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10 uncomfortable truths about Brexit

February 13, 2019

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Following the historic defeat of the Government’s Brexit withdrawal proposal on 15thJanuary, the tactical moves of the coming weeks are hard to forecast. However, the outcome will be determined by the fundamental forces underpinning the UK and Brexit – not by the tactics.

1 We are at the start of the Brexit debate, not the end.

Negotiations with the EU for a new trading relationship will only begin after the UK leaves the EU and will take a number of years. Even after the final trading relationship is formalised – perhaps by 2022 – the political debate will continue because there will be significant dissent from both ends of the Brexit spectrum.

2 The first wave of Brexit harm has already damaged the UK – and will not reverse.

Industrial investors’ perceptions of the UK as a stable destination for investment and as the entry-point for Europe have shifted. The UK’s influence internationally has been diminished by perceptions of unstable and irrational decision-making.

3 The Brexit process has inflicted long-lasting harm on the Civil Service.

Civil Service numbers have rocketed by 20,000+ in the last 2 years while turnover in most Departments has reached 20% per annum. The Civil Service has been publicly attacked by pro-Brexit Ministers and media when the conclusions of work have not suited their views. New practices of not sharing papers or consulting across Departments were introduced to control leaks and information but are adopted as the ‘new normal’ by recruits.

4 The current leaders of the 2 major parties are pre-occupied with avoiding schism in their own party.

The Prime Minister stated irreconcilable ‘red lines’ upfront and launched the Article 50 process before agreeing a plan within the Government. In crisis, she does not share her views, sticks to unsustainable positions until forced to move and says different things to different factions. The Leader of the Opposition resists committing to a policy until forced to move and says different things to different groups of Labour voters. If either the Prime Minister or the Leader of the Opposition moves to a compromise that would command a majority in Parliament, they risk splitting their party for a generation – as Conservatives have done in the past over trade policy and Labour did in the 1930s.

5 The UK electorate is divided 50:50 and is not inclined to debate and compromise.

Europe was never top of voters’ agenda. The referendum legitimised and identified a wide range of social and national ills with leaving or remaining in the EU in a simplistic and rancorous debate. Voters’ views were largely fixed in 2016, immune to debate/new information from the past 3 years, and irritated by the complexity of compromise. Although a second referendum might produce an ‘answer’, it would not end the conflict nor would it encourage constructive compromise.

6 The agreement negotiated between the Government and the EU is what compromise looks like.

The proposal is actually quite a good deal and, if it had been offered in 1972, would have been accepted by the UK rather than full membership – we pay for access to most of the single market and the customs union, without applying the common agricultural policy and without accepting freedom of movement. However, the compromise appears overwhelmingly worse to both Leavers (minimal change from the status quo) and Remainers (no say in the EU rules and direction) – and neither side faces any political cost in continuing to resist.

7 The EU has delivered on its strategy to manage Brexit and will continue to do so.

The EU27 have remained united and have delivered their goals throughout the Brexit process. Given the UK’s initial poor bargaining position and the lack of coherence arising from having a disunited minority Government, the UK will only obtain cosmetic and marginal compromises in negotiation with the EU. For the Remain side, that is a positive situation – the UK will stay close to the EU. The Leave side are left complaining about EU intransigence and claimingthe EU will be forced to offer a better deal eventually.

8 Ultimately the UK will prosper economically regardless of Brexit – but it is transition that kills you.

Regardless of the eventual UK-EU trading relationship settled over the coming years, the UK economy will prosper due to its flexibility and capabilities. Whether it will do better than maintaining the current EU membership is unlikely to be evident for decades. However, any substantial change in trading relationships will cause disruption over 5-10 years – especially if it is imposed in a short period. As an analogy, the closure of the UK coal mining industry is positive over the long term (stopping unsafe extraction of a polluting high-cost fuel) but, by concentrating the closures into a 10-year period, caused immense social pain in already-deprived regions.

9 Brexit has shown up multiple inadequacies in the UK Constitution.

The UK’s unwritten constitution performs poorly under stress and, once crises have been patched-up, constitutional issues are typically neglected until the next crisis. UK law does not address the conflict between referenda and representative democracy, there is no entrenched settlement between the different levels of government (local-devolved-national-European), and the Westminster Government controls money and Parliament – as long as it has a majority. The Government breached numerous conventions to suppress debate 2016-18 and now Parliament is seeking to un-do conventions to control Government. This accentuates the risk that the ‘losing side’ in the eventual Brexit solution will challenge the legitimacy of the solution and the debate will not cease. In Scotland and Northern Ireland, the perceived illegitimacy of the Brexit debate is challenging the continuation of the Union.

10 Civil discourse is poisoned and domestic issues largely unaddressed.

The fantasy politics and the polarisation of views has been reinforced by both sides in the Brexit debate rejecting balanced analysis and seeing compromise as costly rather than beneficial. The serious domestic challenges facing the UK – welfare, education, health and social care, policing, declining tax base – are largely being postponed and public trust in institutions, experts and political leadership is declining. The positive view is that there is a wide-open space for someone to occupy with trusted solutions and which would win broad national support.

Written by Keith Leslie, SAMI Associate

The views expressed are those of the author and not necessarily of SAMI Consulting.

SAMI Consulting was founded in 1989 by Shell and St Andrews University. They have undertaken scenario planning projects for a wide range of UK and international organisations. Their core skill is providing the link between futures research and strategy.

If you enjoyed this blog from SAMI Consulting, the home of scenario planning, please sign up for our monthly newsletter at newreader@samiconsulting.co.uk and/or browse our website at http://www.samiconsulting.co.uk

 

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