Why the UK’s Brexit white paper failed on both sides of the Channel
A little more than two weeks ago, British Prime Minister Theresa May assembled her Cabinet at her country residence Chequers. The result was a white paper detailing how the UK saw its post-Brexit relationship with the EU.
The white paper reads well: There is to be a trade agreement over manufactured goods (including agri-products). The statement foresees more flexibility when it comes to services (because that is apparently in the UK’s best interest). It was clear that May and her aides had heeded the warning of business, particularly in the automotive and aerospace sectors, who had warned that they would halt future investments, and maybe even manufacturing in the UK, if the new arrangements impeded their supply chains or made it difficult to export their final products to the Continent.
The edict from Downing Street was that the prime minister would no longer tolerate any dissent from within her Cabinet. Photos released from Chequers showed May wearing purple and very much in command.
So far so good. Nobody resigned on the day and on the following Sunday talk shows even the “uberBrexiteer” Michael Gove, secretary of state for environment, food and rural affairs, defended the white paper as sound. Michel Barnier, the EU’s chief Brexit negotiator, sounded happy that he would finally get clarity on Britain’s view of its post-Brexit relationship with the EU.
The relative peace during that weekend was the proverbial calm before the storm. Since then events overtook themselves on a daily basis. May’s stark warning for unity of the party was not heeded and the truce among warring factions of the Tory party was short-lived. On Monday, the UK’s chief negotiator, David Davis, resigned from the Cabinet, followed by Foreign Secretary Boris Johnson. Two junior ministers resigned, too.
May’s tough stance did not work and criticism of the white paper grew louder. Johnson’s resignation speech was nothing short of inflammatory. He declared that it was “not too late to achieve Brexit.” Brexit hard-liner Jacob Rees-Mogg stirred things up on the backbenches. The result was that May plummeted in the opinion polls, scoring lower than Labour leader Jeremy Corbyn. Oddly enough that might help the prime minister stay in office, as the Conservative party fears for its position in government and will do anything to avoid an election.
This does not mean that there is no turmoil. Pro-Remain MPs demanded a second referendum, which is a highly contentious request. Many Britons view a second referendum as unseemly, because they believe that the people have spoken, and the vote should be respected. The structure of a referendum is another issue. One pro-Remain Tory MP wants a three-way ballot that allows people to choose between a hard Brexit, a negotiated settlement and remaining in the EU. What, then, if 30 percent vote for hard Brexit, 30 percent for the negotiated version and 40 percent opt to remain?
May has a slim majority in the House of Commons and, therefore, needed to accommodate the hard-liners and insert four revisions into the white paper.
May has a slim majority in the House of Commons and, therefore, needed to accommodate the hard-liners and insert four revisions into the white paper, which considerably watered down the pro-business stance. It also put front and center again the issue of the Irish border.
To make matters worse, when US President Donald Trump stopped by for a visit last weekend, he heavily criticized the white paper as a show of weakness and endorsed Boris Johnson as “a talented guy who would make a great prime minister.” (This might actually have moved public opinion slightly in May’s favor, because nobody in UK wants to be told by a US president how to conduct foreign policy.)
After Chequers there had been some clarity. However, events in the past two weeks have only added to the confusion.
After speaking with the EU’s 27 foreign ministers, Michel Barnier criticized the white paper as not acceptable to the EU. It does what Barnier has told the UK they could not do time and time again, namely cherry picking. It also lacks clarity in aspects such as what will happen to the “common rulebook” if the EU changes some of its regulations? Another issue is how the UK will be able to adhere to the “common rulebook and still enter into trade pacts with other countries (Trump was quite clear that this was a no-go zone for the US). It also brings little clarity to the issue of the Irish border. May and many Britons had surprisingly felt that the white paper in itself would be “the deal.” They seemed to have forgotten that the real negotiating partner was the EU and Barnier — not Jacob Rees-Mogg.
The new Secretary of State for Exiting the European Union, Dominic Raab, went to Brussels for the first time last week. He is firmly in the pro-Brexit camp, but is also a lawyer and more detail driven than his predecessor. He spent as much one-on-one face-time with his counterpart Barnier in two days as his predecessor Davis had done during the whole of 2018. He also asked that there was no summer recess and that negotiations continue since there were only 12 weeks remaining in which to bring things to a conclusion.
In the meantime, both the EU and the UK have come up with scenarios of what would happen in the case of a hard Brexit. Their conclusions are chilly: What would happen to air travel, did the UK need to stockpile food and medicines, had the various countries hired enough staff to deal with the increased activity at customs, etc.? (The Dutch seem to be the best prepared, having hired 750 additional customs inspectors at the port of Rotterdam.) The UK government will release further papers listing issues on a weekly basis. According to the head of the civil service, businesses needed to be informed in order to be prepared for the worst case.
Within the EU some countries are very concerned and others less so. According to a recent IMF study, Ireland would be as much affected by a hard Brexit as the UK, and its GDP could fall by as much as 4 percent. The Netherlands and Belgium, whose ports are vital for the UK’s intercontinental trade, are worried, as is Germany, which has strong trade and economic links with the UK. The Finns and the Italians can be relaxed as their exposure is minimal.
Meanwhile, politicians keep on quarreling in Westminster and business is demanding clarity. We can only hope that Raab and Barnier are aware that time is running out and that it is in nobody’s interest for the UK economy to fall off a cliff — not least because it would drag Ireland along. The Irish are long-standing and faithful members of the EU and, after all, they had no say in the Brexit referendum.
• Cornelia Meyer is a business consultant, macro-economist and energy expert.