Hard Brexit – Not in Our name

This week, Prime Minister Theresa May was asked on LBC whether if the EU referendum was ran again, would she vote to Remain or Leave, given that she originally voted to remain but is now leading a Government intent on leaving the European Union.

 

This prompted Professor of Political Science Simon Hix to ask a more relevant – perhaps the most relevant – question of the Brexit negotiations: “Why is she pursuing a Hard Brexit if she’s still not sure Brexit is a good idea in the first place?”

The British public have voted to leave the European Union, but it was up to the government to implement the specific type of Brexit.

Given that she was a remainer, it would be reasonable to guess that Mrs May would prefer a soft Brexit course – but she doesn’t appear to be taking it. 


Q: Is Mrs May pursuing a Hard Brexit?

A: Given the content of her statements including the Lancaster house Speech we would have to conclude that she is. 


Mrs May has ruled out the UK staying in the EU Customs Union (or an approximation of it), being subject to the ECJ (for anything other than an interim period), ruled out remaining in the EEA and she doesn’t want a basic FTA.

EU chief negotiator Michel Barnier has made it explicitly clear that the UK’s choices are between the Canadian CETA model and the EFTA/EEA Norway Option.

Since Mrs May has ruled both out the only option left is no deal – ‘Hard Brexit’ or falling back on WTO rules. Here we outline why this would be terrible for the UK. 

We have speculated before about why Mrs May seems to be pursuing the hardest possible Brexit.  

At first we suspected that incompetence was to blame. 

We now believe that Mrs May is deliberately being fed incorrect information upon which to base her decisions.

An example of this is when the Prime Minister said that:

“You can’t be a member of the single market unless you’re a member of the European Union.”

This is clearly untrue. The Government’s own website makes that clear. 

But who is giving the PM and government as a whole bad information about Brexit – and why?

Private Eye Magazine recently ran a piece which may help us to work that out: 

 

 

 

 

 

 

Legatum’s ‘Director of Economic Policy and Prosperity Studies’ Shanker Singham recently wrote an article for the Telegraph in which he urged the PM to avoid a “EEA, EFTA or EEA Agreement Framework, or even a Swiss type framework” in order to pursue a ‘Global Britain’ strategy. 

In the piece he says that the UK must be free from the EU’s Common Commercial Policy, Common External Tariff (and, by implication the EU Customs Union).  He says the UK must be free to speak for itself on global bodies. 

What he doesn’t tell the reader is that the EFTA/EEA countries (Such as Iceland and Norway) are free from the EU’s Common Commercial Policy, Common External Tariff and Customs Union). They are free to speak for themselves on global bodies since they are exempt from the EU’s Common Foreign and Security Policy (CFSP) and specifically Article 34 doesn’t apply to EFTA/EEA states. 

But, he repeats several times that unless the UK is removed from the regulations of the European Economic Area (EEA) that we cannot benefits from the “major opportunities” that Brexit presents. 

In order to assess these claims, let us look at the example of Iceland


Iceland (population 334,252) enjoys a close relationship with the EU.

Via the EEA it enjoys free trade with the EU and its 508 million inhabitants.  It enjoys access to trade deals with countries around the world via EFTA. 

The EFTA States including Iceland have 27 free trade agreements (covering 38 countries). 

EFTA is in the final stages of an FTA with India, meaning that Iceland will soon have preferential access to a market of 1.324 billion people. 

Iceland has also signed its own FTA with China (population 1.379 billion). This is because EFTA has a two-track policy, EFTA members can sign their own deals or negotiate as a bloc.

Clearly then, a ‘Soft Brexit’ model hasn’t stopped Iceland trading around the world. 

But if you read Mr Singham’s piece, he is in essence not only asking the PM to give up a close relationship with the EU but also with EFTA, (which the UK helped to create originally) in exchange for some mysterious, unquantifiable benefits.


The motivations behind the Legatum Institute’s drive for Hard Brexit are difficult to discern – our colleagues over at the EUReferendum blog have attempted to try however. We recommend you read this piece.


Legatum has two interesting close associates – Steve Baker MP and Gerard Lyons, former Chief Economic Advisor to Boris Johnson (himself a Hard Brexiter and former writer at the Telegraph).

According to The Times:

Steve Baker orchestrates the European Research Group (ERG) of MPs via a WhatsAPP group. The Times  reported that the aims of the group were “to ensure a hard, clean Brexit with minimal or no payments to the EU, minimal reliance on EU judgments”

Lyons is a leading advocate for what he calls a Clean Brexit (Hard Brexit) and wrote a book on the subject with Telegraph economics commentator, Liam Halligan

Perhaps inspired by Lyons, Boris Johnson wrote an article for the Telegraph urging the Government to push for a Hard Brexit. 


The same names keep cropping up again and again. Whether those involved seek a Hard Brexit out of political ambition, ignorance of the facts, a desire to make money or gain influence, we wouldn’t like to speculate. 

What we can say is that a Hard Brexit would be crippling for the UK economy and damage our standing on the world stage.

The PM has, in our opinion listened to Hard Brexit opinions for far too long. 

This isn’t the Brexit we wanted – we wanted a Smart Brexit as part of the  European Free Trade Association, maintaining close links to our European friends and neighbours. 

Hard Brexit? NOT IN OUR NAME.

 

 

 

 

 

 

For more about Legatum read: https://www.whatdotheyknow.com/request/contacts_with_legatum_institute

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