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Brexit delays: little benefit and no clarity

October 31, 2016

In the immediate aftermath of the shock vote to leave the European Union I felt a prompt start to the Article 50 process was preferable to an extended period of pre-Brexit manoeuvring. Four months later I still think enacting Article 50 quickly would have been better to the prolonging of the uncertainty that delaying it until next March at the earliest has created.

Article 50 is about exiting. It was never going to be about the detail of our future relationship with the EU and the rest of the world, simply because that is far too complex to sort out in two years. Everyone knows that so all we have achieved by hanging around is allow a lot of people here and in the EU to take up entrenched positions while clarifying precisely nothing.

It has actually made the likelyhood of an eventual Hard Brexit more likely.

If we had accelerated the Article 50 process I believe that most of the complex regulations and internal EU free trade arrangements would have been put into a transitional mode, simply because it would have been impossible to even prioritise which ones to sort out before leaving, let alone negotiate new versions to be put in their place. What would have been agreed is some headline grabbing stuff about control of borders on our side and plenty of noise about restricting access to the single market from the EU. Neither would have been immediately deliverable.

This would have created some sensible space to turn those transitional – largely ‘as you were’ – arrangements into something more permanent and probably nearer to a soft than a hard Brexit.

Instead the language on both sides has become intemperate and we now face the near certainty of a rapid plunge towards a much harder Brexit than will be good for us or for the rest of Europe. On top of that we have added further months of uncertainty which will be extended as next year the French and German elections will absorb the attention of the only two countries that now really matter in the EU. No-one wins.

Well, not quite.

Most financial institutions are already planning on the expectation that access to the single market and passporting rights will go. This means that some will have to seek new domiciles within the EU just to continue servicing their existing customers. Regulators in Ireland, Malta and Luxembourg in particular are already reporting high levels of enquiries and applications.

There is one consequence of the delay that might not be entirely detrimental and that is the greater opportunity for Parliamentary scrutiny. Theresa May probably miscalculated when she hesitated over starting the Article 50 process and didn’t entirely appreciate how Parliament might interfere in setting out the negotiating terms – as indeed it should.

A defeat in Parliament is not out of the question and could tip us towards an early General Election. I’m not sure how useful this would be as it would still most likely produce an increased Tory majority, especially with the contraction of the UKIP vote.

It seems to me that we are making a bad position worse at almost every turn.

 

 

 

From → Politics

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