|January has been a momentous month, events have moved forward at a rapid pace, more clarity has emerged – and yet business still doesn’t know as much about the final shape of Brexit as it would like
The Supreme Court ruled on 25 January that Parliament must have a say in triggering Article 50. And on Wednesday, Parliament voted, by more than four to one, to do just that. A date has been announced – 9 March. But there are still obstacles on the path.
The White Paper published yesterday sets out the UK government’s main negotiating points in the process of disengaging with the EU will be still have to be debated by MPs. And while Labour MPs voted overwhelmingly with the government to go ahead with Article 50, their leader Jeremy Corbyn has said that the details of the White Paper will have be argued one by one.
The European Union Bill now faces more debate before it can become law. MPs will discuss the bill in more detail next week when it reaches the committee stage in the Commons, where Labour promises to force through hundreds of amendments. The objectives set out in the government’s strategy expected to attract more.
[Full text of the White Paper here]
Hard Brexit – now re-named ‘clean Brexit’ by the government – still leaves fundamental questions as to the exact nature of the Britain’s trading relationship with the EU after it leaves, and as to the precise nature of transitional arrangements. At this stage, it looks like the UK government is looking for something resembling the Swiss model.
Brexiteers are pulling in two opposite directions. Some want to see the UK restored to a global leader in free trade, unrestrained by Brussels bureaucracy, able to attract the brightest and best from around the world. Such a liberal UK would be able to be a global Hong Kong, with low rates of corporate tax in the spirit of Adam Smith.
But others offer a different vision; they want to pull up the drawbridge on migration and globalisation, retreating from world affairs, shielding local businesses and workers from foreign competition. The latter voices are more grass roots, the former being closer to the official government line.
The big question will still be how much the EU is prepared to yield to the UK in terms of access to the single market given the UK’s insistence on ending free movement on labour. There is all to play for in the negotiations that will begin immediately once Article 50 is triggered. While the UK government is steeling itself for tough talks, the key factor is the EU’s resolve – to what extent will it want to be seen to punish the UK to discourage other member states from thinking that they too can leave and then be rewarded with lenient treatment.
Theresa May’s visit to the White House shows the importance the British government attaches to securing an early trade deal with the US.
TRADE AND MACROECONOMIC DATA
Value of UK-Polish trade in goods, Jan-Nov 2016; all currencies in billions