Mrs. May is on her way to the post office with an important letter to post to the European Union (EU) informing them that the United Kingdom is filing for a divorce. The content of her letter is likely to be based on her Lancaster House speech delivered in January of this year. On receipt of the letter, the EU must present Mrs. May’s divorce petition to the European Parliament who will, following a procedure, pass a resolution as a way of reply. Then heads of the 27 states have to meet and agree on negotiating guidelines and the formal permission for the European Commission to begin its work. This work will be delegated to the European Task Force (ETF) who will act as counsel for the EU. Michael Barnier will be the lead counsel for the ETF, while David Davies will lead for the petitioners.
Will pragmatism prevail in both London and Brussels during these negotiations? For example, a whole range of problems will be discussed and not least of them will be ‘passporting’. There are approximately 5,500 financial firms in the UK who sell their financial services all across the European Union. The Exchequer collects about £176bn from these activities. About half of these are located in the City of London.
As Mrs. May intends to leave the Customs Union, will these firms have free access to the EU after Brexit? What about the motor industry? Another question is the cost of leaving. One newspaper put the cost at £60bn and another I saw put the figure at £50bn, but the Eurosceptic Secretary of State for international Affairs, Liam Fox, rejects these figures as absurd. Irrespective of Mr. Fox’s denial, there will be a high cost, whatever happens. Finally there is the question of the rights of EU citizens in Britain and of British citizens working and living in the EU.
But London has totally ignored the wishes of the ‘remain’ vote in England and more especially the wishes of the majority who voted ‘remain’ in both Scotland and Northern Ireland in their official Brexit strategy. The English Conservative and Unionist Party appears not to care about this and is set on pursuing its own interests. Now enters Nicola Sturgeon, the Scottish First Minister, with a new suggestion on the timing of the proposal for a new independence referendum originally in two year’s time and now at a time “within reason”. Scotland had voted by a decent majority to remain within the EU.
Sturgeon’s press conference overshadowed Mrs. May’s moment of glory as the Brexit Bill went through the House of Commons. All eyes were suddenly on Scotland and away from London. Mrs. May was forced into a defensive mode to defend the Union. On maintaining the Union, one economist, Paul Johnson, of the Institute of Fiscal Studies, says that the bill for exit from the United Kingdom for Scotland would be substantial: Scotland at the moment exports four times more to England than to the EU and it will also lose roughly £1,000 per person in subsidies each year (amounting to about 5.5bn pounds).
However, another part of Nicola Sturgeon’s compromise is that she would accept a ‘soft’ Brexit, which would preserve Scotland’s rights to access the single market. These were days of high drama which placed the onus on the London government to produce a successful ‘soft’ Brexit. But is this what the English Conservatives want? Sturgeon has picked a fight on her terms, as one newspaper headline put it. Then a final development came some days later when Sturgeon announced that she was dropping the policy of applying to rejoin the EU immediately after Brexit. This is not surprising since the Spanish Foreign Minister is reported to have told her clearly that Scotland would have to “join the back of the queue” if it wanted EU membership. Confused? Don’t worry, it will get worse over the next two years as the divorce proceedings toddle on, and then again they may find it too difficult to divorce.
Certainly the big loser in the Brexit negotiation will be Northern Ireland, who also voted to ‘remain’. Northern Ireland, which is 3% of the total population of the UK, is not technically part of Great Britain but is part of the United Kingdom (although its citizens are described as British citizens in their passports and other documents). It is highly unlikely that the generous European Union subsidies they receive, especially for structural reforms and in the areas of agriculture and fisheries, will be replaced by extra subsidies from the London Exchequer, as Northern Ireland is already receiving some 11bn sterling from London (2015-‘16) to maintain normal services. Leaving the United Kingdom and throwing in their lot with the rest of the island with a guarantee of financial help from Brussels might be an alternative for them. At least this will keep them in the EU, as they had voted.
But what will happen in the end? It will be fudged, I predict. The divorce will end in a compromise that will suit neither party. The two problems of the free movement of people, (let’s not forget the central issue in the referendum was migration) and national sovereignty, will be compromised; and it will take more than the two stated years for the negotiations to be agreed. An alternative to this, on the UK side, could be the creation of a new federation called the Federal Kingdom of Great Britain (a simple federation of Scotland, Wales and England), while the Island of Ireland stays within the EU. In this way the marriage between the UK and EU could be annulled and the divorce settlement agreed. Of course this alternative won’t happen; the settlement will be fudged.