Giving up control: where are we and what next?

European Commission President Juncker greets Scottish First Minister Nicola Sturgeon on arrival at EU HQ in Brussels, June 29, 2016.Geert Vanden Wijngaert / Press Association. All rights reserved. With the total vacuum in political leadership at Westminster,
what comes next, after the Brexit vote, is less than clear.

From the discussion so far, it looks as if the UK may spend
the next few years arguing and negotiating over how it might get some access
back to the EU’s single market, with somewhat less freedom of movement than now.
Given that, while still in the EU, the UK currently has full access to that
market and a significant voice and vote in the rules and standards of the
single market – and it will soon have none – this is a bizarre enough result of
the Brexit vote, not least given the slogan of ‘taking back control’ – perhaps
‘giving up control’ would have been more accurate.

A typical UK debate?

But there is something familiar too in this debate over
whether we can get almost as much access as Norway, or a trade deal like Canada
or an association agreement like Ukraine. Once again the UK seems to be
focusing on the EU only as an economic market.

In the face of challenges from climate change and terrorism
to Putin’s Russia,  the refugee crisis,
relations with Turkey and conflict in the Middle East, there is little
discussion of the fact that the UK will no longer be in the room with the other
27 when they discuss these issues and come to common positions and policies.

The UK may get consulted afterwards with other neighbouring
countries. It may get invited to support or back EU common foreign and security
policy positions already made, or climate change deals already struck. But it
will be a weak influence outsider.

For now, the Brexit debate seems focused on triggering Article
50 and single market access. Inevitably, there is also discussion of why the UK
voted for Brexit, who gets to determine what sort of deal the UK asks for, and
whether, as MP David Lammy – and the LibDems – have asked, there is any way
this decision can be reversed.

The only ones with a contingency plan for Brexit – the
Scottish National Party – are bounding ahead, holding high level talks in
Brussels, setting up a committee of EU experts to explore options, and stating
clearly their desire to remain fully in the EU.

The EU 27, as well as debating how to handle Brexit, are
moving on with their large list of serious challenges and policy demands –
Brexit may stay top of the UK’s agenda for years to come, but it will be only
one of many questions on the EU 27 leaders’ list, and the 27 are visibly
adjusting to the new reality already. IMF head, Christine Lagarde, stepped into
the Brexit debate with simple clarity this week, saying Brexit may actually
help the EU 27 move ahead in many areas where the UK was the main block to
progress.

When may Article 50
be triggered and can we change our minds?

Article 50 has never been used and contains some
ambiguities. Even before it is triggered, a legal challenge has been mounted as
to whether the Prime Minister, when we have one, or Parliament gets to trigger
it.

If there is a vote in Parliament, will all Tories support
this? LibDems and SNP will presumably vote against and will Labour vote for, or
abstain?

Labour has somewhat bizarrely rushed to say the vote is
definitive and Article 50 must be triggered straight away. While the vote must
be respected in the short term, what if public opinion changes as the economy
goes into recession or the ramifications get clearer? Labour for now seems unprepared
to continue to argue for the EU, engage with the public and explain the damage
Brexit is already causing and is likely to cause in the future.

Nor is this just a question of Corbyn and McDonnell. Plenty
of Labour figures rushed in the last few days of the referendum – including Ed
Balls – to say that something must be done about free movement of labour.

But if Labour won’t defend free movement, it can’t argue
that the UK should stop and consider if Brexit is really what it wants, nor can
it even argue for a Norway-style EEA deal which requires free movement. The
tens of thousands on the pro-EU demonstration last Saturday were clear on their
desire to stay in the EU and to keep the benefits of free movement – for now
Labour is not speaking for this pro-EU movement.

But Labour looks set to stay in opposition – incapable for
now, unlike the LibDems, of even arguing for an early general election. Theresa
May, the lead Conservative leadership candidate, has said she wouldn’t trigger
Article 50 this year. Yet the longer the delay, the more the EU 27 will move
ahead with plans and policies on the basis that the UK will soon be gone. The
EU 27 did not want the shock and crisis of Brexit – but that does not mean they
will be particularly open to it being reversed as time goes on, especially
given the lack of significant pro-EU leadership in the two main Westminster
parties.

If May is prime minister – her euroscepticism well known,
despite her low profile support for Remain – is she at all likely to want to
ask the EU 27 for a new deal and a second referendum? It’s possible but
unlikely – and whether the EU 27 would offer anything additional is a very moot
point.

Article 50 is silent on the question of whether, having
triggered the exit process, a member state can withdraw its notification. It is
clear that, having left, any such state would have to apply to join again
through normal procedures. But there is nothing about withdrawing in the middle
of negotiations. While the UK for now is a long way from looking like doing
that, it is a potential option – but one that would need the other EU 27 to go
along with it.

This is where the huge difference lies between the UK’s
referendum, and the times when Denmark and Ireland rejected an EU treaty, only
to go ahead after a second referendum. The EU couldn’t go ahead with the new
treaties (Maastricht, Nice, Lisbon) until the Danes and Irish voted again. Meanwhile,
Denmark and Ireland had not suggested leaving the EU, and EU business carried
on as normal. Having voted to leave, the UK has created a new EU reality and
one it would find hard to overturn – it has damaged the EU but not stopped it
from moving forward.

It has been suggested that there should be a referendum on
the new deal agreed between the UK and EU, once the exit talks are complete.
But, as considered below, the exit talks may be separate from talks on the new
deal – so the UK may have left the EU before its new relationship is clear.

Nor is it clear what such a referendum would focus on –
would voters be asked to choose between the exit deal and staying in the EU? If
voters simply rejected the exit deal, would the EU be ready to negotiate
another one? And if it was, somehow, set up as a choice between staying in or
the exit deal, could this happen within the 2 year time scale of Article 50,
and after such an upheaval would the EU in two years’ time still welcome the UK
staying in?

If the UK were to have a second referendum, it would make
more political sense to have it relatively soon, on the big question of staying
in, rather than on the exit deal – perhaps in the first half of next year. But
it could only do that if there had been a significant and sustained shift in
public opinion – and if there were political leadership making the case for
staying in the EU if public opinion did change. At the moment beyond the
LibDems, there is no such leadership.

Does the UK have to
leave, through Article 50, before agreeing a new trade deal with the EU?

How long it may take the UK to sort out a new deal with the
EU is quite unclear – if it wants a specific deal like Canada (which mostly
excludes services), it may take several years.

The UK, for now, does not know what sort of deal it wants.
It was one of the more peculiar – and outrageous – aspects of the referendum
debate, that the Leave side did not set out any one clear option for what
Brexit meant. This though has the advantage that the public cannot be said to
have voted for any one particular model. And the public as a whole – not just
those who voted for Leave – have every right to have a say on what they would
like to come next, making calls for a general election on that basis, quite
appropriate.

Article 50 also implies that the two year exit negotiations
are only on the details of leaving – UK staff in the EU institutions, budget
contributions, rights of EU 27 businesses and citizens in the UK, and UK
businesses and citizens in the EU. The government, and lead candidate Theresa
May, have refused to give reassurances already to EU citizens in the UK that
they will be allowed to stay – creating great uncertainty, and possibly leading
to a reverse drain of people and labour from the UK back to the continent.

But Article 50 also states: “..the Union shall
negotiate…an agreement with that State [the UK], setting out the arrangements
for its withdrawal, taking account of the
framework for its future relationship with the Union.”

This then suggests there will already be parallel
discussions on the future relationship of the UK with the EU. And indeed that
is only logical. If the UK were to go for full European Economic Association
membership like Norway (unlikely given it means full freedom of movement), then
any EU citizens and businesses in the UK would have full rights to stay under
that, so the Article 50 exit deal would need to take account of that.

The European Commissioner for trade, Cecilia Malmstrom, told
the BBC, the negotiations for a future trade deal would come after the exit
deal, and the UK would be trading with the EU under WTO rules after exit and
before the new deal was done. But this looks like part of a big turf fight
between the European Council (the 27 leaders) and the Commission, over who
negotiates what and when.

The UK’s future relationship with the EU may anyway cover
more than trade – from foreign policy to police and judicial cooperation. And
while the Commission does negotiate trade deals with third countries, whether
and when the Council may hand over talks on exit criteria to the Commission,
and how much they will already have agreed at that point is unclear. Article 50
is clear that the guidelines for exit talks are set by the European Council.

It is also possible that both sides, the UK and EU, could
agree an interim transitional deal whereby the UK left the EU – giving up its
vote and seat in the Council – and joined the EEA until the completion of its
talks on its own bespoke relationship with the EU. These options will depend as
much on political will and negotiation as on the legal options.

The UK will also need to negotiate trade agreements with
many non-EU countries. This is likely to take several years, and until there is
clarity on the future EU-UK relationship, it will be hard to conclude those
other deals anyway.

Constitutional crisis

While Westminster leaders flounder, in Scotland, the Scottish
Parliament last week agreed – with Labour, Green and LibDem support – to
explore all options that might keep Scotland in the EU. The SNP has made it
clear that, at this point, this does not only mean through independence, but
rather exploring how Scotland could retain access to the single market  (possibly with London and Northern Ireland)
even if England and Wales do not

Whether Scotland could have some sort of differentiated
relationship with the EU compared to the rest of the UK is certainly worth
exploring – although the implications of such an outcome will also depend on
what sort of deal the rest of the UK goes for. The Scottish Parliament may well
also come into conflict with Westminster when the Brexit process requires
removing the primacy of EU law from the Scotland Act.

But with both main parties in Westminster in disarray, there
is almost no focus or attention from them on the rapidly moving political
dynamics of the Scottish debate – dynamics that are quite different from 2014,
when Brussels was clearly opposed to Scottish independence, with much more
positive mood music now.

‘Little England’

It is less than two weeks since the referendum vote, yet
British politics looks like being consumed by it for a long time to come. Under
David Cameron, the UK was already adopting a ‘Little England’ approach to EU
and wider foreign policy – even at a time of so many global challenges –
letting Germany lead on Ukraine and sanctions on Russia, stepping back from the
refugee crisis, less influential on climate change.

The UK has voluntarily thrown itself into this turmoil. How
and whether and in what form it comes out of it will now depend not only on
Westminster but on the EU 27, on Scotland, on markets. How and why the UK got
itself into this  position will continue
to challenge and baffle commentators now and in the future.