free movement rules would not apply to such citizens (once they acquire EU citizenship) for a period of 10 years. This would mean each EU member state could still welcome immigration from outside the EU to suit its own needs but would address the concern many have in the UK of non-EU migrants coming into the EU and heading straight for the UK. While not strictly a free movement issue if they do not become nationals of the EU member state that welcomed them, this type of immigration seems to me to have been a motivating factor for many who voted leave.

    In my view these ideas would address the concerns many have around EU immigration while not preventing us from being able to remain a member of the Single Market.

  47. Time to inject a hangman’s humour into the debate: our best hope of a delay to Article 50, or of an orderly exit, or even avoiding it altogether, is Mrs May’s legal ineptitude.

    The most recent case to come to court may well have been argued as skilfully as it possibly could have been; but I do not envy any barrister the poisoned chalice of a case that should never have been heard.

    It need not have come to court – and definitely not to appeal – as a minimal amount of forethought could’ve obviated the need entirely. Our host in this forum has pointed out, with painful clarity, that a one-line bill in Parliament would do nicely.

    Instead, we now anticipate a judgement that could throw a colossal spanner in the works; and even ‘winning’ will leave Mrs May facing a clarification of our constitutional arrangements that a competent Prime Minister would’ve left ‘unwritten’ and as vague as it can be, to preserve the leeway and the ambiguities that she enjoys when exercising her executive powers.

    I can’t quite bring myself to say that this is a deliberate strategy – stupidity is always the most likely explanation – but the next court cases, plural, and the inevitable misconceived and dunderheaded appeals that characterise Mrs May and her Ministers’ approach to law, are the only effective injection of objectivity, reality, logic, fact, and common sense into the Brexit process.

    With the utmost respect to the legal professionals and the bench involved in all these cases, I find the prospect equally hilarious and horrifying.

  48. While there is no way Brexit will be pain free, May is hoping for a sweet trade deal with Trump. Problem for May is that it will take too long to pass through the US Congress and that Trump is all talk. Trump is unaware on a very basic level of how government works and how trade deals are negotiated.

  49. David, whereas I believe your specific argument to be correct, I hope you are not dismissing the importance of a legal ruling over the revocability of Article 50. You rightly state that, even if Article 50 can be revoked, it won’t be if the current government chooses not to. What is needed is a fundamental shift in public opinion, particularly from moderate Leave voters appalled at the prospect of the UK being outside the Single Market and customs union, which in turn will force MPs to reconsider what the “will of the people” they represent really is. This will not happen by the end of March, when Theresa May intends to push us all off the cliff without knowing what lies below. But if we can buy ourselves another two years, where Brexit negotiations can continue but in the knowledge that the UK can reject any final deal if it is too detrimental to the country, I believe that changes everything. As your friend, Jolyon Maugham, would surely agree.

  50. Upthread, I wrote:

    “It is too early to regard the Brexit statements of European politicians as having been cast in stone in the same way as we should not regard the statements of UK politicians to have been similarly cast. Nothing about Brexit is easily predictable. The fast changing political and economic climate is sensitive to new events. Carney now regards Brexit as a greater risk to EU27 than to the UK and May is still keen to placate city worries.”

    And:

    “it is likely that compromise will emerge, though it is unclear as yet what the precise mechanisms permitting it will be, at this stage.”

    Soon after, this story emerged:

    https://www.theguardian.com/business/2017/jan/13/eu-negotiator-wants-special-deal-over-access-to-city-post-brexit

    This is the first substantive indication that the EU wants something from the UK – that the UK has real leverage beyond the facile claims of EU citizens as “negotiating capital”.

    For the first time, there is an indication that some of our cake could be both eaten and had.

    Mr Green, of course, has the market in “wells” and whilst we should be reluctant to invest too much in any newly emerging theme, it is clear that the notion of a powerless UK in thrall to the collective, undiscriminated will of an homogenous EU27 necessarily being driven to a certain outcome by it, is a farfetched one. It should be easier for the settled negotiating stance of 27 separate interest groups to be disrupted, than the stance of just one.

  51. Here is an interesting take on the impact of Brexit on UK fisheries. It shows that even the very softest of Brexits, ie to EEA membership like Norway, will require a lot of serious work just to replace the existing arrangements, and may well have huge impacts on an industry that relies heavily on exports to the EU. A pleasant surprise to me was that it’s written by an MP. One who obviously has taken great care to know how a particular industry works (with a bit of help from the Lords!) http://www.richardcorbett.org.uk/brexitcfp/

    1. Sorry, I was really not paying attention. Richard Corbett is an MEP on the European Parliament’s Fisheries Committee. It might be worth striking out the last sentence of my comment (except for the link). The article (and the comment by Mr McLeod) gives a fine illustration of how belonging to a supranational organisation has massive advantages for a country, especially in eliminating red tape!)

  52. A so called Hard-Brexit is ‘inevitable’ largely because ‘Brexit’ is more about domestic Politics than it is about the EU or the UK membership of it.
    This is as true for Labour as it is for the Conservatives.
    -This need not take anything like the two-years A50 sets out;indeed, both major Partys have little to gain – and much to lose, from the least delay.
    -This is Politics though;events and all that, so things are never quite inevitably ‘inevitable’.
    There is a fine balance between an accommodation of all things ‘City’ and what the Supreme Court may require of Parliament, that could tip either way.

    The remaining question for me is: Will we, as an electorate, countenance a volte face on Brexit from current Partys/Parliamentarians? Or will those of us firmly for Remain stand firm and seek to contest the next election on a platform of improved cooperation with and commitment to the EU?

  53. I think it will be a hard Brexit because any other option leaves a commitment to Europe that the hard right in the Tory party will keep coming back to hack at further. This whole thing is about a bonfire in the party that won’t go out. Party will be put before country to stamp out all the embers. And if, as many discussed earlier’it won’t make me poorer’ then that is certainly the case in this scenario from a Tory decision-maker point of view, as suspect they will be well off enough to ride the storm (combined the absence of any opposition to hit votes).

  54. Good analysis but I am not sure about ‘nothing will come from the EU27 to prevent the default position being the case’. If the hard Brexit means there is a hard border between Ireland south and north the Irish government will be under huge pressure to veto from the EU side. Maybe.

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