To Brexit or Not to Brexit?

To Brexit or Not to Brexit?

That is the question.  And chances have increased dramatically for the UK to stay in the European Union after the resignations of Brexit Secretary David Davis and Foreign Secretary Boris Johnson and the backlash over the mid-July release of the Brexit white paper by Prime Minster Theresa May.

Davis and Johnson were the Cabinet’s biggest supporters of a complete break with the EU, known as a “hard” Brexit.  Just days after their departure, Theresa May announced unanimous agreement from her cabinet ministers for a “soft” Brexit with the release of the white paper detailing the proposed blueprint for UK relations with the EU.  A soft Brexit means that the UK would abide by most of the EU rules to allow British companies to easily trade with the EU member states.  May said the white paper “delivers on the Brexit people voted for [in the June 2016 referendum]…  They voted for us to take back control of our money, our law, and our borders.  That is exactly what we will do.”  But, the Prime Minister did concede that her proposal was a compromise meant to protect jobs that rely heavily on trade with the EU, to ensure that a hard border is not erected between Northern Ireland and Ireland, and to adhere to the 2016 referendum decision.

The UK is hoping the EU will back the proposals outlined in the white paper so an exit deal can be reach this fall, ahead of the UK’s official EU departure on March 29, 2019.

Even if the EU backs the proposals, a soft Brexit is deeply unpopular with the hardliner UK politicians wanting to leave the EU as it would prevent the Britain from controlling immigration—one of the main reasons why voters elected to leave the EU.  Jacob Rees-Mogg, chairman of the European Research Group, said it was a “bad deal for Britain” and that “it is not something I would vote for, nor is it what the British people voted for.”  Former Brexit Secretary David Davis said in an article that appeared the Financial Times on July 15 that “This [soft Brexit] jeopardizes the opportunities offered by Brexit” and that “the chance to become a credible trading partner will be compromised, and we will be unable to strike free-trade deals.”

May defended her plan as the only viable option and urged lawmakers and voters to get behind it or “risk ending up with no Brexit at all.”  The Prime Minister said “I am going to fight for our Brexit deal — because it is the right deal for Britain”.

May’s tough stance on the issues raises fears that the UK and EU will fail to negotiate a deal on their future relationship before the March deadline.  The EU is already preparing for a scenario in which no deal is reached.  The European Commission warned in a communication to the EU member states published on July 19 that “there is no certainty that an agreement will be reached.”  It urged the member states to prepare for a “chaotic” Brexit and stated that:

  • There would be no specific arrangement on the future rights of EU citizens in the UK and UK citizens in the EU
  • Border checks would have to be re-imposed, and transport between the UK and the EU would be severely affected
  • The UK would become a “third country” with substantially less access to the EU single market

The UK government says it does not “want or expect a no-deal scenario”, but has also been busy making preparations in the event that a deal is not reached.  PM May told Members of Parliament on July 19 that the government would publish technical notices over the next few months to help businesses and citizens prepare for March 2018 in the event the UK leaves the EU without a deal.  The primary focus of these technical notices will be on ensuring the supply chains of basic services such as food, medicines, and transport.  The Department of Health has already announced that it would stockpile medicines in the event of a no deal Brexit.

Weeks after the release of the white paper, no deal has yet been reach between the UK and the EU.  Jeremy Hunt, the Foreign Secretary, says the chances of a no deal Brexit are “increasing by the day”.

This opens to door to the possibility for a new referendum for the UK to decide whether to leave the EU without an agreement or to remain a member of the EU.  Polling evidence suggests a narrow majority of those who would be in favor of reversing the 2016 Brexit referendum, but the margin is too small to confidently predict an outcome.