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BREXIT DOESN’T NECESSARILY MEAN BREXIT

October 10, 2016 9:13 AM
By Nick Hopkinson is chair of the Liberal Democrat European Group in Liberator, September 2016 edition, #380

The one bit of good news emerging from the 23 June European Union (EU) referendum is that it provides Liberal Democrats with a tremendous opportunity. The Conservatives, after extending their internal split on Europe to the country, are all Brexiteers now. The 70% of Labour Party members who are pro-European are lead by an acquiescent, if not Eurosceptic, leader. Brexiteers ludicrously suggest our Olympic triumphs and recent good short-term consumer figures prove we can jettison our major trading and political partners in the EU. Meanwhile, our leader has been quick to identify the 48% who voted for Remain as a potentially large new source of support. To ensure we capture them, we need to plot a political, constitutional, legal, economic and international roadmap for the likely long rollercoaster ride ahead.

23 June sets a clear direction of travel towards Brexit but it does not necessarily mean Brexit will happen. Pro-Europeans should not let Leavers bully us into standing down because we lost the referendum, nor make us believe we are being negative, nor make us think our calls for a second referendum are undemocratic because the British people have spoken. Whilst we should accept the referendum's result, like the Leavers of the 1975 referendum, we shouldn't stop standing up for what we believe in. We know EU membership is the best deal for Britain. On the referendum scoreboard, we are tied one all. We should actively reject Brexit is a fait accompli, counter public acquiescence, and champion remaining in even if Article 50 to leave the EU has been triggered.

Leave's campaign was mendacious and the franchise was unfairly denied to 16-17 year olds (unlike in Scotland) and most taxpaying EU citizens resident in the UK. Although four million inspirationally forced a debate in Parliament, it is premature to press fully for a second referendum. We should however reject the Government's stance that the referendum has settled the question of our EU membership. As 'Project Fear' gradually becomes reality, we should not hesitate to expose the adverse consequences of Brexit and pin the blame on the Leavers. The consequences of the recent 12% drop in the pound will feed through to forecast 3% inflation only next year. The Chancellor's Autumn statement is likely to reveal reduced tax revenues from a slowing economy. The major hit from leaving though is only likely to become apparent as we near conclusion of the Brexit negotiations, possibly in late 2019. Only then can we start negotiating new, and inevitably less favourable, trade and investment deals, first with the EU and then non-EU countries.

There are a number of steps and possible scenarios resulting from the referendum which will be shaped by our economic and political fortunes, a possible second independence referendum in Scotland, and new uncertainty about the Good Friday peace process: 1. triggering Article 50 without parliamentary approval and assent of the devolved authorities; 2. triggering Article 50 after approval by both Houses of Parliament and assent of the devolved authorities; 3. a 'hard' BREXIT with a bad economic deal and strict immigration controls; 4. a 'soft' BREXIT with a good economic deal and greater control of EU free movement; 5. a referendum around 2019 asking the people whether they support the actual BREXIT deal negotiated; 6. an early General Election or the scheduled 2020 General Election which either validates or reverses the referendum; and 7. leaving the EU without a Brexit deal and having to negotiate new trade deals with all 163 World Trade Organisation (WTO) members.

The Government has argued that Article 50 does not require a vote in Parliament. At least seven legal cases, notably Mischon de Reya's, argue that there is no Prime Ministerial prerogative and that any amendment or repeal of the European Communities Act 1972 requires a subsequent Act of Parliament. Even if these cases win, and Parliament reasserts its sovereignty, many pro-European MPs are likely to respect the people's advice in the referendum. Although roughly two thirds of MPs are pro-European, majorities in two thirds of all constituencies voted for Brexit. Many in the House of Lords oppose leaving the EU, but they face the inevitable refrain from Leavers and unelected print media that a body of unelected politicians should not stand in the way of the will of the people. Ultimately, the importance of Parliament's interventions may be less the outcome and more a delay in triggering Article 50, which in so doing casts further doubt about the benefits and feasibility of Brexit.

The Government may also need the assent of devolved jurisdictions. Scotland could argue it has an implied veto under the Sewel Convention. Scottish First Minister Nicola Sturgeon said she would tell her MSPs to refuse 'legislative consent' if and when the Scottish Parliament was asked to ratify Brexit. The Northern Irish and Irish governments will be important voices on their shared land border and free movement, and London will demand significant input into the negotiations.

Once Article 50 is triggered, with or without the assent of Parliament and devolved jurisdictions, we should seek to influence the Brexit negotiations. No doubt we shall seek the best possible deal for the UK, in particular ensuring that areas with a pan-European dimension (e.g. the environment, workers rights) are safeguarded in UK legislation and new agreements with the EU. We should press for optimal access to EU markets and, as Tom Brake MP is already advocating, protecting the rights of EU citizens already resident in the UK. Advocating the best Brexit deal for Britain does not prevent us from arguing to remain or rejoin.

The Conservatives' remarkable renewed unity on Europe in the referendum's immediate aftermath already appears to be unravelling. Making a success of Brexit will prove challenging. May has cleverly given the three Brexiteers, Johnson, Davis and Fox, the poison chalice of delivering it. They will be confronted by civil servants, businesses and mercantilist global trading partners laying bare the reality that Brexit trade and immigration fantasies are unlikely to work in practice. Leavers still cannot agree what Brexit should look like. The 'hard' Brexiteers want a quick divorce and stringent controls on EU immigration, with little regard for our economic well-being and our national unity. More cautious 'soft' Brexiteers, in May's words, want to secure "greater controls on immigration whilst securing the best deal for British goods and services". Many EU member states and the European Parliament have no wish to offer the UK a generous precedent lest it emboldens greater populism, copycat referenda, and causes the EU to unravel further.

It is believed May is against an early General Election as she does not want to introduce further uncertainty at this tender juncture. However, there is an obvious temptation to secure a stronger and more legitimate mandate whilst Labour is in turmoil. Those emboldened by the 48% remain vote and prospects for a new 'Progressive Alliance', could however be disappointed by the result of an early election. The Conservatives and UKIP could prove to be the main beneficiaries, and the chances of a disastrous hard Brexit would be all the more likely.

However, should pro-Europeans form the next Government, whether in an early General Election or one in 2020, Article 50 negotiations could be abandoned. The House of Lords EU Committee has noted there are no legal impediments to withdrawing notification of Article 50. This period could be extended to before final ratification by all parties. We therefore should seek to remain an EU member on existing terms. If we have left, we should seek to rejoin the EU on the same terms as those prevailing at the time of our departure. However advocating remaining in or rejoining the EU alone is not enough. As I argued in Lib Dem Voice (29 June 2016), we need to help the 'left behind' who voted Leave. Westminster should match our net EU contribution (£8.8 billion) with an EU Impact Fund for affordable housing, health and social provision to ensure all areas of the UK benefit more equally from our membership, and strengthen border controls.

Should Parliament or a General Election not change the dynamics of the Brexit process, we should demand a referendum once the negotiated terms of Brexit are known, perhaps in late 2019. There is a considerable body of legal opinion arguing there must be a second referendum on the exact terms of the negotiated Brexit deal. The June referendum gave only an advisory mandate to the Government to leave the EU - it did not give our consent to the terms of departure. By 2019, momentum will have grown for a second referendum as more Leavers suffer 'buyer's remorse' and realise they have swallowed a litany of lies. Brexit will be associated with having made life more of a struggle, plunging the UK into a constitutional crisis, and not delivering the hoped for benefits, notably on migration.

Even then the terms of our trade both with the EU and 135 WTO members outside it will still not be known. Many Brexiteers argued we can simply rejoin the European Free Trade Association (EFTA) and retain our access to the EU market. The problem is that the Norwegian Government has already suggested it could block the UK's readmission to EFTA - its four small members fear being dominated by a large 'problem child'.

A second referendum would give voters another chance to assess in the cold light of post-referendum experience whether the actual Brexit deal achieved (and uncertainty about our future global trading relations and national unity), or the known terms of our existing EU membership is best for Britain. Electorates make mistakes. Like the Danes and Irish in their second referenda on the Maastricht and Nice Treaties, the UK electorate could very well reverse our previous decision.

We need to play a long game. Brexit will become increasingly associated with economic downturn, constitutional crises, regulatory obstacles, bureaucratic hassle and cost, and a deterioration of both our EU and non-EU relations. Any Government progressing Brexit is unlikely to be able to demonstrate tangible benefits from Brexit, not least because no one will conclude trade deals with us until our departure from the EU is completed and new trade relationship with it is known. Any Government consumed by the complexities of Brexit, rather than focused on addressing the immediate real social and economic problems of voters, will gradually lose support. The majority of voters may at last come to realise we already have the best British deal as an EU member. The last line of the Eagles' 1976 song Hotel California "you can check out any time you like, but you can never leave" could have renewed meaning.

Nick Hopkinson

Nick Hopkinson is chair of the Liberal Democrat European Group and former director,

Wilton Park, Foreign and Commonwealth Office

This article was originally published in the September 2016 edition of Liberator (#380)