Hard Brexit, Soft Brexit, No Brexit

by George Hatjoullis

My first though at a title was ‘stupid is as stupid does’. I am quite exasperated at the number that voted Labour and are now claiming they did not vote for Brexit. The Labour position on Brexit was made clear in the manifesto. Labour supports Brexit. If you vote for a political party at an election you are voting for its manifesto. Ergo, you are voting for Brexit. The Liberal Democrats offered a no Brexit option. At the very least Remain Labour voters could have voted tactically and helped the LibDems in places such as Richmond. Thanks for nothing. You shot yourselves in the foot as well as us in the head.

The Labour manifesto may have had as much to do with the electoral outcome as the motivated youth vote. In many Labour marginal seats, where the Tories expected to make gains on the back of a collapsed UKip vote, many UKip voters opted for Labour. This would not have occurred without Labour’s clear Brexit stance. It was the old Labour voters returning to Labour that had as much to do with the electoral outcome as the new young voters. Some young voters understood the Labour position on Brexit but saw it as a ‘soft Brexit’ option. It seems many people are confused by the issue and are using terms that they do not really understand. Nothing new then.

A hard Brexit means leaving without an agreement with the EU. A soft Brexit means leaving with a negotiated agreement. There are a large number of possibilities for soft Brexit. The issue that seems not well understood is the matter of free movement of people. It is as important to the EU to have free movement as it is to our domestic xenophobes not to have free movement. This is where the irresistible force meets the immovable object. The question we should ask ourselves is what kind of deal is on the table if we insist on restrictions on free movement? Both the Labour and Conservative party insist on this restriction. Indeed it is the issue that enabled a small majority for the Leave camps. It is the promise that clawed back some Labour voters from Ukip.

The answer is probably not much of a deal. The Norway model, to which so many pay lip service, is not on the table. Norway has free movement. Indeed the Norway model is worse than just staying in the EU. The Swiss model requires free movement. The Turkey and Canada models do not require free movement but they are simply tariff agreements (actually the Canada arrangement is slightly more and similar to Norway and Switzerland on market access but carries more obligations). EU import regulations still apply. The alternative is to adopt World Trade Organisation rules or move to the Hong Kong and Singapore models which involve unilateral free trade. The latter means we drop all our tariffs and trade restrictions. The latter favours the City of London but not manufacturing, except perhaps the production of very high value added goods.

A soft Brexit will probably sit somewhere between the Swiss model and the Turkey/Canada model. The reason is the UK is a leaving member whereas Turkey and Canada have never been EU states. Prior membership, over 43 years, has established institutional linkages that offer more scope for continued cooperation, if there is a will. Nevertheless, the EU 27 hold all the cards (despite what the Leavers tell you). They will offer the UK continued linkages that benefit the EU. The number of shapes a soft Brexit might take is thus large.

In short if we are happy to accept free movement we may as well stay in the EU. If we insist on restricting free movement our best outcome is a customs union with some continued institutional linkages. If we cannot agree even this then we will end up with a WTO rule book or unilateral free trade.

 

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