EU referendum:

1. Brexit: one year on Anand Menon p4

Part One: Public Opinion

2. Brexitandtheelection JohnCurtice p6 3. Publicattitudes SaraHobolt,ThomasLeeperandJamesTilley p8 4. Publicdebate AlanRenwick p10

Part Two: Parties and Politics

5. MPs PhilipCowley p12 6. Thepoliticalparties TimBale p14 7. Britishpolitics RobertFord,MatthewGoodwinandMariaSobolewska p16 8. TheroleofParliament AdamCygan p18

Part Three: Brexit and the Politics of the UK

9. NorthernIreland JohnGarryandColinHarvey p20 10. ScotlandandBrexit NicolaMcEwen p22 11. WalesandBrexit RachelMinto p24 12. Brexitanddevolution MichaelKeating p26 13. Regionalimplications PhilipMcCannandRaquelOrtega-Argilés p28

Part Four: Brexit and the Economy

14. TheUKeconomy JonathanPortes p30 15. TradeandtheSingleMarket ThomasSampson p32 16. Publicfinances IainBegg p34 17. UKeconomicpolicy SwatiDhingra p36

Part Five: Brexit and Public Policies

18. Thepoliticsofagriculture CarmenHubbard,DavidHarveyandAnneLiddon p38 19. UKenvironmentalpolicy CharlotteBurns,VivianeGraveyandAndrewJordan p40 20. TheGreatRepealBill CatherineBarnard p42 21. Immigration JonathanPortes p44 22. BritonsintheEU MichaelaBenson p46 23. Nationalitypolitics NandoSigonaandLaurenceLessard-Phillips p48 24. Therepatriationofcompetences JoHunt p50 25. Foreignpolicy RichardGWhitman p52 26. Highereducation SimonMarginson p54

Part Six: Brexit and the EU

27. Thememberstates HusseinKassim p56 28. TheEUposition SimonUsherwood p58

TheresaMay’sdecisiontocallasnapelectionthrewupyetmorequestionsregardingBritain’swithdrawalfromtheEuropeanUnion.Suchatimeofuncertaintycallsfortimelyacademicanalysis,andsothePoliticalStudiesAssociation(PSA)isdelightedtohaveteamedupwithTheUKinaChangingEuropeonceagaintoshedsomelightontheBrexitprocess.

Followingtwosuccessfulcollaborationsin2016(Brexit and Beyond and Brexit: Six Months On),EU referendum: one year onexaminestheprogressthathasbeenmadethusfar.

ThePSAiscommittednotonlytostudyingbutalsoinformingpoliticaldecision-making.InwhatfollowsProfessorAnandMenonandhiscolleagueswillguideyouthroughthecomplexpoliticaljourneythatisBrexitandconsiderhowtheUK’swithdrawalfromtheEUislikelytoplayoutacrossarangeofpolicyareas.

Professor Angelia Wilson

Chair,PoliticalStudiesAssociation

Foreword

Image credits for photographs on the front cover and running header can be found on page 60

Well,it’snotboringisit?Politicscontinuestosurpriseus,andallthewhiletheArticle50clockkeepsticking.OneyearonfromtheEUreferendum,thisreportisintendedforallthosewhoareinterestedinwhathashappenedsincethereferendum,andhowtheBrexitprocessmightunfoldinthemonthsandyearstocome.

Asever,mythankstoallthosewhocontributedtothisreport.Theauthorshave,insomecases,hadtoturntheirsectionsaroundextremelyquicklyafterthegeneralelection.Allhavehadtocopewithirritatingquestionsandqueriesfromme.I’mgratefultoHannahBridgesfordoingthecopyeditingsoquicklyandthoroughly.Asever,BenMillerplayedacrucialroleingettingthereportdesignedandproduced,greatlyassistedbyNavjyotLehl,whilePhoebeCouzenshasworkedtirelesslytokeepTheUKinaChangingEuropeshowontheroad.Finally,I’dliketoexpressparticularthankstoCamillaMacdonald,whohasshepherdedthisprocessfromthestartandgoneoverallthetextassiduously.I’msureit’spurecoincidencethatshe’sleavinguson23June.

Professor Anand Menon

TheUKinaChangingEurope

54

Weshouldhaveknownbetter.WhileitisdoubtlessausefulexercisetotrackwhathasbecomeofBrexitayearafterthereferendumonEUmembership,wewerenaïveinexpectinghistorytostandstillwhilewecompletedthetask.Asthedraftsforthispublicationwerecomingin,theGeneralElectiontookplace.AndwhilsttheoutcomemaychangenothingatalltodowithBrexit,onecannotdiscountthepossibilitythatitwillchangeeverything.

So,withthatcaveatfirmlyinmind,thiscollectionlooksatwhatthedecisiontoleavetheEUhascometomeanoneyearon.Wecovereverythingfrompublicopinion,politics,economicsandtheimplicationsforthenationsoftheUnitedKingdom,toaraftofpublicpoliciesrangingfromagriculturetohighereducation.

Inevitably,thereisnoclearconclusionthatcanbedrawnfromsuchabroadoverview.However,severalthingsdostandout.First,thereismuchaboutBrexitthatisnoclearerthanitwasayearago,andmuchthatislessclear.TalkofareferendumonIrishunityhascomeassomethingofashock.JonathanPortespointsoutthatwhatmightoriginallyhavebeenthoughtofas

relativelystraightforwardissues,suchasdealingwiththerightsofEUnationalsintheUK,areinfactfiendishlycomplicated.

Asforthepolitics,well,whatdoIneedtosay?Publicopinionseemstobeinflux,withJohnCurtice,MariaSobolewskaandhercollaboratorsandSaraHoboltandherteamsuggestingnotonlythatoldclassallegiancestoparticularpartiesmightbeloosening,butthatBrexititselfmightbebecominganewpoliticaldivide,alongsidethetraditionalleft-rightspectrum.Atthesametime,aminoritygovernmentwillhavetodealwithaparliamentwhoseapproachtoBrexitisasyetunclear,andwherebackbenchrebellion,asPhilCowleyunderlines,isalltoolikelyindealingwithoneof,itnotthe,mostcomplicatedissueofpublicpolicyofourlifetime.Asfortheparliamentarypartiesthemselves,well,readTimBale’sentertainingpiece.

AllthispoliticswilltakeplaceagainstthebackdropoftheBritisheconomy.AsSwatiDhingraintimates,theeconomymaynotbeintherudestofhealth,andahardBrexitwouldhardlyrepresentacure.Equally,asPhilipMcCannandRaquelOrtega-Argiléspointout,theultimate

impactofBrexitmaywellbefurthercomplicatedbyitsunequalimpactondifferentpartsofthecountry.

Meanwhile,thereismuchwewillneedtoknowratherrapidly.HowparliamentwilldealwiththeGreatRepealBillisonething.Arelatedminefield,exploredbyJoHunt,concernswherethepowersthatarerepatriatedendup–Belfast,CardiffandEdinburghwillallhavetheirpiecetosayonthematter.

Turningtomoresubstantiveissues,thekindofagriculturalpolicythatwillreplacetheCommonAgriculturalPolicyissomethingweshouldstartworryingaboutsoonerratherthanlater.SotooistheneedtodealwiththerightsofEUnationalsinthiscountry.

Incontrasttotheuncertaintythathascharacterisedourapproach,theEU,foritspart,hassortedoutitsnegotiatingpositionandiswaitingfortheBritishgovernmenttoarrive.ForalltheearlyhopesthatcleverdiplomacymightdividetheEU27,theyhaveremainedresolutelyunitedintheirdeterminationtoseetheprocessthroughwithoutweakeningtheEU.Indeed,as

RichardGWhitmanpointsout,BrexitevenseemstohaveprovidedafilliptoplansforsomekindofenhancedEUdefencecapability.

Muchhaschangedoverthecourseofthelastyear.ButthereisevidencethatnotenoughhasbeendonetothinkthroughboththeimmediateprocessofleavingtheEUandthestructuresandpolicieswewouldliketohaveinplaceoncewehaveexited.Brexit,inotherwords,willposeachallengetoourgovernment,ourparties,ourcivilserviceandallthoseinvolvedinthevarioussectorswhereitwillhithome.

By Anand Menon

ONE

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PART ONE: PUBLIC OPINION

Introduction

TheEUreferendumwasdeeplydisruptiveforBritain’stwomainpoliticalparties.ConservativeMPsweredeeplydividedintheirpreferenceforLeaveorRemain,whileLabourMPsblamedtheirleader,JeremyCorbyn,fortheRemainside’sdefeatandmountedachallengeagainsthim.Meanwhile,amajorityofConservativesupportersignoredtheadviceoftheirPrimeMinisterandvotedforLeave,whilearoundathirdofLabourvoterswentagainsttheirparty’sadviceandbackedLeavetoo.

Incontrast,fewsuchdifficultiesfacedtheLiberalDemocratsorUKIP.HoldingareferendumtogetoutofEuropewasUKIP’sraisond’être,andthusanissueonwhichboththeparty’selectedrepresentativesanditssupporterswereunited.AndwhilearoundaquarterofLiberalDemocratvotersalsofailedtofollowtheirparty’srecommendationtovoteRemain,oncethereferendumwasoverthetraditionallypro-EUpartywassoonarguingthereshouldbeasecondreferendumaftertheBrexitnegotiationswerecompleted.

Betweenthem,thesedevelopmentsraisedaninterestingquestion.WouldtheConservativesandLabourlosesupportduringthecourseoftheBrexitprocess,asunhappyRemainvotersswitchedtotheLiberalDemocratsandLeavevoterswereattractedbytheunambiguouspositionofUKIP.Ifso,mightBritishpoliticsbefracturedyetfurther?

The general election

Atfirstglance,theoutcomeofthe2017electionsuggestsBrexithashadtheoppositeeffect.SupportforUKIPimplodedtojust2%,lowerthanin2005and2010,letalone2015.ThelevelofLiberalDemocratsupportfailedtorecoverfromthe8%towhichthepartyhadsunktwoyearsago.TheConservativesandLabourbetweenthemwon82%ofthevotescastacrosstheUKasawhole,morethanatanyelectionsince1970.ItseemsasthoughBrexithaspavedthewayforareturntothetwo-partypoliticsthatcharacterisedBritishpartypoliticsintheimmediatepost-warperiod.

However,thisconclusionistoosimple.Brexitwasassociatedwith,andwasprobablyatleastapartialcauseof,areshapingofthechoicevotersmadebetweenConservativeandLabour.

Consider,firstofall,thetrendsinpartysupportamongstRemainandLeavevotersduringthecourseoftheelectioncampaign.InthelastfourpollsconductedbyICMimmediatelypriortotheelectionbeingcalled,53%ofLeavevoterssaidthattheyintendedtovotefortheConservatives,comparedwith38%ofRemainsupporters.However,thisgapwidenedduringthecourseoftheelectioncampaign.InthelastfourpollsICMundertookbeforepollingday,supportfortheConservativesamongstLeavevoterswasfivepointshigherat58%,whilethatamongstRemainvotershaddroppedfivepointsto33%.

SupportforLabourincreasedacrossthecourseofthecampaignamongstbothRemainandLeavevoters.But,at13points,theincreasewasmoremarkedamongsttheformerthanitwasthelatter(sixpoints).Asaresult,whatbeforetheelectionwasa15-pointdifferencebetweenRemainandLeavevotersinthelevelofsupportforLabourhadgrownto22pointsbypollingday.

EvidencethatRemainandLeaveBritaindivergedintheirwillingnesstovoteConservativeorLabourisalsotobefoundinthepatternoftheelectionresults.WiththeexceptionofScotland,theConservativevoteincreasedmostinthoseareasthatvotedLeave,whileLabourmademostprogressinareasthatbackedRemain.

WithinEnglandandWales,Conservativesupportincreasedonaverageby10pointsinconstituencieswhere,accordingtoestimatesmadebyChrisHanrettyoftheUniversityofEastAnglia,Leavewonover60%ofthevoteintheEUreferendum.Conversely,supportfellonaveragebytwopointsinseatswheretheLeavevotewaslessthan45%.Labour,incontrast,sawitsvoteincreasebytwelvepointsinseatswheretheLeavevotewaslowest,butbyonlyninepointsinthoseplaceswhereithadbeenhighest.

NottheleastofthereasonswhytheConservativesgainedgroundmostamongstLeavevotersandinplaceswheretheLeavevotewashighestlastyearisthatthepartybenefittedmostfromthecollapseintheUKIPvote.AccordingtoapollconductedonpollingdaybyLordAshcroft,57%ofthosewhovotedUKIPin2015votedfortheConservativesthistime,whileonly18%switchedtoLabour.Equally,whereinEnglandandWalesUKIPsecuredunder7.5%ofthevotein2015,Conservativesupportfellbackonaveragebythreepoints,whileinthoseseatswhereUKIPwonmorethan17.5%,theConservativesadvancedbytenpoints.

TheConservativepartyis,ofcourse,traditionallythepartyofmiddleclassvoters.ButLeavevotersweredisproportionatelyworkingclass.

Consequently,itwasamongstworkingclassvotersandinpredominantlyworkingclassconstituenciesthattheConservativesadvancedmost.AccordingtoLordAshcroft’spollingdata,Conservativesupportwasuptwelvepointsamongstworkingclass“DE”votersthanitwasin2015,butbyonlyfourpointshigheramongstprofessionalandmanagerial“AB”voters.Equally,Conservativesupportincreasedbyninepointsonaverageinthe30%mostworkingclassseatsinEnglandandWales,butbyonlyonepointinthe25%mostmiddleclass.Inshort,thedivergencebetweenRemainandLeavevotersservedtocutacrossthetraditionalclassbaseofBritain’stwo-partysystem.

What lies ahead?

Thegeneralelectionwas,then,moreofaBrexitelectionthanimmediatelymeetstheeye.ManyaLeavevoterswitchedtotheConservatives,whileRemainvotersweremoreinclinedtobackLabourthantheirLeavecounterparts.Asaresult,theConservativepartyinparticularwonovervotersitwouldnotnormallybeexpectedtoreach.ThequestionthatnowfacesthepartyiswhetheritcankeepthemasittriestonegotiateBrexitagainstthebackdropofahungparliament,inwhichtherewillbepressureonthePrimeMinistertosoftenhervisionofwhatBrexitshouldmean.

By John Curtice

TWO

98

PART ONE: PUBLIC OPINION

ThereferendumhasgivenrisetoanewformofpoliticalattachmentbasedontheLeave-Remaindivide.Ayearon,nearlythreequartersofpeoplethinkofthemselvesas“Leavers”(38percent)or“Remainers”(35percent).Thesegroupsaresimilarinsizetotheproportionofpeoplewhoidentifywithpoliticalparties.ItisprimarilythepeoplewhovotedRemainwhohavecometoidentifystronglywiththisperspectiveaftertheelection.TheprospectofBrexithasmadesomepeoplemorecommittedtoEUmembership.AcrucialquestionforthefutureofBritishpoliticsiswhetherthesenewpoliticalidentitiesdissipateovertimeasBrexitbecomesareality,orpersist.Thisislikelytodependonwhether,andhow,politicalpartiesmobilisethisnewfaultlineinBritishpolitics.

What do people want from Brexit?

ThenegotiationsbetweentheBritishGovernmentandtheEUinvolveanarrayofcomplexpolicyquestions.Themostprominentsofarhasbeenthetrade-offbetweentheGovernmentprioritisingpreferentialtradeagreementswiththeEUorprioritisingcontroloverEUimmigrationrates.Buttherearemanyotherpolicychoicesthatrelatetothe“divorcebill”,continuingEUbudgetcontributionsandaccesstoEUfunds,jurisdictionoftheEuropeanCourtofJustice,bordercontrolswiththeRepublicofIrelandandsoon.Thesequestionsdidnotfeatureonthereferendumballotpaper,noraretheyissuesthatmanypeoplenecessarilygavemuchthoughttobeforethereferendum.However,itiscrucialfortheGovernmentthattheoutcomeofthenegotiationsisperceivedtobelegitimatebythepeople.

Ourresearchshowsthat,whenaskedtochoosebetweenoutcomesresemblingwhathavebecomeknownas“softBrexit”and“hardBrexit”,alargemajorityofthepublicfavourthelatter.Perhapsmoresurprisingly,whenaskedtochoosebetweentheGovernment’spreferredoutcomeofhardBrexitanda“nodeal”alternative,thereisamajorityinfavourofwalkingawayfromthetablewithoutanykindofdeal.Inthesurveywe

Introduction

TheEUreferendumwasahistoricdemocraticexercisethathasgiventheBritishGovernmentapopularmandateforleavingtheEU.Yet,thechoicebetweenleavingorremainingintheEUprovidedlittleinthewayofguidanceastowhattypeofBrexitthepublicwanted.AstheGovernmentstartstonegotiatetheUK’sexitfromtheEU,weaskedwhetherthepublicremainsdividedandwhatpeopleactuallywantfromBrexit.Oursurveyevidenceshowsthat,whilethepublicremainsalmostequallydividedonwhetherleavingorstayingisagoodidea,thereisanemergingconsensusaboutwhatBrexitshouldlooklike,andtherearehighlevelsofsupportfora“hardBrexit”alongthelinesproposedbyTheresaMay.

No regrets as the public remains divided

WhilemanycommentatorsspeculatedthatvoterswouldchangetheiropiniononBrexitaftertheimplicationsofleavingtheEUbecameclearer,publicopinionsurveyssofartellaverydifferentstory.Infact,veryfewpeoplehavechangedtheirmindsaboutthewaytheyvoted.Whenasked“Inhindsight,doyouthinkBritainwasrightorwrongtovotetoleavetheEU?”,pollsshowalmostnochangesincethereferendum:peoplewhovotedRemaincontinuetothinkitwaswrongtovoteto

leavetheEU,whilepeoplewhovotedLeavethinkitwasright(seefigureabove).

Interestingly,thecontinuingdividebetweenthosewhofavourandopposeBrexitappearstohavegivenrisetoasetofnewpoliticalidentitiesinBritain.Itiswellestablishedthatmanypeoplefeelattachedtoapoliticalpartyandthisattachmentshapestheirattitudestoallsortsofthings.TheEUreferendum,however,wasahighlyunusualevent.Thetwomainpartieswereopenlysplitovertheissue.Theelectoratewasalsodivided:around40percentofConservativesupportersvotedRemain,whileathirdofLaboursupportersvotedLeave.

conductedinlateAprilthisyear,eachofthesescenarioswasdescribedindetail–cruciallywithoutthe“soft”,“hard”and“nodeal”labels–andpeoplewereaskedtomakeachoicebetweenaseriesofpair-wiseoptionsofdifferentnegotiationoutcomes.OursurveyshowsthatLeaversarerelativelyunitedinpreferringthehardestversionofBrexitwhengivenachoice.Thisisdrivenprimarilybyadesiretocontrolimmigration,tolimitthepowersoftheEuropeanCourtandtoavoidpayinganysortofsettlementbilltotheEU.Incontrast,Remainersaremuchmoredivided:whileasmallmajorityfavoursasoftBrexitoverahardBrexit,40percentpreferthelatter.Onthewhole,RemainersandLeaversarelookingformanyofthesamethingsfromBrexit:greatersovereignty,goodtradearrangementsandnosettlementbill.TheydifferoverthequestionsofcontrollingimmigrationandgivingrightstoEUcitizensresidentintheUK.

Oneyearon,theelectorateremainsdividedonwhetheravoteonBrexitwasagoodorabadthing.However,thosedivisionsaremuchlessstarkwhenwefocusonwhatcitizenswantfromBrexitandwhattheywillaccept.TheresaMay’shardBrexitispopularnotonlyamongLeavers,butalsoamongasizableproportionofRemainers.Moreover,whenaskedhowtheGovernmentishandlingtheBrexitnegotiations,thepercentageofpeoplewhosay“well”hasincreasedfromjust20to35percentoverthelastsixmonths.AsnegotiationswiththeEUstartinearnest,theGovernmentmayalsobenefitfromarally“roundtheflag”effectfrombothLeaversandRemainers.Atthesametime,however,thepossiblecostsofBrexitwillalsobecomemoreapparentasthenegotiationsproceed:thesecouldhardenoppositionamongthosewhocontinuetoidentifythemselvesasRemainers.

By Sara Hobolt, Thomas Leeper and James Tilley

50%

40%

30%

20%

10%

0%August2016

November2016

February 2017

May2017

Right

Wrong

Don’t know

Was Britain right or wrong to vote to leave the EU?Source:YouGovpolls

THREE

1110

PART ONE: PUBLIC OPINION

Brexitassuch.TheConservatives,capitalisingonMay’shugeearlypollleadoverCorbyn,wantedadebateaboutwhocouldbestnegotiateBrexit,notthedetailsofthedealthatshouldbesought.Indeed,theywantedtoavoidtyingthemselvestospecificnegotiatingobjectives.Labour,meanwhile,soughttoshifttheagendaawayfromBrexit–onwhichtheircompromisepositionriskedpleasingnoone–towardsdomesticpoliciesthatwerepopularwithvoters.

Brexit’s unknowns

TheresultofallthiswasthatanelectioncalledtoclarifytheBrexitpositioninfactdidverylittletoadvancepublicunderstandingordiscussionoftheBrexitoptions.AstheDirectorofTheUKinaChangingEurope,AnandMenon,putit,themainpartymanifestos“dance[d]daintilyroundthetrickyissues”ofBrexit.Subsequentcampaigndebatesdidlittletoexpose,letalonefill,thegaps.TherewaslittleexplicitthinkingabouthowtotradeoffageneralpublicdesireforlowerimmigrationagainstthepreferenceformaintainingtradewiththeEU(seethesectiononpublicattitudes).Therewaslittledebateaboutwhethertheadvantagesofbeingabletonegotiatetradedealswithnon-EUcountriesoutweighthedisadvantagesofleavingtheCustomsUnion.TheConservativesbrandishedtheideathat“nodealisbetterthanabaddeal”asatotem,butlittleattentionwasgiventowhat“nodeal”implies.Laboursaidfreemovementwouldend,butalsosaidtheywantedtheoptionofmembershipoftheSingleMarkettoremainopen,implyingfreemovementmightcontinue.

TheweaknessofdebatearoundBrexitislongstanding.Duringlastyear’sreferendumcampaign,bothsidespeddledmisinformation.Mostcriticismhas,understandably,focusedontheinaccuraciesofthevictors,suchastheinfamous£350millionclaimandthestatementsaboutTurkey’sfutureEUmembership.Buttheloserswereatittoo:thattheTreasurymachinewasusedtopromotehighlymisleadingclaimsaboutboth

ThiswassupposedtobetheBrexitelection.InherDowningStreetstatementon18Aprilannouncingherintentiontoseekthedissolutionofparliament,TheresaMayspokeoflittleelse.Shesuggestedthat,withoutanearlyelection,heropponentswouldhaveboththewillandtheabilitytodisrupthereffortstonegotiatethebestpossibleBrexitdeal.Thevote,shehoped,woulddeliverasecuremajorityforherfavouredBrexitplan.

Brexit’s low profile

Intheend,however,Brexitdidnotdominate.Itwasmentionedonaverage580timesadayinthemainUK-widenewspapersintheweekfollowingMay’sstatement.Butthatfellbelow500forthefollowingtwoweeks,thenbelow400forthefourandahalfweeksbetweenthenandpollingday,dippingtojust155mentionsadayinthesixthweekofthecampaign,immediatelyfollowingtheManchesterbombing.WhentheBBC’sAndrewNeilinterviewedtheprimeministeron22April,hisquestionsturnedtoBrexitonlyinthelastfewminutes.InterviewingJeremyCorbynfourdayslater,NeilaskednothingdirectlyaboutBrexititself,althoughhedidenquiretowardstheendaboutimmigration.TheothermaintelevisiondebatesandinterviewsgaveBrexitmoreattention,butstillitdidnotdominate.

Therewereatleastthreereasonsforthis.One,assuggested,wastheunforeseenandtragiceruptionofterrorintothecampaigncausedbytheattacksinManchesterandLondon.Thisinevitablyshiftedtheagendatowardstheterroristthreat.ItraiseddeepquestionsaboutbothTheresaMay’srecordonpolicefundingandJeremyCorbyn’srecordofoppositiontocounter-terrorismlegislationandseemingfriendshipwithcertainterroristorganisations.

AsecondreasonwasthespectacularmisfiringoftheConservativecampaign.Conservativestrategistsintendedtofocusononecoremessage:thatTheresaMay,notJeremyCorbyn,wasthepersontoprovidethe“strongandstableleadership”neededforsuccessfulBrexit.ButtheConservativemanifestointroducedcontroversialpolicies–mostnotablyonsocialcare–thatdistractedattentionawayfromthatcoremessage.Theprimeminister’sforcedU-turnonsocialcareunderminedthecredibilityofthemessage.VeteranelectionwatcherSirDavidButlertweetedthat“Inthe20generalelectioncampaignsI’vefollowed,Ican’trememberaU-turnonthisscale”.

Athirdreason–andperhapsthemostfundamental–wasthatneitherConservativenorLabourstrategistseverwantedadebateabout

theshort-andthelong-termeconomicimpactsofBrexitshouldbeamatterofmajorconcern.

Strengthening the public debate

ThequestionofhowpublicdebateovercomplexpolicyissuessuchasBrexitcouldbeimprovedisimportant.Inthewakeofthereferendum,50MPssignedamotioncallingforthecreationofabodythatwouldcheckthetruthfulnessofclaimsmadeduringcampaignsandfinethosewhoflouteditsrulings.That,however,isunlikelytoachievemuch:itiseasytomisleadwithoutdirectlylying.Italsoraisesquestionsaboutfreespeech,whilefailingtoaddresstheproblemthatimportantmattersareoftensimplygivenlittlecarefulattention.

Anotherapproachseekstocreateforainwhichmembersofthepubliccanlearnaboutanddiscusstheissuesindepth.Oneversionofthisisacitizens’assembly:agatheringofrandomlyselectedcitizenswhoreflectthediversityofthepopulationatlarge.Theymeettolearnabout,deliberateupon,anddeliverrecommendationsrelatingtotheissuesontheiragenda.AspartofTheUKintheChangingEurope,IamleadingateamthatwillrunaCitizens’AssemblyonBrexitintheautumn.Itsrecommendationswillbepublishedinareportandputtoparliament.

AbetterqualitypublicdiscussionnowwouldstrengthentheBrexitprocess.Itwouldencouragepoliticianstofocusonreal,hardchoicesratherthansloganeering.Itcouldreadypublicopinionforthekindofdealwearelikelytoget,ratherthanthedealwemightdreamof.Itwouldhelpnegotiatorsunderstandthekindoftrade-offsthataremostlikelytoengenderpublicsupport.Withoutthis,adebatedrivenbyrhetoricriskscorneringourleadersintoacceptinganoutcomethatharmsusall.

By Alan Renwick

FOUR

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PART TWO: PARTIES AND POLITICS

Introduction

OneofthemoststrikingdevelopmentsintheHouseofCommonsoverthelast50yearshasbeentheriseofbackbenchdissent.MPsareincreasinglywillingtovoteagainsttheirpartyline.Thiswas,atleastinpart,thejustificationforthecallingofthe2017generalelection.WhilsttheclaimthatextrasupportfortheConservativeswouldstrengthenTheresaMay’sbargainingpowerwithotherEuropeanleadersmayhavebeendubious,therewasmorecredibilitybehindtheideathatitwouldbeeasiertogetalltheBrexitlegislationthroughParliamentwithalargerCommonsmajority.MayhadinheritedaslenderCommonsmajorityfromDavidCameron,which,whenshecalledtheelection,stoodatjust17.IntheHouseofLords–whichhasbeenapermanentlyhungchambersince1999andhasbeenincreasinglywillingtodefythegovernment–shehadnomajorityatall.AlargerCommonsmajoritywouldhavegivenhermoreroomformanoeuvrewithherownMPs,andsomemorepowerwiththeLords.TorepeataremarkmadebyDavidCameronat7amon23June2016:“Well,thatdidn’tgoaccordingtoplan”.

What makes for a rebellion?

Indeed,itisprobablyworsethanitlooksonpaper.HereareeightfactorsthathelppartymanagersgetlegislationthroughtheHouseofCommons:

• Attitudinal cohesion.MPsdonotrebelforthesakeofit.Therehastobeadisagreementontheissueforrebelliontobeconsidered.

• A large majority.Althoughlargemajoritiesarenotunambiguouslypositive(theybringwiththemtheirownproblemsofpartymanagement),theydoatleastprovideabufferagainstrebelliousMPswithinagovernment’sownparty.

• Delivery of a manifesto pledge.Knowingthattheyareelectedmostlybecauseoftheirpartylabel,andnotbecauseoftheirownwonderfulpersonality,MPsaremorerestrainedinrebellingifanitemofpolicyhasbeenclearlysetoutintheirparty’smanifesto.

• A first-term government.Discontentbuildsupovertimewithinagoverningparty,sogovernmentsbornoutofaperiodinoppositionusuallyseelowerlevelsofrebellionthanthosethathavebeenreturnedformultipleterms.

• Prime ministerial coattails.MPswhofeeltheyowetheirvictorytotheprimeministercanoftenbepersuadedtoshowloyaltyinreturn(“shegotyouhere”).

• A large cohort of new MPs.The“coattailseffect”appliesespeciallytonewMPssweptinonawaveofsupportforthepartyatthepolls;andanyway,newMPstendtobelesswillingtostanduptotheirwhips,fromamixtureofinexperienceand(insomecases)careerism.

• Low salience issues.Parliamentdealswithalotoflegislation.Onmuchofit,MPsdonothavemuchknowledgeorinterest,andeveniftheydohaveaviewonsomeissues,ifitislowprofiletheycanoftenbepersuadedtosticktothepartylineprovideditisnotsomethingtheyfeelverystronglyabout.

• Threat of an election/resignation.Anuclearoption,tobedeployedonlysparingly,primeministershavethreatenedtomakevotesonlegislationavoteofconfidence–meaningthatadefeatonavotewouldtriggerageneralelection.ThiswasatacticJohnMajor,forexample,usedonoccasioninthe1990s.

What lies ahead?

Oftheseeightfactors,noneapplynow.Thereisnomajority.ThereareonlyahandfulofnewConservativeMPs.NoMPs–oldornew–arethankingtheprimeministerforhermagnificentelectioncampaign.TheConservativeshavebeeningovernmentforsevenyearsnow,eitheraloneorincoalition,andthehabitofrebellionhasbuiltuponthebackbenches.Whateverelseitis,Brexitisnotalowsalienceissue,andwhilstthefundamentalsofBrexitweresketchedoutinthemanifesto,muchofthedetailthatParliamentwillhavetovoteonoverthecomingyearswasabsent.ThislastfactorwouldhavecausedaproblemintheHouseofLordsinparticular,eveniftheConservativeshadwontheelection.

Byrequiringspecificallywordedmotionsforthetriggeringofearlyelection,theFixedTermParliamentsActremovestheabilityofaprimeministertolinkthetriggeringofanelectiontothepassageofspecificpiecesoflegislation.TheresaMaycanstillthreatentoresignasprimeministerifshedoesnotgetherway,ofcourse,butthisisunlikelytohavequitetheleverageitoncemighthavedone.

Intermsofattitudes,weknowrelativelylittleaboutincomingMPs,anditis,anyway,alwaysbesttobescepticalaboutattemptstoreadacrossfromstancestakenbeforeparliamenttobehaviouronceatWestminster.ButontheConservativesideoftheHouseofCommons,atleast,becausetherearesofewnewMPs,wecandrawonsurveysfrombeforetheelection,whichshowplentyofscopefordisagreement.

WeknowthataroundhalfofConservativeMPsvotedRemain,evenifmostsooncametoterms

withtheoutcome.AsurveyofMPsconductedbyIpsosMORIbetweenOctoberandDecember2016askedConservativeMPsaboutthetrade-offsthatmayberequiredinanynegotiations(seefigure).ThepluralityresponseofConservativeMPsisinthetopright-handcornerofthegraph–prioritisingbothcontrollingimmigrationandnotpayingmoneyintotheEUbudgetoveraccesstothesinglemarket–butwithsignificantminoritieswhotookadifferentstance.

ThesamesurveyfoundthatafullquarterofConservativeMPsbelievedthatitwouldnotbehonouringthereferendumresultiftheUKendedupstayinginthesinglemarketaftertheBrexitnegotiations;justoverathirdsaiditwouldbeimpossibletosayitwashonouringthevoteiftheUKstillpaidintotheEUbudget.Almost60%saidthattheywouldnotseeitashonouringthetermsofthereferendumifimmigrationfromwithintheEUcouldnotbecontrolled.

PassingthedetailedBrexitlegislationthroughparliamentwasalreadyahardenoughtaskbeforetheelection;bythemorningof9June,ithadgotalot harder.

By Philip Cowley

On a 0-10 scale, where 0 means being in the EU single market at all costs and 10 means being able to control immigration

at all costs / not paying any money at all into the EU budget, where do you think the balance should lie (combined)? (%)

Ona0-10scale,where0meansbeingintheEUsinglemarketatallcostsand10means

beingabletocontrolimmigrationatallcosts/notpayinganymoneyatallintotheEU

budget,wheredoyouthinkthebalanceshouldlie(combined)?(%)

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Retain access to single market

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34

FIVE

1514

PART TWO: PARTIES AND POLITICS

Introduction

AsfarastheUK’spoliticalpartieswereconcerned,lastsummer’sEUreferendumwasabitlikeoneofthosetag-teamwrestlingmatchesyouseeonTV.Althoughtheboutbeganwitheveryonethinkingtheyknewwhowasonwhichside,bytheendofitno-oneinthering–nor,forthatmatter,intheaudience–wassureanymore.

Everyoneknew,ofcourse,thattheConservativePartywasdividedontheissue.Butitwasn’tuntilthebellwentandthesecondssteppedoutoftheringthatwe(orindeedhe)knewthatDavidCameronwasgoingtobefightingnotonlyNigelFaragebutalsoBorisJohnsonandMichaelGove.

Andwhileno-oneexpectedJeremyCorbyntogetintotheringatthesametimeasDavidCameron,mostpeoplehadassumedhe’ddohisbit.Instead,hespentmostoftheboutinthedressingroom–adecisionwhichallowedgrapple-fanfavouriteslikeKateHoeyandGiselaStuarttogivethedistinct,butmisleading,impressionthatLabour’sMPswereasdividedonwhethertoleaveorremainastheirTorycounterparts.

True,thecountry’ssmallerpartiesmanagedtoholdthingstogetherallthewaythroughtothe

end.No-onecoulddoubt,forinstance,whosesideUKIP(which,asusual,forearmsmashedaboveitsweightmedia-wise)wason.ThesamecouldbesaidfortheLibDems,theSNPandtheGreens.And,althoughno-onewaspayinganywherenearasmuchattentionastheyshouldhavebeen,boththeDUP(pro-Brexit)andSinnFein(anti)behavedentirelyaspredicted.

From referendum to election

Afterthereferendum,thingsseemedtobecomealittleclearer–atleastontheToryside.TheRemainerseitherretiredhurt(DavidCameronandGeorgeOsborne)orelseactedasifthey’dalwaysbeenLeavers(TheresaMayandvirtuallyeveryoneelse)–notonlytotheextentofinsistingonaso-calledhardBrexitbuteventalkingabout“nodealbeingbetterthanabaddeal.”AhandfulofEurophiles(kudos,AnnaSoubryandNickyMorgan)refusedtodrinktheKool-Aidbuttheywerecastintoouter-darkness(andbootedoffthefrontbench)as“Remoaners”,replacedbyveteranEurophobeslikeLiamFoxandDavidDavis.

Labour,however,founditmuchhardertopulloffthecollectiveamnesiatrick.JeremyCorbyn’sAWOLactduringthereferendumcampaignmadehiscriticsintheParliamentaryLabourPartyevenangrierwith

himthantheyalreadywere.Interestingly,however,heseemedtoescapeanycensurewhatsoeverfromhisyouthfulfan-baseoutsideWestminster,eventhoughmanyofthemwerefuriousthattheUKhadvotedtoleavetheEUandthereforemightreasonablyhavewonderediftheirherocouldhavedonemoretoavoidthatoutcome.

HadLabourMPsnotlosttheirheadsandtriggeredaprematureleadershipcontest,perhapsthingswouldhavebeendifferent.Buttheydid,therebyensuringthatanyofCorbyn’sextra-parliamentaryarmywhosharedtheirsuspicionsthathe(andhisShadowChancellorJohnMcDonnell)hadsecretlywantedBrexitallalongpromptlyforgotallabouttheirreservationsintherushtodefend“Jeremy”against“thechickencoup”.

WithCorbynre-elected,LabourMPsfoundthemselvesbeingaskedtogoagainsteverythingalmostallofthemhadeverstoodforbyvotinginfavourofthegovernmenttriggeringArticle50,therebysettingtheclocktickingontheUK’sdeparturefromtheEU.Mostofthemmanagedtoswallowtheirobjectionsandtheirpride,reasoningthatitwastheonlywayofreconcilingthedifferencebetweentheirviewsandthesignificantsupportforLeaveinmanyLabour-heldconstituenciesthatlookedvulnerableeithertoUKIPortotheConservativesasaresult.Thatsaid,nearly50MPsvotedwiththeirconsciencesandinmanycases(andsurelynotcoincidentally)withtheirlargelyRemain-supportingconstituents.

InthewakeofArticle50,Labour’spositiononwhatitwantedoutoftheBrexitithadjustvotedforremained,toputitmildly,alittleunclear.HaditfullyreconcileditselftorejectingfreedomofmovementandthereforeleavingtheSingleMarket?Whatexactlywasthehave-our-cake-and-eat-itsolutionthatitwasproposingifitwasn’t“theNorwayoption”?WouldLabourMPsreallydaretovotedownwhateverdeal(ornodeal)TheresaMayeventuallyagreedwiththeEUintwoyears’time?No-one,notevenLabour’sspokesmanontheissue,KeirStarmer,seemedtoknowforsure.

The election

Allthisconfusion,theLibDemshoped,wouldseetheirfortunesreviveasthestandard-bearerfor“the48%”.ButtheirprayersprovedtobeinvainasthebulkofRemainvoters,eventhosewhocontinuedtohopeBrexitcouldbeavoided,seemeddestined,atelectionsanyway,tostickwiththedevilstheyknewratherthanthrowtheirlotinwithTimFarron.

Brexit’sbiggestloser,however,wasobviouslyUKIP.Farage,whosteppeddowntospendlesstimewithhisfamilyandmoretimewithhisnewbestfriend,DonaldTrump,provedpredictablyirreplaceable.Meanwhile,MrsMaywasofferinghisvotersnotonlymoreBrexitandlessimmigration,butalsogrammarschools,awaronwindturbines,andwholelotmorebesides.

Littlewonder,then,thatshebelatedlyboughtheradvisors’argumentsthatsheshouldcapitaliseonthecollapseoftheConservatives’right-wingrivalbycallinganearlygeneralelection–acontestwhich,bydeliveringherabiggermajority,would,paradoxically,makeherlessdependentonherownEuroscepticultrasatWestminster.

Itdidn’t,ofcourse,turnoutthatway.Sixdisastrousweekslater,theConservativeswerereturnedtoWestminsterwithfewerMPsandnoparliamentarymajority,stuck,whenitcomestoBrexit,betweenScylla(Tory“headbangers”insistingonfull-speedaheadtoaHardBrexit)andCharybdis(theDUPwhichwantsoutoftheEUbutwithoutareturntoahardborderwiththeSouth).Whether,insuchroughseas,MrsMayorhersuccessorcankeeptheshipafloatfortwofullyearsoftoughnegotiationswiththeEU27isanyone’sguess.

By Tim Bale

SIX

1716

PART TWO: PARTIES AND POLITICS

Introduction

The2017generalelectionwasbilledasthe“Brexitelection”.Setagainstthebackdropofthe2016referendumonEUmembership,PrimeMinisterTheresaMayframedtheelectionasawayof“strengtheningherhand”aheadofthenegotiationswiththeEUandensuringstability.But,intheend,sheachievedneither.

WhiletheConservativePartyattracteda42.4%shareofthenationalvote–theirhighestsharesince1979andanincreaseofmorethan5%ontheirresultin2015–thepartyfailedtoincreaseitsnumberofseats.At318,theConservativeswon13fewerseatsthanin2015andwerelefteightshortofamajority.Aworkingmajorityof17madewayforahungparliamentandnegotiationswiththeDemocraticUnionistParty(DUP),whichifsuccessfulwillleaveMay,nowagreatlydiminishedfigure,withaworkingmajorityofjust13.

JeremyCorbyn’sLabour,meanwhile,hadabetternightthanexpected,polling40%ofthenationalvote–theirhighestsharesince2001anda9.5-pointincreasesince2015–andwinning262seats,30morethanin2015.

Cantheelectionresultbeattributedtoa“Brexiteffect”?InitialreactionstotheresultcertainlyfocusedontheBrexitrealignment.TheshockLabourwininCanterburycametoepitomisethis–Labour’svoteincreasedover20percentagepointsinthistraditionallyblueseatwithtwouniversitycampuses,where55%ofvoterswereestimatedtohavevotedRemain.JeremyCorbynbecamethefirstpartyleadertotaketheseatfromtheConservativessinceWilliamGladstone.

The effect of the Brexit referendum on the 2017 vote

Figure1illustratesthechangesinEnglishandWelshconstituenciesbytheirestimatedsupport

forLeaveinthe2016EUreferendum,basedonfiguresprovidedbyChrisHanretty.TheConservativesstagnatedorfellbackinRemainareas,gainingthemostgroundinthestrongestBrexitseats,whichalsosawthebiggestcollapseofUKIPsupport.Thisfitswithmuchofthepre-electionpollingshowinglarge-scaleswitchingfromUKIPtotheConservatives.ThesurprisecomesontheLabourside.Theparty’ssurgewasgreatestinthestrongestRemainareas,butLaboursurgedeverywhereelse,too.Corbyn’spartywasupbynearly13pointson2015inseatswherelessthan35%votedLeave;androseastill-hefty7.4pointsinseatswheremorethan65%didso.

Thishadtwoimportanteffects.Firstly,thefallinConservativesupportcombinedwiththesurgeinLaboursupportwassufficienttotopplehugemajoritiesinConservative-heldRemainseats,particularlyinLondon,whereLabouroverturnedlargemajoritiesinBattersea,KensingtonandEnfieldSouthgate,andslashedConservativemajoritiesinpreviouslysafeseatssuchasPutneyandtheCitiesofLondonandWestminster.BigswingsinRemainseatshavecreatedanewswatheofmarginalseatsforLabourtotargetinthenextelection.

Secondly,Labour’sresilienceinLeaveareasthwartedConservativeattemptstoturntraditionalworking-classLabourheartlandsbluebyconsolidatingUKIPsupport.TheConservativesincreasedtheirvoteinsuchareas,oftendramatically,andusuallyatUKIP’sexpense.Yet,Labouralsobouncedbackintheseareas,sothenetLabourtoConservativeswingwasweakeveninthestrongestLeaveseats.TheConservativesmadejustsixgainsfromLabourinLeaveareasofEnglandandWales.MostMPsrepresentingheavilyLeaveseatssuchasDerbyNorth,BolsoverandStokeNorthheldonwithreducedmajorities.

Party strategies

TheresaMayexpectedherembraceofBrexittofundamentallychangetheelectoralmapinherfavour,byholdingRemainvotingheartlandswhileexpandingintoLeave-voting,Labourstrongholds.Insteadtheoppositeoccurred:LabourheldfirmintheirLeave-leaningseats,andachievedoftenstunningadvancesinpreviouslytrue-blue,Remainseats.Onepossiblereasonisthatinthe“Brexitelection”,JeremyCorbyn’spositionontheEUwasbetteralignedwiththeelectoratethanTheresaMay’s.May’severmorestridentandinflexible

languageonBrexitalarmedRemain-leaningvotersintraditionallyConservativeareasandputherreputationasacompetentstewardofnegotiationsatrisk.ShelookedlikealeaderdeterminedtoappeasethemostvocalandideologicalBrexiteersatanycost.

JeremyCorbyn’sstrategy,bycontrast,movedthepartytowardsthemildlyEuroscepticcentre.Facedwithacomplexissuewherehisparty’straditionalpositionwasalongwayfromthemedianvoter’s,MrCorbynembracedthepro-Brexitpositionofthemedianvoter,evenattheriskofantagonisingthestronglypro-EUsegmentsoftheLabourcoalition,inamovereminiscentofanearlierLabourleader’s.In1997,TonyBlairgambledthathecouldpitchtothecentregroundoneconomicissueswhileretainingtheloyaltiesofworking-classleftwingers.OnBrexit,JeremyCorbynpitchedtotheEuroscepticcentregroundbyinvokingArticle50andacceptingtheendoffreedomofmovement,gamblingthatRemainvotersalarmedbyTheresaMay’sshrillrhetoricandhardBrexitpolicywouldrecognisethatLabourwastheonlyviablealternative.ThisBrexitBlairismhelpedblunttheConservatives’appealinLeaveareas,whileallowingLabourtocapitaliseonalarmwithTheresaMay’sNigelFaragetributeactinRemainareas.

Conclusion

Ofcourse,Brexitwasnottheonlyfactordrivingtheresults.LeaveandRemainvotingpatternscapturearangeofotherfundamentaldifferencesbetweenpeopleandplaces:inidentityattachments,socialclass,educationlevels,ethnicdiversityandviewsofimmigration,amongothers.

YetthismaybeanotherreasonBrexitBlairismprovedasmartstrategy.Labour’sdecisiontoembracedeparturefromtheEUinsomeformmayhavehelpedthemreframetheelectionaroundotherissuessuchasausterityandpublicservices,andremindvotersinLeaveareasoftheirtraditionalsuspicionsabouttheConservatives.MeanwhileinRemainareas,thepartycouldadvancebypromisinga“softer”alternativeapproachto“hard”Brexit.

TheConservativeswentintothiselectioneagertopaintLabourasoutoftouchandextreme,butfailedtorealisethat,intheirownheartlands,theywerevulnerabletothesamecharge.

By Robert Ford, Matthew Goodwin and Maria Sobolewska

FIGURE 1: Vote changes in the 2017 versus 2015 general elections in English and Welsh constituencies by share of support for “Leave” in the 2016 EU referendum

15

10

5

0

-5

-10

-15

-20

Under 35% 35-40% 40-45% 45-50% 50-55% 55-60% 60-65% Over 65%

Change in Labour vote 2015-17 Change in Conservative vote 2015-17 Swing from Conservative to Labour 2015-17 Change in UKIP vote 2015-17

SEVEN

1918

PART TWO: PARTIES AND POLITICS

Introduction

IntheyearsincetheEUreferendum,thekeyquestionthathaspreoccupiedParliamentishowtolegislatetogiveeffecttothedecisionoftheBritishpeopletoleavetheEU.ThepracticalquestionofhowBrexitwouldbedelivered,andinwhattimescale,wasnotfullydiscussedduringthereferendumcampaign.Sincethereferendum,boththeGovernmentandParliamenthavefocussedonhowtoleavetheEUwithinthetwo-yeartimetableprescribedbytheArticle50process,whilesimultaneouslyformulatingastrategytoaddresstheimmediatelegalconsequencesfortheUKofleavingtheEU.Toaddressthislatterpoint,theGovernmenthasproposedlayingbeforeParliamenttheGreatRepealBill,whichwillconvert,onthedayofwithdrawal,allexistingEUlawintoUKlaw.

Tofurthercomplicatematters(notleastbyshorteningtheparliamentarytimeavailabletodebateBrexit)theprimeministercalledasnapgeneralelectionfor8June2017.TheaimoftheGovernmentincallingthiselectionwastostrengthenitsmajorityand,arguably,provideitwithastrongermandateduringtheArticle50negotiations.However,theoutcomeoftheelection,ahungParliamentwithaminorityConservativegovernment,createsuncertaintyandwouldappeartoleavetheUKinmuchweakerpositionatthecommencementoftheBrexitnegotiations.Bycontrast,theoutcomeofahungParliamentcreatesimprovedopportunitiesfor

ParliamenttoexercisecontrolandscrutinyovertheGovernment.

Parliament since the referendum

TheprocessbywhichArticle50wasformallytriggeredon29March2017providesagoodillustrationoftheparliamentarychallengestheGovernmentfacesindeliveringBrexit,evenifithadretainedanoverallparliamentarymajority.ThejudgmentoftheSupremeCourtinJanuary2017confirmedthatParliament,nottheGovernment,hadthesolepowertotriggerArticle50,therebylayingdownanimportantmarkerthatParliamentcannotbebypassedduringthecourseoftheBrexitnegotiations.OneconsequenceoftheSupremeCourtjudgmentisthatithascreatedanexpectationthatParliamentwillbeengagedintheBrexitprocess,which,inpractice,meansexercisingeffectivescrutinyovertheGovernmentduringtheBrexitprocess.Thisengagementwillonlyincreasewithahungparliament,withtheoppositionlikelytoidentifyopportunitiestoamendorevendefeattheGovernmentonBrexitissueswheretheremaybecross-partysupport.

DespitetheGovernmentmakingacommitmentbeforetheelectionthatbothHousesofParliamentwillvoteonanyfinalBrexitdeal,itisnottotallyclearwhatthiswillmeaninpractice,thoughthehungParliamentshouldplacelimitsontheGovernment’sscopetobypassParliament.Specifically,thereremainsuncertaintyastowhetherParliamentwillbeabletorejectthe

finaloutcome–whetheradealornodeal.Furthermore,beforetheelectiontheprimeministerconsistentlystatedherunwillingnesstoprovidea“runningcommentary”toParliamentontheprogressofthenegotiations.

Followingtheelectionofaminoritygovernment,itmaybearguedthatParliamentisinabetterpositiontoexertinfluenceovertheGovernmentduringtheBrexitnegotiationsbothintermsofscrutinyandwithrespecttothesubstanceofthenegotiations.TheabsenceofaparliamentarymajorityislikelytomakeitdifficultfortheGovernmenttoconductnegotiationswithoutreferencetoMPs,especiallybynotofferinga“meaningfulvote”ontheoutcomeofthenegotiationswhich,withaminoritygovernment,itremainspossiblethatParliamentcouldreject.

The parliamentary challenge of delivering Brexit – democracy versus efficiency

PerhapsthebiggestchallengefacingthenewlyelectedParliamentwillbealegislativeone.TodeliverBrexit,Parliamentwillneedtopassanumberofimportantbills(upwardsof10),includingtheGreatRepealBill(seetheGreatRepealBillsectiononthis)beforethecompletionoftheArticle50negotiations.Thiswillprovechallenginggivenlimitedparliamentarytime.Thetimeavailableconsistsofonlytwofullparliamentarysessions,duringwhichparliamentarianswillneedtocontinuewiththewiderlegislativeprogramme.However,itistheabsenceofaworkingmajoritythatwillundoubtedlymakeitmoredifficulttosecureparliamentaryapprovalforkeyBrexitlegislation,suchastheGreatRepealBill.

DeliveringBrexitwithinthetimescaleprescribedbyArticle50willplaceimmensepressureuponParliament.EffectivemanagementofparliamentarytimewillbeanimportanttacticthatislikelytobeemployedbytheGovernment,notleastasawayoflimitingdebateandscrutiny.ItisthereforecrucialthatParliamentusesthe

opportunityofahungParliamenttoprovideastrongcounterbalancetotherequirementofmeetingtheArticle50deadlineof29March2019byinsistingthatdemocraticaccountabilityandscrutiny,whetherinthechamberorviaselectcommittees,isnotcompromised.

GiventhelegislativeandpoliticalchallengesofdeliveringBrexit,itisessentialthatParliamentandtheGovernmentavoidconflictasfarpossibleandcooperateinorderthattheobjectivesofBrexitandparliamentarydemocracyarefullyreconciled.Intermsofparliamentaryactivity,thiswill,firstandforemost,requireimprovedcooperationbetweenGovernmentandtheoppositiontoensurethatparliamentaryscrutinyisfocussedonkeylegislativeproposals.

Post-election,theGovernmentshouldpresent,withoutdelay,itslegislativeproposals,especiallywherenewandpotentiallycomplexUKlegislationwillberequiredbeforeBrexit–forexamplewithrespecttoimmigrationorcustomsrules–whichcannotbeadoptedviatheGreatRepealBill.Toensurethatthislegislationisenactedwithinthenecessarytimeframe,andtoavoidtheuncertaintyoftheso-called“cliff-edge”,sufficientparliamentarytimeforscrutinyofallnewlegislationmustbebuiltintotheGovernment’slegislativeprogramme.

Ultimately,thesuccessofBrexitwillbejudgednotbytheoutcomeofthereferendum,butonthebasisofhowParliamentgiveseffecttothereferendumdecision.Inparticular,thismeanswhetherUKcitizensbelieve,intheyearstocome,thattheirexpectationsforBrexithavebeendeliveredbytheParliamenttheyelectedtofulfilthistask.

By Adam Cygan

EIGHT

2120

PART THREE: BREXIT AND THE POLITICS OF THE UK

Introduction

NorthernIrelandvotedtoRemainand,oneyearon,isasocietystrugglingwiththeforcesunleashedbytheBrexitvote.Ithasexacerbatedtensionsandreopeneditsever-presentsovereigntyfracture.

PoliticsinNorthernIrelandtypicallyfocusesonissuesrelatingtothedividebetweenCatholicnationalists(whoarefavourablydisposedtoaunitedIreland)andProtestantunionists(whoprioritisethemaintenanceofNorthernIreland’sunionwiththerestoftheUK).TherecentWestminsterelection(June2017)confirmsthatthisremainsthedominantdynamicinNorthernIrishpolitics.NorthernIrelandisstillasocietyscarredbyethno-nationaldivisionandtheconsequencesofconflict.

IsBrexitanissuethatcross-cutsthisdivide,withsignificantnumbersofCatholicsandProtestantsonbothsidesofthedebate?Thesimpleansweris:No.

IncontrasttoBritain,wherebothConservative-inclinedvotersandLaboursupportersareseriouslysplitontheBrexitissue,inNorthernIreland,Catholicnationalistvotersandpartiesare

overwhelminglyRemain,whileProtestantvotersandthemainunionistparty,theDemocraticUnionistParty(DUP),arestrongly“Leave”.Thus,theeasiestwaytomakesenseoftheconsequencesofBrexitforNorthernIrelandistoviewthesethroughtheprismoftheunionist-nationalistdistinction.

The border

Whattodoabouttheborderisonemajorchallenge.NationalistpartiesinNorthernIreland(andCatholicvoters)firmlyopposeanyformof“hardborder”betweenNorthernIrelandandtheRepublicofIreland.Andtheunionistparties(andProtestantvoters)arehighlyscepticalofanyeast-westalternative,namelybordercontrolsbetweenNorthernIrelandandtherestoftheUK.

Thesearehighlysensitiveissues.Ifnothandledwell,thereispotentialforsignificantdisquiet,eitherfromstaunchnationalistsupsetbyanyphysicalmanifestationofanorth-southborderorfromhard-lineunionistswhoseidentitywouldbewoundedifbarrierstotheirsmoothmovementacrosstheUKwereintroduced.

HowthisborderquestionplaysouthasbeensignificantlyaffectedbytheWestminsterelection.

Asisnowclear,theDUPislikelytoenjoysignificantpost-electionpoliticalleverageinWestminstertopursueanagendaoftheUKexitingtheEU,andwillbeinpolepositiontoshapetheassociatedborderregime.

United Ireland?

AdangerfortheDUP,andforunionismingeneral,isalienatingthenationalistcommunityevenfurther,tosuchanextentthattheybeginagitatinginasustainedwayforareferendumonaunitedIrelandtofacilitatethe“return”ofNorthernIrelandtotheEUonanall-islandbasis.ThefactthatnationalistsinNorthernIrelandhavenoweffectivelyvotedtoturntheirbacksonWestminsterpoliticsisaclearwarningofwherepoliticsmaygointhenot-too-distantfuture.

Thedebateneedstobenormalised.Demandsfora“borderpoll”shouldnotbeseenasstrange,unusualorcontrarytotheconstitutionalstatusquo.ThepossibilityofareferendumonaunitedIrelandisacoreelementofthe1998GoodFriday/BelfastAgreement,whichestablishedthecurrentpoliticalstructuresinNorthernIreland.Ifitisobvious(totheSecretaryofStateforNorthernIreland)thatthereissignificantdesireforsuchareferendum,thensuchapollmaybeheld.

Withbothnationalistpartiesnowputtingthismorefirmlyontheagenda,andwiththemajorgainsforSinnFéinintheWestminsterelection(andtheelectionstotheNorthernIrelandAssemblyinMarch2017),thelikelihooditwilloccurhasincreased.IfopinionpollevidenceoverthecomingmonthspointstoasignificantproportionofNorthernIrelandcitizensfavouringunitywiththeRepublicofIreland(orclearlysupportingthecallforaunityreferendum),itwouldbedifficulttowithstandthepressuretoadvancethisoption.

UnitywouldalsorequireareferendumintheRepublicofIreland,andanysuchdebatewouldgrapplewiththefinancialprosandconsofunity

aswellasthesymbolicandidentity-relatedaspects.AstheDUPisfindinginitsdiscussionsovercooperationwiththeConservativeParty,bothcommunitiesinNorthernIrelandmaydiscovertheyarenotuniversallywelcomedintheirrespectivesovereignstates.

Conclusion

WhileinBritainBrexitmapsontoasetofissuesrelatingtosovereignty,immigrationandglobalisation,NorthernIrelandisgrapplingwithanarguablybiggerbasketofthornierquestionsrelatingtotheplaceandnatureoftheborder,therelatedsignificantthreatofcivildisquiet,andtheprospectofareferendumonaunitedIreland.AllofwhichwouldaddfurthercomplexitytotheUKconstitutionalmix.

ThesechallengeshavetobefacedinthefragilecontextofnofunctioninggovernmentinNorthernIrelandandanunstableWestminsterregimedependingonapartyrepresentingonehalfofNorthern Ireland.

By John Garry and Colin Harvey

NINE

2322

PART THREE: BREXIT AND THE POLITICS OF THE UK

Introduction

LastJune,Remainsecureda62%voteshareinScotland,withonly38%ofvotersbackingLeave.SupportforremainingintheEUwasthehighestofanynationorregionintheUK,withamajorityinall32localauthoritycountingareasandalmosteverydemographic.

ButthechoicewasnotonlyScotland’stomake.InherspeechtotheConservativePartyConferencelastautumn,TheresaMayinsisted,“BecausewevotedinthereferendumasoneUnitedKingdom,wewillnegotiateasoneUnitedKingdom,andwewillleavetheEuropeanUnionasoneUnitedKingdom.Thereisnoopt-outfromBrexit.”Bycontrast,FirstMinisterNicolaSturgeoninsisted,“wedidn’tvotetoleave–wevotedtoremain.Tobetoldthatwehavetoleave,regardless,istantamounttobeingtoldthatourvoiceasanationdoesn’tmatter”.

Developments since the EU referendum

Themorningafterthereferendum,thefirstministerannouncedherintentiontofindawaytorespectthewishesoftheScottishpeople.ShesecuredthebackingoftheScottishParliamenttonegotiatewiththeUKGovernment,EUinstitutionsandmemberstatestoexploreoptionsforkeepingScotlandintheSingleMarket.AcompromisepropositionwassetoutintheScottishGovernment’spaper,Scotland’sPlacein

Europe.ThefirstprioritywastotrytokeeptheUKwithintheEuropeanEconomicArea(EEA)andtheEUCustomsUnion.IntheeventoftheUKGovernmentnegotiatingwithdrawalfromthese,thepaperarguedthatScotlandshouldeitherbecomeafullorassociatedmemberoftheEuropeanFreeTradeAssociation,orhavedirectassociationwiththeEEA.

Clearly,theprospectofScotlandremainingwithintheSingleMarketwhileEnglandandWalesdonotraisesconsiderablepracticalandlegaldifficulties,notleastaroundthefreemovementofmoney,goods,servicesandpeopleacrosstwoseparatemarkets.TheScottishGovernmentarguedthattheseneednotbeinsurmountable,andthatinnovativesolutionscouldbefound.TheextentofthechallengewouldonlybecomeapparentoncetheUK’sstatusvis-à-vistheEUwasmadeclearer.IftheUK-EUagreementminimisestariffsandnon-tariffbarriers,thepracticalobstaclesinthewayofadifferentiatedBrexitforScotlandwouldbereduced.

Overcomingthepoliticalobjections,however,wasalwaysgoingtobedifficult.IncontrasttoNorthernIreland,wherethelandborderwiththeRepublicofIrelandhasgeneratedpoliticalcommitmentinDublin,LondonandBrusselstofindacompromise,thereislittlesympathyintheUKGovernmentforadifferentiatedBrexitdealforScotland.ThepropositionwasformallyrejectedbytheSecretaryofStateforExitingtheEUinApril.

Brexitalsocatapultedtheindependenceissuebacktothetopofthepoliticalagenda.TheScottishNationalParty(SNP)manifestoforthe2016ScottishParliamentelectionssoughtamandatetoholdanewindependencereferendumiftherewascleardemand,oriftherewasa“significantandmaterialchangeinthecircumstancesthatprevailedin2014,suchasScotlandbeingtakenoutoftheEUagainstourwill”.AmajorityintheScottishParliament(consistingofSNPandGreenMSPs)backedtheGovernment’scallforareferendumoncethetermsofBrexitwereknown.Yet,theScottishParliamentlacksthelegalauthoritytoholdareferendumsimilartothe2014voteandtheUKGovernmentrejectedthecall,declaringthat“nowisnotthetime”.TheScottishConservatives’electoralgainsandtheSNP’slossesinthe2017generalelectionhavebeenwidelyinterpretedaspublicrejectionofanearlyreferendum.

TheprocesstowardtriggeringArticle50hadalreadygeneratedastep-changeinformalintergovernmentalrelationsbetweentheUKGovernmentandthedevolvedgovernments.ButtheJointMinisterialCommittee(EuropeanNegotiations)–setupspecificallytodiscussBrexit–hasbeenafrustratingprocessforallinvolved(seealsothesectiononWales).HavingraisedexpectationsthatitwouldprovideanavenueforjointagreementonaUKapproachpriortothetriggeringofArticle50,itsingularlyfailedtodoso.TherewasnointergovernmentaldiscussionoftheUKGovernment’sBrexitpositionpriortoeithertheprimeminister’sLancasterHousespeech,thepublicationoftheWhitePaperorthetriggeringofArticle50.TheJMC(EN)wasalsosupposedtoprovidethedevolvedgovernmentswithoversightofnegotiationswiththeEU.

TheJMCprocessmaybedifficulttoresurrectwithoutafunctioningExecutiveinNorthernIreland.Besides,priortothegeneralelectionatleast,theUKGovernment’sappetitefortheJMC(EN)haddiminished,ashadtheexpectationsoftheScottishGovernmentregardingitscapacitytoupholditsremit.

Looking ahead

BoththeUKConservativesandtheSNPhavebeenhumbledbythegeneralelectionresults,anditisnotyetclearhowthiswillaffecttherelationshipbetweentheirtwogovernments.ThecomingyearwillbedominatedbytheBrexitnegotiations.Despitethefirstminister’scallforaseatatthetable,theScottishGovernment’scapacitytoinfluencenegotiationsislikelytoremainlimited.Ontheotherhand,theScottishConservativeleader,RuthDavidson,buoyantfromherelectoralsuccess,seemsintentontryingtoinfluencetheUK’sBrexitstance.

Inparallel,theintroductionoftheGreatRepealBillwillintensifydebateabouttherepatriationofEUcompetencesandtheirimpactonthedevolutionsettlements(seethesectiononrepatriation).TheprimeministerhasinsistedthatEUframeworksneedtobereplacedbyUKframeworkstopreservetheUKinternalmarket.ThishasbeenperceivedbytheSNPasanattempttoweakenthepowersoftheScottishParliamentbyexpandingtheareaswheretheWestminsterParliamenthasexclusivecompetence.TheScottishGovernmentdoesn’trejecttheneedforcommonUKframeworkstoavoidbarrierstotradeandmobility.Buttherewillbetensionsoverwhogetstodecidewhatsuchframeworkswouldentail,whoownstheprocessofoverseeingtheirimplementation,andwhowieldsthepowershoulddisputesemerge.

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inpartnershipwithPlaidCymru,asanevidence-basedcontributiontotheUKdebate.TheWhite Paper–‘SecuringWales’Future:TransitionfromtheEuropeanUniontoanewrelationshipwithEurope’–addressedboththeUK’sfuturerelationshipwiththeEU,andtheinternalfunctioningoftheUKpost-Brexit,asaunionoffournations(seethecontributionsbyJoHunt and MichaelKeating).

TheWelshGovernmentpresentsacontrastingvisionofBrexittothatproposedbytheUKGovernment.Notleast,itpreferscontinuedparticipationinboththesinglemarketandtheCustomsUnion.TheWelshGovernmentalsostressestheimportanceoffreedomofmovement,althoughassertsthatthereoughttobeastrongerlinkbetweenfreedomofmovementandemploymentthaniscurrentlyexercisedintheUK.ItcallsforcontinuedWelshinvolvementinanumberofEUprogrammes,includingHorizon2020(forscienceandresearch),ERASMUS+(educationandtraining),CreativeEurope(supportingculturalandcreativesectors)andtheIreland-WalesProgramme(aEuropeanTerritorialCooperationprogrammethatconnectsorganisations,businessesandcommunities).ItalsoseeksfortheUKtoremainapartnerintheEuropeanInvestmentBank.

Despitethesecontrastingpositions,theWelshGovernmenthasconsistentlyemphasisedareasofcomplementaritywiththeUKGovernment,insistingthattheirpositionsare“notirreconcilable”.ItisinthiscooperativespiritthattheWelshGovernmenthasparticipatedinthecross-nationsforumonBrexit:theJointMinisterialCommitteeonEuropeanNegotiationsorJMC(EN),establishedon24October2016.Thisforum“seek[s]toagreeaUKapproachto,andobjectivesfor,Article50negotiations”.However,eventhemostmeasuredparticipantshavebeenmovedtoexpresssomeexasperation.BoththeWelshandScottishrepresentatives(CabinetSecretaryMarkDrakefordandMinisterMichaelRussell,respectively)havebeenoutspokenintheircritiqueoftheforum,withDrakefordstatingthat,“StFagansCommunityCouncil,inmyconstituency,

Introduction

On24June2016,Walesawokeonthe“winningside”oftheEUreferendum.17of22localauthorityareashadvoted“Leave”,totalling52.5%ofthosewhowenttothepolls.AndthisagainstabackdropofhighlevelsofEUfunding,adevolutionsettlementpremisedonEUmembership,andoverwhelmingsupportfor“Remain”fromWelshpoliticiansandsectoralorganisations.SobeganWales’Brexitjourney:adividednationwithaweakbargaininghand,yetwithdistinctintereststoprotectbothwithintheUKandwithinEurope.

Wales’ journey since the EU referendum

TheLeavevoteinWalesplacedtheWelshGovernmentinanunenviableposition.PriortotheEUreferendum,ithadvehementlyexpresseditspreferenceforRemain,assertingthattherisksofBrexitweremanifoldinfinancial,economicandpoliticalterms.Indeed,asabeneficiaryfromEUfunds(totalling£658millionin2014)andasmallnationforwhomtheSingleMarketholdsparticularsignificance,thispro-EUpositionhadbeenrathertakenforgrantedinWelshpolitics.Thevotingpublic,however,didnotagree.

TheLeavevotelefttheWelshGovernmentwithoutamandatetoadvocateitspro-EUposition.AddedtothisistheWelshGovernment’sweakbargaininghandinitsdealingswiththeUKGovernment.Inthis,WalesdiffersfromScotland(throughcallsforasecondindependencereferendum)andNorthernIreland(withacutelysensitivepoliticalissuesthatdemandattention),bothofwhichvotedRemain.

Duringthesummerof2016,thepoliticalinstitutionsofWalessettoworkpreparingthemselvesfortheUK’sprospectivewithdrawalfromtheEU.TheWelshGovernmentestablished inter aliaanEUTransitionTeamtocoordinateallBrexitactivity,andaEuropeanAdvisoryGroupofexternalstakeholders.TheresponseoftheNationalAssemblyforWaleswasswiftanddecisive.DaysaftertheEUreferendum,itissuedareportoutliningsomeoftheimplicationsofthereferendumforWales.Itthenembarkeduponaprogrammeofresearchandanalysis,spearheadedbythenewlycreatedCommitteeonExternalAffairsandAdditionalLegislation.TheCommitteelauncheditsreport,‘ImplicationsforWalesofleavingtheEuropeanUnion’inearlyJanuary2017,inwhichitclearlyoutlinedthepriorityareasforWalesandascrutinyrolefortheAssembly.

TheWelshGovernment’swhitepaperonBrexitwasreleasedlaterthatmonth,on23January2017,

wouldbebetterorganisedthanmostJMCmeetingshavebeen.”Indeed,thereislittletoindicatethattheUKGovernmenthasengagedseriouslywiththedevolvedadministrations.Thisdoesnotbodewellforthelatter’sroleintheBrexitnegotiationsthemselves,somethingboththeWelshandScottishGovernmentshavecalledfor.

What next for Wales?

Today,WalesisworkingtoprotectitsfuturebothwithintheUKandwithinEurope.OfcentralimportancetoWalesistheGreatRepealBill,anditsconsequencesfordevolutionandthefutureoftheUK’sownunion(seeJoHunt’scontribution).AttachedtothisarefundamentalquestionsabouthowpowerswillberepatriatedtotheUK,how(orindeedwhether)lostEUfunds(specificallyforagricultureandregionaldevelopmentpolicy)willbecompensatedforviaUKdomesticsources,andhowWelshinterestswillbeprotectedininternationaltradedeals.Beyondthis,duringthenegotiationsthemselves,Waleswillcontinueworktodefenditskeyindustries,seekingtoensuresufficientlevelsofmigrationandpushingforacloserelationshipbetweentheUKandtheEU.

However,whateverthefinalrelationshipbetweentheUKandtheEU,WalesisinvestinginitsownfutureinEurope,asa“Europeannation”initsownright.Asitstands,fromtheWelshoutpostinBrussels(WalesHouse),anumberoforganisationsworktoadvanceWelshinterestsandsupportWelshparticipationincollaborativeventureswitharangeofnationalandregionalactors.MuchofthisEuropeanactivityalreadyreachesbeyondtheEU,providingfoundationsuponwhichtobuildpost-Brexit.Indeed,WelshengagementwithEuropeissettocontinuefollowingtheUK’swithdrawalfromtheEU,albeittailoredtoarenewedsetofcircumstances.

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viewoftheconstitutioninwhichsovereigntymustbeinoneplace.ThemajorityinScotlandandNorthernIreland,however,votedRemain,wantingtoremaininboththeUKandEuropeanunions.Nowtheyareforcedtochoose.

From then till now

BrexitthereforepresentsaseverechallengetotheUK’sevolvingconstitution.WecanillustratethisbythreedevelopmentsintheyearsincetheBrexitvote.

ThefirstisthejudgmentoftheSupremeCourtin the Millercase,whichprimarilyconcernedwhetherParliamentneededtoapprovetheGovernment’striggeringofArticle50,givingnoticeofwithdrawalfromtheEU.TheScottishGovernmentjoinedthecasetoarguethatitwouldalsoneedtheconsentofthedevolvedlegislatures.Thisisbecauseitwouldrequirechangesinthedevolutionactsinvariousways.AttheminimumtheprovisionsbindingthemtoactwithinEUlawwillhavetoberemoved.TheSupremeCourtcouldhaveruledthattheconventionwasnotapplicablebecausethesituationwasnot“normal”,orbecausetheEUcomesunderforeignaffairsandisnotdevolved.Instead,attheurgingoftheUKGovernment’sAdvocateGeneral,itruledthattheconventionwasamerepoliticaldeviceandnotbindinginanycircumstances.

ThesecondissueconcernstheideathatScotlandandNorthernIrelandmighthaveadifferentiatedfromofBrexit,allowingthemtoremaininpartsoftheEU,includingtheSingleMarket,evenastherestoftheUKwithdraws.AplanwaspresentedbytheScottishGovernmentinDecember2016.NationalistsinNorthernIrelandhavemadetheirownsuggestionsforadifferentiatedsettlement,althoughunionistshaveopposedtheidea.TheUKGovernmentresponseisthattheremustbea“UKapproach”inwhichthewholeoftheUKmustinthefuturehavethesamerelationshipwiththeEU.

Introduction

TherearetwoverydifferentviewsoftheUK’slargelyunwrittenconstitution.One,the“Westminster”view,isbasedontheprincipleofparliamentarysovereigntyandsupremacy.ThisholdsthattheUKParliamentisthesupremesourceoflawandcandoanythingexceptbinditself.Parliament,inturn,isanswerabletoaunitaryBritishnation.ItisthisviewoftheconstitutionthatclasheswiththeEuropeanproject,whichisbasedonaphilosophyofsharingsovereigntyandpower.

Theotherview,widelyheldinScotlandandtheotherUKnations,isthattheUnitedKingdomisaunionofnations,eachofwhichhasitsownrelationshipwiththecentre.Devolutionsince1999hasreinforcedthisviewbyprovidingScotland,NorthernIrelandandWaleswiththeirownelectedlegislaturesandgovernments.Itisfurtherstrengthenedbythe“SewelConvention”underwhichWestminsterwillnot“normally”passlawsindevolvedareaswithouttheconsentoftheScottishParliament,NationalAssemblyforWalesorNorthernIrelandAssembly.TheconventionwasputintolawintheScotlandAct(2016)andtheWalesAct(2017).TheNorthernIrelandsettlementrejectstheideathatthereisaunitaryBritishpeople.Instead,itallowspeopletodefinethemselvesasBritish,Irish,NorthernIrishofanycombinationofthose.Italsoprovidesthat

thepeopleofNorthernIrelandcanvotetojointheRepublicofIreland.

The constitution and the EU

This“devolved”viewoftheconstitutionisentirelyconsistentwiththeEuropeanproject.TheUnitedKingdomandtheEUarebothunionsinwhichdifferentnationssharepower.Bothareopen-ended,withoutaclearendpoint.Rathertheyadjustaccordingtothetimes.Theissueofsovereigntyisfudgedandneverabsolutelyresolved.

OpinionsurveyshaverepeatedlyshownthatthepeopleofScotlandandNorthernIrelandhavenoproblemwithmultiplelayersofauthority.OurworkontheScottishindependencereferendumshowedthat,despitebeingforcedtochoosebetweenindependenceandtheunion,mostvoterscontinuedtoprefersomethinginbetween.InNorthernIreland,thepower-sharingsettlementhasgainedcross-communitysupport.ThenumbersofpeopleinScotlandandNorthernIrelandwhowanttoputallthesovereigntyinoneplaceissmall.

TheargumentforBrexitwasto“takebackcontrol”,andrestorethesupremacyoftheUKParliamentandpeoplebyeliminatingtheprovisionsthatmadeUKlawsubordinatetoEUlawinfieldswheretheEUiscompetent.ThisreflectstheWestminster

ThethirdissueconcernsthosepowerscurrentlyheldbytheEUwhicharealsodevolvedwithintheUnitedKingdom.Themainonesareagriculture,fisheries,theenvironmentandsomeaspectsofjusticeandhomeaffairs.TheUKGovernment’spositionisthatallpowerswillcomebacktoWestminster,whichcanthendecidewhichonestopassdowntothedevolvedlevel.TheScottishandWelshGovernmentshavearguedthatthesepowersconstitutionallybelongtothem.TheremightneedtobeUKframeworkstoreplaceEuropeanframeworksbutthesewouldhavetobenegotiatedvoluntarilyamongthefournations.

What lies ahead?

BrexitexposesverydifferentviewsoftheUKconstitution,somethingthathasnothadtobeaddressedsincedevolutioninthelate1990s.TheUKGovernment’spositionshaveimpliedareaffirmationofWestminstersupremacyatoddswithdevelopmentssince1999andtendingtocentralisation.

TheissuecouldberesolvedbytheUKbreakingup,withScotlandandNorthernIrelandremainingintheEU.Alternatively,itcouldberesolvedbytheUKGovernmentimposingitswillandleavingtheEUontermssetbyitself.TheresultoftheGeneralElectionsuggeststhatneithertheUKGovernment,withitsunitaryviewoftheconstitution,northeScottishorIrishnationalists,arestrongenoughtoalloweitherofthesetohappen.Instead,BrexitwillremainentwinedinthechangingconstitutionalpoliticsoftheUK.

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Introduction

TwoclaimsweremadeduringthereferendumcampaignconcerningtheimplicationsofBrexitfortheUK’sregions,citiesandnations.ThefirstwasthatthemajorbeneficiariesofEUmembershipwerethe“metropolitanelites”inLondon,whiletherestofthecountrywaslargelydeprivedofthebenefitsofEUmembership.Thisthemereappearedonmanyoccasions,andwasreferredtobymanyhighprofileLeaveadvocates.Italsofrequentlyre-surfacedwhenthemembersofthepublicwereinterviewedbythemedia,suggestingthat,asacampaignslogan,ithadgainedrealtraction.Indeed,thegeographyofthereferendumresultprovidedfurtherevidenceforthe“metropolitanelite”argumentwithinEnglandandWales,revealing,asitdid,astarkdivisionbetweenpro-RemainLondonanditshinterlandandtherestofthecountry.

The“metropolitanelite”argumentwasalwaysaboutLondon,notcitiesingeneral.Therewasneveranysuggestionthatpro-LeaveadvocateshadplaceslikeLiverpoolinmindwhentheyreferredto“elites”.Anditwasneverbasedonanyempiricalevidence.

Thesecond,interrelatedclaim,wasthattheUKhasaverystrongeconomichandtoplayinthe

BrexitnegotiationsbecauseofitsbalanceofpaymentsdeficitwiththerestoftheEU.Assuch,otherEUmemberstateswillbeeagertoagreeacomprehensivefreetradedealwiththeUKinordertoprotecttheirtradesurplus.Thisargumentfindslittlesupportinmoderneconomics.Incontrast,mosteconomistsagreethatthestrengthoftheUK’spositioncanonlybeunderstoodintermsoftheimpactoftradeandforeigndirectinvestmentonalleconomicactivitytakingplaceinthedomesticeconomy,irrespectiveofwhetherthoseactivitiesarethemselvesinvolvedintradeornot.Crucially,tradesurplusordeficitlevelssimplyhavenorelevancefortheseissues.Again,thetruthofthisclaimcanonlybetestedbyexamininghowtheinternationalandinterregionaltradestructuresoftheUK’sregionsaffecttheirinternaleconomicperformance.

Testing the claims

Testingbothclaimsrequiresmovingbeyondsimplenumbersregardingthelevelsorchangesingrossexportsandimports,becausethesenumbersactuallytellusverylittleabouttheeconomicdependenceofacountry,acityoraregion,onitstraderelationships.Modernglobalvaluechainsinvolvemovinggoodsandservicesacrossmanydifferentbordersmultipletimesbeforeafinalproductorserviceisproduced.Thismeansthat

onlyasophisticatedanalysisbasedondetaileddatalinkingtradepatternstodomesticeconomicstructuresandpatternscanuncovertheserelationships.

Thisshowsusthat,firstly,the“metropolitanelite”argumentiscompletelywrong.LondonislessdependentontheEUforitsprosperitythananywhereelseintheUK.Indeed,theregionswhichvotedLeavetendtobetheregionswhicharemostdependentonEUmarketsfortheirprosperity.ThisstronglysuggeststhatitistheUK’sweakerregionswhicharemostexposedtoBrexit.

Secondly,ineconomicterms,theUKanditsregionsarefarmoreexposedtoBrexittrade-relatedrisksthanregionsinanyotherEUmemberstateexcepttheRepublicofIreland.EvencountriessuchasGermanyortheNetherlandswillbelessaffectedbyBrexitthantheUK,whilemanyothermemberstateswillfeelalmostnoeffect.ThissuggeststhattheeconomicstrengthoftheUK’snegotiatingpositionisfarweakerthanmostoftheUKpublicunderstands.

The regional rather than just the sectoral dimension

Untilnow,muchofthediscussiononBrexithasbeendominatedbythepotentialimpactonparticularindustriessuchasautomobilesorfinanceandwhetherthiswouldrequirespecificdealsforcertainindustries.Importantly,however,thisdiscussionhasoverlookedthefactthatthespecificdetailsofthefinalUK-EUagreementarelikelytohaveverydifferentimpactsondifferentpartsoftheUK,andhavethepotentialtounderminemuchoftheeconomic“rebalancing”agendathatiscurrentlybeingwidelydiscusseddomestically.TheimpactsofBrexitontheUK’sdevolvedadministrationsandcity-regionsarelikelytodiffermarkedlydependingonthetermsofthefinalUK-EUagreement,andtherearenowgrowingvoicesthatadvocateagreaterinvolvementofdifferentpartsoftheUKinthenegotiations.

CurrentpoliticaldebatesfocusontherolethatthedevolvedadministrationsmayplayintheBrexitnegotiations,butthesegivelittleornoattentiontotheissuesaffectingtherestofthecountry.Takentogether,thepopulationsoftherecentlyconstitutedcity-regioncombinedauthoritiesaremuchlargerthanthetotalpopulationsofthethreedevolvedadministrations,althoughtheseareasbarelyfigureincurrentdiscussions.Furthermore,manyofthesmallertownsandruralareaswhichvotedstronglyforBrexit,andwhicharelikelytobethemostadverselyaffectedbyit,effectivelyhavenorepresentationwhatsoever.Althoughvariouslocalgovernmentleadershaveraisedtheseissues,thishasachievedlittleornobroaderresonance.However,astheBrexitnegotiationsproceedandthepotentialimpactsondifferentareasstarttobecomeclearer,itmaybethattheUK’scitiesandregionsbecomemoreinvolvedintheprocess.

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bethemainloserinanyresultingrestructuringsbecauseoftherelativesizeofthetwomarkets.Andlabourmigration–particularlyofhighlyskilledworkers–appearstohaveslowed.Noneofthesespellimminentdisaster,butallwilldamagetheUK’slong-termgrowthprospects,verymuchaspredictedbeforethereferendum.

Meanwhile,Brexithasprecipitatedsignificantchangesintheorientationofdomesticeconomicpolicy,withlessemphasisonfiscalrestraintorderegulationthanintheOsborne-Cameronera;indeed,theMaygovernmentisarguablytheleast“liberal”ineconomicorientationforfourdecades.

Finally,thenotionthatBrexitwillleadtoanoverallreductionin“redtape”nowseemsincreasinglyabsurd.Rather,increasedbureaucracyandgovernmentinterventionappearlikely.Evenonanoptimisticreading,businessfacestheprospectofbeingforcedtoimplementnewimmigrationcontrolsonEUworkers,newworkers’rights,andcopewithcustomschecksatborders.

What happens next?

Intheshortterm,theeconomyappearstobegraduallyslowing.Growthfellto0.2%inthefirstquarterof2017(downfrom0.7%inthefourthquarterof2015)andrecentindicatorsofconsumerandbusinessconfidencehavebeenweak.However,employmentremainsathistoricallyhighlevelsandthereislittleevidenceyetofadramaticreversal.Unemploymentmayrise,althoughnotrapidly.Onceagain,thisisthecentralview;thereareasalwaysriskstoboththeupsideanddownside–withthelatterperhapsratherlarger.Theinconclusiveresultoftheelectionaddsafurtherelementofuncertaintyintheshortterm.

ButwhatwillbecrucialoverthenextyearistheinteractionbetweentheeconomicsofBrexitandthepoliticsofthenegotiations.Underonescenario,thenegotiationsprogresswell,witharelativelyearlyagreementonthebroadtermsofwithdrawal,aconstructiveapproachonboth

Introduction

TheRemaincampaignmadetheeconomicconsequencesofBrexitthecentralelementoftheircase.Inthis,theyweresupportedbytheapparatusofgovernment,thekeyinternationaleconomicinstitutions,andthevastmajorityofacademiceconomists.MostforecasterspredictedthataBrexitvotewouldlead,intheshortterm,toasharpfallintheexchangerate;turbulenceinfinancialmarkets;and,overthesubsequentfewmonths,toasignificantslowdowningrowth(withtheTreasurypredictingamildrecession).Credibleanalysesofthelong-termeconomicimpactofBrexitforesawasignificanthittoGrossDomesticProduct(GDP),althoughwithconsiderableuncertaintyovertheprecisemagnitudeofthisimpact.Whilesomeelementsofthiscampaignmaywellhavebackfired–inparticular,GeorgeOsborne’s“punishmentbudget”,widelyregardedaspoliticalposturingratherthancredibleeconomics–mostpollssuggestedthatvotersexpectedBrexittodamagetheUKeconomy.

What’s happened since the referendum?

Intheshortrun,however,anydamagewasminimal.Thepounddidfallsharply,butstabilisedandhasrecoveredsomewhatinthelastfew

months.TheBankofEnglandcutinterestratesinAugustandannouncedfurtherquantitativeeasing;thisappearstohavesupportedmarketsandbusinessconfidence.Financialmarkets,intheUKasglobally,havebeenbuoyanttothepointwheremanyfeartheyareovervalued.Mostimportantly,growthandemploymentheldupwell.Indeed,themainstrengths(aremarkablyresilientlabourmarket,strongconsumerspendingandsteadygrowthintheservicessector)andweaknesses(weakprivateandpublicinvestment,poorproductivitygrowthandaverylargecurrentaccountdeficit)oftheUKeconomyremainedlargelyastheywerebeforethereferendum.

However,thepoorrecordofshort-termforecastsconcerningtheimpactoftheBrexitvotetellusalmostnothingaboutlonger-termpredictions.Here,theindications–albeittentativeatthispoint–arebothgloomierandmoreconsistentwiththeeconomicconsensus.Asexpected,somefinancialsectorjobsandinvestmentarebeingrelocatedelsewhereintheEU.Sofarthisisatrickle,butitseemslikelytoaccelerateasthenegotiationsprogresswithlittleornoprospectofanyearlydealoncontinuedmarketaccess.Companiesthatrelyonpan-Europeansupplychainsaremakingcontingencyplanstodealwithbordercontrolsand/ortradebarriers;theUKstandsto

sidestowardsthelonger-termrelationship,and,crucially,anextended“implementation”phaseafterBrexitinwhichlittleornothingchangeswithrespecttotheUK’seconomicrelationshipwiththeEU27.Thiswouldmaintainconfidenceandgivefirmstimetoadjust;anynegativeimpactswouldbespreadoveralongerperiodand,atthesametime,theUKcouldbegintopursuedeepereconomicrelationshipswithnon-EUcountries.ThisscenariowouldalsohelpgivetheUKGovernmentpoliticalspacetomakethenecessarycompromisesneededtosecureasuccessfuloutcome.

However,ifnegotiationsstall,orworse,breakdownentirelywhiletheArticle50clockkeepsticking,theriskisthatthereisarapiderosioninbusinessandconsumerconfidenceasfearsofa“cliff-edge”or,stillworse,a“chaotic”Brexitgrow.Atitsworst,thiscouldspiral,withasuccessionofannouncementsofbusinessrelocationsinavarietyofsectors.Thiswouldalsospilloverintofinancialmarkets,withafurtherfallinthepound.Politically,therewouldagainbefeedbackloops,thistimenegative,giventheGovernment’sdomesticpoliticalweakness.Fromaneconomicperspective,thelastyearmaywellprovetohavebeenthecalmbeforethestorm.

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Facedwiththesetrade-offs,TheresaMay’sgovernmentwantstoprioritisesovereignty.TheGovernmenthopestoendfreemovementoflabourandtoremovetheUKfromthejurisdictionoftheECJ.Consequently,PrimeMinisterMayannouncedinJanuary2017thattheUKwouldleaveboththeSingleMarketandtheCustomsUnion,andwouldseekanewfreetradeagreementwiththeEU.TheGovernmentalsosignalleditwaswillingtoleavewithoutadealifasufficientlyattractiveagreementcouldnotbereached.Thisapproachwasdrivenprimarilybytheprimeminister’sneedtosecuresupportfromvoterswhobackedBrexittotakebackcontrolfromtheEU.However,theConservatives’failuretowinamajorityofseatsinthegeneralelectionmeanstheGovernmentisnowunderpressuretoappealtoabroadercoalitionofvotersbydevelopingaBrexitplanthatislessharmfultotheeconomy.

Negotiating a free trade agreement

IftheUKdoesleavetheSingleMarketandtheCustomsUnion,whattypeoffreetradeagreementshoulditaimfor?ThemostbasicagreementwouldsimplybantariffsonUK-EUtrade.ButeconomicanalysisfindsthelargestpotentialcostsofBrexitcomenotfromthethreatoftariffs,butfromhighernon-tarifftradebarriersduetotheimpositionofcustomsproceduresandtheemergenceofregulatorydifferencesbetweentheUKandtheEU.Anambitiousfreetradeagreementneedstogobeyondtariffsandtakestepstokeepthesenon-tariffbarrierslow.ThismeansfindingcreativewaystominimiseborderchecksandensurethatchangestoUKregulationdonotcreatenewtradecosts–agoalthatconflictswiththedesiretoreassertnationalcontroloverregulatorypolicy.AswillbecomeincreasinglyapparentduringtheBrexitnegotiations,givingupcontrolisthepricecountriespaytokeeptradecostslow.

ItisalsoimportantfortheUKthatanyagreementcoversservicesindustries.ClosetohalftheUK’stradeisinservices,butmostagreementsdolittletoreducebarrierstoservicestrade.EvenSwitzerlanddoesnothaveacomprehensiveservicestradeagreementwiththeEU,despiteallowingfree

Oneyearago,theUKvotedtoleavetheEU.However,votersdidnotchoosewhatwouldcomeafterBrexit.

Options for “life after Brexit”

OneoptionistoremainintheSingleMarketandpreservethefreemovementofgoods,services,capitalandlabourwiththeEU.AnotheristonegotiateabespoketradeagreementwiththeEUthatkeepstradebarriersaslowaspossiblewhileendinglabourmobilityandgivingtheUKgreatercontrolovereconomicregulation.Finally,ifnodealisreached,theUKandEUwouldtradeunderWorldTradeOrganization(WTO)terms.ThismeanstheUKwouldhavemuchthesameeconomicrelationswiththeEUaswithnon-EUcountriessuchastheUSorJapan.Itwouldleadtotariffsongoodstradeandreducedmarketaccessforserviceexporters.

EachofthesealternativeswasendorsedbydifferentfactionsoftheLeavecampaignpriortothereferendum.Askingvoterswhattheypreferdoesnotresolvetheconundrum:opinionpollsshowsupportformaintainingthebenefitsofSingleMarketmembership.YetpollsalsofindsupportfortakingbackcontrolbyrestrictingimmigrationandremovingtheUKfromthejurisdictionoftheEuropeanCourtofJustice(ECJ)(thoughseethesectiononpublicopinion).

Europeanintegrationbringseconomicbenefitsbyreducingbarrierstotradeandinvestment.But,toreapthesebenefits,countriesmustgiveupunilateralcontroloversomeareasofeconomicpolicy.Forexample,harmonisingproductstandardsacrosstheEUcreatesexportopportunitiesforUKbusinessesbecausetheydonothavetosatisfydifferentregulationsindifferentmarkets.But,harmonisationisonlypossibleifallcountriesagreetoadoptthesamestandards,whichmeansgivingupnationalcontrolofregulation.Similarly,theEU’s CustomsUnionkeepstradecostslowbyallowinggoodstocrossborderswithoutfacingcustomscontrols.However,countriesthatbelongtotheCustomsUnioncannothaveindependenttradepolicies.

The integration–sovereignty trade-off

AsitleavestheEU,theUKmustchoosewhethertoprioritisemaintainingeconomicintegrationorassertingitssovereignty.Thischoicewillhaveimportanteconomicconsequences.ResearchconductedwithcolleaguesattheCentreforEconomicPerformanceattheLondonSchoolofEconomicsfoundthatthefallinUKlivingstandardscausedbyBrexitwouldbetwiceaslargeiftraderevertstoWTOtermsthaniftheUKstaysintheSingleMarket.

movementoflabour.NotradeagreementwillofferthesamemarketaccessthatmembershipoftheSingleMarketprovides,particularlyforfinancialservices,buttheUKshouldseektokeepbarrierstoservicestradeaslowaspossible.

TosecureagooddealwiththeEU,theUKmustbepatientandwillingtocompromise.Tradenegotiationsarelengthy,complexandoftencontentious.ThereislittlechanceanambitiousagreementcanbereachedbeforeBrexitoccursinMarch2019,sotheUK’sfirstobjectiveshouldbetonegotiateatransitionarrangementtogovernUK-EUrelationsuntilalonger-termagreementispossible.Togiveadequatetimefornegotiations,thetransitionarrangementshouldlastuntilatleast2022.Andtoavoideconomicdisruption,itshouldmimicthestatusquoascloselyaspossible.

Oncelonger-termnegotiationsbegin,progresswillrequiretheUKtomakeconcessions.PossibleconcessionsincludemakingpaymentstotheEUbudget,agreeingEUregulationswillcontinuetoapplyinsomeindustries,andguaranteeingimmigrationrightsforEUcitizensofferedajobintheUK.TheUKhasaweakernegotiatingpositionthantheEU,soevenwiththeseconcessionsitisunlikelytoachieveallitsobjectives.Butrefusingtocompromisewillguaranteefailure.ResearchestimatesthatleavingtheEUwithoutadealcouldreduceUKincomepercapitabyupto10%intheworst-casescenario.

Where next?

AsBrexitapproaches,theUKisfacingmorechallengesthanopportunities.Fromaneconomicperspective,thequestionisnotwhetherBrexitwillharmlivingstandards,buthowlargethecostwillbe.Followingthegeneralelection,theGovernmentneedstoaskhowmuchvotersarewillingtopaytoasserttheirsenseofnationalidentity.IfleavingtheSingleMarketisviewedastoocostly,theUKisheadedinthewrongdirection.

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closetothegrossamount(afterdeductingtheUKrebate)theUKwasexpectedtopayintotheEUbudgetovertheentirespanofthe2014-20MFF.Unsurprisingly,messagesfromtheUKsidedismisstheseclaimswhich,ithastobeemphasised,no-oneon,EUBrexitnegotiator,MichelBarnier’steamhasformallymade.

AnarguablyrathervindictiveproposalinanEUbriefingdocumentpublishedattheendofMay2017suggeststheUKmayalsobeaskedtopayforrelocatingEUagenciesfromtheUK,suchastheEuropeanBankingAuthority,aswellasthesalariesofteachersattheEuropeanSchoolsinBrussels.TheBankofEnglandcan,however,lookforwardtorecoveringitspaid-incapitalfromtheEuropeanCentralBank.

If€100billionisfanciful,asresearchersfromBruegelimply,whatisrealistic?DespiteaHouseofLordsCommittee’sverdictthatthereisnolegalobligationtopay,Britishministershavebeencarefulnottoruleoutsomepayment,usinglanguagesuchas“obeyourlegalobligations”[DavidDavis].Evenso,theUKisreluctanttocountenanceanearlyagreement,forfearofanegativepublicreaction.

What sort of compromise could be envisaged?

Asexplainedin an earlier paper,themainelementsofafinancialsettlementarenotundulycomplex.Theyturnon:theextenttowhichtheUKacceptsthatitisboundbythecommitmentsmadeforthefulldurationoftheMFF,andnotjustuptothedateofBrexit;theshareoftotalcommitmentstheUKshouldbear;andonapportioningtheassetsandliabilities(notablypensions)oftheEU.TheEUpositionistousethetotaltransferredbytheUKfrom2014-18asaproportionofthetotaltransferredbyallmemberstates.Extrapolatingfromthedatafor2014-16,thiswouldmeanaratioofaround12%.

Aneatanswermightbetoallowthe2014-20MFFtoplayoutaspartofabroadertransitionaldeal,implyingtheUKcontinuestopayinuntilthe

endof2020,whilecontinuingtoreceiveitsshareofEUfundingforagriculturalsupport,regionaldevelopmentandresearch.ThissolutionhasthepragmaticadvantageofenablingtheGovernmenttofulfilthepromisetomaintainfundinguntiltheendof2020toUKbeneficiariesfromtheseEUprogrammes.FortheEUside,higherpaymentstoBrusselsorcutsinEUprogrammeswouldbeavoidedforthe2014-20MFF,althoughtheissuewillreturnwithavengeancewhenthenextMFFhastobenegotiated,mostprobablywhileBrexitnegotiationsareheadingtowardsaconclusioninlate2018.UsingTreasuryprojections,thenetcosttoUKtaxpayerswouldbeoftheorderof£18billion(€22billion)fromApril2019totheendof2020.

RALwouldstillbeaproblembecause,underEUrules,claimsforEUregionalprogrammesarealloweduptothreeyearsbeyond2020;aswouldthebalanceofassetsandliabilities.TheamountofRALchangesfromyeartoyearasprojectsarecompletedandnewmulti-yearcommitmentsarecontracted,butistypicallyintherangeof€200-300billion.WhethertheUKshouldbeliableforaproportionofRALisnegotiable:theUKcouldarguetherewasalreadyastockofRALfromthepreviousMFFanditshouldonlybeliableforashareofthechangeinRAL,whereastheEUsidecouldinsisttheUKpayitsshareofthefullstock.SimilarbargainingcouldbeenvisagedforEUpensionliabilitiesandassets.

Bestguess?Around€30billion.

By Iain Begg

Introduction

Duringthereferendumcampaign,themaindebatearoundpublicfinanceswasaboutwhetherleavingtheEUwouldrelease£350millionaweektobespentontheNHS.Evenonthemostfavourableassumptions,theclaim–whichinfluencedmanyvoters–wasrepeatedly showntobeexaggerated.TherewerealsoconcernsthatanydownturnintheeconomyasaresultofBrexitwouldreducetaxrevenues in a waythatcouldworsentheUKfiscalposition.

TheEU’sfinancesaresetinaseven-yearMultiannualFinancialFramework(MFF),currentlycovering2014-20andformallyenactedina2013CouncilRegulation.TheMFFisahardfoughtbargain,invariablyagreedaftermuchacrimonyandbrinkmanship.AswithmanyEUaccords,theministersconcernedusuallyclaimvictoryathome,whilebemoaninginBrusselshowmuchtheyhaveconceded.Theadvantageoftheseven-yeardealisinallowingtheannualbudgettoproceedrelativelysmoothly,preciselybecausetheMFFiswhereallthebigcompromisesaresettled.

What has changed since the referendum?

Thesubsequentemergenceofthe“divorcebill”rapidlybecameanewandpotentiallydivisiveissueintheBrexitnegotiations.Itarisesmainly

becausemanyEUprogrammes,principallyforresearchandforEUregionalpolicy,aremulti-annualincharacter.Inbothcases,theaimistoavoidpiecemealprojectsandtolookinsteadforcoherentprogrammesdeliveringresultsgreaterthanthesumoftheparts.Itdoes,however,meanthatcontractssignedinonefinancialyearwilloftennotfalldueforfinalpaymentuntilseveralyearslater–knowninEUcirclesasRAL,fromtheFrenchexpressionresteàliquider.

Againstthisbackdrop,thedepartureoftheUK(assumingApril2019),willbesevenquartersbeforetheendoftheMFF.AnimmediateendtoBritishpaymentswouldleaveaholeinthebudgetthatwouldhavetobefilledbyothermemberstates.ForthelikesofGermanyortheNetherlands,theadditionalpaymentswouldbemanageable,butthepoliticalfalloutwouldbeopentoexploitationbyanti-EUpopulists.Others,suchasGreece,Italy,SpainorevenFrance,alreadystrugglingtoconsolidatetheirpublicfinances,wouldneedtomakecutsinotherspendingprogrammesatatimewhenausterityisalreadyhavingdamagingpoliticaleffects.

What happens next?

AfinancialsettlementhasbeenputforwardasoneofthreekeyareasonwhichtheEUsidewantstoseesignificantearlyprogress.ReportssuggestthedemandfromtheEUcouldexceed€100billion,

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Introduction

WhatformofrelationshiptohavewiththeEUafterBrexitisthekeyeconomicpolicyissuefacingtheUK.Thiselectionwasmeanttogivetheprimeministerastrongmandatefora“hardBrexit”.TheConservativePartyandtheDUP,whosesupportwillbenecessarytoallowTheresaMaytocontinueasprimeminister,agreeonthemainelementsofUK’sfutureeconomicrelationshipwiththeEU.TheywanttoleavetheSingleMarketandtheCustomsUnion,andtheydon’twanttobesubjecttothejurisdictionbytheEuropeanCourtofJustice.Both,inthissense,supporta“hard”Brexit.NowthattheDUPissupportingthegovernment,however,thereareacoupleofnewprioritiesfortheConservativeParty,notleastdecidingonreplacementsfortheincomesupportthattheEUprovidestothefarmingsector,whichisimportantforNorthernIreland.

Softly, softly?

Broadlythough,whilebothpartiesintherulingcoalitionagreeontheplanforBrexit,theinconclusiveelectionresultmeansthatahard

Brexitlooksfarlesscertain.Thepress,foritspart,hasneverbeenmorescepticalofthispath.

OnereasonforthisisthattheseatshareofMPsfrompro-RemainScotlandintheConservativepartyhasincreased,whichcouldsoftenthegovernment’spreviousstanceof“nodealisbetterthanabaddeal”.Anotherreasonisthewaythisgeneralelectionresultwillchangethepublicdiscourseoneconomicpolicy.Earlyestimatesarethattheturnoutofyoungpeoplebetween18to24yearsincreasedfromabout40%in2015to70%.Youngpeopletendtobemuchmorepro-Remainthanoldervoters,soahardBrexitwouldignorethewishesofanewlymobilisedelectorate.Inaddition,theRemain-LeavedivideseemstohavebeenafactorunderlyingwhichconstituenciesswungtoandfromtheConservativepartyinthisgeneralelection,withtheGovernmentperformingparticularlybadlyinpro-Remainurbanandsouthernconstituencies(seethecontributionbyJohnCurtice).TheelectionresultshaveunderminedtheplansoftheConservativeparty,whichstoodontheplatformofastrongandstableleadershipintheBrexitnegotiations.

The economics of Brexit

TheWhitePaperonBrexitprioritisesimmigrationcontrolsandcommitstoleavingtheSingleMarketandtheCustomsUnion,whiletheprimeministercontinuestoreaffirmthat“nodealisbetterthanabaddeal.”Thereisnearconsensus amongeconomiststhatthehard–orchaotic–formofBrexitthatthisimplieswouldhurttheUKeconomy.AlthoughtherewaslittleimmediateeconomicfalloutfromtheBrexitvote,inthefirstquarterofthisyearUKeconomicgrowthwastheslowestofanyEUeconomy.Themodestrecoveryinrealwagethatstartedin2014hasbeenerodedbythehigherpriceinflationfromthedepreciationofthepoundsincetheBrexitvote.Youngworkersbetweentheagesof18and21haveseenthebiggestdeclinesinrealweeklyearnings,whichforthemhavefallenby16%sincetheglobalfinancialcrisisin2008.

Allthiswillputpressureonthegovernmenttosoftenitsapproach,perhapsseekinganextensionofthe2-yeartriggerperiodoraquicktransitiondealthatmaintainssinglemarketmembershipforanextendedperiod.Thiswouldavoidthe“cliffedge”scenarioofanodeal,whichwouldmeanthattheUKrevertstoWorldTradeOrganization(WTO)membershipwithoutaspecialdealwiththeEUonthefreemovementofgoods,services,peopleandinvestments.Werethistohappen,itisestimateditwouldreduceGDPintheUKbyabout3%peryearduetohighertradebarrierswiththeEU.

WealsohavemoretolearnabouthowtheRemain-Leavedivideshiftedpartyaffiliationsandtheroleplayedbytheverydifferentapproachestoeconomicpolicysetoutbyeachparty.Certainly,therhetoricofalow-tax,Singapore-styleeconomythatmanyhardBrexiteersdreamoflooksincreasinglydistantfromtheUKcentreofpoliticalgravity.Inturbulentpoliticaltimes,futureeconomicpolicyishardtopredict.Theonlycertaintyisthattherealeconomic

challengeremains–howtoreversethedecadesofeconomicstagnationthathaschangedthepoliticallandscapeoftheUK?Thereareseveralpolicyproposalstoaddressthesechallengesandmanyhavebroadpoliticalsupport.Hopefully,theywillbecomeacentralissueinthenextelection.

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Incontrast,manyenvironmentalgroupsareconcernedthatthelossofEuropeansupportforenvironmentalconservationendangersourcountryside(seeenvironmentsection).Theyarecallingforpoliticalcommitmentstopreserveandenhanceincentivesthatprovidepublicgoods,suchasthemaintenanceoftraditionallandscapes,wildlifehabitatsforbothplantsandanimals,andhigh-qualitywater,airandsoil.UKconsumergroupshavenot,sofar,articulatedanyconcernsaboutrisingfoodpricesorthepotentialthreatstofoodqualityandstandardsfromfreertradewiththerestoftheworld.Thepoliticalbargainingbetweentheseinterestgroupshasyettobegin,sincenooneisatallclearaboutwhatthefuturemightbring.

The future

TherewillclearlybemajorpoliticaldebatesabouttheneedforcontinuedtaxpayersupportforfarmersandtheroleoftheGovernmentinprotectingourenvironmentandensuringthesafetyandqualityofourfoodsupplies(includingtheregulationofinputssuchashormonetreatmentofbeefandgeneticallymodifiedcrops).

Therearealsoconcernsabout:

i) Immigration:Partsoftheagriculturalandfoodsectors(especiallyhorticulture,livestockprocessingandretailing)areheavilydependentonmigrantlabourfromtheEU.

ii)Tradingrelations:Thesectorisalreadynervousabouttheextenttowhichagriculturaltradewillbesacrificedtoobtainpreferentialtradeagreementswithnon-EUcountries.ManyofthesecountriesmayregardaccesstotheUKfoodmarketasavaluablebenefittooffsetincreasedUKaccesstotheirindustrialandservicesmarkets.

TheuncertaintythatsurroundsthetermsofnegotiationswiththeEUhavemadefarmersand

Introduction

ThereferendumcampaignsmademuchoftheUK’spaymentstotheEUandofhowmuchtheUKGovernmentcouldsaveifweleft.Therewas,however,verylittledebateontheEUspendingonagriculture,otherthanclaimsthatwecould,afteraBrexitvote,achievethesameendsmuchmoreefficiently,andwithsubstantiallylessregulation.

EUspendingontheCommonAgriculturalPolicy(CAP)peakedinthemid-1980sat73%ofthetotalEUspend,decliningtoabout40%today.Thisfollowedmajorreformsofthepolicytosubstantiallyreducetariffprotectionanddistortionofinternationalmarkets.ThesereformswerefullysupportedbyUKgovernments,whichhavebeenhighlycriticaloftheCAPsincewejoinedtheEuropeanEconomicCommunityin1973.Thecurrentannualpaymentstofarmers(totalling£2.5bnperyeartotheUK)aretheremnantsoftheprotectionistCAP.Afurther£0.8bnperyearisspentintheUKundertheCAPforenvironmentalconservationandruraldevelopmentschemes.Thesepayments(£3.3bnperyear)formthemajorpart(90%)ofthefinancialbenefittotheUKofEUmembership,offsetbytheUK’scontributiontotherestofEUspending(whichhasalsobeensubjecttothecontroversialUKrebatefromtheEU).

Since the referendum

WhiletherehavebeenreportsthatthemajorityoffarmersfavouredBrexit,wehavefoundnocompellingevidenceofthis.Ontheonehand,itisclearthatCAPpaymentsarecurrentlyamajorpartoftheincomesearnedfromfarming,leadingtogovernmentcommitmentstomaintainthesepayments.TheConservativemanifestopledgestocontinuethesepaymentstotheendofthenextparliament(2022).Ontheotherhand,manyintheindustrybelievethatthesepaymentsaredistortinglandvaluesandrents(andpossiblyothercapitalandinputcostsaswell),thusmakingitmoredifficultforfarmerstoentertheindustryandexpandtheirbusinesses.Meanwhile,theincreasingtendencytomakethefarmpaymentsconditionalon“greening”measures(e.g.thethree-croprulewhichrequiresfarmerswithmorethan30hectaresofarablelandtogrowatleastthreecrops)andtheincreaseinredtapeingeneralirritatessomefarmers,whofeelthataBritishagriculturalpolicywouldbepreferable.

Thedepreciationofsterlingsincethereferendumhashelpedouragriculturalexportersandmayhaveboostedfarmprices,encouragingsomefarmerstobelievethattheycansurviveBrexit.Equally,however,aweakerpoundhasmadeimportsmoreexpensiveandincreasedcostsacrossthesupplychain.

ruralcommunitiesveryanxious.Theyfearthattheendofsubsidiescouldhaveadevastatingimpactontheirlivelihoodsandontheindustryasawhole.Intheshortterm,farmersmayexperienceareductioninfarmincomes,buttherearethosewhomaintainthattheeffectsofBrexitonagriculturaloutputandfarmers’incomesmaynotbeassevereasexpected,atleastinthemediumandlongrun.Whatwillhappenafter2022,however,isnotatallclear.

Therearemajorquestionstobeanswered:

• Shouldfarmsubsidiescontinue?

• Shouldfarmersbesupportedonthebasisofthepublicgoodstheyprovidebeyondfood–theirinputtolandscapemanagement,biodiversity,soilandwaterquality,andcarbonstorage?

• Ifso,shouldthatbeviapublicsubsidy,privateinvestmentorboth?

• Finally,whatkindofagriculturalgovernanceisneeded?

WhilethereislittledoubtthatUKagriculturewillsurviveandcouldevenprosperwithoutCAPsupport,thetransitionmaybepainfulandwillaffectallfarmersandrelatedbusinessesinruralBritain.

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thatinformationcontinuestobefullyavailableinthepublicdomain.However,thereseemstobelittleappetiteingovernmentforsuchlegislationorforawide-rangingdebateaboutthefutureofenvironmentalgovernance.The25-yearplanontheUK’sNaturalEnvironment,firstpromisedin2015,isstilltoappear,althoughitremainedamanifestocommitmentfortheConservativePartyin2017.

What will happen?

ThereisasignificantpossibilitythatUKenvironmentalpolicywillbeweakerpostBrexit.Takeairquality.ThereisanongoinglegalactionagainsttheGovernmentforitsfailureproperlytoimplementEUlawsonairquality.TheactivistlegalgroupClientEarthhastakentheGovernmenttocourtovertheissue.OutsidetheEU,suchgroupswillhavelessleverageovertheGovernment.TheConservative2017manifestohassomevaguementionsofairqualitybutfewconcretecommitmentstoimplementthecurrentplanortomaintainEUstandardspostBrexit.

Brexitraisesother,equallyprofound,questionsaboutthegovernanceoftheUKenvironment.Forexample,thereisscopeformuchgreaterfragmentationofUKenvironmentalpolicyastheenvironmentisafullydevolvedmatter.Currently,EUdirectivessetaminimumlevelofprotectionbutmemberstates–ordevolvedbodies–cansethigherstandardsiftheysochoose.Thus,ScotlandandWaleshavemoreambitiousclimatepoliciesthanEngland.PostBrexit,differentpoliciesaremorelikelytoemergeacrossthefournationsoftheUK–unless,thatis,anagreementisstrucktoestablishminimumstandards.Determiningwhodecidesthosestandards,andtheirlevel,willbepoliticallychallenging.

Brexit,therefore,hasprofoundimplicationsforenvironmentalpolicy.Theimmediateoutlooksuggestssomepolicycontinuity,notleastbecausemuchenvironmentalpolicyisunderpinnedby

Introduction

TheEUhashadaprofoundimpactonUKenvironmentalpolicy.Inthe1980s,theUKwasderidedasthe“dirtymanofEurope”.Today,itisaglobalclimateleaderandhassuccessfullyexporteditsownpragmatic,evidence-informedstyleofpolicymakingtotheEUlevel.Yetdespitethis,theenvironmentbarelyfeaturedasanissueduringtheEUreferendumcampaign.Aftersustainedpressurefromthelargenon-governmentalorganisations(NGOs),PrimeMinisterCameronbelatedlymadeanenvironmentalcaseforvotingRemain,butVoteLeavesteeredclearoftheissue.Consequently,eventhoughtheDepartmentforEnvironment,Food&RuralAffairs(DEFRA)stoodtobeamongtheMinistriesmostheavilyaffectedbyavotetoleave,theenvironmentwasoneofthecampaign’s“Cinderella”issues,gaininglimitedpublicormediaattention.

What has happened since the referendum?

Sincethereferendum,therehasbeenagrowingrealisationintheenvironmentandbusinesssectorsthatBrexitwillhaveprofoundimplicationsforenvironmentalpolicies,includingthoseonagriculture,fisheries,climateandenergy.TheGovernmenthascommittedto“cuttingandpasting”EUenvironmentalrulesintotheUK

statutebookviatheGreatRepealBill(seethesectionontheGreatRepealBill)topreventanyregulatoryholesemergingwhentheUKleavestheEU.TheGovernmentclaimsthatonceoutsidetheEU,individualpolicieswillbereviewedanditwillbeuptoParliamenttodecidewhichtoremove,amendorleaveastheyare.

However,itwasacknowledgedbyAndreaLeadsom,formerSecretaryofStatefortheEnvironment,FoodandRuralAffairs,thatathirdofEUenvironmentalpolicycannotsimplybecopiedintoUKlaw.Inmanycases,EUlawmakesreferencetoEUinstitutions(suchasprovisionsforreportingtotheEuropeanCommissiononwaterquality).ItremainsunclearwhethertheUKwilldevelopalternativegovernancearrangementsandwhether,indevolvedareassuchastheenvironment,thesewillbecentralisedordevolved.

TheHouseofCommonsEnvironmentalAuditCommittee(EAC)hasalsounderlinedtheriskof“zombielegislation”,aliveonthestatutebookbuteffectivelydeadforwantofmechanismstosecureitsupdatingandimplementation,withpossiblynegativeconsequencesforenvironmentalquality.TheEAChascalledforanewEnvironmentalProtectionActtoensurethattheenvironmentisadequatelymonitored,thatpolicyisenforcedand

productstandardsthatarelikelytoremaininplacetoenableUKfirmstocontinuetotradewiththeEU.However,whilsttheGovernmenthaspaidlipservicetomaintainingtheEU’senvironmentalrules,itsgeneralstateofreadinesstocopewithBrexithasbeendescribedas“worryinglycomplacent”bytheHouseofLords.TheirLordshipswereparticularlyexercisedbytheGovernment’sapparentunwillingnesstoengagewithdeeperquestions,suchashowruleswillbeproperlyimplementedandenforcedoutsidetheEU’senvironmentalgovernancestructures.ThereducedcapacityofDEFRA,coupledwiththeclosureoftheDepartmentforEnergyandClimateChangefurthersuggeststhatenvironmentalpolicyinnovationislikelytoberatherlimited.Forexample,opinionpollsshowthatthepublicsupporttheadoptionofaCleanAirAct,butonlyLabourandtheGreenPartywerecommittedtointroduceoneintheirelectionmanifestos.OnepossibleoutcomeofBrexit,then,isincreasedpartycompetitionoverenvironmentalissues.

Anotheroutcomeisincreasedmobilisationonenvironmentalissuesbypubliccampaigninggroups.Forexample,theGreenerUKcampaignhasbroughttogetherenvironmentalNGOstocampaignfornew,post-BrexitnationallegislationthatismoreambitiousthancurrentEUenvironmentalprotections.Thereiscertainlyscopeinapost-Brexitworldtodeveloppoliciesthataremoresensitivetolocalconditions,andtobuilduponBritain’sreputationforleadershipinkeyfieldslikeclimatechange.Deliveringthesegoalswill,however,requireambitionandvision.

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Introduction

TheBrexitvotewasabouttakingbackcontrol.IthadbeengivenupatUKlevelbytheelegantbutterseEuropeanCommunitiesAct(ECA)1972.ThisActgavesupremacytoEUlawwhereitconflictedwithUKlaw(i.e.EUlawtookprecedenceoverUKlaw)andmandatedBritishjudgestofollowjudgmentsoftheCourtofJustice.BrexitrequiresthisActtoberepealed.ThiswillbedonebytheGreatRepealBill(GRB),whichwillalsomakeprovisionforthemanythousandsoftechnicalchangesthatdeliveringBrexitwillrequire.TheGRB,inotherwords,aimstodeliveratthedomesticleveltheresultsoftheArticle50negotiationsinBrussels,aswellasthechangestoUKconstitutionallawneededtogiveeffecttoBrexit.MostlawyersacceptthataBillalongthelinesoftheGRBisnecessary,althoughJeremyCorbyn,theleaderoftheLabourparty,hasindicatedthatthePrimeMinister’splanstocompleteBrexitthrougha“GreatRepealBill”were“history”andwouldhavetobedropped,withoutprovidingclarityastowhathewoulddoinstead.

TheGRBhasnotyetbeenpublished.However,awhitepaperisavailableandwhatfollowsistakenfromthat.ItisprimarilyaboutpreparingtheUK

legalsystemforBrexit.Itisnotavehicleformajorpolicychanges(whichwillbedeliveredbyotherpiecesoflegislation).ThewhitepapermakesclearthattheintentionoftheGRBistoensurea“smoothandorderlyBrexitthatcommandstheconfidenceofall”.Inotherwords,toreassureemployers,workersandconsumersthat,asfaraspossible,thesamelawsandruleswillapplythedayafterBrexitdayasthedaybefore.Specifically,theGRBhasthreeaims:

• RepealtheECA

• ConvertEUlawintonationallaw

• CorrectUKlawtodeliverafunctioningstatutebook

Repeal

ThefirstandmostimportantaimoftheGRBistorepealtheECA,thusmakingUKlaw,notEUlaw,supreme.ThispartoftheGRBwillcomeintoforceonthedaytheUKleavestheEU.TheGRBwillendthegeneralsupremacyofEUlaw:“newerlegislation[passedbyParliamentpostBrexit]willtakeprecedenceovertheEU-derivedlawwehavepreserved”.Butif,afterexit,aconflict

arisesbetweentwopre-exitlaws,oneofwhichisEU-derivedandtheothernot,thentheEU-derivedlawwillcontinuetotakeprecedenceovertheotherUKlaw.Inotherwords,adegreeofsupremacyispreserved,albeitonethatcanbecorrectedbyanActoftheUKParliament.

Convert

ThesecondaimoftheGRBistoconvertthewholecorpusofEUlawintonationallaw.Inessence,theGRBwilltakeasnapshotofallEUlawandensureitallbecomespartofUKlawonBrexitday.Thisiswhysomerefertoitatthe“GreatCutandPasteBill”.

Infact,therealityissomewhatmorecomplex.TakeDirectives,forexample.TheUKhashadtoimplementDirectives,usuallywithintwoyearsoftheiradoption.SomeDirectiveshavebeenimplementedbyanActofParliament,liketheEqualityDirectives,whichwereimplementedbytheEqualityAct2010.TheywillbeunaffectedbytheGRB.Others,liketheWorkingTimeDirective,havebeenimplementedthrough“StatutoryInstruments”(SIs)–secondarylawintheUK–usingpowersconferredontheexecutive(thegovernmentandthecivilservice)byprovisionsintheECA.OncetheECAisrepealed,alltheseSIswoulddisappear.However,theGRBwillensuretheycontinuetohavelegaleffect.

AnothertypeofEUlaw,Regulations,ofwhichtherearearound12,000,willalsohavetobeincorporatedintoUKlaw.ThiswilllargelybedonesimplybyreferringtothemintheGRB,ratherthancopyingandpastingthemintoit.

ThecaselawoftheCourtofJusticeisalsoakeypartofEUlaw.TheGRBwillensurethatpre-BrexitcaselawwillcontinuetobebindingontheUKcourts.ItwillhavethesameprecedentstatusasdecisionsoftheUK’sownSupremeCourt.Inexceptionalcircumstances,theSupremeCourtcanreversethosedecisions.AfterBrexit,Parliamenttoowillbeabletoreversethosedecisions.When

itcomestopost-Brexitcaselaw,theGRBwill“notrequiredomesticcourtstoconsiderCJEU’sjurisprudence”.Butitislikelytohave“persuasive”effect(i.e.thejudgeswilltakeitintoaccount).

Correct

ThethirdandmostcontroversialaspectoftheGRBwillbethepowersto“correct”theUKstatutebook.Thesewilltaketheformof“HenryVIIIpowers”.ThesearepowersgiventotheexecutivetoamendUKprimaryandsecondarylawusingStatutoryInstruments.TheuseofthesepowersisnecessarytodeliverBrexitinthetwo-yeartimeframe(andsowillhavetobebroughtintoforcepriortoBrexitday),butarecontroversialbecauseParliamentdoesnothavemuchchancetoscrutinisethelegislation.Thesepowerswillbeusedtomaketechnicalchangestothelaw(e.g.removingreferencestoEUlawandinstitutions),buttheywillalsobeusedtodealwithissuesthatariseduringthenegotiations.Inotherwords,theHenryVIIIpowersintheGRBwillbeusedtofixtheplanewhileitisstillflying.Holdontoyourhats.

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a“hardBrexit”.Andthisisdespitethefactthatitwas,andis,farfromclearthatthispositioncommandedamajorityeitherinParliamentorinthecountry.Whilepublicopinionisbroadlyhostiletofreemovement,itremainssplitonwhetherornotfreemovementisanacceptablepricetopayforpreservingotheraspectsofSingleMarketmembership.

Paradoxically,theclarityofthisspecificdecisionhasthrownalmosteveryotherelementoftheUKimmigrationsystemintodoubt.AmongthefundamentalquestionsonwhichtheUKGovernment(andtheofficialopposition)currentlydoesnothaveanythingresemblingaclearpolicyare:

• Whenwillfreemovementend?

• ShouldEUcitizenscontinuetoenjoypreferentialstatusinthenewsystem?

• Willthenewsystemhavepreferentialorspecialtreatmentforspecificsectors(orindeednationsorregions)?

• WillpolicybesetprimarilywithrespecttotheeconomicneedsoftheUKorbyreferencetoanarbitraryandlargelydiscreditednumericaltarget?

Meanwhile,oneissuethathasrisensharplyuptheagendasincethevoteisthestatusofEUnationalsresidentintheUK(andBritslivingelsewhereintheEU).ItquicklybecameapparentthatthepromisesfromVoteLeavethatthesegroupshadnothingtoworryaboutwereeitherignorant,deceptiveorboth.Equally,theprimeministerclaimedthatthisissuewouldbeeasilyresolvedoncetheEU27setouttheirposition.Theyhavenowdonesobut,beforetheelection,weremetwithadeafeningsilencefromtheUKside.

What next?

Intheshortterm,themostsalientpoliticalissueislikelytobecitizens’rights,sinceanacceptable

Introduction

IftheUK’svotetoleavetheEUwasavotefor,ormorespecificallyagainst,anything,itwasavoteagainstfreemovementofworkerswithintheEU.Pollingevidenceshowedthatapproximately80%ofthosewhothoughtthatimmigrationwasmostlyaforceforgoodvotedtoRemain,whileasimilarproportionofthosewhothoughtitwasaforceforillvotedtoLeave.

Theslogan,“VoteLeave,TakeControl”,summeduptheentireLeavecampaign.However,itwasparticularlyeffectivewithrespecttoimmigrationpolicyandbordercontrol,becauseitcontainedalargeelementoftruth.Freemovementofworkersisoneofthefoundational“fourfreedoms”oftheEU.Consequently,theRemaincampaignfounditextremelydifficulttocounterthesimpleargumentthattheonlywayfortheUKto“control”immigrationwastoleave.

OtherclaimsmadebytheLeavecampaignwithrespecttofreemovement–inparticular,thatEUmigrantsdrovedownwages,reducedemploymentprospectsforBritishworkersorwereresponsibleforreducedaccesstopublicservices–wereatbestexaggeratedandoftensimplyunsupportedbytheevidence.However,becauseoftheperceived

advantageoftheLeavesideontheimmigrationissue,theRemaincampaignlargelyavoidedthetopic.

Meanwhile,oneissuethatreceivedlittlehigh-levelpoliticalattentionduringthecampaignwasthefutureofEUcitizensresidentintheUK,andofBritonselsewhereintheEU(seethesectiononthelatter);broadly,VoteLeave’sclaimsthat“nothingwillchange”forpeopleinthesituationwasnotchallenged,exceptbylegalexperts.

What has happened since the referendum?

Afewlinesinonespeech–TheresaMay’sspeechtoConservativePartyconferenceinOctober2016–settheparametersofthepoliticaldebatenotjustonimmigrationbutonBrexitmorebroadly.Bysaying“wearenotleavingtheEuropeanUniononlytogiveupcontroloverimmigrationagain”,sheessentiallydecided,unilaterally,thatBrexitmeantnotonlyleavingthepoliticalstructureoftheEU,butalsotheSingleMarket,giventheEU’sinsistencethatthereisnoscopefor“cherry-picking”differentelementsoftheSingleMarket.

So,theprimeminister’spositiononimmigrationhas,upuntilnow,beenbyfarthemostimportantfactorbehindtheUK’scurrentcoursetowards

resolutionisanessentialelementofanArticle50deal.Alongsidethe“divorcebill”,theextenttowhichtheUKGovernmentispreparedtocompromiseonthisissue–which,fortheEU,mustinvolvesomecontinuedelementsof“European”lawholdingswayintheUKforanextendedperiod–willbeakeysignalofwhetheranultimatedealispossible.

Assumingthisisresolved,thefocusofpoliticaldebateislikelytomovebacktothetrade-offbetweenfreedomofmovementandtheSingleMarket,whichTheresaMaythoughtshehadresolvedlastOctober.Paradoxically,despitethefactthatbothmainpartiescommittedinprincipletoendingfreedomofmovement,theinconclusiveresultoftheelectionmeansthatthegovernment’sapproachtoBrexitiscalledintoquestion.Labour’sstance–supportingboththeendoffreemovementandthecontinued“benefitsoftheSingleMarket”–wasbothconfusedandcontradictory,butdoesnotentirelyprecludethepossibilityofcontinuedmembershipoftheSingleMarket,perhapswithsomemodestamendmentstothecurrentfreemovementrules.Morebroadly,theelectionresultalsocallsintoquestiontheConservativeParty’s(uncosted)pledgetoreduceimmigrationtothe“tensofthousands”,whichishighlyunpopularwithbusiness.

Muchwilldependoneconomicdevelopments.Upuntilnow,thedebateaboutBrexit,freemovementandimmigrationhasbeenagainstthebackgroundofarelativelyrobusteconomyandlabourmarket,andhighimmigration.If,asseemsplausible,theeconomyslowssignificantly,andnetmigration–particularlyfromtheEU–fallssharply,thenthetrade-offsnotedabovewillappearverydifferent,andthepoliticaldynamicsmaychangesignificantly,openingupspaceforamoreeconomicallyliberalapproachtoimmigrationbothfromwithinandoutsidetheEU.

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thisfoundationalrightofEUmembershipwillalsohaveconsequencesforEUnationalsmakingBritaintheirhome.October2016sawtheestablishmentoftheAll-PartyParliamentaryGrouponFreedomofMovement,aforumemphasisingthevalueoffreedomofmovementtotheBritisheconomyandBritishsociety,aswellastherightsofEUcitizenslivinginBritainandBritonsresidentinotherEUmemberstates.

ThegeneralelectionhascausedfurtherdisquietamongBritishoverseasresidentsabouttherighttovote.TheGovernmentissuedawhitepaperinOctober2016outliningitsplanstolegislatetograntlifetimevotingrightstoindividualBritishcitizenswhohadpreviouslybeenregisteredtovote.However,thishadnotbecomepolicybeforethegeneralelection.

Britishpensionerslivingabroadhavealsocontinuedtomaketheheadlines.WhileclaimsaboutwhattheirreturnmightcosttheNHScontinuetobemade,concernsaboutwhatmighthappentopensionspaidabroadhavealsosurfaced.Simplyput,whilecurrentarrangementsallowforBritonslivingintheEUtoreceivepensionincreasesinlinewithinflation,withdrawalfromtheEUmightentailtheendofthisreciprocalarrangement.Thiscouldresultinthefreezingofpensionsandhenceareal-termreductionintheincomesthesepensionersreceive.

ThelackofclarityaboutwhatBrexitmightmeanforBritainalsoaffectsBritishpopulationsabroad.Thisuncertaintyisprofoundandiscausingsignificantunease.

The future for Britons abroad

Theendoffreemovementwillundoubtedlyimpactonwhocanmigrateto,andwhocancontinuetoliveandworkinEUmemberstates.ItispossiblethatoneresponsetoBrexitmightberepatriation,particularlyofthosepopulations

Introduction

Freedomofmovement–therighttolive,workandaccesswelfarearrangementsinanotherEuropeanUnionmemberstate–isoneofthefoundingprinciplesoftheEU.FreedomofmovementbecameacentralthemefortheLeavecampaign.Playingtopublicconcernsabouthighlevelsofmigration,theyarguedthatstoppingfreedomofmovementwascriticaltocurbingtheseflows.

Anestimated3millionEuropeancitizensareresidentinGreatBritain,whilethelatestfiguressuggestthatthereare1.2millionBritonslivingelsewhereintheEU.Thelatterrepresentadiversepopulationthatincludesthoseworking,studyingandretiringabroad.JustasfortheirEUcounterpartslivinginBritain,BrexitmightbringaboutasignificanttransformationinthelivesoftheseBritishmigrantsastheirpoliticalrightsandsocialandfinancialentitlementsarerenegotiated.

Britons abroad and the EU referendum

Intherun-uptothereferendum,Britain’sexpatriatesfeaturedintwoprominentways.First,inthatthosewhohadlivedoverseasfor15yearsormorefoundthemselvesineligibletovote.Second,becauseofthepotentialconsequences

oflarge-scalerepatriation.TheinabilitytovoteinareferendumthatcouldhavesuchprofoundconsequencesfortheirdailylivesreinvigoratedthequestionofoverseasvotingrightsforBritishcitizens,sparkingpoliticalmobilisationandcampaigningamongBritonslivingabroadarounda“voteforlife”.Ontheotherhand,Britain’sexpatriatesweredepictedasasocialproblemwaitingtohappen.TheprospectthatelderlyBritishpensionerscurrentlylivinginotherEuropeancountriesmightbeforcedtoreturnpromotedconcernsthatBrexitmightplacefurtherpressureonanalreadystrainedNationalHealthService.

Theseheadlinespaintonlyapartialpicture.TheBritishpopulationslivingelsewhereintheEUareamorediversegroupthanafocusonpensionerssuggests.Similarlyvariedarethemotivationsfortheiremigration.Theseincludework,studyandfamilyreunion.Freedomofmovementmayfacilitatesuchmigrations,butisnottheonlythingthatenablesthemigrationandsettlementofindividualmigrants.

One year on…

FreedomofmovementdoesnotunilaterallyaffectBritishpopulationslivinginEurope;theremovalof

mademorevulnerableasaconsequence.Ifthistranspires,properplanningwillbenecessarynotmerelyintermsofthepotentialcostsinrelationtohealthandsocialcare,butalsowithregardtohowthereintegrationofthesepeopleintoBritishsocietywillbefacilitated.Absentrepatriation,itisimportantthatclarityisprovidedassoonaspossibleastowhatBritonslivinginotherEUmemberstateswillneedtodotocontinuetheirresidence.

Thesearejustsomeofthequestionswemightconsider.Lookingforward,itisimportanttocarefullyattendtohowBritain’swithdrawalfromtheEUvariouslyimpactsonBritonslivingandworkingelsewhereintheEU.

By Michaela Benson

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PART FIVE: BREXIT AND PUBLIC POLICIES

Introduction

ImmigrationwascentraltotheEUreferendum.Inparticular,theprincipleoffreedomofmovement,oneofthepillarsoftheEU,becameakeytargetoftheLeavecampaign.ThepromisetocurbtheflowofEUnationalsintoBritainprovedparticularlyeffectiveinmobilisingLeavevoters.FarlessattentionwasgiventotheimpactofBrexitonoverthreemillionEUcitizensleavingintheUKandonemillionBritonsresidingintheEU.Theissueoftheirlegalstatuswasputaside,andafterayearitisstillunresolved.

AttemptstogetbothsidestopledgesupportforarapidresolutionconcerningthelegalstatusofEUnationalslivinginBritainreceivedcrosspartysupportbeforethereferendumbutevaporatedsoonafter.Todate,callsforaunilateralgestureofgoodwillfromtheprimeministertowardsEUnationalshavefallenondeafears.However,therearesignsthatthepoliticallandscapeemergingfromthe2017generalelectionmayforcetheGovernmenttosoftenitsposition.

A year of uncertainty

AyearofuncertaintyovertheirrighttoremaininBritainistakingitstollonEUnationals,withsome

evidencepointingtoanincreaseinmentalhealthandanxietydisordersamongEUresidents.Anumberofonlineandofflinediscussionforahaveemerged,offeringlegaladviceandmutualsupportinthefaceoftheeverydayandbureaucraticchallengesthereferendumhascreatedforEUnationals,especiallywithregardtosecuringlegalstatusintheUK.Tomanyofthem,thereferendumresult,andtherealisationthattheirpositioninBritainwasnowbothlegallyprecariousandsubjecttothefluctuationofpartypolitics,cameasaprofoundshock.

TheoptionsopentoEUnationalsvaryprimarilyaccordingtothelengthoftheirstayinBritain.ManylongtermresidentsareapplyingforpermanentresidenceandBritishcitizenship.OthersarecontemplatingleavingtheUK,especiallythosewho,becauseoftheirage,workingstatus,familyarrangements,orlengthofstay,feelexcludedfromexistingpathwaystosecuretheirstatus.Othersmaybedoingboth,securingtheirlegalpositioninBritain,whileconsideringoptionselsewhereinEurope.

AccordingtotheOfficeforNationalStatistics’latestquarterlyreleaseofprovisionallong-terminternationalmigrationestimates,netmigrationisatitslowestlevelfornearlythreeyears.The

dropispartlydueto25,000fewerPolesandotherEasternandCentralEuropeanscomingtoworkinBritain,andanincreaseof16,000inthoseleaving.UncertaintyovertheirfuturelegalstatushasalsotriggeredariseinthenumberofEUnationalsandtheirfamilymembersapplyingtotheHomeOffice forpermanentresidence–fivetimeshigherthanlastyear–andBritishcitizenship,whichisup35%inthepastyear.DetailedHomeOfficedataonnaturalisationshowthatthesurgeincitizenshipapplicationsisparticularlynoticeableamongthecitizensofolderEUmemberstates,withanincreaseincitizenshipsapplicationsamongItalian,French,andGermannationalsinthemostrecentperiod.Inthatsameperiod,someofthelargestnumberofapplications,however,camefromPolishnationalswho,since2010,havesubmittedapplicationsforcitizenshipinlargenumbers.

Forty years of EU membership

Thefocusduringthereferendumonrecentarrivals,particularlyfromEasternEurope,hasovershadowedrecentandpastimmigrationfromolderEUmemberstatesand,moregenerally,thefactthattheUKhasbeenamemberoftheEUfor40years.Forexample,whiletheinflowofCentralandEasternEuropeans,whoselevelsofimmigrationhavebeenrelativelyhighsincethosecountriesenteredtheEUin2004and2007respectively,hasreceivedextensivemediacoverage,farlesscoveragewasaccordedtothemobilityofEUnationalsfromGermany,France,Spainandtheotheroldermemberstates.ThesehavemadeupanincreasingshareofEUmigrationtotheUKinrecentyears;mostrecentestimates for2016showthat53%ofthemostrecentimmigrantsestimatesfromtheEUcomefromEU14countries(memberstatesjoinedin2000s).

Besides,thisattentiononlatestarrivalhasalsoobscuredaninconvenienttruth.ThroughoutfourdecadesofEUmembership,therehasbeeninterminglingofpeoplewhichcanbemostclearlyseeninthegrowingnumberofmixed-nationalityEUfamiliesintheUKandtheiroffspring,many

ofwhomwerebornintheUKandholdaBritishpassport.Datafromrecentbirthstatisticsshowthatalmost12%ofchildrenborninEnglandandWalesin2015hadatleastoneEU-bornparent(thefigurerosefrom8.1%in2009),pointingtotheirpotentiallyincreasingdemographicimportance.

ThisisagrowingbutasyetunderstudiedandunderreportedsegmentofBritishsociety.Inthepost-EUreferendumcontext,inwhichtherhetoricaboutcurbingEUimmigrationhaspermeatedpolitical,media,andpopulardiscourses,producingastark“usandthem”narrative,thequestionleftunaskedandunanswerediswhatthehumanandemotionalcostsofthiswillbeif,foralargesectionoftheBritishpopulation,“usandthem”arethesame.

By Nando Sigona and Laurence Lessard-Phillips

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PART FIVE: BREXIT AND PUBLIC POLICIES

Introduction

DuringtheEUreferendumcampaign,muchwasmadeoftheUK“takingbackcontrol”oflaw-makingpowersfromBrussels,andtheissuecertainlyresonatedwithmanyvoters.BeingpartoftheEUhasmeantthatalotoftheUK’slawsoriginateinBrussels.EUlawmakinginvolvesEU-widestandard-settinginareasasdiverseasbankingregulation,agriculture,theenvironment,consumerprotectionandemploymentrights.WiththeUK’swithdrawalfromtheEU,thesepowerswillberepatriatedtotheUK.HowmuchflexibilitytheUKwill,infact,havetosetitsownlawsafterthisremainstobeseen,andmuchwilldependonthetermsofourexistingandfutureinternationalagreements.

Butthereisanotheraspectofthisrepatriationofpowersthatiscausingconstitutionalheadaches.Brexitmaymeantakingbackcontroloverlawmaking–butwhereisthiscontrolbeingtakenbackto?TheUKhasnowexperiencednearly20yearsofdevolution.Scotland,WalesandNorthernIrelandhavetheirowngovernmentsandparliaments,andhaveprimarypolicyresponsibilityforareasincludinghealth,education,environmentalprotectionandagriculturalpolicy.BlockgrantsfromtheTreasurytothedevolvedadministrationshavebeensupplementedbyimportantEUfundingstreams,especiallysignificantforthedevolvednations’agriculturalsectors,aswellasfortheiruniversities.

meanstofinancethem.NorthernIreland,WalesandScotlandshouldthenberecognisedasbeingabletodeterminetheirownpoliciesoverdevolvedareas,includingfisheries,agriculture,andtheenvironment.TheSupremeCourtintheArticle50Miller caseagreed,sayingthat“removalofEUconstraintsonwithdrawalfromtheEUTreatieswillalterthecompetenceofdevolvedinstitutionsunlessnewlegislativeconstraintsareintroduced.Intheabsenceofsuchnewrestraints,withdrawalfromtheEUwillenhancedevolvedcompetence”.

ButfortheUKGovernment,suchnewlegislativeconstraintsarerequired.Powersindevolvedpolicyareaswillnotflowdirectlytothedevolvedlegislatures,butwillcomebacktoWestminster.Asafirststep,asforeseenintheGreatRepealBillWhitePaper,thelegalframeworkssetatanEUlevel,withinwhichtheUKanditsdevolvednationscurrentlyoperate,willberetained.Thisisintheinterestsoflegalcertainty,andtoensurethereislegalcontinuityafterBrexit,withnoblackholesemerging.Subsequently,andfollowing“intensivediscussions”withthedevolvednations,furtherdecisionsmaybetakenondeterminingwhereUK-wideapproachesareneeded,andwherepowersmaylieatadevolvedlevel,includingthelocalgovernmentlevel.Itisexpectedthatsomecommonframeworkswillemergeonagriculture,environment,fisheriesandregionalpolicy–areasthataredevolved,butwhichhavebeensubjecttoEUlaw.TheUKGovernmentarguesthatthisapproachisnecessarytoensurethereisnodisruptiontotheUK’sowninternalmarket–onthebasisthatdivergencesinlawcreateunnecessaryandcostlyobstaclestocross-UKtrade.Additionally,itissaidtobeneededinorderfortheGovernmenttoundertakeinternationaltradenegotiations,withthesepowersfallingtoLondontoexercisefortheUKasawhole.Forthedevolvednations,however,thisapproachistantamounttoapowergrabthatunderminestheexistingdevolutionsettlementandforwhichtheirsupportiscertainlynotguaranteed.

What happens next?

Whatthatmeansinconstitutionalterms,anditssignificanceforthelong-termfutureoftheUK,remainstobeseen.Pre-election,theGreatRepealBillwassettostartitslegislativejourneythroughtheHousesofParliamentbeforethesummerrecess.Whilstthisisstillexpected,theGovernment’splansforthedevolvednationsmaycomeupagainstoppositionthere.Yettheopportunitiesforthedevolvedparliamentsandgovernmentstofeedintothislaw-makingprocessareverylimited,despitethecriticalsignificanceitwillhaveforthemandtheirpowers.Thisreflectsthelackofexperienceof“shared”rulemakingamongstthedifferentlevelsofgovernmentintheUK.OppositionfromthedevolvedparliamentscanbesignalledthroughtheirrefusaltograntLegislativeConsentMotions.Byconvention,thesearerequiredwhenWestminsterlegislatesondevolvedmattersortochangethescopeofdevolvedpowers.AccordingtotheSupremeCourtintheMiller case,however,thisconventionisnotlegallyenforceable,operatingonlyasapoliticalconstraint.AnyresultingconstitutionalclashoverpowersmayprovokefurthermovestowardsindependenceinScotland.InWales,theGovernmenthascalledforaconstitutionalconventionandaredefinitionoftheUKmachineryalongmorefederallines,creatinganewsystemformakingcommonpolicies.Inanycase,theUKGovernmentwillbegoingintotheBrexitnegotiationswithdisunityathome,whichmayultimatelyprovemorethananunwelcomedistraction.

By Jo Hunt

WhilsttheUKhasbeenpartoftheEU,thepowersheldbythedevolvednationshavebeenexercisedwithinthelimitsofEUlaw.TheyhaveimplementedcertainEUlawsthemselves(resultinginsomedifferenceacrosstheUKintherulesoneligibilityforagriculturalpayments,forexample),aswellasensuringthattheirownpoliciescomplywiththedemandsofEUlaw.So,forexample,Scotland’splansforminimumalcoholpricingranintotroublewiththeEU’sinternalmarketlaws,constrainingtheScottishGovernment’sactions.AstheheadoftheScottishVoteLeavecampaignannouncedaheadofthereferendum,BrexitwouldlifttheserestrictionsandleadtoScotlandgaining“majornewpowers”.Devolution,accordingtothisargument,wouldbeenhancedasEU-derivedconstraintsinpolicyareasdevolvedundertheScotlandAct,GovernmentofWalesActandtheNorthernIrelandActfallaway.

What has happened since the referendum?

Howmuchsaliencethisdevolutionargumenthadwithvotersinthereferendumisunknown.However,wedonowknowthatthesuggestionmadebysomecampaignersthatBrexitwouldleadtoanexpansioninthepowersofthedevolvednationsisprovingconstitutionallycontroversial.Forthegovernmentsofthedevolvednations,thematterthoughisstraightforward.Thecurrentdevolutionsettlementsmustberespected,andpowersoverthoseareaswhicharedevolvedthatcomebackfromBrusselsmustgotoBelfast,CardiffandEdinburgh,alongwithappropriate

TWENTY-FOUR

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Introduction

DiscussionofforeignanddefencepolicywaslargelyconductedintermsofgeneralitiesduringtheEUreferendumcampaign.KeythemesweretheEU’shistoricroleinbringingpeacetotheEuropeancontinent,andclaimsthatitwasontheroadtocreatinga“Europeanarmy”.

RemaincampaignersarguedthattheprosperitycreatedasaconsequenceofEUmembershipwasintegraltonationalsecurity.Brexit,theyargued,wouldunderminebothUKandEUsecurityandstability.Theseclaimswereechoedbykeyinternationalfigures,includingPresidentObamaandNATOSecretaryGeneralJensStoltenberg.

Brexitcampaigners,incontrast,madetheargumentthatBrexitwouldprovidetheUKwithgreaterfreedomtofullyutiliseitsdiplomatic,militaryand“softpower”capabilities,andhenceachieveenhancedinternationalinfluence.TheyalsosoughttodownplaytheEU’scontributiontosecurity,insistingthatNATOandtheUnitedStates,nottheEU,havekeptthepeaceinEuropesinceWorldWarII.ThesecampaignersalsoemphasisedthedangersinherentinsupposedEUmovestocreatea“Euroarmy”inplaceofnationalarmedforces.

TheBrusselsbombingsofMarch2016gavedifferentsecurityissuesgreaterprominence.Itfocusedattentionontheissueofborderand“homeland”security,andwhethertheUK’ssecurityisenhanced,orcompromised,throughitsmembershipoftheEU.ThisissuegainedrenewedattentionmorerecentlyfollowingtheterroristattacksatWestminster,ManchesterandLondonBridge.

What has happened since the referendum?

ThefutureoftheEU-UKforeignandsecurityrelationshiphasbeenthesubjectofrelativelylittlepublicdebatesincethereferendum.Thisispartlybecausenoneofthealternativemodelsforafuturetradingrelationshipcomewithapredefinedmodelforforeignandsecuritypolicycooperation.Inaddition,foreignpolicy,andespeciallysecuritypolicy,areareasinwhichMrsMay’sgovernmenthasindicatedthatitwantstomaintainclosecooperationwiththeEU.TheBrexitWhitePaperandspeechesbytheprimeministerhaverepeatedlystressedadesireforacloseEU-UKsecuritypartnership.

TheGovernmenthasalsopromotedtheideathatBrexitgivestheUKanopportunitytoreshapeitsplaceintheworld.“GlobalBritain”,asloganfirst

usedbyPrimeMinisterMayinherConservativePartyconferencespeechinOctober2016,isintendedtosignifya“reboot”ofUKforeignpolicy–activelypromotingfreetradeandcooperatingcloselywithalliestobuildasafeandjustworld.Howtheseprioritieswilldifferfromexistingcommitmentsisstillunclear.

Overseasvisitsandmajorinternationalsummitssincethereferendumofferlittleindicationofmajorshiftsinprioritiesbeyondstressingtheimportanceofnewexportopportunities.Further,theelectionofPresidentTrump,andtheUKgovernment’sdesiretoseekacloserelationshipwithhisadministration,haveattractedunfavourablecomparisonswiththemorecriticalstanceofotherEuropeangovernments(notablyChancellorMerkelandPresidentMacron).TheUKhasgiventheimpressionofdownplayingPresidentTrump’sambiguousstanceonmattersofkeyimportancetotheUK,suchasthestabilityofNATOandglobalfreetrade.

What might happen?

TherelativelyunderdevelopednatureoftheEU’sforeignandsecuritypolicymeansthatBrexitwillhavelessobviousimpactsfortheUKthaninotherpolicyareas.TheUKhasnotintegrateditsmilitarycapabilitiesoritsdiplomaticinfrastructurewiththeEUand,consequently,detachmentpost-Brexitdoesnotrequiremajorinstitutionalreform.

However,theUKwillloseitsparticipationandthecapacitytodirectlyinfluenceEUforeignpolicymakingprocesses.Further,itwillhavediminishedinfluenceonthedirectionofdevelopmentoftheEU’snascentdefencepolicyasanon-member.ThereferendumhasalreadyhadadirecteffectonthebehaviouroftheEU’sothermemberstates.ItcoincidedwiththepublicationofthenewEUGlobalStrategy(EUGS)thatsetsouthowtheEUintendstobroadenanddeepenitsroleinglobalpolitics.OneaspectoftheEUGSwastofurtherdeveloptheEU’sroleinthesecurityanddefencefields.UKsupportfortheEUGSwaspredicated,inpart,onitsambitiontodeepentheEU-NATO

relationship(subsequentlyagreedattheJuly2016WarsawSummit).

AsindicativeofthediminishedinfluenceoftheUKpriortocompletingtheformalitiesofBrexit,somememberstateshavealreadymadeproposalsfordeepeningEUdefencecollaborationinadirectionthattheUKhasresisted.TheFrenchandGermangovernmentshavejointlyproposedaseriesofmeasuresthatincludeapermanentmilitaryheadquartersforEUmissions,andthecreationofacommonbudgetformilitaryresearchandjointprocurementtoberunthroughtheEuropeanDefenceAgency(aninstitutionthattheUKhasresistedgivingasubstantivebudgetoramajorroleindefenceprocurement).Finally,theyhaveadvocatedreinforcingexistingmilitaryformations,suchastheEU’sBattlegroups,usingEUtreatyprovisionsthatallowforsmallergroupsofmemberstatestoundertakedeeperdefencecollaboration.

TheseideashavegivenenergytotheambitionsoftheEUHighRepresentativeforForeignAffairsandSecurityPolicyforboostingtheEU’scapabilities.TheyhavealsogivenimpetustotheEuropeanCommissiontoearmarkpartoftheEUbudgetforspendingondefenceresearchsupportedbyallmemberstates.

ProposalsforgreaterEUdefenceintegrationhavelargelyfailedinthelasttwodecades,partlybecausethesehavebeenresistedbytheUK.Brexit,incombinationwithaUSadministrationthatappearslesscommittedtoEuropeansecurity,hasgivenimpetustoEUsecuritydevelopmentsthattheUKisnowinlessofapositiontoinfluence.Asanon-member,theUKfacestheprospectofbeingabystandertodecisionsonthefutureofEuropeandefencethatdirectlyimpactontheUK’snationalsecuritybutoverwhichithasminimalinfluence.

By Richard G Whitman

TWENTY-FIVE

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PART FIVE: BREXIT AND PUBLIC POLICIES

Introduction

Britain’srelationshipwiththeEUhasbeenafruitfulonewhenitcomestohighereducation.ByoperatingwithinalargerEuropeannetwork,UKuniversitieshavebecomeincreasinglycompetitiveinworldterms.TheUKattractsthesecondlargestnumberofinternationalstudentsand,bymostcounts,hasthesecondstrongestresearchsystemintheworldaftertheUnitedStates.TheUKaccountsfor3.2%ofglobalresearchanddevelopmentexpenditurebut9.5%ofscientificpapersdownloaded,11.6%ofcitations,and15.9%ofthemosthighly-citedarticles.SharedEuropeanideas,resourcesandtalentplayakeyroleinthisremarkableglobalperformance.

TheUK’sresearchstrengthrestspartlyonitsleadingroleinEUprojects,whichprovideaccesstocollaboratorsacrossthecontinent.From2007to2013,theUKcontributed€5.4billiontotheEUforresearch,developmentandinnovation,whilereceiving€8.8billioninresearchgrants.Ofthis,€6.9billionwasfromtheUK’sFramework7Programme,inwhichUKuniversitieswerethemostsuccessfulrecipientswitha71%shareofprojects.

ThisimmersioninEuropeisequallystrikinginrelationtopeoplemobility.In2015-16,127,440EUstudentsenrolledinUKhighereducation,5.6%ofallstudents.Non-UKEUcountriesmadealargercontributiontostaffing.In2015-16,31,635EUstaffworkedathighereducationinstitutionsintheUK,16%oftheworkforce.Thefiguresarehigherintheresearch-intensivesector,including37%ofacademicstaffatLSEandmorethanoneinfourinOxford,CambridgeandUniversityCollegeLondon.Inthelasthalfdecade,morethan40%ofnewacademicstaffappointedonmerittoRussellGroupuniversitieswerefromtheEU.

Inthereferendumcampaign,theargumentinrelationtohighereducationwasstraightforward.UniversitiesUKandothersectorbodies,andindividualVice-Chancellors,arguedvigorouslyforRemain,thoughtheissueneverachievedmuchpublicprominenceandenteredtheofficialRemaincampaignonlymarginally,inrelationtoresearch.TheLeavecaseacceptedtheneedfortheUKGovernmenttocompensatescienceresearchfunding,butignoredtheextenttowhichfreemovementwithintheEUbenefittedhighereducationandresearch.UniversitytownsvotedstronglyforRemain,asdidstaffandstudents.

What has happened since the referendum

Onlyoneoftheissuestriggeredbythereferendumhasbeenresolved,onatemporarybasis.TheUKgovernmenthasruledthatin2017-18EUcitizenstudentscanenterBritishuniversitiesonthesamebasisasUKstudents,asbeforethereferendum.EUstudentswillcontinuetopaya£9,000perannumfeeforfull-timecourses,supportedbyincomecontingentloanspayableaftergraduation.However,thepositionforstudentsenteringin2018-2019isunclear,anditseemsalmostcertainthatafterBrexitEUstudentswillpayfeesonthesamebasisasnon-EUinternationalstudents—thatis,theywillpayup-frontfeesintheyearofstudywithoutthebenefitoftheincomecontingentloans.Thosefees,determinedbytheuniversities,willrangefrom£12,000peryearto£20,000andmore.

ThefutureUKresidencyandcontributionofallnon-UKEuropeanshasbeenfundamentallyplacedindoubtbythereferendum.TheFebruary2017WhitePaperonBrexitindicatedthattheGovernmentwantsto“securethestatusofEUcitizensalreadylivingintheUK”buttherehasbeennoresolutionofthis.ATimesHigherEducationpollofacademicsinMarch2017foundthat53%ofnon-UKnationalswere“activelylookingtoleavetheUK”and88%saidthatBrexithasmadethemmorelikelytodosointhemedium-termtolong-term.Thisisacrucialissue,andthelongeritisunresolvedtheworsewillbethelong-termeffects.

TheTreasuryhasundertakentocompensateuniversitiesforanyearlylossofresearchfundingunderHorizon2020andotherEuropeanschemes.ThegovernmentincludescontinuedUKmembershipofEuropeanresearchschemesasanobjectiveinBrexitnegotiations.WhiletheimportanceofEuropeanresearchlinksforUKscienceisclearlyunderstood,perhapsmoresothantheimportanceofretainingEUstaff,itisnotgenerallyrealisedthatthetwoareasarepartlyinterdependent.Further,researchisasecondorderpublicissueatthisstage.

What might happen in the years to come?

AhardBrexit,andparticularlyanodealoutcome,constituteseriousthreatstothenationalviabilityandglobalcompetitivenessofUKuniversities.Underthesescenarios,accesstothebulkofEuropeanresearchfundingwillbelost,anditishighlyunlikelythatUKuniversitiesandsciencecouldbeadequatelycompensatedinthelongrun.Itisnotjustamatterofmoney,thereisalsothelostaccesstonetworksofsharedexpertise.Anyreductioninthenationalsciencebasealsonarrowsthescopeforindustryinnovation.

TheendofdirectEUaccessrightswilltriggeranewskilledmigrationschemeinUK,withincomersfromallcountrieshandledonanequivalentbasis.Theoutcomehereisambiguous.AschemethatfavouredhighskillresearchersandeducatorscouldmaintainmuchofthepresententryfromEuropewhileenlargingthescopeforentryfromotherpartsoftheworld.However,iflargescalecutsininternationalstudentnumbersgoaheadasplanned,thiswouldnarrowtheflowoftalentfromonesource(internationalstudentgraduates)whilediscouragingtalentfromanother(academicstafffromEuropeandelsewhere).MuchinhighereducationdependsonwhetherinthefraughtclimateofBrexitthegovernmentandthecountrycanmaintaintheUK,especiallyitsuniversities,asmeritocratic,internationallyengaged,andaboveall,open.

By Simon Marginson

TWENTY-SIX

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PART SIX: BREXIT AND THE EU

Introduction

DespitetheUK’swell-earnedreputationasan“awkwardpartner”,noneofthememberstateswantedtoseeitleavetheEU.TheyhavebeenperenniallypuzzledbytheUK’sdomesticdebateabout“Europe”,especiallygivenLondon’ssuccessingettingitswayinsuccessivetreatynegotiations,aswellasinday-to-daypolicymaking.Morerecently,theyhavebeenfrustratedbytheUK’slackofsolidarityovertheeurozoneandmigrationcrises.Still,thememberstatesrecognisedthevalueoftheUK’smembershipandtheassetsitbroughtasamajorEuropeaneconomy,withstrongsecurityanddefencecapabilities,aseatontheUNSecurityCouncil,andglobaltradinglinks.TheyalsoadmiredtheprofessionalismwithwhichtheUKargueditscaseinBrussels,aswellasthepragmaticapproachitbroughttothetable.

Moreover,forsomememberstates,theUKwasanimportantally.ItisfirmlyrootedintheliberaleconomiccampalongsideDenmark,Finland,Germany,theNetherlands,Sweden,andtheBalticstates.ItwasrespectedbythecountriesofCentralandEasternEuropeforchampioningenlargement,aswellasfordecidingnottorestrictmigrationupontheiraccessiontotheEUin2004.ForFrance,theUKhasbeenacounterweightto

Germany;forGermany,ithasplayedthesameroleinrelationtoFrance.TheUK’srelationshipwithIrelandisespeciallyintimate.Aswellasacommonborder,thetwocountriesshareclosehistorical,culturalandeconomicties.

Forthesereasons,membergovernmentsrespondedpositively,ifwarily,toPrimeMinisterDavidCameron’sdemandin2015foranewbargainforBritain,eveniftheUKtooktimetospecifywhatitwanted.Yet,althoughtheywerewillingtodoadealtokeeptheUKinsidetheEU,theywerenotpreparedtocompromisetheEU’sfundamentalprinciples,especiallythefreedomofmovementofworkers.

Post-referendum

TheresultsoftheEUreferendumweregreetedwithdisappointmentacrossthenationalcapitalsoftheEU.“Weregretthisdecisionbutrespectit”,saidPresidentTusk,PresidentJuncker,PresidentSchulzandtheNetherlandsPrimeMinisterRutteintheirjointstatementthedayafterthereferendum.Atthesametime,agitatedbytheUK’srepeatedclaimthat“theydependmoreonusthanwedoonthem”,nationalleadershavecautionedthat,althoughBrexitwillhurttheEU,theUKwillsufferevengreaterharm.

TheEU27werequicktoadoptacommonposition.AswellascallingontheUKGovernmenttonotifytheEuropeanCouncilofitsintentiontowithdrawfromtheEUasquicklyaspossible,theleadersoftheEU27underlinedtheircommitmenttotheEUandagreedthreeprinciplesfortheconductoftheBrexitnegotiations:

• thatnegotiationsshouldnotbeginwiththeUKuntilafterLondonhadtriggeredArticle50;

• thattheUKwouldneedtoacceptobligations,notablyconcerningEUcitizensresidentintheUK,aswellasrightsvis-à-vistheEU;

• thattheUKcouldnotexpectaccesstoEurope’sSingleMarketunlessitacceptedthefourfreedomsofmovementofgoods,capital,servicesandworkers.

Subsequently,theEU27havemaintainedtheircollectiveposition.Althoughpreparedtocommitthemselvestoaconstructivebilateralrelationshipinthepost-Brexitera,theyhaverefusedtoenteranydiscussionsthatmightpre-empttheArticle50negotiations,particularlyregardingfuturetraderelations.Atthesametime,theyhaveemphasisedthat,whiletheaimisnottopunishtheUK,thenegotiationswillbehard,andtheUKcannotexpecttoretaintheadvantagesconferredbyEUmembership.

AnyhopeinotherEUcapitalsthattheUKwouldchangeitsmindaboutBrexitquicklyreceded.Indeed,thetoneofUKrhetoric–notablyinthespeechesmadebyTheresaMayandHomeSecretaryAmberRuddatthe2016ConservativePartyconference,whichappearedtothreatentherightsofEUcitizensintheUK,MichaelHoward’scommentsaboutgoingtowartodefendGibraltar,aswellasForeignSecretaryBorisJohnson’srepeatedreferencestoWorldWarIIandtheNaziregime,tocitebutafew–provokeddismayandbewildermentamongtheUK’spartners.

Moreover,alarmaboutLondon’sexpectations(“havingourcakeandeatingit”),itsthreattowalkawayfromnegotiations(“nodealisbetterthan

abaddeal”),andtheunwillingnessoftheprimeministertooutlinetheUK’sobjectives,hasledtovolublecriticismthatisunusualamongallies.Mostnotably,inthewakeofEuropeanCommissionPresidentJuncker’sinfamousdinneratNumber10,ChancellorMerkelwarnedtheUKaboutharbouring“illusions”abouttheoutcomeitwouldachievefromthenegotiations.Inaddition,Ireland,whichwillbemoreaffectedthananymemberstatebyBrexit,fearsitsconcernshavenotbeentakenseriouslyinLondon,andhassoughttoensurethatitscircumstancesareunderstoodinotherEUcapitals.

One year on

SinceJune2016,thesentimentinthecapitalsoftheEU27hasmovedfromdisappointmentanddisbelieftoimpatience.Whilethereisstillregretabouttheoutcomeofthereferendum,aswellasahopethattheUKwillonedayreturn,membergovernmentsareirritatedaboutthelengthoftimeittookLondonfirsttotriggerArticle50andthentocommencenegotiations.TheUK’spartnershavealsobeenunimpressedbyUKdiplomacysince23June2016.

Ontheeveofnegotiations,theUK’sobjectivesremainlargelyunknown.ThereisconcernthatLondonentertainsunrealisticexpectations,andanxietythattheUKwillstageawalkout.Tomakemattersworse,asnapelectionthatwascalledtodeliverastrongerpersonalmandatefortheprimeministerhasdeliveredahungparliament,introducingstillfurtheruncertaintyanddiminishingtheprospectsofaconclusionofbusinesswithinthetwoyearsforeseenbyArticle50.

HavingcommittedthemselvestoafuturewithintheEU,theUK’sEUpartnershaveheldfirm,resistingallattemptsbyLondonto“divideandconquer”.FromtheNetherlandsPrimeMinisterMarkRuttetoFrenchPresidentEmmanuelMacron,Europe’sleadershaveunderlinedthat,whiletheyaredisappointedattheUK’sdecision,theyrespectit.However,theyalsowarnthattheforthcomingnegotiationswillbetough.

By Hussein Kassim

TWENTY-SEVEN

5958

PART SIX: BREXIT AND THE EU

Introduction

TheEUdependsonitsmemberstatesforitslegal,financialandpoliticalexistenceandsoisusuallywillingtotrytoaccommodatetheir“localdifficulties”.IntheUK’scase,thismeantJean-ClaudeJuncker(PresidentoftheCommission)andespeciallyDonaldTusk(PresidentoftheEuropeanCouncil)tryingtofindanaccommodationintherenegotiationthatwouldallowCamerontotakebacksomethingvaluableinthecomingreferendumcampaign,butalsorespectingtheinterestsofothermembers.

FromtheEUperspective,theresultant“newsettlement”wasasincereefforttogiveCameronaleg-up,albeitonepointedlydrapedinlanguagethatremindedeveryonethatthetreatiesalreadyallowedformuchmoreflexibilitythanpublicdebateseemedtosuppose.However,theoverblownrhetoricthatCameronhadtakenintotherenegotiationmeantthatanyadvantagehemighthavegainedwaslostinthehowlsoftheBritishpressaboutbeingshort-changed.

Unsurprisingasthiswas,itconfirmedthedominantviewinBrusselsthatthebestsubsequentcourseofactionwastomaintainaverylowprofile,asanyinterventioninthereferendumwaslikelytoback-

fire.Eitherthevotewouldbewon–inwhichcasethenewsettlementwouldcomeintoeffectandnormalservicewouldresume,orlost–inwhichcasecontingencyplanswouldkickin.

Post referendum

Theoutlineoftheseplanswasalwaysclearbeforethereferendumitself,butwasexpandeduponveryquicklyafterwards,notablyinthestatementson24and28JunefromEUleaders.

Inessence,theEU’spositionwas,andcontinuestobe,thatiftheUKwantstoleavetheorganisation,thenitshoulddoso,followingtheprocedureestablishedforjustsuchaneventuality:theinfamousArticle50.

WhileitissimpletostatetheUnion’sview,itcarrieswithitanumberofkeyconsequences.

First,itfitswiththeEU’straditionoftryingtobalancelocalneedswithcommoninterests.IftherenegotiationwasnotenoughtoconvincetheBritishpublic,thentheirviewsmustberespected.However,thisimpliesrespectingtheviewsofothermemberstatesthatwerenotwillingtoofferfurtherconcessionstotheUK:hence,nopost-referendumrenegotiations.

Second,andlinkedtothis,theUKwillnotgetspecialtreatment.Therenegotiationtextitselfappliedtoallmemberstates,withthesoleexceptionfortheUKbeingaconfirmationthatitalreadymetthethresholdtolimitbenefits.Likewise,theEUhasaprocessfordeparture,andaprocessforestablishingthird-countryrelations,bothofwhichwillbeusedtoestablishanewrelationshipwiththeUK.

Thirdly,theinsistenceonArticle50placestheEUinastrongnegotiatingposition.ThedynamicofthenegotiationswillbeoneoftheEUmakinganoffertotheUK,ratherthanviceversa.WehavealreadyseenthiswiththepublicationofdetailedEUnegotiatingguidelines.WhiletheEUisfreetomakewhateverofferitwishestotheUK,theUKwillbelimitedtoworkingaroundthatagenda,respondingratherthandefining.

ThisimbalanceofpowerpartlyexplainsthelongdelaybetweenthereferendumandthenotificationthattheUKwantedtotriggerArticle50.AslongastheBritishGovernmentdidnottriggertheprocedure,therewasnotimepressure,andanopportunitytotryandinfluencethecontentanddirectionofnegotiations.However,intheabsenceofanycoherentBritishpolicyonhowtoapproachthenegotiations,andinthefaceofevidentdeterminationonthepartoftheEUinstitutionstoavoidanypre-notificationtalks,thisopportunityultimatelycametonothing.

One year on

AstheUKbeginssubstantivenegotiations,itfacesanEUwithaverywell-developedorganisationalstructureandanegotiatingpositionthatenjoysahighlevelofbuy-infromallsides.

Importantly,anypotentialforconflictbetweentheEuropeanCouncil,CommissionandEuropeanParliamentwasaddressedearlyon.EuropeanCouncilPresidentDonaldTuskquicklytooktheleadasthemaincontactpointatthelevelofheadsofgovernment,whiletheCommissionbuiltadedicatednegotiatingteamaroundMichelBarnier.

Meanwhile,theEuropeanParliamentwasabletoinfluencetheformulationofthenegotiatingmandates.Itsroleunderits“leadnegotiator”GuyVerhofstadtmightbebestthoughtofasthatofa(notvery)badcopalongsidetheCommission,promisingtovetoanyagreementthatdoesnotsecurecitizens’rights.ClosecoordinationbetweentheEUinstitutionswillalsolimittheUK’sabilitytoplaythemoffagainsteachother,somethingthatmightpotentiallyhavecomplicatedratificationofthe deal.

Theunityoftheinstitutionswillbeseverelytestedintherestof2017,asoneofthemainprinciplesofthemandateischallengedbytheUK,namelysequencing.Whilethemandatedoeshavesomeflexibility,itessentiallyassumesthatliabilitiesofmembership–includingfinances–mustberesolvedbeforeanydiscussionofthenewrelationship.GiventhepoliticallytoxicnatureofthemoneyquestionfortheUKGovernment,itisunderstandablethatitwouldprefertobundleeverythinguptogether,ifonlytodistractattention.Asever,theEUissympathetictothis–henceitsclearfocusonprinciplesforcalculatingliabilities,ratherthanusingactualfigures–butitsneedtocoverthegapsinfinancingforothermemberstatessuggestthatitwillstanditsgroundonthisissue.

WhethertheEUinstitutionswillbewillingorabletomaintaintheirpositionsthroughtotheendofArticle50remainstobeseen;givendevelopmentstodate,itlooksmuchmorelikelythatitwillbetheUKthathastocleavetotheEU,ratherthantheotherwayaround.Indeed,theunityoftheEUhasanintrinsicvalueasasymbolofEuropeancooperationthatwillmakeitthatmuchhardertocompromiseorshiftitsposition.

By Simon Usherwood

TWENTY-EIGHT

60

Credits for front cover photographs and for images used in the running header on odd numbered pages:(inalphabeticalorder)

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