Thursday

27th Apr 2017

Column / Brexit Briefing

Brexit white paper is a clear break, with shades of grey

  • The White Paper is essentially a longer version of Theresa May’s speech on 17 January. (Photo: Number 10/Flickr)

British government proposals, known as white papers, rarely contain anything genuinely new.

Despite its 77 pages and grand title - The United Kingdom’s exit from and Partnership with the European Union - the government's Brexit white paper is essentially a longer version of Theresa May’s speech on January 17.

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Even so, it contains numerous passages which underscore the scale of the UK’s imminent break from the EU.

“As we will no longer be members of the Single Market, we will not be required to make vast contributions to the EU budget,” the White Paper states, in one sentence nailing two sacred cows of European integration - the single market and the EU budget.

The clearest break, however, is on immigration. “In future, therefore, the Free Movement Directive will no longer apply and the migration of EU nationals will be subject to UK law.”

Those looking for lots of detail in the White Paper and certainty will be disappointed.

Even the section on immigration leaves a bit of wiggle room. The White Paper states that there “may be a phased process of implementation to prepare for the new arrangements”.

The days of UK contributions to the EU budget are not necessarily over either. “There may be European programmes in which we might want to participate. If so, it is reasonable that we should make an appropriate contribution,” the White Paper concedes.

Pragmatic and business-like

Much of the document is pragmatic and business-like - almost like the mandate for a conventional trade deal.

Alongside the usual optimism you get in a government document, plenty of care has been taken to guard against hostages to fortune.

The difference between the Brexit White Paper and a negotiating mandate for a trade deal is that failure to broker a deal on TTIP, for example, leaves nobody (even the negotiators who wasted their time) materially worse off.

Failure to reach agreement when the two-year deadline of Article 50 is up, will place individuals and businesses in a weaker and uncertain position than exists now. By triggering Article 50 and set out, albeit ambiguously, its strategy, the UK now has less leverage.

How much pragmatism actually exists in practice will be demonstrated by the UK’s approach to the inevitable transitional arrangements that will be required. This could last as long as five years after the completion of the first phase of withdrawal in 2019.

The lack of detail has prompted plenty of concern, particularly in the business community. In a note to clients on Thursday (2 February), Malcolm Barr, a JP Morgan economist, commented: “As a distillation of the state of knowledge within the UK government six months after the vote, and with the beginnings of a time-compressed negotiation just weeks away, the shallowness of the analysis and absence of detail are matters of great concern."

Barr won’t be alone. Bank executives and corporations are right to be worried because Brexit will not be for them.

The next step into the uncharted waters of Brexit will be Theresa May’s long-awaited letter to Council President Donald Tusk, which will probably be on the table when EU leaders meet in Brussels in March.

But Article 50 was not drafted with the expectation that it would ever be used. The treaty does not specify where the negotiations should take place, for example.

Michel Barnier's Commission unit will do the daily leg-work with their British counterparts led by Ambassador Tim Barrow. The big political decisions on the negotiations will be taken at the very top.

Existential threat

One of the most telling points made during two days of parliamentary debate on the Article 50 bill was former Chancellor George Osborne remark that “the government has chosen – and I respect this decision – not to make the economy the priority”.

A spokesperson for May insisted that Osborne was “speaking for himself” not the government. Yet Osborne was right.

If the six months since the June referendum has offered more confusion than clarity, the government has been unswerving that ending freedom of movement will be the UK’s most important "red line" in the negotiations.

If Britain’s refusal to budge on immigration means a punitive deal on single market access, then May will take it.

It is easy to accuse the May government of arrogance, hubris and naivety in their assumption that they will be able to cherry-pick as much access to the single market and other EU policy areas of their choice for a bargain price.

But eurocrats would be well-advised not to scoff or be complacent. The very existence of a White Paper on Britain leaving the EU would have been unimaginable as recently as a year ago.

Brexit represents an assault and existential threat to the EU’s long-term survival.

The risk to the EU is that other countries may look at the British blueprint and see much in it that they would like for themselves.

Benjamin Fox, a former reporter for EUobserver, is a consultant with Sovereign Strategy, a London-based PR firm, and a freelance writer.

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