11 April 2018

This is the text of a speech delivered by Open Europe Director Henry Newman at the “Brexit: Reconciling Different Perspectives” panel debate that Open Europe held in cooperation with the Martens Centre in Brussels, on 10 April 2018. 

We are approaching two years since the UK’s Brexit referendum and debate on both sides of the Channel has shown a strange and rather depressing circularity. In the UK we are still arguing over the merits of the decision to leave. Despite much noise, opinion polls broadly show that voters have not changed their minds. The country is still split down the middle, even if a significant majority now expects politicians to just ‘get on with it’. Meanwhile, despite a dip in the pound and the UK growing less than predicted, the economy has held up far more than the vast majority of economic commentators expected.

On the Continent, the UK decision – which after all is to exercise an option to leave which is specifically afforded in EU law – is widely dismissed. Sometimes it’s seen as a fit of xenophobia; or as British exceptionalism – a strange throwback to an (imagined) Britannia ruling the waves, as if Euroscepticism was a uniquely English phenomenon stoked by our tabloid media. Worse still, it’s too often ignored. We regularly hear that Brexit isn’t a key topic in European capitals or in Brussels itself. Perhaps…but to my mind there’s been too little serious consideration of why one of Europe’s most vibrant and innovative countries voted to leave. The UK is one of 28, but in economic size, Brexit is equivalent to 19 smaller members leaving.

If we are to reconcile different perspectives we need to understand them. In the year since the UK triggered Article 50, we’ve seen substantial political flux right across the Continent. Yes, we have seen the rise of Macron on an explicitly pro-European platform, but his victory over Le Pen and Mélenchon in the first presidential round was quite narrow. In Germany, Austria, Italy, the Czech Republic, and elsewhere we have seen a succession of political electoral upheavals.

All over Europe, voters are rejecting politics as usual and demanding change. I’m not saying that we should expect other members to leave the Union, nor that there’s a direct link between Brexit and Continental anti-politics movements, but rather that peoples across Europe want to see something other than business as usual. Surveys show public support for Brussels doing less not more. And rather than dismissing recent votes as populism, and ploughing ahead with the European project regardless, it’s the duty of political leaders to address these concerns.

President Macron has a bold vision of a reformed Europe, centred on a tightly integrated Eurozone with outer spheres of more peripheral associations. His vision isn’t one which I could entirely support, although I’m attracted to aspects of it. More importantly, Macron’s unlikely to win German support for his more radical ideas and we have already seen other members mobilising against it. But it’s important that there is this public debate about the future direction of the EU – even if its one that Britain can’t directly shape any more.

We need to see more flexible thinking, and a clearer determination to find a political solution to Brexit and more broadly to the fundamental concerns about the future of Europe which are shared by people across our Continent.

We have heard endlessly about the UK’s red lines and how these limit Britain’s possible future relationship with the bloc. To some extent of course this is perfectly legitimate criticisms: it’s Britain’s decision to leave the EU and also not to seek a formal relationship with the Single Market. But there’s also a great deal of muddled thinking and disingenuous rhetoric. The EU side has its own red lines in the negotiations – no cherry picking, no relationship outside as good as inside, and so on. Mr. Barnier claims that our future relations will be limited by the UK decision to leave the Customs Union, but leaving the Customs Union is a inherent aspect of leaving the EU – even those countries closest to the EU, like Norway, are outside the Customs Union.

I’d also question the EU’s overall approach: nowhere in Article 50, or in EU law, did it require Brexit negotiations to be separated into two phases. Nor did it require the UK to reach a “sufficient progress” test before discussing our future relations. These were political decisions masquerading as legal logic.

What’s the path through? Both sides need to find an approach which addresses their fundamental concerns and protects their interests, but creates a lasting solution. We often get lost in the technical complexity of Brexit, which is fascinating to think tanks and Brussels-watchers, but in so doing we lose sight of a bigger picture. Without being too portentous, the Brexit negotiations will determine much of the future political and economic dynamics on the Continent. An agreement which unfairly disadvantages the UK will prove unstable in the longer-term. And, although the EU side could choose to punish Britain by limiting its future market access, the result will be a UK that orientates itself further away from European economies.

The EU has shown impressive flexibility in the past, an impressive ability to resolve political deadlocks with what is often dismissed as “fudge”, sometimes by bending the rules or by looking outside of them. If we look at the panoply of agreements that the EU has entered into, or is/was negotiating, we can see a range of options from Norway to Canada – as the UK media likes to frame things, but also via the Ukraine, TTIP, Switzerland, the Japan agreement JEEPA, and the accession agreements reached with what are now member states. No extant agreement in of itself provides the exact right model for future UK-EU relations, but all show possible paths and powerful precedents.

The UK side has been too slow to say what it wants. Too often the UK government has seemed to be negotiating with itself. We need to hear more honesty from the UK side that things will change. We can’t have the exact same relationship after Brexit, as we had before. There will be some additional costs to businesses on both sides of the Channel, but the scale of those costs will depend on the nature of our future relations. Equally, the EU side cannot (to paraphrase Theresa May) demand that the UK has the obligations of Norway but the market access of Canada, while offering a unilateral security guarantee to the entire Continent on unchanged terms.  There’s no point insisting on the supposed inviolability of the Single Market, when countries from Switzerland to Ukraine enjoy hybrid relations with the EU, and the Single Market itself is far from complete when it comes to services.

Already in the draft negotiating mandate approved by the European Council, the pathway to a deep future deal is becoming clearer. The EU side has put a tariff-free trade agreement on the table. To secure high-level access on goods, the UK may need to agree to follow much of the EU’s goods regulations. That will help resolve issues at the Irish border.

But on services – where the majority of UK exports – are beyond the EU, it’s not sustainable for the UK simply to be a long-term rule taker. We need an arrangement that recognises the unique importance of the City (and UK financial services more broadly) for Europe, while providing greater stability than a simple equivalence system.

Brexit will entail the UK and EU moving apart. But the extent of that divergence of that distance, of the metaphorical width of the Channel, depends on the leadership of our political classes and on their ability to agree a sustainable future partnership. It’s time for some visionary, innovative thinking and flexibility, in all of our interests.

The event can be watched again here.