By Tamara Alliot, MMTA
The British public has spoken and the long and winding road to leaving the EU has started.
Those at the helm have the challenge of steering the nation to a prosperous new future outside the confines of the EU while avoiding the many pitfalls. Whatever your personal feeling on the matter, the political, social and economic uncertainty that has been unleased makes for truly interesting times.
At the end of November, MMTA member, Holman Fenwick Willan (HFW), put together an exceptional seminar asking for some ‘clear thinking’ on Brexit from an illustrious panel (with a mix of Bremainers and Brexiteers represented) The discussion was chaired by Radio 4 ‘Today’ programme presenter John Humphrys.
The panel consisted of:
Ruth Lea, economic adviser and Director of the Arbuthnot Banking Group
The Right Honourable Jack Straw, Home and Foreign Secretary under Prime Minister Tony Blair
Anthony Woolich, Partner and Head of Competition and Regulation for HFW
Joshua Rozenburg QC, British legal commentator and journalist
Sir Paul Jenkins QC, formerly the UK Government’s most senior legal official and the Permanent Secretary to the Attorney General
There were around 150 delegates the room, comprised of lawyers, insurers, bankers and representatives of large UK companies such as Virgin Atlantic and M&S.
Humphrys launched proceedings by asking the panel ‘Where will we be in 2 ½ years?’
(This timeframe being significant as the 2 years after the triggering of Article 50 will be completed and theoretically the UK could have left the EU by the then.)
Ruth Lea believes that a ‘hard’ Brexit, (out of the customs union and the single market), will be completed by this point with regulatory equivalence established for financial services and other industries. Lea also predicts that the UK economy in 2019 will be the same as if there had been no Brexit.
Rozenburg, however, was not convinced that there would not be major delays brought about by the Supreme Court verdict (due in January) on whether Ministers can go ahead with Brexit or if a vote by MPs is required (which should, however, be in line with their constituents’ views). Rozenburg’s belief is that the major sticking point would be in the House of Lords where questions and clarifications could drastically slow the process of triggering Article 50 in the ‘Spring’ of 2017. Interestingly, a Member of the House of Lords in the audience believed that there would not be any undue delay caused by the Lords.
Other pertinent points raised included the uncertain future of some European countries at the moment, with elections in France and Germany during 2017, and the change of the EU Parliament in Summer 2019.
The attitude of the European Parliament to the UK’s decision should not be underestimated, which perhaps could encourage unnecessary delays and barriers. It does seem unlikely, however, that a General Election will be called in the UK before 2020, according to Jack Straw, so this is not likely to be a factor in delaying the process.
Humphrys’ second question was simply ‘What do we mean by ‘go’?’
As a background note, during the campaign for the ‘Leave’ side, slogans such as ‘taking back control’ were used abundantly.
The government has been shy on their intentions according to Ruth Lea. During the last Conservative party conference, Theresa May said she wants to control immigration. This means that we would by default have to leave the EEA (European Economic Area). The 4 freedoms guaranteed by EU Membership are free movement of goods, freedom of movement for workers, right of establishment and freedom to provide services and free movement of capital. Only taking one part of the deal is not an option if May is serious about controlling immigration from EU countries.
Adding further weight to the argument, it was emphasised that the single market and the customs union are not the same thing, and that if we stayed in the EEA then the EU Court still has power, therefore staying in the EEA would be a very ‘soft’ Brexit indeed, and unlikely to go down well with Brexiteer voters.
It seems, however, that immigration is unlikely to be curbed in total numbers, but rather a non-discriminatory approach between EU and non-EU citizens established. Everyone will probably be required to apply for work visas on an even footing, but whether this is what the general public has in mind when they demand control of immigration from Brexit remains to be seen.
Another point from the panel is that there is unlikely to be a ‘bonfire of regulations’, as industries will need to stay compliant in order to access markets; rather, EU laws will be transferred into British laws.
Sir Paul described the situation as the biggest bureaucratic challenge in peace time, with the UK hugely dependant on things like Competition Law, as well as 140 EU institutions currently being referred to in domestic law.
Mr Straw saw a more pragmatic solution to the issue of laws. He used the example of former British colonies that have continued to use a base of British law for their own laws. A more copy and paste approach could save money and time he believes.
I have to admit that some of the debate on the legal basis of some laws and mention of Henry VIII clauses* was slightly over my head, but perhaps this just highlights the complexity of what the country is facing.
*see glossary
The third question posed to the panel was: ‘Trump presidency: Good or bad?’
After the inevitable witticisms, the Trump presidency was certainly not seen as negative in terms of Brexit and in establishing a potential trade deal with the US. There was confidence that positive relationships have already been forged between the Trump team and British diplomats.
Although the Trump presidency may not be worrying in this aspect, the audience member from the House of Lords brought a more sobering view that Trump’s views and policies go far beyond trade and business and that his views on Iran, torture, climate change and NATO must not be forgotten. These, in his view, are the questions that matter most about Trump.
It was agreed that maintaining the intelligence relationship with the USA is of paramount importance for the future.
The panel members were also of the opinion that it may be easier to make trade deals with the US without the EU. TTIP (the proposed EU-USA trade deal) is probably already dead in the water.
Humphrys’ then opened the floor to questions from the audience:
Hard Brexit looks certain. What about trans-national events? Climate change, war in the Middle East, African migration etc.
Trilateral agreements between the UK, France and Germany are key in this context. Within Europe, only the UK and France spend on defence, and Germany makes armaments. Therefore, separate agreements between these three countries will tackle transnational events.
It is important to note that due to the intelligence relationship between the US and UK, other EU countries will not want to lose this access through the UK.
What about transitional regulations?
We will probably end up with similar or identical regulations, but there will be uncertainty for the next 2 years (or 18 months as recent updates have indicated). The panel used aviation as an example; if there is no agreement or extension within in the time limit then treaties will cease to exist and planes will not be able to fly between the UK and US. This seems like a ‘scaremongering’ scenario, but in this case insurers would not insure the planes to fly if no solution is found.
What about Scotland, Northern Ireland and Wales?
As we are in a union, the decision of the British parliament is final. The border between Northern Ireland and the Republic of Ireland must be kept open. It is not part of the Schengen zone so panellists were of the opinion that an additional agreement can be made to resolve this issue.
My general impression of the opinions expressed by the expert speakers was ‘this is what’s happening, so let’s make the best of it’. There was some sense of positivity, but the overall theme of uncertainty for a number years was prevalent. Some of the UK’s most important trade partners have already approached and signalled their willingness to negotiate. One additional point to make is that there was no questioning of the legitimacy of the referendum from the panel. Everyone believed that the will of the British public should be followed whether for better or worse.
Glossary
European Economic area (EEA) – The European Economic Area is the area in which the Agreement on the EEA provides for the free movement of persons, goods, services and capital within the European Single Market. The EEA was established on 1 January 1994 upon entry into force of the EEA Agreement.
Customs Union – The European Union Customs Union is a customs union which consists of all the member states of the European Union, Monaco, and some territories of the United Kingdom which are not part of the EU. Some territories within the EU do not participate in the customs union, usually as a result of their geographic circumstances. Besides the EUCU, the EU, through separate agreements, is in customs unions with Andorra, San Marino, and Turkey, with the exceptions of certain goods
Single Market – The Single Market refers to the EU as one territory without any internal borders or other regulatory obstacles to the free movement of goods and services. A functioning Single Market stimulates competition and trade, improves efficiency, raises quality, and helps cut prices. The European Single Market is one of the EU’s greatest achievements. It has fuelled economic growth and made the everyday life of European businesses and consumers easier.
European Parliament – The European Parliament is the directly elected parliamentary institution of the European Union. Together with the Council of the European Union and the European Commission, it exercises the legislative function of the EU. The Parliament is composed of 751 members, who represent the second largest democratic electorate in the world and the largest trans-national democratic electorate in the world.
European Commission – The European Commission is the executive body of the European Union responsible for proposing legislation, implementing decisions, upholding the EU treaties and managing the day-to-day business of the EU. Commissioners swear an oath at the European Court of Justice in Luxembourg, pledging to respect the treaties and to be completely independent in carrying out their duties during their mandate.
Henry VIII clauses – The Government sometimes adds this provision to a Bill to enable the Government to repeal or amend it after it has become an Act of Parliament. The provision enables primary legislation to be amended or repealed by subordinate legislation with or without further parliamentary scrutiny. Such provisions are known as Henry VIII clauses, so named from the Statute of Proclamations 1539 which gave King Henry VIII power to legislate by proclamation.
