LONDON – The surprise decision by British Prime Minister Theresa May to call a general election sends one very clear message: While the Brexit negotiating process is moving forward in a manageable and increasingly positive way, she needs a clear and strong majority in Parliament to get all the necessary legislation —which will be extensive — passed.
If the “deep and special partnership” between the United Kingdom and the European Union, which she has called for, is to be realized, it is clear that there will be moments of compromise and moments of great controversy ahead. Concessions may have to be made with which the hardest line “leavers” in her own party will not be happy. In other instances it will be the so-called Europhiles, those who deplore the whole Brexit affair, who will be against her.
May’s present small majority of 17 leaves her dangerously vulnerable to these challenges. To face them she needs a much bigger House of Commons majority, say 50 or 60, and the opportunity has clearly risen to secure just that, thanks to the persistent weakness of Labour under the poor and confused leadership of the leftist Jeremy Corbyn.
To keep up the Brexit momentum and ensure negotiations go the right way, four key categories of issues will now have to be covered — and resolved:
1) Organizing full and strong participation by the U.K. in a wide variety of European defense, security, policing, regional environmental and institutional matters, with new institutions to facilitate new arrangements as required.
2) Clarifying the rights of U.K. and EU citizens and their freedom generally to move around in Europe.
3) Agreeing to prompt payment by the U.K. for all continuing participation in European schemes and programs — but not fines just for leaving.
4) Securing minimum tariffs (probably zero) and nontariff barriers to all goods trade, and no worse barriers to services and information flows than the array of current ones (which are mostly national rather than EU-controlled), and continued synchronization of many rules and regulations, together with agreement on the latest technology for fast and easy customs clearance where required.
In addition, a complex period of transition, or implementation of agreements,will have to be negotiated.
Are these goals attainable? A few months ago the answer would have been “no.”
On the Brussels side, there was talk of punishing the deviant British, all sides losing out, barriers and long lines at Channel ports, no deal unless the U.K. stayed a member of the EU single market and the customs union, and showed absolute adherence to the four freedoms of movement — of people, goods, services and capital — and all the laws and regulations that go with them.
On the British side, there was talk of a total and clean break, with the U.K. becoming just another country seeking to export into the EU under basic World Trade Organization rules, but not much else. It seemed all or nothing, and no room in between.
But reality and reason have now begun to intrude into this over-polarized wrangle, with clouds of confusion clearing somewhat as to the real nature of modern trade and commerce, and reinforced by the sheer ongoing pace of communications technology and the ever-accelerating digital revolution.
Of the four categories above, the first is the most straightforward, and is happening already. This is just the natural development of regional cooperation, born of geographical proximity and normal good neighborliness. In the defense field, pan-European arrangements will largely be buttressed by closer bilateral links, already evident in U.K.-German, U.K.-French and U.K.-Polish agreements, with many more to come.
The second category is trickier — freedom of movement — not because of a lack of political will on both sides but because the EU “side” is in fact 27 different border restriction and entry control systems — a far cry from the theoretical “freedom of movement” so often cited as a fundamental principle, and needing complicated coordination before a common position can be found to match the British side. Also, May faces a hard core of opponents who call for massive reductions in immigration from the rest of Europe, which in practice would be deeply damaging and are probably unattainable anyway.
The third category — the payments question — can be easily settled with goodwill, with the U.K. paying for what it properly owes and continues to get in the future, but no more.
It is, of course, the fourth category — covering trade and economic relations — that raises the most difficulties. But even here the worst doubts and fears seem to be evaporating. To start with actual events, rather than just opinion, and going flatly against expert economic predictions, the British economy is thriving, with the International Monetary Fund now forecasting still higher growth. British exports are rising.
One notable shift is that central bankers are said to be busy selling euros and buying pounds. Another is that medium-size companies in the U.K., always in the past seen as a weak sector — are now growing faster than their continental counterparts. Another is that the flow of inward foreign investment is continuing strongly, with earlier threats of a mass exodus of banks and insurance firms now dwindling to plans for small transfers of additional staff to other capitals.
All this clearly favors the current Conservative government and reflects growing confidence that the main Brexit trade issues can be settled without too much damage to either side, possibly even with some gains all round.
Finally, while all the focus has been on Article 50 of the Lisbon Treaty — the procedure for leaving — there has been the belated rediscovery of Article 8. This says that “the Union shall establish a special relationship with neighboring countries, aiming to establish an area of prosperity and good neighborliness.”
A British prime minister with a big majority for a smooth Brexit could suddenly make Article 8 look a whole lot more interesting and relevant to the other 27 members of the EU.
David Howell is a Conservative politician, journalist and economic consultant. He is chairman of the House of Lords International Relations Committee.
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