Sunday, 21 August 2016

We won't trigger Article 50 until after 2017 – and that means Brexit may never happen at all

Dennis MacShane in The Independent


It is now eight weeks since we voted to leave the EU but it may be at least eight years before the UK is fully and totally out of Europe– if we finally leave at all. After a post-truth Brexit campaign, now the era of truth is dawning in Downing Street and they are discovering there was never any work completed by the Brexit team on what the costs of leaving the EU would be and how precisely it would be done.

The new Prime Minister, Theresa May, who is coldly pragmatic, has given the three Musketeers of Brexit – Boris Johnson, Liam Fox and David Davis – the task of getting us out of Europe as painlessly and quickly as possible. They are finding out that their two decades of demagogic condemnation of the EU and all its works is no preparation at all for turning Brexit into reality. Instead, there is the surreal sight of Liam Fox writing a letter saying that half the Foreign Office staff and responsibilities should be placed under his control. Ever since it was set up after Britain lost America at the end of the 18th century, the Foreign Office has been seeing off raids on its territory like these.

Having been told that leaving the EU would reduce bureaucracy and costs, there is the bizarre sight of Whitehall recruiters hiring lawyers expert in EU law on £5,000 a day and consultants from KPMG and Ernst and Young on £1,000 a day. The extra cost of negotiating Brexit is reckoned to cost £5bn – which taxpayers will have to pay for.

Fox has a name for unforced errors, as his abrupt dismissal as Defence Secretary in 2011 showed. He is finding out from the US Trade Secretary, and every other minister responsible for trade around the world, that no-one will talk to the UK about trade deals until we are completely outside the EU.

For years the Europhobes told us that the world would be queuing up to sign trade deals with Britain once we were out of Europe. Now Fox is discovering that it is illegal under World Trade Organisation rules to start negotiations with the UK as the EU has sole and exclusive responsibility for speaking for its member states on major trade matters.

Of course countries can negotiate small market openings. Spain has spent eight years negotiating a deal to export plums to China. The UK has spent just as long trying to get India to lift its 150 per cent tariff on Scotch whisky – so far, without success. The Indians are willing to let Scotch be imported duty-free but in exchange they want visa-free access for Indians to come to the UK. Over to Dr Fox to solve that conundrum.

When she was Home Secretary, Theresa May tried to abolish visa-free travel arrangements with Brazil, but was slapped down by David Cameron who judged the good relations with Brazil was worth the risk of some over-staying by Brazilians who came to London and then disappeared into the black labour market. The same dilemma faces UK exporters who have been told by all EU leaders, not just the wicked Eurocrats, but nationally elected leaders in Germany and France that there is no question of having access to the EU Single Market for 500 million middle class consumers without allowing those consumers the right to travel, live and work – the same rights that more than a million Brits in Spain enjoy too.

No-one in Europe wants to ”punish” Britain but no EU leader dare deny his or her own citizens the rights that Brits take for granted in order to give the UK a special privileged status.

The Mayor of London, Sadiq Khan, has sensibly said that there is no point in beginning the initial withdrawal negotiations – the so-called 'Article 50 procedure' – until there is clarity on who will be in charge of Europe. In 2017 there are elections in France likely to produce a new president next May and right-wing challengers have called for the relocation of the Calais frontier to UK territory. Angela Merkel will have done 12 years as German Chancellor at the time of the federal elections in September 2017 and may decide to stand down rather than go on and on and on to the kind of unhappy career end of Helmut Kohl.

But Khan, a shrewd EU watcher, is right to say that inserting a rushed UK withdrawal into a crucial election year in both France and Germany is not smart.

He also has to speak for London and the $120tn volume of business in trading and clearing euros, which only takes place in London because we are in the EU. London is home to 350,000 French citizens alone, as well as hundreds of thousands other European professionals, and removing their right to live and work freely in the UK will send a disastrous signal around the world that London is no longer Europe’s hub for financial transactions.

In any event, Article 50 negotiations are not even foreplay to the main event. They only cover how to share out between Brussels and London the responsibility for paying the pensions of Brits who work for the EU and will now be dismissed, as well as existing retirees like Stanley Johnson, father of Brexiteer Boris.

Once Article 50 talks are over, Jean-Claude Piris, the EU’s former chief lawyer, reckons it will take at least eight years to write out any kind of satisfactory UK-EU deal on trade access and the rights of British citizens living in Europe. Pascal Lamy, the former WTO director general, also dismisses the idea that a final EU-UK trade deal is achieveable without years of negotiation. It has taken the EU and Canada eight years to agree a relatively modest trade deal which now has to be ratified by all 28 EU national parliaments. Any UK-EU deal would also have to be agreed by national parliamentarians from Ireland to Bulgaria.

To be sure, the 23 June vote must be accepted and respected, even if two million young citizens and two million Brits in Europe were denied a vote by the inefficient jobsworths at the Electoral Commission. But it is not the last word. There has been a major new surge led by young activists who refuse to accept, as with general elections, that a change in UK policy is impossible.

Theresa May is the leader of Tory MPs and most of them – like her – were Eurosceptic but not in favour of the Ukip-Johnson-Fox agenda on Europe. She returns from her Alpine walking holiday to find that her predecessor, David Cameron, has handed her mission impossible: to pull the UK out of Europe without huge economic damage and political anger.

Farage, Johnson and Fox have won their 15 year-long battle to obtain a vote for Brexit. But Britain is not out of Europe. And as the UK public realises the damage to their future that isolation represents, there will be a re-think.

May is no Europhile, but she does not want to lead a Britain that become poorer and weaker in wealth and status, with the ever-present shadow of Scotland leaving the UK too. The Europhobes who brought us Brexit may not have the last laugh.

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