We are heading for an all-or-nothing deal with the EU.
It's over two months since the Referendum on whether the UK should leave the EU, and a few things have started to happen.
Firstly, we have a new team in government, led by Theresa May, who seemed determined to make Brexit happen, and make Brexit work. These people seem bloody minded, are impervious to evidence and are happy to steamroller due process. The Labour leader Jeremy Corbyn is also anti-EU, will uphold the referendum and is an electoral disaster. An extremely weak opposition. The Labour leadership contender Owen Smith seems much more amenable but probably lacks enough support in the wider Labour Party. The Remain campaign Remain shambolic. They have now rebranded themselves "Open Britain" and seem indistinguishable from the Leave campaign.
The man to really fear is David Davis, the Minister for Brexit. He seems to be in favour of "Flexcit", using EEA as a stepping-stone to leaving the EU, but is entirely happy with throwing the UK economy under a bus and fall out to WTO rules.
The problem with the Leave side is that it's very broad, and isn't really one strategy. There seem to be a number of "red lines", which include not paying a fee to the EU, not being bound by EU law, and not allowing freedom of movement. This almost certainly guarantees that the UK will not be part of, nor have any "access" to any single market. So many people are in denial that this is even an option. Well, there's a saying "you don't ask, you don't get" but really, it's just not very likely.
I've summarised the possible outcomes here, together with my best guess at their likelihoods:
An EEA-style agreement seems to me very implausible, as it breaks too many of Leave's red lines. Both sides would see that we'd be worse off in every way compared to just staying in the EU, and it doesn't really further the Brexit cause.
A temporary extension seems much more likely, as the process of disentanglement is horrendously complex. However all EU members need to agree the extension which makes this problematic. The EU may see the need for continuity, purely for its own benefits.
Remain in the EU seems unlikely given the Prime Minister's determination. However if the government gets bogged down before triggering Article 50, or runs up against the City or its own MPs, it might just happen. Maybe some people in government might even change their minds after learning how the EU actually works and the harm they are causing.
The "partial market access" may well be what happens in the long term, but this will be after protracted trade negotiations with the EU lasting several years. I can't see a deal being concluded quickly. The UK doesn't even know what it wants, and needs to agree with 27 other member states. Don't hold your breath.
This leaves the default, "no market access". The reason I rank this so highly is because the EU won't give us a free ride, and The Three Brexiteers (Davis, Fox and Johnson, aka the Triumvirate) will want to save face and claim this was their idea all along. EEA isn't palatable, and an interim agreement can't be reached in time.
The really really dumb thing in all of this is that we are likely to keep 99% of EU laws (as they are mostly very sensible and allow us to trade with the EU), keep immigration (we desperately need staff for agriculture and the NHS), yet lose any influence at all in Europe, lose access to all single markets, hastily enter a load of ill-conceived trade agreements and take a huge economic hit. Slow clap for Leave.
It's over two months since the Referendum on whether the UK should leave the EU, and a few things have started to happen.
Firstly, we have a new team in government, led by Theresa May, who seemed determined to make Brexit happen, and make Brexit work. These people seem bloody minded, are impervious to evidence and are happy to steamroller due process. The Labour leader Jeremy Corbyn is also anti-EU, will uphold the referendum and is an electoral disaster. An extremely weak opposition. The Labour leadership contender Owen Smith seems much more amenable but probably lacks enough support in the wider Labour Party. The Remain campaign Remain shambolic. They have now rebranded themselves "Open Britain" and seem indistinguishable from the Leave campaign.
The man to really fear is David Davis, the Minister for Brexit. He seems to be in favour of "Flexcit", using EEA as a stepping-stone to leaving the EU, but is entirely happy with throwing the UK economy under a bus and fall out to WTO rules.
The problem with the Leave side is that it's very broad, and isn't really one strategy. There seem to be a number of "red lines", which include not paying a fee to the EU, not being bound by EU law, and not allowing freedom of movement. This almost certainly guarantees that the UK will not be part of, nor have any "access" to any single market. So many people are in denial that this is even an option. Well, there's a saying "you don't ask, you don't get" but really, it's just not very likely.
I've summarised the possible outcomes here, together with my best guess at their likelihoods:
- Full market access (total 50%)
- EEA-style (15%)
- A temporary extension (25%)
- Remain in EU (10%)
- Partial market access (10%)
- No market access (40%)
An EEA-style agreement seems to me very implausible, as it breaks too many of Leave's red lines. Both sides would see that we'd be worse off in every way compared to just staying in the EU, and it doesn't really further the Brexit cause.
A temporary extension seems much more likely, as the process of disentanglement is horrendously complex. However all EU members need to agree the extension which makes this problematic. The EU may see the need for continuity, purely for its own benefits.
Remain in the EU seems unlikely given the Prime Minister's determination. However if the government gets bogged down before triggering Article 50, or runs up against the City or its own MPs, it might just happen. Maybe some people in government might even change their minds after learning how the EU actually works and the harm they are causing.
The "partial market access" may well be what happens in the long term, but this will be after protracted trade negotiations with the EU lasting several years. I can't see a deal being concluded quickly. The UK doesn't even know what it wants, and needs to agree with 27 other member states. Don't hold your breath.
This leaves the default, "no market access". The reason I rank this so highly is because the EU won't give us a free ride, and The Three Brexiteers (Davis, Fox and Johnson, aka the Triumvirate) will want to save face and claim this was their idea all along. EEA isn't palatable, and an interim agreement can't be reached in time.
The really really dumb thing in all of this is that we are likely to keep 99% of EU laws (as they are mostly very sensible and allow us to trade with the EU), keep immigration (we desperately need staff for agriculture and the NHS), yet lose any influence at all in Europe, lose access to all single markets, hastily enter a load of ill-conceived trade agreements and take a huge economic hit. Slow clap for Leave.
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