Brexit: Thoughts on the eve of the UK general election

As I write this, on Tuesday, December 10, we still have no idea how the UK general election will end. Neither does anyone else. On the night of the 2017 election, Theresa May′s team was predicting an 80-seat majority just minutes before the exit polls flashed up that she had actually lost the small majority she had when the campaign began. Political pundits are like sports pundits. They can tell you what went on in the first half, analyse every move, but are hopeless at predicting the second half. On how many occasions have you heard pundits say after the game: “Well, we didn′t see that coming”, 

But, no matter how the election turns out, the UK will never again be the same country it was on the eve of the 2016 Brexit referendum. There is no status quo ante to go back to because what existed before 2016 is broken beyond repair. When all of this is over, there may not even be a UK.                                                      

Back then – how long ago it seems - Cameron′s Conservative government, with a slim but sufficient majority, was pro-business, working to an agenda of small state liberalism, free markets, financial prudence and cautious European engagement. Labour, under Corbyn, had moved past Blairism. Its policy platform of some renationalisation of key public utilities, an end to austerity, increased public spending and support for unions and collective bargaining was framed by critics as “far-left wild radicalism”. In truth much of it was somewhat commonplace across mainland Europe though not necessarily all in the one place at the one time.

Scottish independence had gone down 55% to 45% in a 2014 referendum and while the Scottish Nationalists, committed to an independent Scotland, were the dominant force north of the border, there was little prospect of an immediate second “Indy” referendum. The peace was uneasy in Northern Ireland, as always, but was holding, and the two parts of the island of Ireland lived together without a border between them, fellow members of the European Union, with economic life facilitated by the EU′s frictionless internal market.

The 2016 Brexit referendum shattered all of this. By the slimmest of margins, 52/48, the 52% representing just 37% of the total electorate, the UK voted to leave the EU. But it was an uneven vote. England and Wales voted to leave. Scotland and Northern Ireland to stay. Within England, the great cities voted to remain. It was non-metropolitan England that carried the day for what was to become known as Leave. 

Within hours of the result being declared Cameron resigned to be replaced by the former Home Secretary, Theresa May, who during the referendum had been a somewhat “light Remainer”. There was no dossier on the new Prime Minister′s desk marked “How to Leave the EU”. Nor was there such a file to be found anywhere across the entire UK government apparatus.

The Leave campaign itself never had a “Brexit” blueprint. Because of the diverse nature of the Leave coalition, stretching as it did from London hedge fund billionaires to the “left behind” tenants of council houses in the North of England, its leaders had decided, as a matter of strategy, to avoid saying what leaving the EU would mean lest it split the coalition. It was always “BYOB”, Bring your own Brexit.

To buy time, May simply said that “Brexit meant Brexit”. Following her Delphic utterance, she could have opened a wide-ranging consultation on how best to deliver Brexit. She could have said that while Brexit meant that the UK would leave the EU it wanted to stay in the customs union and single market, subject to having a voice in their governance. This would have taken the UK out of the “political” EU while staying in the “economic” EU, thereby avoiding any hit to UK businesses and safeguarding complex EU-wide value chains built up over many years.

Such an approach would probably have commanded cross-party support in parliament and could have been done within the 2 years available under Article 50, the EU Treaty provision governing the exit of a country from the EU. 

Driven as she was by her burning desire to cut immigration to the UK, May was fixated on ending EU freedom of movement. This ambition blinded her to the consequences of the course she mapped out. She decided that Brexit would have to mean a complete rupture between the UK and the EU, which would involve leaving the customs union, the single market and the jurisdiction of the European Court. When that train to Brexitville left the station there was no stopping or diverting it. There was no going back.

Then, suddenly, as if out of nowhere, if you leave aside just eight hundred years′ of history that is, “Ireland” became a major roadblock in the way of May′s Brexit. If for May “Brexit meant Brexit”, for the island of Ireland “Brexit meant Borders”.  

For leaving the single market and the customs union would result in the return of border infrastructure on the island, between Ireland, which would remain in the EU, and Northern Ireland which would Brexit as part of the UK. If for Ireland “Brexit means Borders” then “Borders mean Bombs” and the fragile, Good Friday peace agreement would be at risk.

Her attempt to avoid the “Brexit means Borders” dilemma in Ireland saw May accept the UK-wide backstop. It led to her ousting and replacement by Boris Johnson who immediately dropped the UK-wide backstop and accepted an NI-only arrangement, in the teeth of opposition from the Democratic Unionist Party which had propped up May’s minority government. History may well see Johnson′s decision as the moment a majority in NI decided that its future may not lie with a resurgent, nationalist England, for which political “unions” of all sorts are expendable. 

If Johnson and his Conservatives secure a majority this week then the UK will leave the EU on January 31st next. Brexit will have been done. As and from midnight on January 31, Brussels time, the UK will no longer be an EU member, but a “third country”, on the outside looking in. A third country needing to negotiate a complex, new relationship with the EU. The negotiations will be long, torturous and probably bitter. There will be no happy ending. And time is tight.

Politics will change dramatically. As of today, December 10, “Remain” is still an option. The UK can unilaterally cancel its decision to leave and stay in the EU on current membership terms. While Brexit is still an “known unknown”, we know exactly what “Remain”. It is the current deal the UK has as an EU member.

But if the UK leaves the EU on January 31 then “Remain” as an option falls away. From February 1, Brexit will be the status quo. What “Rejoin” means, which will become the successor to Remain, will be highly problematic. Because the EU will not offer the UK new membership on old terms. Brexit cannot be reduced to a simple, “time out”.

British exceptionalism, “in with a lot of opt-outs” in the words of the Luxembourg prime minister, will be a thing of the past. Future membership would involve joining both Schengen and the Euro. Maybe a price the UK might be prepared to pay in eight to ten years′ time as the costs of being outside an ever-integrating EU sink home. And trade deals with the US and elsewhere turn out to be of minimal value. But not anytime soon.

If the Conservatives fail to get a majority then all options remain on the table. A Labour-dominated government would seek to negotiate a new Withdrawal Agreement with the EU, with quasi-single market and customs union membership very much on the agenda. The revised deal would be put to the people in a new referendum, with Remain on current terms the alternative option. Would the EU give a new government time to do this? Of course, it would. Keep in mind that until now all Brexit negotiations have been done by a Conservative government. A non-Conservative government creates completely new dynamics.

In such a scenario a Conservative opposition, deeply committed to a hard Brexit, would be as disruptive as possible and that disruption would carry over into any future referendum campaign. And on afterwards. But then, what future is there for the Conservative Party in opposition?

All the while calls for Scottish independence and questions about the position of Northern Ireland will not go away. For those who want to keep Northern Ireland firmly in the UK the best Brexit would be no Brexit because all the uncomfortable border questions raised by Brexit would disappear. Conversely, for the Scottish nationalists, the harder the Brexit the better because a hard Brexit makes it clear that English nationalist concerns trump (no pun intended) all else. 

No matter what happens, British politics will be remade, but in ways we can only guess at. The results of this week′s elections will decide the contours of the new politics. There is no going back to the old.

For business, all that lies ahead is uncertainty. While the UK market is big enough in its own right to justify investment, it is unlikely that international business will be making large bets on the UK in the near future. The UK will no longer be seen, as it has been for the past twenty years, as the gateway to Europe. It will take some time to adjust to the new realities, whatever they are.