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In 2017 the other EU states will take back control of Brexit

The illusion of sovereignty conferred by the referendum will vanish once the negotiations begin. 

Everything has changed but nothing has changed. The UK’s EU membership, like Schrödinger’s cat, is both dead and alive. A Conservative prime minister is once again preparing to tour the chancelleries of Europe, vowing to get the best deal for Britain. But this time it is with the intention of leaving, rather than remaining.

Some of Theresa May’s European counterparts were slow to grasp this point. They sincerely believed that the referendum result would be ignored. May’s repeated insistence that “Brexit means Brexit” was designed to dispel this illusion.

Other than the government’s commitment to withdrawal, it is often said that we know little of the UK’s stance. But May cannot be accused of concealing her intentions. As long ago as last October, she signalled that her priorities would be achieving control of immigration and leaving the jurisdiction of the European Court of Justice. “We will do what independent, sovereign countries do,” May told a rapturous Tory conference. “We will decide for ourselves how we control immigration. And we will be free to pass our own laws.”

Her unambiguous stance reflected both politics and principle. May, who told George Osborne to get to know his party better when she sacked him, recognised that Leavers would accept nothing less. She has also long believed that the UK needs to end the free movement of people, only reluctantly backing Remain when David Cameron failed in this quest. Her vow to reduce net migration to “tens of thousands” a year is not achievable without a fall in newcomers.

But this heavy intro has been followed by softer verses. May has consistently refused to rule out continued EU budget contributions. And while Leave’s promise to control immigration was embraced, its pledges to spend £350m more a week on the NHS and to scrap VAT on fuel bills were not.

To the relief of business, May has also acknowledged the need for a transitional arrangement to smooth the UK’s exit (albeit one shorter than the decade suggested by the newly departed EU ambassador Ivan Rogers). In a cabinet split at senior level between Remainers and Leavers, the Prime Minister is seeking to hold the centre.

May’s New Year message struck a noticeably more conciliatory tone than her autumn conference speech. She spoke of bridging the divide between “the 52 per cent who voted Leave and the 48 per cent who voted Remain”. Though there is no evidence that the country regrets supporting Brexit, the Richmond Park by-election showed the risks of excessive stridency.

Remainers, in turn, will make their own concessions. If, as expected, the Supreme Court rules this month that parliament must approve the triggering of Article 50, neither the Commons nor the Lords will seek to block Brexit. The UK will likely begin negotiating its fate in March.

At that moment, the illusion of sovereignty conferred by the referendum will vanish. It was Britain that voted to leave, but it is Europe that will decide how it does. When the EU drew up the divorce proceedings it did so with the intention of maximising control. The withdrawal deal that Britain reaches must be approved by at least 72 per cent of member states, representing 65 per cent of the EU’s population. Once Article 50 has been triggered, the two-year deadline for leaving can only be extended by unanimous agreement. Even the much-maligned European Parliament has a pivotal role. Unlike its British equivalent, it has been guaranteed a vote on the final deal.

For this reason, Westminster, rather than obsessing over what the UK wants, should devote greater attention to what Europe wants. The irony of Brexit is that the internal affairs of EU member states have never mattered more.

Like May, European leaders have not disguised their intentions. Angela Merkel has repeatedly stated that she regards the “four freedoms” (movement of goods, capital, people and services) as indivisible. If the UK wishes to control immigration it will do so at the cost of single-market membership.

The rise of nationalists such as Marine Le Pen of France’s Front National, Alternative für Deutschland and the Dutch Partij voor de Vrijheid (Party for Freedom) has made the EU less, rather than more, amenable to British demands. In this hazardous climate, the UK cannot be seen to enjoy a cost-free Brexit. The fate of Switzerland, which voted two years ago to impose quotas on EU migrants, is instructive. After prolonged negotiations, the country last month signed an agreement affirming the free movement of people.

Brexiteers contend that the UK has a stronger hand to play. “Britain has got a very strong objective, rational economic case,” the Conservative MP Dominic Raab told me, pointing to the “massive trade deficit” with Europe in goods and services. Yet EU leaders dismiss this argument. When Boris Johnson recently told Carlo Calenda, Italy’s minister for economic development, that Britain would have to be granted access to the single market “because you don’t want to lose Prosecco exports”, Calenda replied: “I’ll sell less Prosecco to one country and you’ll sell less to 27 countries.”

Leavers hope that the election of Donald Trump will strengthen their cause. “It shows the value of the British military alliance and partnership,” said Raab, referring to the president-elect’s dalliance with Vladimir Putin. But eastern European member states, who want their citizens to maintain the right to free movement, are disconcerted by the suggestion that this should determine their negotiating stance. Though they are divided on other matters, the 27 are for now united on Brexit. 

The power that the EU wields led some Leavers to argue that May should unilaterally declare withdrawal. Not wishing to breach international law, the Prime Minister chose the longer route. If she is true to her word, the UK will eventually retrieve some powers from Brussels. But in 2017 it is not Britain that will take back control – it is Europe. 

George Eaton is political editor of the New Statesman.

This article first appeared in the 05 January 2016 issue of the New Statesman, Divided Britain

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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.