On June 23rd a majority of people in the UK voted to leave the EU. In the months since then, we’ve not gained any clarity on the UK’s future relationship with either the EU or rest of the world.
During the referendum campaign, those supporting remain were criticised for the negative slant portrayed by their messages. We tried to make the positive case for the benefits of the EU, and largely managed to achieve this in Scotland.
Now, in the cold light of day, it’s relatively difficult to see the possible positive outcomes of Brexit. The UK Government has thus far only been clear that ‘Brexit means Brexit’. Nothing else is certain.
Hardline, right-wing Brexiteers continue to make the case that the UK is somehow a unique country and that everyone else will be delighted to allow us to have a special, unique, favourable trading relationship. There’s a sort of unrealistic patriotism being displayed.
Through the referendum period, the Leave campaign made all sorts of suggestions about how the UK would benefit from leaving the EU – the UK would have £350 million more a week to spend, we would have our fishing quotas back, we would be able to secure our borders – and all of this without detriment to our financial services, our agricultural sector or our universities.
The more I find out about the Brexit process, the more convinced I am that exiting the EU can only be done at huge detriment, particularly to Scotland.
As has been widely discussed, the Brexit negotiation period will begin when Article 50 is invoked. This will create a period of discussion between the UK and the EU’s lead negotiators. These teams will work on hammering out how any future relationship will be shaped. Right now, industry and representative bodies across the UK are making their views known to the Government, hoping their interests can be protected with any new framework.
Universities are asking for protection for academic funding and cross border collaboration, which ensure we can undertake high quality research and attract the best talent. Universities rely on these PhD students to lecture undergraduates and on the research programmes to ensure we are at the cutting edge of academia and have the highest quality universities.
Financial services, incredibly important for the economy of the UK as a whole as well as for both Edinburgh and London, are lobbying for their interests to be protected. The EU treats trade of services separately to trade of goods and has a different framework of agreements. In order for the UK’s financial services to continue to thrive and so to continue to pay taxes and support jobs here, they will need to continue to be the EU’s main financial centre. This means the UK’s relationship with the EU would require to have a strong level of flexibility when it comes to trade of services. The financial services passport is a key element of this, which is documentation allowing UK companies to trade though out the EU. Without this there would be barriers and difficulties and institutions might find it easier to move abroad.
Our agricultural and fisheries sectors are arguing for their rights to be protected. Farming communities want to protect their funding, but to ensure it is distributed in a more appropriate way, incentivising sustainable use of land. Our farmers receive significant levels of funding from the EU. The UK Government has guaranteed this level of funding, but only until 2020. Given decisions about land management need to be taken far in advance in order that sufficient preparation can take place, increased long-term certainty would be preferable. Those involved in catching fish are arguing for increased right to catch, keeping us outside of the common fisheries policy’s quotas. There is also a push to try to get back quotas that were sold to foreign fishing boats. To be clear, this portion of the quota was allocated to the UK but then was sold by some of our fishermen to their counterparts in other countries. As these were sold in private deals, it’s going to be pretty near impossible to get them back without a significant cost. Fish processors have different key priorities – they’re keen to ensure we keep trade links so that they can continue to access their export markets.
Businesses in general want to protect their access to as many customers as possible, with as few barriers as possible. They also want to ensure the UK is not flooded with cheaply made imports. Trade Unions have an interest here too – workers in some other countries have poor terms and conditions.
Finally, our NHS and many businesses rely on labour from other EU countries. They are pressing the Government to ensure that free movement restrictions do not impact their business models.
The UK Government is faced with all of these conflicting interests and has to ensure that they negotiate the best possible future relationship with the EU and to try to please everyone. In the past twenty years or so, the vast majority of diplomacy and negotiation between the UK and other countries has been ceded to the EU. This means that Brussels is full of trained international negotiators while the UK has very few people with any recent experience. Clearly that puts us on the back foot to begin with.
The UK and the EU will sit down and hammer out a possible deal. They’ll discuss movement of people, movement of goods and services, fishing quotas, single market access, university and other research programmes. Eventually an accord will be reached. It’s anybody’s guess as to how long this will take. I understand that trade deals between countries take at least 5 years usually, but hopefully this part of the process will be done more quickly.
This is not the end of the process though. Once the EU and UK negotiators have agreed on a proposed framework, it will have to be ratified by all 27 EU countries and possibly also the UK parliament. Each of the 27 countries has the ability to hold up or even veto the deal, so each has to be happy before a deal can be agreed.
The Spanish Government may not support any deal that erodes their access to UK waters for fishing. The Polish Government may not support any deal that removes the ability of their citizens to move freely to the UK. Germany has the chance to become Europe’s financial centre if they can ensure the UK’s financial services sector faces as many barriers as possible. Most of the EU countries, particularly those with world renowned Universities like the Netherlands, will be keen to receive extra research funding.
Given all the conflicting needs of these countries, it is possible that no deal will be agreed at all, never mind one that is favourable to the UK’s interests.
If the UK has to compromise, it is in their interests to compromise on those positions which matter least to the most populated, highest grossing parts of the country. It’s difficult to imagine a position where there’s a positive outcome for fishing communities, because it’s difficult to imagine a deal where the UK doesn’t try to protect the financial services industry in London.
Without a deal, the UK’s international relationships will be difficult, at best. It’s not like the EU and the UK can just agree to keep everything the same until a deal is agreed – to begin with, the World Trade Organisation (WTO) wouldn’t let us; we’d also have to keep implementing all EU laws in order to stay on the right side of the EU harmonisation regulations and keep our place in the single market. We’re going to have to create a new trading framework with the (WTO). Currently we follow the schedule agreed between the EU and the WTO and because it involves quota and tariff levels we can’t just copy and paste it. So while negotiating our EU relationship we will have to renegotiate our WTO membership so we can actually trade with other nations. That agreement has to be ratified by at least two thirds of the 160 plus other countries.
There’s basically no way the Brexit negotiations can go well for us and the UK Government knows it. That’s why we’re being kept in the dark.
Broadcast media has been full of positive stories about the economy in the past few weeks, suggesting that because house sales have gone up, the economy is not damaged by Brexit. In fact, the pound has decreased in value, meaning it’s a good time for foreign investors to buy up assets in the UK. The effects of Brexit have not hit us yet, but they will, and no corner of the UK will be able to avoid them.
Article source: http://www.huffingtonpost.co.uk/kirsty-blackman-mp/brexit-uk-economy_b_12158204.html?utm_hp_ref=uk-politics&ir=UK+Politics