2 months after ‘Brexit’ vote, Britain’s push to leave EU is a muddle

By Stephen Castle

New York Times

LONDON >> Since Britain’s vote in June to quit the European Union, its government has promised repeatedly to make a success of withdrawal, known as Brexit.

More than two months later, however, it still cannot say how.

On Wednesday, Prime Minister Theresa May called Cabinet ministers to a brainstorming session about the withdrawal, pledging to examine “the next steps” for Britain and to identify “opportunities that are now open to us as we forge a new role” in the world.

However, in ministerial offices, where turf wars have rapidly broken out, advocates of the withdrawal have discovered that four decades of European integration have left Britain so deeply embedded in the 28-nation bloc that there is no easy escape route.

British officials currently have neither the expertise nor the staff for the tortuous exit negotiations, which are likely to last at least three years and possibly much longer. Some analysts have even said they might take a decade.

But perhaps what they lack most of all is a game plan.

“At the moment, they haven’t got a clue,” said Charles Grant, director of the Center for European Reform, a London-based research institute. “It is such a difficult challenge with such disparate leaders at the top of government, with such different views, that they are trying to work out how to respond.”

Beneath the fog lie fundamental questions about how much economic pain Britain should risk to restore powers to its national Parliament and to curb immigration from the European mainland.

For example, ministers must decide whether, to gain the restrictions they want on immigration, they are willing to endanger the health of London’s financial center, which contributes billions in tax revenues, by sacrificing its unfettered access to European markets.

Presiding over this is May, who argued against the withdrawal before the referendum (albeit tepidly), and who succeeded David Cameron in the political meltdown after the June 23 vote.

Perhaps to compensate for her support of EU membership, May installed supporters of leaving the bloc in critical, rival positions: the flamboyant Boris Johnson as foreign secretary; the more hard-nosed David Davis at a ministry created to oversee the withdrawal; and a right-wing former defense secretary, Liam Fox, at international trade.

The three men do not like one another much and, perhaps mischievously, May has instructed them to share the use of Chevening, a 115-room country mansion in Kent, southeast of London, that is normally assigned to the foreign secretary but that is now nicknamed Brexit Towers.

Tensions stemming from the turf wars surfaced in a leaked letter in which Fox asked Johnson’s Foreign Office to surrender economic diplomacy functions to the Trade Department.

Because Britain’s trade deals are currently negotiated by EU officials, the British government is chronically short on expertise and has had to call in expensive external consultants while starting to recruit its own specialists.

May says she will not start formal negotiations on the exit before the end of the year. Once she does so — by invoking Article 50 of the EU’s Lisbon Treaty — a two-year deadline will loom, putting Britain under pressure to cut a deal or risk finding itself with no foreign trade agreements and, perhaps, tariffs on its exports to Europe.

In a statement after Wednesday’s meeting, May’s office said there was a clear view among ministers that there should be a “unique” deal for Britain, with “controls on the numbers of people who come to Britain from Europe but also a positive outcome for those who wish to trade goods and services.”

Legally, no global deals can be struck until Britain leaves the EU, a process that will create economic losers at home. As a member of the bloc, Britain has access to Europe’s $19 trillion integrated economy of more than 500 million citizens.

To obtain access to that market, Britain currently accepts free movement of workers across European frontiers. The opportunity to regain control of immigration, however, was perhaps the most fundamental issue championed by the campaign to leave.

Britain also pays into the EU budget, money that many advocates of withdrawal have argued should be spent at home, particularly on the hard-pressed National Health Service.

Supporters of leaving the bloc say that Britain’s economic muscle will allow it to negotiate a better deal. (Johnson has said that his “policy on cake is pro having it and pro eating it.”) But there is no sign yet that the EU will breach its principles by allowing Britain full market access without the usual quid pro quos on issues like freedom of movement.

One British strategy would be setting political objectives — like regaining national sovereignty, rejecting free movement and renouncing the right of the European Court of Justice to trump British law — and fitting the economy around such aims.

The alternative tactic would be to prioritize key economic sectors — particularly London’s financial services industry — and to try to retain as much access to the single market as possible, while compromising only the minimum over free movement, European law and budget contributions.

For the financial sector, a central issue is retaining “passporting” — the right that banks and finance companies based in London currently have to offer services throughout the European Union.

British businesses, like carmakers, want to avoid export tariffs, and many employers want the flexibility to continue recruiting European workers.

“What is interesting, is how little Theresa May has said,” said Anand Menon, professor of European politics and foreign affairs at King’s College London. “It would be good to get some sense of whether the government wants absolutely no free movement of workers or is willing to accept some free movement; do they want to retain passporting? Is the priority to avoid a situation where there are tariffs on cars?”

Some wonder how useful access to the single market would prove in the long run, even if it could be negotiated. That is because Europe’s market is not written in stone but is the sum of various European laws, many of which are updated regularly.

Overall, Grant said that for Britain, “the trade-offs will be painful, and that’s why the government has said very little: It doesn’t want to admit that it is in a pickle.”