James Bevan: Brexit and politics

Uncertainty continues to beset British politics and constitution after the EU referendum result. Pundits, commentators and experts have all attempted to divine the future. James Bevan explores the options and possibilities.

We’ve spent some time since the Brexit referendum, grappling with the political issues and challenges.

Here are our findings and current working assumptions.

It goes without saying that the UK electorate’s decision last week to leave the EU opened up a large range of uncertainties for both the UK and the EU and we can identify both ‘known knowns” and the “known unknowns”.

Triggering of Article 50

It is unclear whether the government will require approval from Parliament before it may activate Article 50, which starts the two-year countdown to the UK leaving the EU.

There are legal experts on both sides with opposing views. Thus some experts (including the UCL Constitution Unit) believe it is within the Royal Prerogative of Her Majesty’s Government and therefore does not require parliamentary approval.

But there are others (including the UK Constitutional Law Association) who believe that it does. What definitely will require parliamentary approval will be the final agreement the UK reaches with the EU (assuming it does reach one) along with any bills to revoke EU legislation (e.g. the 1972 European Communities Act).

In summary, the UK Constitutional Law Association’s view is that our membership of the European Union has conferred a host of legal rights on British citizens, some through incorporating statutes, some granted directly in domestic law.

Applying the common law principle found in The Case of Proclamations and Fire Brigades Union, the Government cannot remove or nullify these rights without parliamentary approval. Its prerogative power cannot be used to overturn statutory rights.

Can Britain change its mind during the two-year period under Article 50? What if there is an election and the Brexit camp loses?
Can the process be abandoned?

There is no provision in the treaty for the process to be reversed. But there is nothing precluding such a reversal either.

In legal opinion expressed to the House of Lords both Professor Derrick Wyatt QC and Sir David Edward QC agreed that a country could change its mind after Article 50 had been activated at any time before the exit agreement had entered into force and before the two year deadline defined by Article 50 had elapsed.

This is what Derrick Wyatt said: “In my view a Member State could have second thoughts, and rescind its decision to withdraw at any time prior to conclusion of a withdrawal agreement, or expiry of the two year period, or any extended period agreed by the Member State and the European Council.

“I would offer three reasons. First, there is no indication in the wording of Article 50 that a Member State could not change its mind.

“Secondly, it would accord with the general aims of the EU to allow a potentially departing Member State to change its mind and remain in the EU after all.

“Thirdly, a conclusion that a Member State could not rescind its notification of intention to withdraw could have absurd consequences… It would mean that that Member State, and the other Member States, would still have to conclude a pro forma withdrawal agreement, or await the lapse of two years, then start the process of the Member State re-applying to the EU. That would all be pointless. It cannot be right.”

This would presumably rely on cooperation from other member states however, and given the clear preference of the remaining EU members to limit the uncertainty inherent to Brexit, it cannot be guaranteed that they would be willing for the question of Britain’s EU membership to linger throughout the two years after Article 50 had been activated.

Could the government simply ignore the referendum result?

Technically yes, but in practice probably not. The referendum as legislated was consultative, not legally binding. Therefore the government could legally ignore the result and carry on as normal. But this is unlikely for three reasons:

1. It would be anti-democratic. When it legislated for the referendum the government clearly indicated that it would abide by the result. Turnout for the referendum, at 72% was higher than a typical general election, and the result, while close, was a clear majority of 52% in favour of Leaving.
2. If the result were ignored then large numbers of those who voted Leave could be driven into the arms of UKIP at the next general election. Respecting the result is an act of self-preservation for many MPs, particularly the 120 MPs who saw UKIP finish in second place in their constituencies at the 2015 election
3. The risk to public order. The referendum exposed clear fault-lines between London and the rest of UK (minus Scotland and Northern Ireland). For London’s political elites to countermand the will of the people would play into exactly the kind of anti-elite grievances that led a majority of voters to ignore their advice during the campaign. Voters who expressed their desire to reduce immigration legitimately at the ballot box only to be ignored, could reasonably conclude that democratic means were not a viable avenue for the change they sought.

Does there need to be a fresh election, and the creation of a pro-Brexit House of Commons?

No. It seems likely that the government will need a fresh mandate to negotiate the UK’s exit agreement, but that does not necessarily mean that mandate needs come in the form of a general election victory.

A pro-Brexit House of Commons is not necessary to implement the expressed will of the people to withdraw from the EU. It also doesn’t follow that a general election which failed to return a majority of pro-Brexit MPs would negate the referendum result.

The referendum was a specific question with a specific answer. In a general election every policy area and politician is on the table.

The only reason for the new Prime Minister to hold a fresh election would be if they expect to win it.

So, the state of the polls and the identity of the Labour leader will be the key drivers of that decision. If Corbyn is still in place, a snap election is much more likely, while if, say, David Miliband had swooped in via a by- election in Jo Cox’s vacant seat, it would be far less likely.

Is there a requirement for a new mandate and how can that be achieved if not by an election?

The government is likely to need to win a mandate to negotiate the UK’s post-Brexit relationship with the EU however. This could be done either by a general election or a referendum

A mandate for the post-Brexit deal probably is required. The referendum was about Brexit, not about the UK’s post-Brexit arrangements, of which there are a number of variations with fundamentally differing outcomes for immigration and trade.

There is little doubt that millions of voters voted in favour of Brexit in order to regain control over and ultimately reduce the levels of EU immigration. But there was obfuscation as to the true costs of doing this.

Is the current Corbyn coup in anticipation of an expected snap election?

Most Labour MPs have never supported Mr Corbyn, but his 60% landslide victory in the leadership election meant that he had to be allowed to ‘fail on his own terms’.

His lacklustre performance in the EU referendum (demonstrated by the underperformance of the Remain campaign in Labour areas) has provided that failure in the eyes of most Labour MPs.

The Corbyn coup is also linked to fears of a snap election and to concerns that UKIP are poised to replicate the big wins of the Leave campaign in previously rock-solid northern Labour strongholds – they’ve seen how a referendum aftermath can play out before, in Scotland.

How likely is it that UKIP might win half Labour’s seats in the event of an election?

It’s not possible to answer this question without knowing who would be leading Labour and what platform they would be standing on.

If they decided to stand on a platform of ignoring the referendum result (as some in the party would probably like) they would risk large losses to UKIP.

We’ve seen in Scotland how enormous Labour majorities can be wiped out in the space of one election when the tide of public opinion turns.

As it stands, there have been a couple of polls since the referendum which have shown UKIP doing quite well in Wales and the Midlands, on 21% and 20% respectively, but still comfortably behind the Conservatives (28% and 35%)and Labour (28% and 31%).

Can everything (politically) be put on ice until September/October?

Nothing can be done on Article 50 until a new Prime Minister is in place on the 9th September. We can expect that the new Prime Minister will also need a mandate to negotiate the UK’s future relationship with the EU.

This is because a decision will need to be made on what concessions the UK is willing to make on the free movement of labour (if any) in return for Single Market access.

There is the risk that European leaders refuse to enter into any kind of informal negotiations prior to Article 50 being activated, and the period of uncertainty is extended to no gain.

Putting some flesh on the bones of what’s at stake, ultimately the key question for the UK is what kind of deal does it want to achieve, and there is little point starting negotiations until it decides what its priorities are, including its willingness to accept some degree of free movement in order to maintain access to the Single Market or its willingness to sacrifice single market access in order to bring down net immigration.

This issue wasn’t addressed in the referendum campaign and needs to be explicitly decided upon before negotiations start, otherwise the government risks negotiating a package that is rejected by parliament and/or the voters, leaving the UK with no viable exit agreement at all.

An important issue will be how the UK bridge the gap between what voters thought they were voting for in the referendum and what the UK is able to achieve in negotiations with its EU partners.

It can’t have market access for free. But it can’t just carry on with identical rules on free movement either.

That choice is going to have be explicitly made by the British people – perhaps in another referendum. As David Cameron has said: “Before we trigger Article 50 we need to determine the kind of relationship we want with the EU. That is something for the next prime minister and his or her cabinet to decide”.

James Bevan is chief investment officer of CCLA, specialist fund manager for charities and the public sector. CCLA launched The Public Sector Deposit Fund in 2011 to meet the needs of local authorities and other public sector organisations. You can follow James on twitter @jamesbevan_ccla

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