There is a great debate unfolding in our media as to whether or not the Government will pursue a ‘hard’ or a ‘soft’ Brexit. But this discussion continues to demean those who voted to leave the European Union were under the false illusion that this meant leaving the Single Market too. No one denies that Europe remains an important market for Britain, but this is why May will be pursuing a British Brexit. Nothing more, nothing less.
The Prime Minister stated this point clearly in her recent address during a visit to the Gulf when she used the awful slogan ‘red, white and blue Brexit.’ Despite all these fruitless attempts to frustrate the will of the British people with High Court challenges and the Labour Party expecting the Government to announce their Brexit plans, May is right to keep her cards close to her chest. Yet it is evident that we are gaining an insight into the Government’s strategy.
As soon as the Prime Minister announced her intentions for Britain to quit the Single Market altogether, the pound’s value sank to its lowest level since 1985. But this demonstrates the sheer ignorance of the market’s understanding of how it works. There is a stark contrast between being a member of the Single Market and being allowed access to it. As Andrew Neill stated: ‘North Korea can trade with the Single Market if it intends to.’ Nonetheless, this has failed to offer the markets any reassurances. There is also the prospect of Japanese businesses leaving London if the Government does not clarify what its Brexit strategy is sooner rather than later.
This is an unfair expectation. This is because it became apparent that David Cameron was so confident about Stronger In winning the EU Referendum that he refused to allow HM Civil Service to initiate plans in the event of a Leave vote. David Davis, the Brexit Secretary, recently stated that the Government’s negotiating strategy is not ready.
Despite this, Conservative governments normally have a strong interest in maintaining the confidence of the business community, regardless of their comprehension as to how the Single Market operates. This is why Liam Fox, the International Trade Secretary, appeared on The Andrew Marr Show this weekend and hinted that Britain could remain a partial member of the Customs Union. But many media outlets have over-interpreted the implications of this policy. It is not this body which hampers Britain’s trade with the rest of the world, it is the European Common Commercial Policy that does that, which must be repealed as soon as possible. It seems pointless to appoint an International Trade Secretary if the Government intends to keep us in a body that prevents us from pursuing trade agreements.
Also, there is talk of a transitional deal that will be implemented in the event of failing to organise a free trade deal after April 2019, the date when we would have formally left the EU. Again, this is designed to provide the markets with confidence during the Brexit process. Regardless, this is merely a short-term measure whereby Britain would continue their talks with the EU in a less pressurised environment and guarantee that the Government would be able to fully exit the European bloc over an extended period of time. This is designed to maintain the confidence of banks anxious about a complete withdrawal from the Single Market. This would also mean Britain remaining in the EEA as a stopgap measure, much like Norway. But as previous articles have highlighted, the ‘Norway option’ does not result in countries having to oblige by EU rules and pay into the EU budget to the extent Stronger In suggested.
It is no secret that the EU is no rational actor. Considering the period of time it took Canada to conclude their recent free trade agreement with the European bloc, they are not capable of arranging trade deals in a reasonable period of time, regardless of how dependent European markets are on Britain. Realistically, a full withdrawal from the EU may take five years due to the bloc’s inability to behave in a reasonable manner when negotiating with countries that have defied their will.
As ministers continue to keep their cards close to their chest, it is likely that Britain will fully withdraw from the EU, but not in the two year frame that the triggering of Article 50 allows for countries to leave. This is not the outcome many Leavers desire, but it seems to be one that the Government, the EU and businesses intend to settle on, thereby delivering a unique ‘British Brexit.’ Nevertheless, there is always the possibility there may not be an EU left by 2019 once the consequences of Italy’s recent referendum and forthcoming national elections rear their ugly heads. Nothing is certain anymore.