Brexit: where will we be in a year’s time?
We enter the final year of the UK’s EU membership with the main elements of an emerging deal becoming clear. The withdrawal issues – Irish border aside – and a standstill transition have been agreed in principle. But where will we be in 12 months?
Most obviously, outside the EU. MPs rejecting a deal would make no difference to the simple operation of EU law after Article 50 has been triggered. That could only be avoided if the Government said the UK wanted to cancel or pause Brexit – and if the EU27 agreed and felt there was a settled UK change of heart in favour of staying in. Short of a political revolution in Britain, that looks unlikely.
Since the UK will formally leave on 29 March with or without a deal, chances are there will indeed be one. The EU and the UK have a shared interest here, meaning we are likely to be headed for a smooth, orderly and vague Brexit. In one year’s time the framework deal will have been approved, but it will be general, aspirational, and light on detail – other than the fact we will (eventually) leave the Single Market and the Customs Union, companies will not have much to work with.
That lack of detail will have given the Government enough wiggle room to – just – squeeze the approval Bill through a sceptical Parliament, by reassuring backbenchers that there is plenty of scope to negotiate a closer – or more distant – relationship once the detailed trade talks start in April 2019.
But the requirements of avoiding a hard border in Ireland and seeing off Opposition and backbench pressure to avoid trade friction mean that the Government will be committed to an open-ended, full customs union – at least for Northern Ireland. There will be face-saving commitments to leave this fully once ‘frictionless’ technology is available, and for the UK to be able to negotiate (though not bring into force) its own trade deals during an extended customs transition.
Business already knows (and officials on both sides privately confirm) that the UK will need to effectively remain in the Single Market and Customs Union beyond the current transition period, which ends in 2020. Theresa May hinted as much before the Parliamentary Liaison Committee in March. An extended transition is the easiest way for the UK to formally leave without major logistical disruption on both sides of the Channel, and for the EU27 to maintain unity (and hope that UK politics shifts during trade talks towards a closer future relationship with the EU). Behind the scenes in Whitehall, the discussion will be about how and when – not whether – to extend the transition, even if that means that the UK is not fully out before the next general election. The EU politics are tricky too; every Member State would need to ratify an extension through their national parliaments. But business will still need to prepare for the UK fully leaving the Customs Union, with all the disruption to supply chains and trade in time-sensitive products which that implies.
Finally, one year from now UK politics will be entering a new period of instability. When we formally leave, many Tory backbenchers will feel that May’s usefulness as leader has ended. As the real decisions loom, Tory advocates of both loosening and strengthening the UK’s links with the EU will want one of their own in No10. The frustrations of the Brexit transition – with the UK tied to EU rules it cannot influence – will sharpen the mood, as will the dawning realities of the compromises we will have to accept in order to do trade deals with any major economies. The Conservatives will be largely united in wanting a new face, someone not solely identified with Brexit, to establish a new platform to go to the country before 2022. Labour will be gearing up for an election which it expects to win.
In short, one year from now, the real debate about what kind of country post-Brexit Britain should be will be beginning.