For the past few years, Brexit has dominated public discourse in the UK, spilling across the Channel and sparking nervous discussions about the beginning of an exodus of nations from the EU.
It intensified debates on whether the 60-year old ideal of a unified Europe had failed to live up to expectations, since one of its pillars — which already had a cautionary foot out of the door — intended to quit entirely. Domestically, quitting the EU threw Britain into the familiar chaos of wading unprepared into uncharted territory. Failure to navigate these strange waters sank two prime ministers and escalated political gamesmanship in Westminster, which further frustrated an already polarized, exhausted public, desperate to regain any kind of footing on either side of the dilemma.
At one point, it appeared as though the UK would resign itself to a perpetual limbo of indecision as equally loud voices on either side sought to rush into the unknown or retreat to the comfort of the familiar. Last year’s general election delivered an emphatic reckoning that rewarded the Conservative Party for their unity behind a singular aim, while punishing Labour for its infighting, factionalism and incoherent message. As a result, the Tories have a commanding majority in Westminster that the opposition are unlikely to be able to overturn until 2024 — and probably not even then; the government's quick delivery of Brexit to fulfill its election promise has significantly improved the odds of Prime Minister Boris Johnson being at 10 Downing Street for the next decade.
However, therein lies the problem.
The Conservative government will loudly tout its successes in regaining what Johnson calls “full legal autonomy,” of which the Jan. 31 official exit was a part. However, there are troubling signs; any blowback, escalating tensions, violent protests, failed negotiations or wider economic fallout will be blamed solely on the Johnson government and the Conservative majority in Parliament.
First, Johnson’s 11-month deadline for a transition period for the UK to negotiate its future relationship with the EU is already ruffling feathers in Brussels. A host of issues will need to be settled such as law enforcement, security, intelligence, sharing data, industry standards, safety, supplies of electricity and gas, licensing and regulations of medicines, and access to fishing waters. If the clock runs down, what sort of alternative arrangement does Downing Street foresee that will not project a failure or signal an extended period of troubles to come?
EU leaders argue that similar trade deals with Canada, Japan and South Korea took years, not months — while also insisting that the UK agree to a level playing field that does not undercut EU regulations. Downing Street cannot ignore these arguments since about a half of UK exports go to EU countries.
Fortunately for Johnson, the transition period began only a week ago and there is time yet before December 2020 for his government to achieve its objectives, signal momentum and demonstrate some prescience for risk mitigation. Failure to do so will grant an opportunity to a revitalized Labour Party sans Jeremy Corbyn riding on anti-Conservative populism that will now be asking whether the UK is better off staying out or rejoining.
Hafed Al-Ghwell
Second, the June 2016 referendum has forced a substantive rethinking of the relationship between England and some other parts of the Union, namely Northern Ireland and Scotland. Both voted to remain in the EU but London’s rush toward Brexit is already threatening the integrity of the Union. Scotland’s First Minister Nicola Sturgeon wants to hold a ballot this year to ask the Scottish public whether they would like to remain part of a UK that has taken them out of the EU against their will, or become an independent nation and seek full EU membership.
For Northern Ireland, the movement to distance itself from London is more nuanced but it is taking shape and gathering momentum. The territory has elected more nationalists, who seek reunification with the Republic of Ireland, than unionists, who favor remaining a part of the UK.
Third, Brexit antipathy remains strong in major cities where most voted to remain and failed to force a second EU referendum despite protests and petitions to do so. Even in the last election, voters in major cities still favored the many iterations of the Brexit-wary Labour Party, despite its flaws. Brexit further divided urban and rural communities, leaving a palpable undercurrent of frustration that will fuel backlash, protests or labor strikes in reaction to any perceived failures attributable to the Conservative government's management of post-Brexit affairs.
In other words, a combination of lay-offs, an exodus of manufacturers, declining investment, tax increases and inevitable new tariffs could trigger protests and no confidence in the Johnson government. The prime minister had hoped to escape tariffs by urging a new arrangement modeled on Norway and Switzerland’s relationship with the EU. Unfortunately, that would leave Britain bound to all EU regulations without any means to influence what they said, or weasel out of them. Thus, any new arrangements with the EU would be introducing new tariffs in accordance with WTO rules, something UK businesses have never had to deal with for decades.
Fourth, an estimated three million jobs are tied to the UK’s current arrangements with the EU, and new arrangements may lead to an exodus of this labor, while tighter immigration restrictions will shrink the additional 2.93 million non-EU foreign workers in the UK, mostly from China and India. Failure to balance these shortfalls would further pressure entities — already seeking to avoid navigating complex new arrangements or paying higher wages to Britons — to quit the UK.
Car manufacturers have already cut jobs, closed plants or abandoned plans for new investments. It is a discernible sentiment shared across many industries, especially in financial services, where more than 120 firms have moved to Ireland and Luxembourg to insulate themselves from Brexit. Others are likely to follow suit, given the EU’s ongoing work toward weakening the London Stock Exchange in favor of Deutsche Borse for futures and derivatives trading, which will ultimately force London to play by Brussels’ equivalency rules.
Fortunately for Johnson, the transition period began only a week ago and there is time yet before December 2020 for his government to achieve its objectives, signal momentum and demonstrate some prescience for risk mitigation. Failure to do so will grant an opportunity to a revitalized Labour Party sans Jeremy Corbyn riding on anti-Conservative populism that will now be asking whether the UK is better off staying out or rejoining.
To that end, the Johnson government and the Tories in Westminster should be worried because, if the conflicting emotions during muted exit “celebrations” are anything to go by, there is not much enthusiasm for a UK adrift — only wariness, exhaustion, frustration, uncertainty and fear. The opposition is fortunate that they now have time to reinvent themselves and the benefit of two options, should they take over leadership — either making Brexit work by learning from Tory failures, or doing a full retreat back to a tried and true membership, despite a past toxic relationship and breakdown of trust worsened by Brexit woes.
- Hafed Al-Ghwell is a non-resident senior fellow with the Foreign Policy Institute at the John Hopkins University School of Advanced International Studies. He is also senior adviser at the international economic consultancy Maxwell Stamp and at the geopolitical risk advisory firm Oxford Analytica, a member of the Strategic Advisory Solutions International Group in Washington DC and a former adviser to the board of the World Bank Group. Twitter: @HafedAlGhwell
