One hundred days later – what does Brexit mean?
It’s been 100 days since the momentous decision by UK voters to pull out of the EU. But we’re no closer to understanding what that means.
There’s been little indication from Prime Minister Theresa May, although some of her Cabinet have sounded a tough stance.
The British economy may have proved more resilient following the vote than had been expected, but economists argue it’s very early days. What a post-Brexit world will look like is essentially as unclear now as it was prior to the vote. Ms May’s approach has been slow and steady, with clues about the future in short supply. So what’s the state of play just over three months since the historic poll?
Big changes here. There’s a new prime minister and a new cabinet that includes three Brexiteers in key posts.
Ms May has kept her position on the future vague, cryptically stating that Brexit means Brexit. Some of her cabinet appointees have been less reticent, and loose tongues have led to official rebukes. Downing Street has had to slap down Liam Fox, the International Trade Secretary, for saying Britain should pull out of the Customs Union; Brexit Minister David Davis for stating it would be improbable that Britain will remain in the Single Market post-Brexit; and Foreign Secretary Boris Johnson for trying to narrow down when the formal negotiation process would begin. The perceived lack of discipline has made for an unconvincing start for the new Cabinet.
Hard Brexit/Soft Brexit:
Neither has any clear definition. A so-called ‘soft’ Brexit could see a situation where the UK retains some access to the Single Market, in return for compromise on, say, the free movement issue. A ‘hard’ Brexit could see the UK withdraw from the Single Market altogether, and have a trading relationship based on World Trade Organisation rules, a scenario dreaded by businesses and bankers.
Speculation is mounting that we could be heading towards the ‘hard’ scenario, as it would be a tough political ask for either May, or the EU, to compromise on a key principle such as free movement. But it’s very early days.
Five short paragraphs which set out how an EU country can voluntarily withdraw from the bloc. It says that if a state wishes to leave, it must formally notify the European Council of its intention. From that date, two years are allowed for completion of negotiations, unless the European Council unanimously decides to extend this.
What it doesn’t specify is when the Article should be invoked if a country decides it wants to leave. Downing Street has said it won’t be before the end of this year, as it prepares a strategy. Donald Tusk has said May told him it could be January or February, but her office has denied this.
May is said to be under pressure to set out a clearer timetable in her speech to the Tory conference tomorrow night. In theory, to invoke the article, a short statement is required. But it’s expected the UK will accompany the letter with its negotiating position.
British and Irish economies:
Despite predictions of doom and gloom, there’s been little impact so far, although the vote hit the value of sterling and initially sent stocks of some sectors crashing. Just last week, the UK’s Office for National Statistics (ONS) said the referendum appears “not to have had a major effect” on the country’s economy. Fears of a recession in the UK this year have also receded.
But, to state the obvious, Brexit hasn’t occurred yet. The negotiation process will last at least two years and economists believe the effect will likely be felt long-term. Here, the Government has reduced its growth forecast for this year and next year, and economists have warned of uncertainty. Enda Kenny said Budget 2017 will “Brexit-proof” the economy, whatever that means.
Sterling took a battering even ahead of the referendum. In October 2015, €1 bought you about 69 pence. Now it’s around 86 pence. This has been the big issue for Irish exporters selling their wares into the UK market.
Their produce has become more expensive, and that’s made them less competitive. It’s also a problem for border businesses in the Republic, and, potentially, for attracting UK tourists here. If a hard Brexit becomes a reality, expect the pound to weaken further.
The Governments have been clear that they do not want to see a physical border on the island, but there’s no certainty yet how, or if, that can be avoided. Border communities are particularly concerned.
A group – Border Communities against Brexit – has been formed, made up of business people, farmers and other members of the public.
Discussions are already taking place between Irish officials and their UK counterparts on the issue. Preparations are, however, taking place for the possibility that some form of border controls will need to be put in place. But the Revenue Commissioners are looking at the potential for an electronic system whereby trucks and other vehicles will be able to move freely from south to north and vice versa without physical border restrictions in place.
There are also concerns about the economic impact on the North, and the potential impact on the peace process. Mr Kenny has twice mooted the possibility of an all-island forum to deal with the vote’s fallout, but the DUP has dismissed this.
There’s been a surge in applications for Irish passports from both Northern Ireland and Britain since the vote. Figures show that passport applications processed by the Irish Embassy in London last month jumped by more than 104pc to 6,710 as the lure of Irish, and therefore EU, citizenship, has heightened.
Applications from Northern Ireland rocketed by almost 80pc. Mr Kenny believes the surging interest will continue amid reports that Britons may need a visa, or at the very least may have to enter details online, simply to travel into mainland Europe once the UK pulls out of the EU.
All departments have had to set out how the vote will affect their respective areas, but the issue is being headed up primarily between the Departments of the Taoiseach and Foreign Affairs.
A senior civil servant in the Department of the Taoiseach – John Callinan – has been appointed to oversee a new integrated division and deal specifically with the challenges posed by Brexit.
Rory Montgomery, another senior civil servant and former ambassador, is returning to the Department of Foreign Affairs from the Department of the Taoiseach to lead Ireland’s Brexit negotiations at EU level.