In my last post on this site I set out my predictions for the outcome of the Brexit negotiations. When I wrote that post in March, Theresa May was on the verge of submitting the Article 50 notice to the EU, which she duly did on 29th March.
I predicted that the UK and EU27 would eventually reach an agreement involving a three to five year transition period, followed by an EU/Canada style ‘goods only’ free trade agreement. I also predicted that during the course of the exit negotiations there would be a confrontation between the ‘soft’ and ‘hard’ members of the Tory Cabinet, which might even bring down the government.
Negotiations between the UK and the EU27 have now been underway for just over six months and there has also been a general election in the UK (which I did not predict). I think it is now worth considering just where we stand in terms of my original predictions.
Current status of negotiations between the UK and the EU27
The exit negotiations have so far made little headway and there has been more emphasis than I expected on the ‘exit bill’, i.e., the amount that the UK must agree to pay the EU27 when it leaves to cover EU spending commitments that it agreed to before deciding to leave. The amounts in question, though large in absolute terms, are very small as a proportion of overall UK government spending. They represent a difficult pill for Leavers to swallow, but I still expect there will be eventual agreement on this point, with the government assuring leavers that the ‘exit bill’ will only cover commitments during the transition period.
The looming confrontation between Tory ‘hard’ and ‘soft’ Brexiteers
More interestingly, it appears that the confrontation between ‘hard’ and ‘soft’ members of the Cabinet over the exit terms is finally on the horizon. Theresa May’s authority as Prime Minister was seriously weakened by the Tories’ poor performance in the general election in June. She has only remained in office because her colleagues fear that replacing her could result in another election which would see the Labour party secure a majority in Parliament and form a new government. Meanwhile tensions between Ministers pushing for ‘hard’ and ‘soft’ versions of Brexit, and between the pro- and anti-Brexit wings of the Tory party, continue to simmer. They have recently flared up with Boris Johnson’s interventions in articles in The Daily Telegraph and The Sun newspapers in which he made clear his disagreement with Theresa May’s approach to the Brexit negotiations. This week’s Tory Conference has brought the tensions to a fever pitch and Theresa May’s disastrous speech to the Conference today was symbolic of the disarray in which the British government now finds itself. It is now difficult to see her surviving more than another month or so as Prime Minister.
Exposure of the threadbare nature of the Leavers’ case for Brexit
Meanwhile, the threadbare nature of the Leavers’ case that Brexit will be good for the UK has become all too clear. It is now apparent that the UK will not be able to negotiate new trade agreements with countries outside the EU for some years after we leave in March 2019. It also seems that those agreements will merely duplicate (if that) agreements that we already benefit from as a member of the EU. Leading Leavers like Johnson, Gove and Fox are reduced to urging us all to have confidence in the UK’s wonderful future outside the UK. They are incapable of putting any flesh on the bare bones of their case, though Gove did say this week at a Tory Conference meeting that UK farmers will be able to export pigs’ ears to China due to a relaxation of the EU regulations that require the said ears to be clipped with identifying tags!
A slowing UK economy and trade ructions with the United States
The British economy has also started to slow down after holding up surprisingly well in the immediate aftermath of the referendum vote to Leave. We are not in absolute recession territory, but the UK has fallen to the bottom of the G7 growth table after being at the top for a number of years. Jobs in Northern Ireland have also been threatened with the imposition of penal tariffs by the United States (with which Leavers say we are on the verge of agreeing a substantial free trade agreement).
Against this backdrop of a slowing economy and the increasing exposure of the weakness of the Leavers’ case for Brexit, I think there is now a greater chance of Brexit not actually happening than I did in March. I would say the chance is still less than 50% (Tony Blair says 30%), but we are in a dynamic situation and no-one can predict the final outcome at this stage.
Conclusions (for now)
The next act is, however, likely to be the long awaited internal bust-up in the Tory party. If that leads to the selection of a new leader, I cannot see how another general election can be avoided. Whether or not that results in Jeremy Corbyn becoming our next Prime Minister, it is bound to have a big impact on the Brexit negotiations and will increase the chance of Brexit not happening. I still cannot imagine the government will proceed with a ‘hard’ Brexit, or storm out of the negotiations, even if Johnson becomes leader, as that would inevitably lead to the adoption of ‘Singapore style’ economic policies for the UK, a stance that is supported only by a right-wing fringe in Parliament and the country.
The one certainty at this stage is that there will be several more acts in the Brexit show before it finally ends.