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154: Brexit: where next?

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154: Brexit: where next?
Leave your thoughts Stuart Thomson

By Stuart Thomson

This blog is based Stuart Thomson’s talk on Brexit at a 2016 ERSA conference.

With the immediate shock over the European referendum result diminishing and with politics taking a well-earned break over the summer, now is the time to take stock over what Brexit really means for you.

There is no doubt that the amount of change in politics has been quite difficult to keep up with. Whilst we have a new Prime Minister and Cabinet in place, politics hasn’t taken a complete break as another leadership campaign is taking place in the Labour Party.

So we now have our new Government that has to decide what Brexit really means. Theresa May is in charge and has the people around her that she wants. Those in favour of leaving the EU are now responsible for doing the deals to get us out and make a success of it. If they don’t, then she knows who to blame.

So what do we know so far?

Speaking at the launch of her short-lived national campaign, May couldn’t have been clearer:

‘There are politicians – democratically-elected politicians – who seriously suggest that the Government should find a way of ignoring the referendum result and keeping Britain inside the European Union’; and

‘Brexit means Brexit’.

But a lot of the emphasis was on the (potentially) radical view of the country she has:

‘I want to see an energy policy that emphasises the reliability of supply and lower costs for users. A better research and development policy that helps firms to make the right investment decisions. More Treasury-backed project bonds for new infrastructure projects. More house building. A proper industrial strategy to get the whole economy firing. And a plan to help not one or even two of our great regional cities but every single one of them.’

The speech also had a lot on the radical reform of the corporate sector:

‘We’re going to have not just consumers represented on company boards, but employees as well.’

In her first speech as PM, May promised to be a One Nation Conservative.

Brexit

Before he left office, David Cameron put Oliver Letwin in charge of the Brexit Unit (actually the Europe Unit) in the Cabinet office, headed by Oliver Robbins. He is now the Permanent Secretary in the Department for Exiting the EU headed by David Davis MP. It has a team of around 40 civil servants at the moment expected to rise to a couple of hundred in due course.

The Department is “responsible for overseeing negotiations to leave the EU and establishing the future relationship between the UK and EU.”

It is drawing in EU focused people from across government especially the Foreign and Commonwealth Office but also from the UK Perm Rep as well.

May also established the Department for International Trade – headed by Dr Liam Fox – which takes on responsibility for trade and investment policy from the rebranded Department for Business, Energy and Industrial Strategy. It is “responsible for promoting British trade across the world and negotiating new trade deals with non-EU countries”.

Boris is Foreign Secretary and will meet world leaders but won’t seemingly talk about the EU. He is a glorified cheerleader for the UK around the world, apparently doing what he did for London during his time as Mayor.

But…

So we have some of the architecture in place but there is a massive skills shortage – 300 people are needed just to do the trade deals, and that number could rise.

I heard a talk recently and it seems that Australia has around 160 people dealing with trade negotiations under normal circumstances when there are not any particularly complex ones taking place! Deals are generally easier to put in place if they are only focused on markets and do not

And don’t forget there are two things going on – the unpicking of the relationship with the EU and forging the new trade relationships around the world after we leave.

It is little wonder that a number of bodies have already held talks with the Treasury about how they can help.

Yes, we will have some negotiators returning from Brussels but very few.

The other side of things is that the UK civil service has been hollowed out. Many senior people have long gone and in those areas where the EU often took the lead, we have left them to it.

And in trade terms, before we talk to individual countries, we need to have decided what to do with bodies like the WTO. None of this will be quick to sort out.

Overall thoughts

David Davis has indicated that he wants to trigger Article 50, the formal getting out process, ‘before or by the start of 2017’. That makes the discussions taking place now, over the summer, of critical importance. The approach to Brexit is already being sketched out behind closed doors. There could also be disagreement between the three Brexiteers – Davis, Johnson and Fox – about what Brexit looks like. Normal politics will soon be resumed.

Some companies have already been asked to provide input to this process. Some Departments have started their own Brexit units as well so they can work out what they want from the negotiations as well.

So it is critical that sectors and companies get involved. Don’t leave it up to others.

The normal life of Government will continue to be interrupted as well. Despite the claims, it is not business as usual.

Osborne may have abandoned the deficit target before he left office but there isn’t a large pot of cash to splash around. There is also not currently a suggestion that May is a huge fan of the public sector.

There are all the follow-ons from the eventual deal with the EU – which might include who can come in / out of the country, the skills they have, and could be directly related to the trade deals as well. There are no guarantees about what immigration will look like.

There are of course issues related to the future of the UK as well…

8 August 2016

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