It’s like watching the lead up to a train wreck. In slow motion. Over six months.
Britain has only six months to go before it ejects itself from the European Union—six months in which it has to negotiate the terms of its exit, with no consensus on the horizon. Within just days of a brief visit back, it has become apparent that Britain is a deeply divided society, and floundering as the 29 March deadline inches closer.
Prime Minister Theresa May, saddled with the onerous task of leading her nation out to what could be a pretty uncertain future, has set out her terms quite clearly. It’s either the terms that she set out in early July after a marathon session with her loyalists at her country residence of Chequers or nothing. Under her terms, Europe and the UK will have a “common rule book" for trade in goods, they will jointly interpret European agreements, and the UK will end the right of Europeans to work and live in the UK.
This, in other words, is the UK wish-list. We don’t know what the Europeans think of it. The alternative is a “no deal", said May this week. This is a prospect that fills a lot of Britons with understandable dread. No deal in effect is the hard divorce that no one wants. No one, that is, except Boris Johnson, the colourful Tory politician who has been sniping away at May from the sidelines through his newspaper columns since resigning as foreign secretary. He, however, remains an influential voice in the Conservative party and could mount a leadership challenge—he remains the odds-on favourite to succeed May at this point in time which could alter dramatically, a week being a long time politics.
According to Johnson, no deal is better than Theresa May’s Chequers terms. For now, Johnson appears to be focusing his challenge on the complex problem of what to do about Northern Ireland border once Britain leaves the European Union. Northern Ireland shares a soft border with the Irish Republic. But the people of Northern Ireland voted to remain in the European Union when the referendum on Brexit was held in 2016.
No one wants a hard Irish border but the problem is that under Theresa May’s terms, the UK will cease to be a member of the European customs union. The two sides have come up with a term—‘backstop’ for the border—but this appears to mean two entirely different things to the two. The Europeans want Northern Ireland to stay in the European customs union. Theresa May has taken a hard line on the European proposal. Earlier this year, she told Parliament it would “undermine the UK common market and threaten the constitutional integrity of the UK by creating a customs and regulatory border down the Irish Sea, and no UK prime minster could ever agree to it".
No one’s saying it in those terms, but a harder border could mean Northern Ireland eventually being swallowed up by the Irish Republic.
Worrying as the Irish question is to the future of the UK, for the time being, the elephant in the room is immigration. It was immigration that lit the immediate spark for Brexit, with Brits complaining that the free flow of Europeans to the UK was resulting in joblessness. Every problem was laid at the doorstep of Europe, with European immigrants accused of cheating and taking advantage of Britain’s generous welfare system. “We are paying for their social security allowances" pretty much sums up that perception.
Under May’s Chequers proposal, Europeans will no longer have the right to live and work freely in the UK but there could be a “mobility framework". But it remains unknown whether the Europeans will agree to this. Failure to agree could mean a no-deal, and all that it entails.
Just this week, the government’s Migration Advisory Committee said the UK should consider resuming allowing highly skilled migrants into the country. The report is important because it was commissioned by the government last year in the run-up to Brexit, and ought to be closely studied by India, China and other non-EU countries because it suggests that European migrants could be subjected to the same visa rules as nationals of non-EU countries. If accepted by the May government, this will mark a dramatic departure from the practice by levelling the ground for prospective Indian skilled migrants and others. On the other hand, the report could be used more pragmatically to try and strike a bargain on the Brexit negotiating table.
In the meantime, there are mounting claims from credible sources that the British economy has already taken a hit from the Brexit referendum and will suffer further damage if there is a no-deal Brexit.
Just last week, Ralf Speth, the CEO of Britain’s biggest car maker Jaguar Land Rover, owned by the Tata group, warned that tens of thousands of jobs could be at risk if the UK crashes out of Brexit without a deal.
Speth said uncertainty around the terms of Brexit meant he does not know if his plants that employ 40,000 people in Britain alone, will be able to function after 29 March 2019, adding: “Just one part missing could mean stopping production at a cost of £60 million a day. That is a huge risk. We depend on free, frictionless, seamless logistics." And on Monday, it said it will go down to a three-day week at its Castle Bromwich plant in central England, affecting 1,000 workers.
For Airbus, which makes the wings for its passenger jets in Britain, the worst-case Brexit scenario would occur if Britain was no longer part of the EU aviation safety certification agency, EASA, which gives planes and parts approvals. “The only thing that we can prepare for is the worst-case scenario. In that event, sites not only in Britain would be affected but also, for instance, Hamburg and Toulouse," news agency Reuters cited board member Tom Williams as telling German magazine Der Spiegel last week.
The ramifications of a no deal Brexit could be far wider than ordinary Britons appear to realize. They should listen to International Monetary Fund managing director Christine Lagarde, who was in London this week issuing a dire warning: “Let me be clear," she said. “Compared with today’s smooth single market, all the likely Brexit scenarios will have costs for the UK economy, and to a lesser extent for the EU as well. The larger the impediments to trade in the new relationship, the costlier it will be. This should be obvious but it seems that sometimes it is not."
Why is a no deal so bad? Again, here’s Lagarde: “It would be a shock to supply, and would result in reduced growth, increased deficit, depreciation of the currency… and in reasonable short order, it would mean a reduction in the size of the UK economy."
That’s called suicide in some circles.
Dipankar’s Twitter handle is @Ddesarkar1