Tuesday , May 28 2024

Brexit election

The general election has finally been called. Of course a general election should be about more general issues but will Brexit dominate the agenda? The early stages suggest that this will be the defining issue.

Looking back at previous elections, 2015 provided a surprising Conservative majority. Many aspects may have tipped the balance but Cameron’s EU referendum promise can be argued to have been decisive.

In retrospect, May’s 2017 election has been widely interpreted as a vanity project, seeking to capitalise on a healthy lead in the polls. Ultimately, it may have been the student debt vote that swung in, ostensibly at the last minute, that led to her minority government.

She was finally derailed by her “no deal is better than a bad deal” mantra, a stand that was only “in the abstract”. May lost the support of the ERG wing of her party, one person’s “extreme”, another person’s global free traders.

Now, the 2019 election became inevitable, the minority government leaking former ministers, later backbenchers, at an alarming rate. Those rebels who had supported May’s withdrawal agreement, keeping the UK closely aligned to the EU, were unable to unconditionally support the new Boris Withdrawal Agreement.

The Boris deal provides a few changes, most notably removal of the back stop but with a (possibly) temporary solution that Northern Ireland has a foot in both the UK and in the EU Single Market. The long term view in the accompanying Political declaration is towards a free trade agreement (FTA) rather than close alignment.

So where do the parties stand on Brexit now?

The Liberal Democrats have been quite open in seeking to revoke Article 50, to remain in the European Union. They are also home to six former Conservative MPs as well as four from Labour. It remains to be seen how they would realign once Brexit has finally reaches the next stage of voting as well as economic policies should the next parliament run for the full five year turn.

It will be remembered that the current Liberal Democrat leader, Jo Swinson, was one of the most supportive of Conservative policy during the 2010-15 coalition, regularly voting against her party manifesto commitments. It might be that her chameleon-like status affords the opportunity to form other alliances in the event of another hung parliament.

The most obvious potential is with Labour, whose position has moved in the last thirty months from respecting the result of the 2016 referendum. Currently, the line is that they would seek to negotiate a third new “credible” deal before holding a second referendum. Although Corbyn maintains silence on how we would vote, leading members of his party suggest that they would vote against whatever they manage to negotiate.

Completing the UK wide Remain line up are two separate factions, the first of which is The Independence Group, made up of four former Labour MPs and Anna Soubry who are firmly in the second referendum camp, at least for the time being.

Others are predominantly former cabinet ministers who will have claimed to be standing as independent candidates, serial rebels against the Boris deal, advocates of taking “no deal” off the table and orientating towards Remain.

The Leave side is more coherently summarised as the Conservatives and The Brexit Party. Ostensibly, the former line up behind the Boris deal, the latter to leave on WTO rules. The differences between those positions becomes more nuanced depending on interpretation of the agreements, the WA and PD.

Farage and his cohorts have argued that the Boris deal is not really Brexit, that the UK remains under the control of the EU in many regards, through treaty commitments and through adherence to adjudications from the European Court of Justice. He stipulates that the UK does not regain control, the EU can still lay traps.

On the other hand, Boris might argue that his deal gives a managed exit. Total independence is not gained straight away but allows for a negotiating period, during which time the UK can also negotiate trade deals around the world, something that can not be done as a full member of the EU.

At the risk of oversimplification, potential compromise may be somewhere in between with two key components. The first is a gamble on EU27 strategy, the second in answering the question “when?”.

The Farage case is embedded in the assumption that free trade with the EU27 may continue as currently if both parties commit to the FTA. In that case, under WTO rules, GATT Article XXIV can be invoked. This allows for a reasonable period, notionally up to ten years, for the FTA to be finalised. If there is no agreement to pursue Article XXIV, then the UK leaves with trade barriers. Farage seems that to follow the line of EU officials an FTA would in any event take at least three years to negotiate.

Certainly, the WA and PD allow for talks to be extended to 31st December 2022 and potentially beyond. The initial time scale is that a decision must be made by July 2020 if an extension is to be sought beyond December 2020.

Therein lies a potential compromise but it should be born in mind that the current legal default position is that the UK leaves the EU on 31st January 2020 on “no deal” or WTO rules, unless alternative arrangements are agreed in the interim.

So what is that compromise? Quite simply, that a Conservative government under Johnson would adopt the position that a trade deal can be broadly cut and pasted from the Canada deal, to be agreed by July 2020.

Already, the Prime Minister’s official spokesman has “categorically ruled out extending the transition period”, presumably subject to the outcome of the election.

Both the UK and EU27 are currently aligned, so to maintain trade on current terms is simple. An agreement to invoke GATT XXIV extends the negotiating period but outside the PD. The Brexit transition period ends on 31st December 2020 with minimal risk.

To illustrate the point, fishing may be a workable example, again arguably slightly oversimplified.

Under the Boris solution, the UK does not regain control over fish stocks until January 2021. If an FTA is agreed before then, fish sold into the EU27 are free from tariffs. If GATT Article XXIV is invoked, those sales are tariff free for a longer period.

The Brexit Party position would give control over fish stocks after 31st January, subject to challenge under international law but also subject to any five month extension proposed by Farage, were the EU27 to agree.

There may be a higher risk that GATT Article XXIV might not be invoked. There may also be a potential saving of around £10 billion on the “divorce settlement”. However, other industries may face greater risk.

In the meantime, breathing space is added for negotiations on other international FTAs which in turn might provide leverage for a beneficial future relationship with the EU27.

So what of the chances for electoral success?

Much depends on the potential for electoral pacts. On the Remain side, we have already seen that the Liberal Democrats stand aside in Beaconsfield to enhance Dominic Grieve’s chances of achieving success as an independent. His 65% rating last time, against Lib Dems 15% may give him a chance but those 65% voted for him as a Tory. He could be subject to Brexit Party and Tory candidates.

Similarly, Antoinette Sandbach stands as a Liberal instead of Conservative. Her vote as a Tory was 57% against Lib Dems 6%. Both she and Grieve are in constituencies that were marginal in the referendum.

The Brexit Party won most votes at the MEP elections, Lib Dem second with Labour third and Conservatives fifth, even behind Greens. A low turnout then, followed by subsequent changes in the political landscape provide no guarantees. Tactical voting may become the norm.

Polls will emerge in the coming weeks as to how loyal supporters are in different parts of the country. The perceived industrial Labour North is also home to majorities of Leave voters. For once, there could be scores of four way marginal seats.

Unless those electoral pacts develop, the outcomes are possibly the least certain in history. For the time being, Boris leads the polls but so did May at this stage in 2017. Instinctively, Leave have greater potential to unite although the diverse Remain side have the less nuanced divisions.

It may be that the outcome leads to balances of power held by the smaller constituent members of the United Kingdom, Scotland and the independence argument, Northern Ireland with the Irish Sea border, an element of Welsh nationalism perhaps?

On other issues, there are different alignments. The Brexit Party have more in common with the Lib Dems than they do with other parties. Boris has signalled his own end to austerity and stressed the public service element. Labour have produced one of the most idealist and economically illiterate agendas ever. If they keep us in the EU, their nationalisation policies will be inoperable under EU competition rules.

Ironically, the state of the parties could lead to a stronger Brexit. They could also lead to the most European political modus operandi of coalition government and alliances that the UK has experienced.

One thing is for certain, those who choose to study politics have never had it so good.

This post was originally published by the author on his personal blog: http://www.rexn.uk/2019/11/01/brexit-election/

About Rex N

Rex is a freelance writer in medical affairs, economics and sport. A former teacher and examiner of Economics, his interest in European Union affairs took root when discovering the depths of the Maastricht Treaty. He is a committed democrat having campaigned for a popular vote to decide on further integration measures, based on fact rather than spin.

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