Britain and Europe

Brexit: Where next following the high court’s Article 50 ruling?

15 November 2016

Labour’s bottom lines on the invocation of Article 50 must expose the incoherence, contradictions and rank populism of the Tory approach to Brexit

Roger Liddle

The high court ruling made me proud to be British. We do not, at least yet, live in a plebiscitary elective dictatorship. We live under the rule of law which ministers have to obey. Whether we should celebrate the freedoms of the British press is another matter. In principle, yes of course, but what has been shocking is the tardy way at best in which ministers have been prepared to back unequivocally judges whose only means of defence is in the clarity and force of their rulings. For the attitude of the British government to the high court to be compared widely in the rest of Europe to the governments of Hungary and Poland is an indication of how Britain’s standing with our closest friends and partners is worryingly on the slide. This does not bode well for a civilised and successful Brexit.

Inevitably the greatest focus is on the political consequences of the ruling, assuming it is upheld by the supreme court. While the high court ruling does not make a general election next year certain, it certainly raises the stakes. It is important though to understand that the first person in the firing line is not Labour, but Theresa May.

Theresa May’s tactic since becoming prime minister has been to prioritise the unity of the Conservative party over any clear definition of how she sees the national interest. In her party conference speech, she made crystal clear her ‘red lines’ for the Brexit negotiation – Britain regaining sovereignty over its borders and being no longer subject to the jurisdiction of the European court of justice (ECJ) – while showing no apparent understanding that such crowd-pleasing statements make it impossible for Britain to remain a full member of the single market or gain anything like ‘full access’ to it. She put politics before the interests of the economy and jobs without either understanding the power of her position as prime minister to shape expectations by her words or not caring which is difficult to believe. Sterling plummeted as a result.

When Nissan made clear that this might prejudice future investment in the UK, the prime minister pledged that they would not face tariffs or cumbersome bureaucratic regulations such as the EU’s ‘rules of origin’. The government has refused to publish the ministerial letter containing the precise nature of the promises made to Nissan. It seems likely that she pledged her honour to the Japanese that somehow she would see them right, rather than detail any specific arrangement such as continuing British membership of the EU customs union that would guarantee their position. Why? To admit the possibility of remaining in the customs union could have triggered a Liam Fox walkout from her cabinet.

In Fox’s worldview, membership of the customs union greatly constricts Britain’s ability to negotiate the hypothetical worldwide trade deals that Brexiteers imagine are a mere signature away, if only we can quickly be freed from the constraints of EU membership. Especially now that Donald Trump is about to become US president, Liam Fox and the rightwing Brexiteers will imagine that a British-American bilateral trade deal is on the cards in weeks not months. No thought is given to the price Britain would have to pay in market access or specific political support for Trump’s dubious favours

Conservative party unity requires the prime minister’s appeasement of Fox

In other words, ideology dictates sacrificing the ‘free trade plus’ benefits of the European single market, accounting for nearly half our exports, for the wholly uncertain prospect of favourable free trade deals with the rest of the world – which in practice can only be negotiated once the precise terms of our EU exit are finalised. Fox’s policy preferences therefore prioritise years of negotiating uncertainty over the certainties of the ‘free trade plus’ with Europe we presently enjoy. And he never explains that free trade deals with the rest of the world would come at a price for Britain – not least increased immigration as countries like India would demand greater visa access for their nationals to work in the UK. Yet Conservative party unity requires the prime minister’s appeasement of Fox.

Similarly, May has promised the Irish government that Brexit will not mean the return of internal borders in the island of Ireland. Few on the Irish side understand how this will be possible. In their view, how can there not be border controls for goods (for example the northern Irish beef sold into southern Irish markets) if Britain is no longer a member of the customs union. As for people, how can free movement across the Irish border be maintained if Britain insists that free movement for EU citizens across its borders is no longer available? The UK government can hardly expect the Irish Republic, as a fully committed and loyal EU member state, to disapply EU free movement rules at its own external border. This all depends on a bold assumption that cutting immigration to the “tens of thousands” can be achieved by internal controls within the United Kingdom and not by checking immigration status at the border.

Had the government been able to invoke Article 50 by royal prerogative, it could have continued to mouth these contradictions perhaps indefinitely, perhaps hoping that it can reach agreement by the spring of 2019 on an interim transition arrangement with our European partners that resolves none of the long-term hard choices for Britain, but enables the prime minister to say she has at least negotiated a date for our withdrawal from the EU. My guess is the crunch will come a lot sooner, possibly after the German elections next September. Then in all likelihood Britain will be told formally in the European council what British ministers are being told on their every visit to Brussels and continental capitals. The May government’s illusions that Britain can enjoy a better deal outside the EU than it had within, are fanciful. And the rest of the EU would maintain that stance on any transitional deal too: in other words if Britain wants to keep membership of the single market while some comprehensive and specific free trade deal is negotiated years ahead, it cannot ‘take back control’ of its borders at the moment in 2019 that this interim deal would come into effect. If Britain prioritises politics over economics, as the May government is doing, how can it complain when our EU partners do the same?

The high court ruling

The high court ruling has, however, made it much harder for the government to prolong its obfuscation of Britain’s negotiating options on EU withdrawal. For the necessary Act of parliament to invoke Article 50 will be almost certainly amendable in ways that expose the government’s contradictions. But this will require subtle, not full frontal opposition. Foolish talk of defying the invocation of Article 50 should be immediately set aside. It leaves remainers open to the charge of attempting to defy the will of the people and should be ruled out forthwith. The proposal to attach to the Article 50 bill an amendment requiring a second referendum on the terms is similarly misguided. A second referendum would be pointless unless the adverse economic consequences of Brexit had already brought about a significant switch in public opinion. The demand for a second referendum, if it comes, will come from the people not the elite. It is possible, though by no means certain, that by 2019 a demand for a second referendum might be justified and plausible. But it is neither right nor politically wise to press that case now. Maybe people like me will be proved wrong and a deal that achieves the ‘best in the best of all possible worlds’ will turn out to be possible! We shall see.

Rather in the forthcoming legislation for the invocation of Article 50, the opposition should focus on key questions of process and set meaningful tests for the success of the negotiations. On process, the crucial question is whether parliament will have a right to form a judgement of the terms before the deal is finally done. Parliament should not face a ‘fait accompli’. That requires full scrutiny of the negotiating process. Parliament should insist that at every stage it is informed as thoroughly as the European parliament will be. It is not acceptable for Theresa May to deride the information the European parliament will receive as of right as a “running commentary” that she feels entitled to deny the Commons and Lords.  It would indeed be paradoxical if the return of sovereignty from Brussels to Westminster – the essential Brexit demand – were to be achieved by a negotiating process that proved less transparent and less accountable to parliament, than occurs in the allegedly less democratic EU itself.

As for tests of success for the withdrawal negotiation, there should follow one governing principle alone: the avoidance of a so-called “hard Brexit”. The much derided “expert” evidence that this will prove economically extremely painful is in truth overwhelming. Amazingly the present Conservatives sound like Ukip in dismissing the warnings of business and the City as cries of pain from unrepresentative, privileged elite. This is not how a responsible government should behave. Labour governments have never behaved like that with the partial exception of one short period in 1974-5. Theresa May’s ministers are toying with a profoundly dangerous populism. The profitable business activities that a “hard Brexit” threatens finance the tax revenues which fund our NHS and welfare state and on which hundreds of thousands of decent well-paid jobs depend. The British public fully understand this. Liam Fox and David Davis, along with the other Brexiteers, are living together in some alternative reality.

The argument that must be made against “hard Brexit”

However, the argument against a “hard Brexit” requires an essential subtlety of approach. Jeremy Corbyn’s ‘Brexit bottom lines’ are not bad in themselves but they have one fundamental vulnerability: they completely dismiss the issue of migration and ‘free movement’. The lesson of the referendum campaign was the fundamental mistake of the remainers in ignoring public concerns about migration. It would be ludicrous to repeat that mistake in the debate about the conditions under which Article 50 should be invoked.

Labour may be at risk of a confused muddle on immigration. But we should always remember that it is the Conservative government that lacks a credible and coherent migration policy. Theresa May continues to insist that she is committed to the goal of reducing net migration to no more than tens of thousands every year. The home secretary, Amber Rudd, was slapped down by No 10 when she suggested that target might be abandoned. The government even refuses to remove overseas students from its immigration its target, eyeing instead the opportunity to crack down harder on alleged “abuses” in the student visa system. Such an approach risks weakening one of Britain’s greatest sources of international competitive strength, our universities.

Yet despite this blatantly political posturing, the government refuses to explain what the objective of its post Brexit immigration policy will be. Is the aim to bring down migration to the tens of thousands or is it not? Ministers refuse to answer. Rather the debate, while ignoring the question of the substantive policy goal, has shifted onto the superficially easier ground of process. Leaks suggest that the government wants to avoid a full visa regime on travellers to Britain from the rest of the EU and for good reason. British holiday makers and business travellers will not take kindly to the reciprocal imposition of visa restrictions on their travel to the continent. But if controls at the border are not to be imposed, how can the government devise a new system that limits work permits to EU migrants. The government has apparently rejected a comprehensive national immigration ‘points system’ on the grounds that this would place the whole of the British labour marker under some form of centralised bureaucratic control: it would also make it more difficult to maintain some form of preferential access to visas for EU over non-EU migrants. There is much discussion of regional and sectoral work permit arrangements, based around a presumption that the public acceptability of high-skilled immigration is much greater than for low-skilled immigration. City banks will be allowed to recruit skilled Europeans; Pret a Manger apparently not.

If the government is determined to enforce this goal of reducing substantially low-skilled economic migration (so that the total number for all net migration falls, according to their election pledge, to the ‘tens of thousands’) this policy could prove an act of economic and social self harm of considerable proportions. It would at a stroke destroy the business models of many profitable taxpaying firms that depend on the ready availability of EU migrant labour. It would be a hammer blow to our hard-pressed public services, particularly the NHS and social care. It would result in cheating and illegal working in many corners of Britain’s largely unregulated labour markets, such as construction. Its failure as a policy to achieve its stated goal of cutting migration would be evident from the start: the populist reaction would only encourage xenophobia and hate crime. It would be bad for our diverse culture, our tolerance, our openness as a society: all the things that Labour must continue to celebrate from the rooftops.

So Labour’s argument and amendments on Article 50 should only contain careful and credible proposals for how migration should be managed. This is not about stopping migration or even cutting numbers substantially. But it is about tackling stresses and abuses and allowing better management of migration flows, while permitting the mobility of labour that is essential for a single market to function and ensuring reciprocal rights for EU and British citizens that choose to settle in each others’ countries. The first thing to be clear about is that real long-term reform of the British labour market depends on radical changes in domestic policy, not EU requirements. The problems of migration are largely a symptom of over-deregulation, not its cause. Yet there are legitimate concerns about free movement that need to be addressed. It has caused unacceptable social stresses in some areas and national governments must be free to address these concerns through a Migration Impact Fund and other measures. There is an issue of wage undercutting that the EU is currently trying to address through amendments to the Posting of Workers Directive: the principles of reform contained in that tirective need to be made operative in the circumstances of the UK. There may be room for temporary quotas and ‘emergency brakes’ as the EU is presently negotiating with Switzerland. As part of the terms of Brexit, Britain should be seeking rational reforms to free movement that do not compromise our continued full participation in the single market. But we will not achieve this by shouting abuse from the sidelines.

In other words, Labour’s bottom lines on the invocation of Article 50 should put the government on the spot. They should expose the incoherence, contradictions and rank populism of their positions and demand consistency and clarity. Such an approach cannot be cavalierly dismissed as ignoring the result of the referendum.

Photo credit: Ms Jane Campbell / Shutterstock.com