Brexit weekly: 5 things

By Frances Powrie September 8, 2017 1:37 pm

Cries of betrayal are lacking in substance

This week, there’s been an effort from some quarters to paint Labour’s decision to vote against the European Union (Withdrawal) Bill, known in a previous life as the Great Repeal Bill, as some kind of betrayal of the vote to leave the EU. This is fairly disingenuous – Labour MPs were whipped to support the Bill which gave permission to trigger Article 50, and the process of leaving has been underway since then.

The current Bill is not about whether we leave the EU, or even really what our future relationship looks like. It will ease the transition by ensuring that our laws apply the same the day after Brexit as they do the day before – with the right to amend or repeal them thereafter. The Bill is contentious because of how much power it gives the Government, and how little parliamentary security it will allow. The sheer volume of legislation which will be covered (David Davis has estimated that 800-1,000 statutory instruments could be needed) means that some areas will inevitably escape scrutiny – and it’s not unreasonable for the main opposition party to question whether the Government will use this as an opportunity to slip some changes through unnoticed. The Government is also pushing to give itself a majority on parliamentary committees which scrutinise legislation, including on the statutory instruments included in the Bill.

The Bill will in all likelihood pass with or without Labour support. Prominent rebels such as Anna Soubry seem unlikely to actually vote against their own government, while Labour MPs ranging from true Brexit believers such as Kate Hoey to pragmatists with heavily-Leave seats, such as Caroline Flint, may well rebel against the leadership to avoid any hint of disrespecting the Brexit vote.

Immigration paper exposes cabinet splits

Talking of our future relationship with the EU, the Home Office paper setting out proposals for a future immigration system leaked this week contained a number of policy options, including a two year implementation period before significantly harsher rules are put in place. Future plans include quotas for low-skilled workers, and limited residence permits even for high-skilled workers, as well as restrictions on both long-term settlement and the right to bring relatives to the UK.

In many ways, the paper is not surprising – reducing immigration has been a key theme of Theresa May’s political career, and was undoubtedly a factor in the referendum outcome. But the leak has drawn significant criticism from those who think that freedom of movement is an economic and moral good, as well as those concerned about how the proposals will limit access to the single market, even in a transition period. Home Secretary Amber Rudd is reportedly trying to water down the proposals, reflecting a split in the Cabinet – where even prominent leavers including Michael Gove and Boris Johnson hold relatively liberal views on immigration. Expect this row to rumble on and on.

European Research Group argues for a hard line…

It was a busy week for the European Research Group, the hard-Brexit Conservative grouping chaired by Suella Fernandes. First, they interjected into the debate about the Brexit “divorce bill”, publishing an analysis of international law, which they claimed showed that not only did the UK not owe the EU any money, but that the EU actually owes the UK £10 billion. When it comes down to it though, it’s likely that the UK’s desire for a strong future relationship will win out over technical legal analysis, whatever its merits turn out to be.

This was followed by the leak to the Times of a letter planned for Sunday, in which Fernandes will call on the Prime Minister to ensure that the UK is fully out of the EU and its regulatory structures from March 2019 – making a transitional deal based on membership of the single market and custom unions (or an equivalent arrangement by another name) almost impossible. The letter won’t be welcomed either by remain supporting Tories, or the Government – which while continuing to pursue Brexit, has wanted to leave open the possibility to a transitional period to circumvent any “cliff edge” exit in 2019. The business community, which also wants to avoid a sharp drop off, is also unlikely to be thrilled.

…but the business community isn’t impressed…

Talking of the business community, the FT revealed this week that an attempt by the Government to get business leaders to publicly back its approach to Brexit negotiations backfired – when many not only refused to do so but some also went to the press to complain about it.

The most surprising thing about this episode is that the Government thought it was likely to work. As noted, Theresa May has a long-standing desire to reduce immigration – but as well as many businesses having a desire to continue to have access to both skilled and unskilled immigrants, harsh restrictions will make it harder to secure access to the single market in the future. Added to this, there’s still a significant amount of uncertainty about the shape of both the ultimate deal with the EU and any post-Brexit transition period. It’s not altogether surprising that business isn’t that keen to help support the Government’s PR exercise.

Business leaders aren’t the only ones expressing reservations about the Government’s approach to Brexit. A survey for the Mirror found that almost two-thirds of people had less faith in the Government’s handling of Brexit negotiations than they did six months ago, including 40% of Conservative voters. The Government’s lead on perceived ability to negotiate Brexit was a big selling point during the recent general election campaign – but clearly not enough to secure a majority.

The UK needs to get to know its neighbours better

Meanwhile, those hoping that Angela Merkel may help the UK achieve a softer Brexit could well be disappointed. As chief economist Christian Odendahl explains, not only are all major German parties pro-European, they’re also focused on preserving the specific institutions of the EU, including the “four freedoms” of goods, capital, services, and labour – and so won’t want to see this undermined with partial participation.

The approach to Brexit negotiations has often suffered from a lack of understanding on the British side as to what motivates our neighbours. While other member states are of course not keen to lose out on trade with the British, in the longer term the main consideration will be to ensure the continuing strength of the whole project, which means resistance to anything which would weaken it, even gradually. The Government needs to bear this in mind when setting out its negotiating strategy.

 

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