Anand Menon: Towards a Hard Brexit

Professor Anand Menon*

Don’t panic. At least not yet. The Prime Minister has stipulated that the UK will trigger Article 50 by the end of March. And there seems to be a widespread assumption that she has a preference for what is termed a ‘hard Brexit.’ I am less than convinced. I suspect, insofar as the government has a position at all, it will evolve both before and during the negotiations. That being said, the nature of politics both here and in continental Europe, means that, whatever she wants, a hard Brexit is what she will end up with.

The one thing the Prime Minister has been unequivocal about is timing. In the absence of any transitional arrangement prolonging the timetable, she will have two years from the triggering of Article 50 to negotiate one deal securing our exit and another regulating future relations with the EU.

Debate now is focussed on the potential of this leading to a ‘hard Brexit.’ The phrase is frequently used, yet infrequently defined. Strikingly, just as with pre-referendum debates about the EU, the argument focuses on the economic relationship. One could easily imagine discussions of Brexit focussing on the UK’s relationship with the EU institutions in fields ranging from economics to foreign policy and defence. This, however, has simply not happened.

Consequently, varieties of Brexit are generally distinguished by the relations they imply with the single market. A ‘soft Brexit’ is commonly taken to mean continued membership of the single market. The hardest ‘hard Brexit’ is usually understood to mean the UK having no preferential relationship with the single market and relying only on World Trade Organisation (WTO) rules. This implies not merely non membership of the single market (meaning the potential for non-tariff barriers to be adopted) but also the imposition of tariffs on at least some trade in goods between the UK and the EU.

So, where are we headed? Certainly, towards Brexit. Even if one of the various court challenges attempting to force a parliamentary vote on triggering article 50 proves successful, it is hard to see a majority in the House of Commons voting to overturn the referendum result. While 479 of the 650 MPs are reckoned to have backed ‘Remain’ (including over half of Conservative MPs), 421 of 574 English and Welsh parliamentary constituencies voted to leave (Hanretty). Polling suggests, moreover, that significantly more than 50% of 2015 Conservative and more than 30% of Labour voters backed ‘Leave’. Labour MPs in the party’s traditional heartlands are especially vulnerable to the immigration-based challenge from UKIP, which came second to Labour in 44 seats in the 2015 General Election. Voting against a referendum result generated by many of their own voters is not something many MPs would willingly countenance doing.

So the real question then is what kind of Brexit? Following the aggressive rhetoric at the Tory party conference, many fear that the Government has set course for the hard side of the spectrum. Yet to assume this is to assume too much. Yes, the rhetoric in Birmingham was aggressive, particularly on immigration and the notion of ‘taking back control’ from Brussels. But party conferences are at best imperfect guides to governmental action, and many of the more inflammatory announcements made have been subsequently shown to have been little more than rhetoric. Much can change between now and the start – let alone end – of the negotiations, and divisions within the Cabinet have yet to play out. Philip Hammond for one shows no signs of ending his quest to ensure some kind of single market membership. Meanwhile, warnings from business leaders about the economic harm non membership of the market might wreak are becoming more urgent and promise to form an unceasing accompaniment to the discussions to come.

What transpires will be down not to the personal choices of our Prime Minister, but to the constraints implied by politics both at home and abroad. And it is here that the picture becomes less congenial to soft Brexiters.

On the British side, the notion of a parlimanetary vote preventing a hard Brexit seems at best fanciful. Leave aside the question as to whether parliament will in fact vote down a position negotiated by the Government. More importantly, the practicalities are hard to envisage. When would such a vote take place? Once the negotiations have concluded? What chance then of returning to the negotiating table, not least as Artlce 50 lays down a specific and unforgiving timetable for talks to end.

So what might the governemtn be able to negotiate? Strikingly, public opinion has remained remarkably receptive to key messages of the ‘Leave’ campaign. In his August polling, Lord Ashcroft found 81% of respondents felt that paying into the EU budget was incompatible with Brexit.

Moreover, despite recent – and unconvincing – attempts by so-called ‘liberal leavers’ such as Dan Hannan and Fraser Nelson to argue that immigration was not a key reason behind the vote to leave, the polling shows otherwise. Almost 90% of those who think immigration is bad for the economy voted to leave. Already, a number of Labour MPs have expressed their belief in a need to limit free movement and reduce the number of migrants coming to the UK. The rhetoric from Birmingham will hardly serve to dampen such tendencies.

Moreover, as Matthew Goodwin has argued, the fact that the economy has performed relatively well since the referendum has hardened opinion amongst those who believe Brexit will make the UK better off –rising by about 6 points to 28%. Thus while it is credible to argue that a recession would reduce the likelihood of a ‘hard Brexit’, it may be that any economic impact of such an outcome would post date it. Thus, the economic case against leaving the single market will lack credible evidence, and continue to be undermined by the relatively good economic performance post 23 June.

So, in order to avoid a hard Brexit, Britain needs some sort of deal that combines market membership with an ability to respond to the abiding concerns of public opinion. Precedent does not offer many grounds for optimism. To date, market membership for non-EU states can be secured only through membership of the European Economic Area (EEA). While enjoying membership of the single market, non-EU EEA states also accept the attendant four freedoms - including freedom of movement. Non-EU states in the EEA also contribute financially towards EU support for less developed EU states and regions.

What chance, then, of our partners making an exception for Britain? Frankly, not much. Again, this is not because there is no functional reason to do so. Whilst the claim that ‘they need us more than we need them,’ is dubious at best, it remains the case that the abrupt rupture a hard Brexit would represent would cause economic damage on both sides of the channel.

Yet there is politics in Europe too. And it seems more than likely that any long term deal signed will confront all of it, as it will require parliamentary ratification in all member states. This, of course, means not only national but sometimes regional parliaments – a total of 38 votes. And remember the Wallonian parliament is currently threatening to unilaterally veto the EU’s trade deal with Canada.

A special deal for Britain which, say, gave us market access whilst restricting the ability of other Europeans to come and work here would not be an easy sell before the Polish parliament (amongst others). Nor would it obviously be acceptable to west European leaders anxious to persuade their publics of the benefits of full EU membership in the face of sometimes serious populist challengers.

It’s the politics, stupid. For all that the idea of a ‘hard Brexit’ has galvanised cross party resistance in the House of Commons. For all that it has caused consternation amongst senior business leaders. For all that many ‘liberal Brexiters’ condemn the idea, the politics means that hard Brexit is probably where will end up.

* Professor of European Politics and Foreign Affairs, KCL