T-Day: The UK’s withdrawal from the EU is as much a race against time as anything else

Today is T-Day. Slightly more than nine months has passed between the EU referendum on 23 June 2016 and the formal triggering of Article 50 of the Treaty of Lisbon. The ‘end of the beginning’ phase of withdrawal from the EU is now over and we are in ‘beginning of the end’ territory. It will consume British politics not only for the remainder of this Parliament but in all probability for most of the next one.
The UK will cease to be a member of the EU in March 2019 (bar the unlikely event that either all sides agree to extend the two-year schedule for departure or the UK determines that it will abandon the entire exercise) but the process of full extrication will take considerably longer. This does not necessarily mean an extended period of uncertainty (the line of travel in most cases should be clear within 24 months) but it does mean an extended period of some imprecision. The business community, in particular, does not care for such an outcome but it will have to live with it.
What happens next? The present blueprint does not suggest a manic degree of urgency. The EU is not due to hold a summit at which it will agree guidelines for negotiations until the end of April. It may be June before a complete structure for the dialogue to come is settled between the UK and the EU-27. That void will be filled by what will almost certainly be a contentious set of talks in which the ‘assets’ and ‘liabilities’ that the UK has within and owes to the EU are assessed and quantified. This is the ‘divorce’ aspect of the arrangement, which in theory should be agreed before the question of the future relationship between the two sides is addressed and (hopefully) settled. In the real world, however, there will almost certainly be a blurring between these different elements of the process.
In terms of simply mapping what needs to be done and assembling the resources needed to do it, the UK Government has actually made quite a lot of progress in a relatively short period of time. A year ago not only did the Department for Exiting the European Union not exist, there was not even a blueprint for such an entity to come in to being if the UK opted to quit the EU. A hectic, at times truly frantic, process of simultaneously recruiting the right sort of people and settling on an agenda for releasing the UK from thousands upon thousands of pages of EU-related legislation and activities has now been very largely completed.
To that extent, the UK is in a more advanced position than those on the other side of the negotiating table. This is hardly surprising as: (1) Brexit is more important to the UK than it is to the EU-27; (2) the UK has only one government within which to co-ordinate while the rest of the EU consists of 27 member states, the EU Council, the European Commission and the European Parliament; and (3) the UK is not due a general election which might change its political leaders until May 2020 (after Brexit), whereas many EU member states face elections beforehand.
How are matters likely to develop? The fainthearted might be best advised not to read newspapers (British ones anyway) for the next two years. The process will bring out all of the worse traits in the media. It will be a melodrama like no other. There will be numerous reports of disagreement and deadlock. Absolutely everything will leak. Toys will be thrown out of prams and over a vast distance. Almost everyone involved will profess to being clinically depressed at some point in proceedings. It will be predicted multiple times that the UK is on the verge of leaving the EU without a deal at all (which is, of course, possible but far from probable).
In terms of where we are likely to find ourselves in terms of the eventual future relationship between the UK and the EU, a few fundamentals apply. These will, in the end, set the context in which the UK Government arrives at the position in which it officially takes its leave of the EU at some point in March 2019 and moves to a new accord with it. Both camps privately recognise these basics. They will ultimately shape what eventually emerges.
Time is the real enemy
On paper, Article 50 allows for a 24-month period of negotiations. In reality, it will be much closer to the nine months or so that have elapsed between the referendum and the triggering event today. This is because the really crucial high-level decisions about the future relationship cannot be taken until there is settled political leadership in Brussels, Paris and Berlin. The German elections are due to be held on 24 September but, absent an unanticipated turn of events, they will not lead to a new administration emerging instantaneously but weeks and probably months of hard bargaining before a new coalition is established (which even if it involves the Christian Democrats and Social Democrats once again will still be new in terms of personnel, policy programme and relative power). With at least five months required for the ratification of what is agreed, this means that in terms of what the future relationship might be, the negotiations will run from mid-January to very late October 2018.
This tight timetable means that the chances of settling absolutely everything by March 2019 are nil. In the best case scenario, the big themes are dealt with but there will be a range of transitional or interim arrangements lasting between two and five years according to sector. If matters are less well developed, then almost everything will fall into this transitional or interim arena with it being possible that the UK might (temporarily) opt for membership of EFTA to buy time after an exit. The outstanding item, therefore, is likely to be this balance between the resolved and the unresolved.
Brexit will crowd out almost everything else in British politics
The parliamentary consequences of Brexit have not been widely discussed or fully appreciated. The Queen’s Speech in May will start an extended process of scrutiny by which the Great Repeal Bill that both abandons the European Communities Act 1972 and reapplies the whole body of existing EU law as domestic legislation, will absorb Parliament for the better part of nine months until early 2018. It will be accompanied by what is currently expected to be no less than 15 other Brexit-related Bills which will have to be deliberated during the next two parliamentary sessions and which absolutely have to be enacted in some form before March 2019. This is an astonishingly sweeping undertaking.
And it will have opportunity costs across the system. In a typical year around 15 to 20 Government Bills are put before the House of Commons. Quite a few of them are technical and uncontroversial. There is nothing related to Brexit that will command anything close to a consensus. The space for ‘normal’ Bills over the next two years is, hence, extremely modest. Ministers will be obliged to look for policy initiatives that either do not require primary legislation or can legitimately be enacted via the Budget, as the Finance Act is the one unambiguously ‘must pass’ measure for Government and Parliament. The turf fight over who secures the scarce slots for new parliamentary legislation will not be pretty.
The Government will have to assume extraordinary powers to meet its deadlines
The sheer volume of legislation which will be required to meet the March 2019 deadline means that conventional parliamentary scrutiny will have to be curtailed and ministers will have to ram through the authority to deal with a vast amount of material via secondary legislation. The ghost of Henry VIII will be exhumed as Theresa May and her colleagues will be accused of acting much like that King at the height of his rule as they insist upon their right to rewrite what is not merely just detail but the essence of legislation itself, without the process of parliamentary oversight that is usually witnessed. This will not be the product of dictatorial tendencies but the necessity of administration. It is highly unlikely, however, that Labour, the SNP or the Liberal Democrats will be charitable to ministers. In retrospect, T-Day, for all its symbolic force, may be seen as one of the calmer events in this calendar.
Tim Hames
Director General, BVCA