All bets are off: What’s the deal with Brexit?

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By Professor Scott Lucas, Professor of American Studies
Department of Political Science and International Studies, University of Birmingham


It is less than six months until the UK’s departure from the European Union. The party conferences have ended with the May Government clinging to a compromise “Chequers Plan” – but with the Prime Minister so embattled by hard Brexit-ers that she dare not mention it by name. Uncertainty prevails.

So what are the Brexit options and the chances for each one on March 29?

The Chequers Plan

The official Government plan at this point is the July proposal agreed by the Cabinet. This maintains a “common rulebook” for trade with the EU, through “harmonisation” and a “joint institutional framework” – although there is some flexibility for “different arrangements”.

UK services – which make up 80% of the economy – will be outside the rulebook, giving Britain full leeway to negotiate agreements with other countries.

Free movement of people ends, with a “mobility framework” to be pursued for UK and EU citizens to travel to each other’s territories, and for applications for study and work.

Upside:
• Prevents a “hard border” between Northern Ireland and the Republic of Ireland.
• Buffers against a shock of supplies, for example, food and medicine.

Downside:
• Uncertainty over the short-term status of services
• (for Brexit-ers) Acceptance of some European jurisdiction regarding goods.

Forecast: 3/10 – The EU is not happy with some provisions of the plan, seeing it as “cherry-picking”, but it is willing to negotiate because of its concerns over a No Deal and who might succeed Theresa May as Prime Minister. But hard Brexit-ers, including former Foreign Secretary Boris Johnson and Jacob Rees-Mogg, are dedicated to burying the plan – it doesn’t fit their message or their political ambitions.

The Canada option

Both UK goods and services would be separated from the EU, leaving Britain to negotiate arrangements with other countries and to set its immigration restrictions as it seeks a new relationship with Europe. The option is named after the Canada-EU Comprehensive Economic and Trade Agreement, approved in 2017.

Upside:
•  Meets hard Brexit-ers requirement of no EU jurisdiction in any UK economic matters.

Downside:
• Establishes a “hard border” between Northern Ireland and the Republic of Ireland.
• It takes a long time to establish – CETA, the free-trade agreement between Canada, the European Union and its member states, took 8 1/2 years between the start of negotiations and approval.
• It also makes no provision for economic arrangements before an agreement is reached.

Forecast: 2/10 – If the UK had embarked on this option in 2016 after the Brexit vote, it might have this as a viable option in the final stages of talks with EU. However, with no planning established this is, at most, an aspiration for a not-so-near future. It is likely to be invoked by Johnson and the hard Brexit-ers to cover a “No Deal” (see below), but as a political device rather than reality

Norway Option

Keeps the UK in the EU single market for goods and services and in the customs union. Takes the UK out of some EU arrangements, such as the Common Fisheries and Common Agricultural Programs, and ends the jurisdiction of the European Court of Justice.

Favoured by the House of Lords but rejected so far by the Government as incompatible with the 2016 referendum.

Upside:
• It is the least disruptive of the options, and thus least damaging to UK economy.
• It also resolves Northern Ireland-Republic of Ireland border issue.

Downside:
• Acceptance of EU laws and regulations over UK-EU matters (For Brexit-ers)
• It reduces UK influence over EU policy and rules
• Free movement of people will be retained. (For Brexit-ers)

Forecast: 1/10 – Seen by economists and many business interests as the best option, but not even May – let alone hard Brexit-ers – are willing to go this route. Best seen as a “recovery position” after a No Deal and its consequences – if the EU is willing to countenance it.

No Deal

 No agreement on any matter with EU: goods, services, immigration, security issues, research and academic cooperation, and much more.

Some Brexit-ers such as Boris Johnson and Jacob Rees-Mogg are likely to favour this outcome, even if Johnson is talking vaguely about a “Canada Plus Plus” plan. Others such as David Davis and Michael Gove are not going this far.

Upside:
• No ties to EU and possibility of trade deals with countries such as US (For some Brexit-ers)
• No limits on immigration restrictions (For Brexit-ers)

Downside:
• Likely economic damage, with almost all economists – including Treasury and Bank of England – projecting 5% to 7% relative loss of GDP
• A hard border between Northern Ireland and the Republic of Ireland
• Disruption to supplies and to staffing of crucial services, including National Health Service
• Uncertainty over arrangements in transport and other public sectors
• No foreseeable alternative trade arrangements, including with the US, for years

Forecast: 6/10 – By far the riskiest option for the economy, the Irish border, and UK security and international position. But it appeals emotively to many Conservatives, the opposition Labour Party is still uncertain over its stance, and Johnson and Rees-Mogg (with supporters in UK media) have the momentum.


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