An Update on Brexit. Tim Oliver European University Institute and LSE IDEAS

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1 An Update on Brexit Tim Oliver European University Institute and LSE IDEAS 1

2 a. How did Britain vote? b. Why did 52% of Britons vote Leave? 2. What does Brexit mean? a. Britain s Brexit b. UK-EU Brexit c. Europe s Brexit 3. What are the challenges and opportunities of Brexit? Page title goes here as footer 2

3 3

4 Cameron, Renegotiation and Referendum Tensions within the Tory party Another concession Coalition government Rise of UKIP Referendum a norm in UK pol. EU was changing 4

5 Why a renegotiation? Show UK could win concessions Provide cover for Remain MPs Gave time Unclear what UK wanted 4 areas of renegotiation: ever closer union ; competitiveness; EU- U; Immigration It failed to convince 5

6 The Referendum Campaign Cabinet divisions Remain = economics and not much else No single Leave campaign Leave sovereignty and immigration Immigration = predominant issue Post-truth politics? 6

7 a. How did Britain vote? Geography 7

8 a. How did Britain vote? MPs v s constituents By constituency: result on left, MPs on right 8

9 a. How did Britain vote? English votes 9

10 a. How did Britain vote? Social and age differences 10

11 a. How did Britain vote? Educational background 11

12 a. How did Britain vote? Party alignment 12

13 a. How did Britain vote? Liberalism v s authoritarianism 13

14 a. How did Britain vote? Immigration v s Economics Leave Voters 14

15 a. How did Britain vote? Immigration v s Economics Remain Voters 15

16 a. How did Britain vote? Immigration v s Economics Undecided Voters 16

17 a. Why did 52% of Britons vote Leave? Renegotiation failed to convince Leave = Stronger Messengers Leave better positioned Economics secondary Remain struggled on immigration Media was for Leave EU a difficult sell Vote on matters other than EU 17

18 2. What does Brexit mean? a. Britain s Brexit Key has been the Brexit Narrative HM Government has struggled with strategy Parliament and the judiciary Party politics and Brexit A united Kingdom? British society: immigration? The British economy: what model? 18

19 2. What does Brexit mean? b. UK-EU Brexit 1. Exit negotiation (Article 50) Northern Ireland, budget, Citizens rights Agreed last December maybe fudge on key issues? 2. Transition negotiation How long and to what end? 3. New Relationship (Article 218) New or off-the-shelf? 19

20 20

21 2. What does Brexit mean? b. UK-EU Brexit = Acceptable to UK. = Unacceptable to UK. *EU Rules Apply? Equivalence? Mutual recognition? Harmonisation? Divergence Convergence Free Movement Goods Services People Requirements Financial Payment EU Rules Apply (ECJ) UK Influence in EU Sign Own FTAs UK s Cake YES YES NO NO NO YES YES EU YES YES YES YES YES YES NO EEA YES (Norway) (Mostly) YES YES SOME YES NO YES EFTA (Switzerland) Customs Union (Turkey) YES (Mostly) YES (Mostly) SOME (Complex) YES SOME SOME NO YES NO NO NO NO NO NO FTA (Canada) YES Limited NO NO NO NO YES Canada +++ YES UK: Please NO Maybe? * Security YES Association Agreement Some Limited NO NO NO NO YES WTO NO NO NO NO NO NO YES 21

22 2. What does Brexit mean? c. Europe s Brexit Adjusting the EU Balance of power in reu (institutions, policies, between MS) Integration, disintegration, something in-between? The EU in Europe EEA, EFTA, multipolar Europe Business as usual? Britain and EU play fair? 22

23 3. What are the challenges and opportunities of Brexit? Challenges: Political Uncertainty Another referendum? Opportunity costs for UK UK Gov. consumed by Brexit Divided UK politics Dysfunctional/Tory government? Jeremy Corbyn/Labour government? Who are the losers? London: No. Rest of UK. EU unity Challenges: Economic Legal basis for UK-EU/other trade? E.g. transfer of personal data What tariffs and when? Access will not be the same as now Border problems? Work permits? Seasonal workers? Mutual Recognition, harmonisation etc.? In what areas? EU s future economic direction? 23

24 3. What are the challenges and opportunities of Brexit? Opportunities: Political Puts a limit on populism in UK UK single market benefits Possible regulatory change An end to blaming the EU UK push own agenda at WTO etc. EU can focus on Eurozone reform Opportunities: Economic UK needs trade deals More nimble negotiator eventually UK remains open for business London remains a global city Remaining EU picks up business Biggest Question: What would a good Brexit look like? 24

25 Questions? 25

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