The Political Economy Review 2017

which involves an administrative Brexit, a legal Brexit and finally a trade Brexit. Let's not forget that the countdown has started and that around 3 months was wasted with a general election and that the Germans will be pre-occupied later this year with their own election. In reality there is little more than a year for talks themselves. It seems inevitable that a transition arrangement will emerge, but under what terms? We do not know. Last June, the referendum asked the electorate whether Britain should remain or leave the EU, and hence there is a mandate to leave the EU. To quote Ian Dunt, 'the referendum settled a question. It did not shape the answer.' This is because it is not like leaving a golf-club. There are many different versions of Brexit: hard, soft, cliff- edge, fast, slow, open, and even 'red, white and blue', each with different consequences. The Tory government has selected the 'hard' option from this menu, extrapolating its own mandate from the referendum result. Apparently the government has a mandate to leave the Single Market and to prioritise hostile sentiment towards immigration over the economy. It doesn't; not only because this wasn't on the ballot paper, but also because 42% of leave-voters (according to YouGov) would like Britain to follow the Norwegian-style option, whereby Britain leaves the EU but remains in the Single Market. Even Mr. Farage has spent his career calling for us to be like Norway or Iceland. Hence, there is by no means majority support for a 'hard' Brexit, clarified by the election result where 57.6% rejected this vision. However, the approach doesn't seem to have changed. Theresa May's 'hard' Brexit means Britain leaving the Single Market and making UK families poorer. 45% of UK exports and 53% of imports depend on the Single Market, guaranteeing tariff-free and barrier-free trade at present. Clearly if Britain left, it could not enjoy the benefits of trading with 500 million consumers in the same way. The UK, depending on the new deal, could be subject to export tariffs as well as other non-tariff barriers/ regulations. It is also important to point out that once Britain leaves this market, it will lose the 56 free-trade deals which it had with the rest of the world as an EU member state. Therefore, the UK will have no free-trade deals until all these bi-lateral agreements have been negotiated, which each take years. This is estimated to cost the UK billions of pounds annually. Mrs May seeks to negotiate a free-trade deal with the EU (like the US and Canada have), to gain access to the Single Market, but to do this, the UK will need to accept a lot of red-tape dictated from Brussels, over which the UK would have no control. This also means accepting the authority of

the ECJ (European Court of Justice), which David Davis and his Brexiteer friends will not accept. Thus, there is a major issue in the government's 'hard' Brexit plans. Not only will it cost the UK billions (on top of the multi-billion divorce settlement), tightening the squeeze for consumers, but there is also a prospect of no deal i.e. 'cliff-edge' Brexit. This is the worst possible deal, meaning no co-operation between the UK and EU and the UK being subject to WTO tariffs on all trade to and from the EU. These include a 59% tariff on beef, 40% on cheese, and 10% on cars, pushing up prices drastically in the UK. Leaving the Customs Union would also create chaos in Ireland and make border controls more complex. Thus, even the possibility of 'no deal' is terrifying. Although the Brexit team seem to have ignored the election result, many leading members of the party and business

leaders are calling for more cross-party consensus about the approach to Brexit. They highlight the realities of a 'hard' Brexit and demand a 'soft'/'open' Brexit, whereby the UK joins the EEA (European Economic Area) -


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