Atlantic Council Press and Members Call: Brexit Nears its Endgame
Atlantic Council Press and Members Call: Brexit Nears Its Endgame
Moderator: Bart Oosterveld
Speakers: Sir Peter Westmacott, Benjamin Haddad
March 11, 2019
10:30 a.m. ET
Listen to the audio version here
Operator: Welcome to the Atlantic Council Members and Press Call, Brexit Nears its Endgame.
Please be aware that each of your lines is now in a listen only mode. We will open the lines for the queue for questions following the speakers’ opening remarks. Please press “star” followed by the “one” key on your phone to ask a question. Questions will be taken in the order which they are received. Please be sure to introduce yourself when asking a question.
I will now turn the call over to the Atlantic Council who will introduce the call and begin our discussions. Mr. Oosterveld, please go ahead.
Bart Oosterveld: Thank you, (Maria). Good morning. Thank you, everyone, for joining us. My name is Bart Oosterveld; I direct the global business and economics program here at the Atlantic Council. Welcome to the third in a series of calls that we’ve been hosting on the topic of Brexit.
And it may be the third time we have the world endgame in our invitation language. The endgame is really nearing. Something will happen on the 29 of this month -- either an extension of the negotiating process between the U.K. and the E.U., a hard Brexit or one way or another, a Brexit with an agreement in place. There’s a few more weeks for that to happen. Talks right now appear to be yet another stalemate, both in terms of domestic politics in the U.K. and in terms of the negotiating dynamics between the U.K. and the E.U.
I’m joined today by two fantastic experts who will be able to make some sense of all of this. First, Sir Peter Westmacott is a distinguished ambassadorial fellow here at the Atlantic Council. He’s the former U.K. ambassador to the U.S., France and Turkey among other posts over a long and distinguished career in the U.K. Foreign Service. And then secondly, Benjamin Haddad, who is relatively new to the Council and directs our Europe work and is an expert when it comes to E.U. politics and E.U.-U.K. dynamics.
So welcome to both of you and thank you for taking the time to do this. Sir Peter, let me start with you. Obviously Theresa May has promised what I think is the fifth or sixth meaningful vote tomorrow in the House of Commons. As we understand it, there is still no solid majority in the House of Commons for any of the major options. And then there’s the ongoing discussions that she is having with E.U. officials today and over this past weekend. What is the lay of the land and can you give us an overview of what it is you’re expecting in the next 48 hours and then through this week?
Sir Peter Westmacott: OK, well thank you for the opportunity to try and shed some light on what is a very murky picture. I think the first thing I would say is that anybody who thinks they know what’s going to happen over the next days and weeks here in the U.K. on the Brexit negotiations is either an extraordinary psychic predictor of the future or a liar. So the picture is really very uncertain. But let me try and give an idea of what’s really going on. The general mood both here and in Brussels I think is bad. It is rather pessimistic about the chances of United Kingdom -- European Commission reaching a fresh agreement beyond the agreements that have been made in the past but which have not found favor with the British parliament.
So there’s been a pretty frantic weekend of contact. There is talk now that Mrs. May may get on an airplane to Strasbourg later today. Strasbourg, where the European Parliament is. And there is even talk that some of the famous (re-votes) which have been predicted for Tuesday, Wednesday and Thursday may b e either compressed or indeed delayed. So even though it’s so few days less to the 29th of March, there is still a lot of uncertainty. And the heart of it really is that although there is a withdrawal agreement which has been agreed between the British government and the European Commission team, it hasn’t found favor with the British parliament.
Mrs. May managed to delay a further defeat after the resounding 230 defeat in parliament last month by saying there would be a further meaningful vote tomorrow and that she would come back with legally binding changes and improvements to the withdrawal agreement. They have not yet appeared, haven’t seen the light of day and it’s getting a bit short (before anything can) be put in place that can inform parliament when it makes its vote -- what’s called in the jargon now, MV2, in other words the second meaningful vote tomorrow evening in the House of Commons.
Now, things may yet change because this is really a last chance saloon we’re in at the moment -- seriously last chance saloon. And there is a pretty wide sense in Brussels and in the English Parliament -- and probably amongst public opinion more generally -- that crashing out with no-deal is not in anybody’s interests, except that of a few hardline Brexiteers who want to have a complete break with the European Union and start afresh.
But it’s very, very last minute to try and do that and frankly, nobody is in a position, nobody has made the necessary preparations. So where we are now is that unless things change, the British Parliament will know tomorrow on Mrs. May’s package deal, which may end up with some last minute improvements, but we haven’t seen them yet, as I was saying. In which case, the expectation amongst politicians and the media here in London is that the Theresa May package will go down to a pretty large defeat. That is not a good position for the prime minister to be in. There is even some talk that her position will become untenable, but I think she will remain prime minister, for the time being at least, because it’s too complicated at this stage to try to switch horses and because there is no mechanism by which the conservative party can actually unseat her at the present time.
So the likelihood is tomorrow’s vote takes place. I don’t think she could put it off because she’s committed to holding this vote on Tuesday evening, though some (commentators) are saying she might (fathom) a way of delaying it. I think that’s unlikely. If that package is a yes -- unexpectedly, but if it’s a yes then we go ahead with departure on the 29th of March on the basis of the withdrawal agreement, which the British government has negotiated with the European Commission. Which of course leaves most things to be negotiated during a 20 month-long transition period. Btu it would at least -- there is a decision.
If the vote goes down, goes against the government, then the next day is the following day, Wednesday, there will be the first of two more votes. Which (indeed) take place one on Wednesday, one on Thursday but might get (reconstituted) and both take place on the Wednesday. We don’t know. But the first of them will be the vote that the prime minister has promised parliament on whether or not crashing out with no-deal -- no-deal Brexit, in other words -- is acceptable to the British Parliament.
There is a widespread expectation that members of parliament will not accept that and that they will vote against there being no-deal. The prime minister wants to keep the no-deal option on the table because she and some of her allies think that it improves her negotiating leverage with the European Commission in Brussels. But she was forced to offer members of parliament on a vote because most people think that no-deal Brexit is a very bad idea. So if that vote goes ahead, the chances are that it would (exploit) the option of no-deal Brexit. Then that raises the question of, well, if there’s no-deal Brexit and nobody wants Mrs. May’s package, which will have been voted down on the day before, then what happens.
And so the third vote is going to be would parliament like to ask for a delay in the implementation date of Brexit from the 29th of March to a later date. This opens up the possibility of a bit more time to seek other ways of doing things or to seek a consensus around Mrs. May’s package or whatever. But this is not (now) straightforward. The government, it has to do this and they don’t really want to seek a delay. The prime minister’s been clear about this. But if they do, they will want the shortest possible delay of a couple of months or so. For a number of reasons, partly to keep the Brexiteer wing of the conservative party happy and partly because if you have a longer delay, there are several complications, including the fact that there are European Parliamentary elections due in May and what happens to the British representative.
Do we not take part in those elections? If so, how long do those people remain members of the European Parliament? What happens to various budgetary and other decisions that need to be taken in Brussels and Strasbourg in the coming months. And so it is possible that if the British government says we need the delay, we want more time, please, that the European side will say well, OK, but what’s it for?
Because we’re not just going to play this game of Russian roulette every couple of moths staring over the cliff -- to mix my metaphors -- if we’re going to give you a delay, there must be a reason. Is it because you want to have a different approach, you want to have a Norway solution or Canada solution, or you want time to hold another referendum to see if you want to leave the European Union after all or not? And so on.
And the chances are, also, lot of this started at the British meeting this morning, that if the European side does agree to an extension of deadline, that there will be certain conditions attached to agreement, including continuing payment of the budgetary contributions, possibly excluding the United Kingdom from having a seat at the table while decisions are taken, something about the European Parliamentary elections and all those various conditions which could be problematic for the British Parliament. And that is worrying some British politicians that we could end up, by the end of the week, with Mrs. May's deal being voted down, the British Parliament having voted against crashing out with no-deal, but no real agreement on an extension of the deadline beyond the 29th of March.
One other option that's being considered is that Mrs. May's might say, despite all this stuff, let's have a (early go) in 10 days' time, after the next European Council, on the theory that, while it very, very last minute, the European side might have offered some fresh improvements or (concessions) whatever you want to call them, to make Mrs. May's departure package more amenable to British members of Parliament.
That would give yet another definition to kicking the can down the road, but it would be taking it to just the last very few days before the 29th of March deadline, which gives you extraordinary little time to make preparations for Britain's departure on the 29th of March.
Even though, let me just underline, going ahead with the 29th of March on the basis of the deal of some variation of Mrs. May's deal doesn't really change that much in the short-term. It means we leave the only things that actually are altered are the rights of the E.U. citizens in Britain and British citizens elsewhere in the E.U.
The budgetary issue where there will be the beginning of a number of large pay-outs from the British government and something around the Northern Irish backstop, which is the proximate cause of the disagreement within the British (Parliament and European) Commission, but actually it's only one of several elements which are problematic for British Parliament in the current Theresa May package.
Everything else about Britain's future relationship with the European Union and with the rest of the world would be delayed during the 20 -- for completion and negotiation during the 21 month transition period, which is part of the Theresa May package.
So we are in the beginning of a very complex few days. Some things may yet change, but as things stand, there's supposed to be a vote on Tuesday, and if that goes a certain way, a vote on Wednesday, and if that goes a certain way, a vote on Thursday, but none of it gives us any real certainty about where this leads us. And I'll stop there for comments from others and questions.
But, I would just remind people that as an indication of the mood of it, a friend and former colleague of mine who was the senior official in the (finance office) until a few years ago tweeted earlier today, this is an extraordinary failure of government and Parliament and a national humiliation, that at this late stage in the game, nobody yet knows what's going to happen.
So that's the rather muddled picture. I hope it makes some kind of sense of how things look at the moment. Not much clarity and we are in the middle of something that I think I have to call a political crisis.
Bart Oosterveld: Thank you very much Sir Peter, that's very comprehensive and insightful as always. Let me turn to Ben to talk about the perspective from Brussels. Ben, the E.U. has been, while willing to talk quite firm on the contents of the deal that was originally struck with Prime Minister May and aside from clarifications, hasn't offered much in terms of renegotiation, where do you see officials in the E.U. standing on this, particularly on such topics as a possible extension? What is the mood, if you will, to sort of describes the general mood is bad? What's the general mood in Brussels on this topic?
Benjamin Haddad: Thank you, Bart.
I agree with Sir Peter, the mood in Brussels is bleak (when) Michel Barnier briefed the Ambassadors, the perm reps, clearly there's growing impatience with U.K. politics and the U.K. position and Sir Peter and did his expose talking about the failure. And clearly I think after two years we see that one of the key U.K. gambles in this negotiation has failed.
We're just hoping that there would be a wedge or a division within Europeans that it could exploit. And we can get into the nitty gritty of certain policy positions, but it's clear that keeping E.U. unity has been an objective in itself for Europeans, for the French, for the Germans, for Michel Barnier in this negotiation.
And so, in respecting the four freedoms on preventing through reinstatement of the hard border in Ireland and you see clearly a strong position and Michel Barnier in the last few days has, indeed, issued clarification on the bad stuff, saying that the U.K. would not be forced into a customs union against it's will, so it would have the possibility to unilaterally from the backstop, but as long as it, from the Customs Union, as long at it continues applying to Northern Ireland, which has been said to be unacceptable for the U.K., that an arbitration panel also allowing U.K. to suspend some of it's obligations if it proved that the E.U. is not acting in good faith in the negotiation after the withdraw, but it does not change the core of the position.
So when it comes to the extension, as Sir Peter said, I think the E.U. will first wait for what's going to unfold in the next few days politically in the U.K. There is a general sense that a no-deal will have to avoided.
No one wanted to get -- no one wants to crash into Brexit, so my sense is that, there will be, obviously, openness to an extension, but at the same time, the E.U. will demand some clarification from the U.K. on whether that means that it will change some of it's position, that it will go to a second referendum, but what does mean exactly, because I -- the E.U. leaders have been united, including the Dutch were much more sympathetic I think to the U.K. position last year, that everyone has been very clear that the deal is on the table and there's not going to be more flexibility in the next six months if they as for an extension.
And I think we're seeing, also, I mean we're two months ahead of the E.U. Parliamentary election and there is an eagerness now to move on and to build the future relationship between the E.U. and Britain.
We've seen in the last few days Macron's letter to Europeans on his E.U. renaissance, sort of response from Annegret Kramp-Karrenbauer in German, both mentioned Brexit in and already make concrete policy prescriptions on the next step, especially on security and defense.
I mean, there's a clear desire to build the defense relationship with the U.K. post Brexit. So a lot of impatience. I would say, also, you had some personal agendas that kick in. Michel Barnier, I think, wants to free himself from his Brexit mission to get more involved in E.U. politics.
He's clearly eying maybe the commission presidency. So he needs a win. A lot of people, I think, need a win on this (in order) to be able to move on. But, I -- clearly I -- once again, as Sir Peter said, I think a lot of impatience and just gloom right now in Brussels over where this going.
Bart Oosterveld: Thank you both. Let me ask you both a follow up question about a possible extension, I'll ask the same question of both of you.
If things play out this week in a way that leads us to an extension, so, let's follow the scenario in which the E.U. and the U.K. agree to negotiate -- agree to a negotiation extension of the Article 50 process probably shortly before the 29th, all of that is included, what would be the content of those talks?
And what -- Sir Peter, first to you, what reshuffling of the decks would happen in that case in terms of U.K. politics and who do you see rising to the fore in that scenario, with what agenda? And then to you Ben, what does an ideal or a good, quote, unquote, "extension" look like from an E.U. perspective?
Sir Peter Westmacott: So just to be clear, the question you’re asking me is what happens if there is a deal or what would be the changes to the package that would come from Brussels? I’m not quite sure what the question was.
Bart Oosterveld: What does the -- what does an extension look like in terms of U.K. politics?
Sir Peter Westmacott: Oh.
Bart Oosterveld: ...how long you think it might last and then what -- how do you see political dynamics within the U.K. changing in the -- in the scenario of an extension?
Sir Peter Westmacott: Yes, I see. Well, how long does it last? Prime minister said she would much prefer not to have an extension. That is what the hard-line Brexiters would also prefer. And the real reason is not that we are ready to leave on the 29th of March. It is that they are nervous that an extension could lead to no Brexit at all.
And one of the arguments which the chancellor of the exchequer, Phillip Hammond, has used in recent days is that if parliament does not support the prime minister’s deal, then we might end up with no Brexit at all because of delay and because of the increased impetus that there might be for going to the country again with a fresh referendum which would by the way take several months to organize.
So British government is likely to be pressing for a very short extension. The European side as I was saying will want it to be longer. But subject to certain conditions and with clarity as to what the purpose of it is. So we don’t yet know. It’ll be somewhere between two months and 21 months I would have thought, but all still to be negotiated. So that -- we just don’t know much more than that.
Politically, it would be quite toxic for the conservative party, many of them would cry foul and they would say this is a betrayal of the popular will. We said we'd leave on the 29th of March. How can we not do so? So that’s a bit of a problem.
The other thing is that between now and the end of the week, if we get to the stage of vote in parliament on whether or not there is no-deal, a number of government ministers would have to resign in order to vote against no-deal which (seems to be a) very bad idea.
Because at the moment, the government’s official position is that we’re not taking no-deal off the table. I think that means that if she loses the vote on Tuesday, the prime minister will probably have to give members of her government and the conservative party a free vote. Otherwise, her government risks disintegrating.
And so, to the second part of your question, if we get in to extension territory, the first thing we’ll have to have dealt with is the fallout from the vote on no-deal. And then the second one is going to be greater tensions within the conservative party on the issue of the extension and what it is for.
There is some talk that in order to get the deal through, the prime minister might have to offer to stand down as prime minister much sooner than she is intending. I doubt if she would do that. But -- and I'm not sure if it solves anything because there isn’t somebody else waiting in the wings like Winston Churchill to take up the baton and make a success of this -- of this muddle.
So the jockeying for position might continue. And it’s already (visible in terms of) a government with no majority -- means that the prime minster has very little authority over her ministers. And many of them are out there saying their own thing and making clear that they are prepositioning themselves for the leadership contest that they expect to be taking place before long.
So it’s not impossible that by the end of the week, especially if we have to go or an extension that the prime minister’s position becomes untenable within her own party. But her (passionate) behavior has just hang in there, do the job, do her duty and not stand down until she has either delivered Brexit or at least got some sort of clarity as to what happens next.
I think that’s about all I can say on that for the time being.
Bart Oosterveld: OK, thank you so much, Sir Peter.
Benjamin Haddad: Yes, I agree with all of this. I mean I think that there might be some hope on the U.K. side that after the European elections there might be more wiggle room, flexibility on the (E.U. side). But once again I think it’s a gamble that’s been made for the last (few) years that's failed so far. And I don’t see it happening.
Clearly Brexit is going to be part of the E.U. parliamentary campaign. But I think both Macron and Merkel and (commission) leaders have made it clear that the unity of the 27 and the integrity of four freedoms and preventing a hard border in Ireland are objectives -- are criteria on which they will not budge.
So I don’t see more flexibility on this. There is clearly an eagerness to avoid a no-deal situation. So I think there will e flexibility on the E.U. side of the extension. But it will pressure the U.K. into giving some sort of clarity over why it is asking for it and what it’s trying to achieve.
I will say also that another question will be as Sir Peter alluded to it earlier, the framework of this extension because past May 26, the U.K. is not supposed to have members of European Parliament anymore, it's supposed to have a commissioner anymore.
So it will still technically be part of the European Union. So we might end up in a situation that looks a little bit like the transitory phase that was supposed to happen after the deal goes through which is that the U.K. still pays its dues to the E.U. budget and still applies the regulations of the customs union. But at the same time is not (privy) to the decision making process in the European Union. So we end up in a very weird sort of a hybrid situation that could even last longer.
I think on the E.U. side, what’s going to be interesting is you might have some -- well, you might see some divisions between leaders who really want to move on and start thinking about relationship between the U.K. and the European Union. I clearly -- I think the French have already moved on from the idea that U.K. could be part of the European Union. They’re actually happy to move forward on defense cooperation. And clearly you have other countries that would (overturn) this situation.
I think it is still unlikely because -- and Sir Peter might correct me on this -- but if you look at polls in the U.K., they are actually quite similar to the ones two years ago. And the only main difference that both sides, the people who want to -- wanted to remain and people who voted for Brexit are actually reinforced in their initial opinion, their initial votes. It’s just more polarized than it was earlier.
So I don’t think there’s much hope for a potential (second) referendum to overturn the initial decision. But some Europeans might cling on an extension and a paralysis of the talks maybe to reopen that question. But I don’t -- I don't think there’ll be a lot of appetites in Paris about that.
Bart Oosterveld: OK. Thank you, Ben.
Sir Peter Westmacott: (I can I just) -- let me (add two) comments if I may...
Bart Oosterveld: Yes, please.
Sir Peter Westmacott: One is I think that there is not a great deal of chance of what you would call, Ben, overturning the earlier decision. And if you go to the country now with a fresh referendum to overturn it, you probably get either the same result or people just -- people would -- there would be a strong resistance to that. It’s a slightly different scenario.
I think you get into second referendum territory not so much to overturn the earlier decision, but to break a deadlock if parliament is unable to agree on a way forward. And it then begins to look after this week’s votes or even the next week’s votes if that’s how long it’s delayed that there is no other way of getting an answer.
And then overwhelming pressure from within parliament to say we have to break this somehow. We better go and ask the people if this is really what they want to do. That takes time, it’s messy, it’ll be a very divisive campaign. There’ll be a lot of debate about what the questions would be put to the people, if there was a further referendum. And so on.
But there are a lot of people who think that Brexit has turned out so much worse than even the Brexiteers predicted and promised as well as the remainders who always thought this was mad. That if there was some way of stopping it happening, they would like to. So don't dismiss the chances of another referendum. But we’re not there yet. I think it’s -- you’ve got to get through the other hoops first.
Your other point, would opinions have changed? Well, the main thing that will have changed between June 2016 and now is that a good million people of the older generation who voted to leave will have died off. And you’ve got another million or so young people who are overwhelmingly remainders who will come on to the electoral register.
So even without anyone changing their mind, you’ve got a couple of million expected votes which would go in the direction of remain compared to the result last time. And then you’ve got a few people, probably not that many but you never know -- if it got to deadlock and you’re breaking deadlock, it might look different -- who, having looked at the facts, have changed their mind and decided they want to remain. But it’s -- nobody could say with any certainty that another referendum produces a different result or a different result that is just decisive.
And then my second (little) point just to say do keep this in mind that the default position as things stand is that we do leave with no-deal and this parliament agrees to something else. So even though parliament doesn’t want to leave with no-deal, if you have voted against the package and there isn’t an agreement on an extension even if parliament has said we don’t want to leave with no-deal, I think what happens unless parliament and the European side reach an agreement to do something different.
So some of my friends who are deep in the weeds with this negotiation are still given their chances on Britain leaving with no-deal on the 29th of March is something around 50-50. So don’t forget that that is – that remains even though the markets seem to discount it and sterling remains quite strong it’s still out there as a real possibility.
Bart Oosterveld: Thank you so much for that last point, Sir Peter. That’s actually – it’s a good transition in the final question I was going to ask you and then I’ll turn it to the audience for questions as well.
So this default position of a no-deal on the 29th, let’s take that as the scenario for now. One of the things that’s less visible here in the U.S. is how the government’s might have to prepare for that eventuality. What contingency planning is in place? What assurances to the business community, for example, are in place to ensure that those first few weeks of a hard Brexit – chaotic as they may be – are guided and business interests, for example, are secured? Do you have a sense of what the government has done in that area?
Sir Peter Westmacott: (Some don’t), yes. That is to say that some of our earlier concerns that electricity (slides) across the channel pipeline might be interrupted or that because of the rules of ownership within the European air space that flights stop between the U.K. and the rest of Europe. All that’s been addressed.
So too, has the continuation for fundamental elements of financial services cooperation clearance is used between the City of London and other financial centers. There’s an interim understanding that life will go on in those centers.
The government has said that it’s made sure that it’s stockpiling enough drugs and food and other essential requirements which might be held up at the borders. It’s talking about zero tariffing imports from the European Union, which would also have to mean by law zero tariffing of imports everywhere else around the world. (People have forgotten about that), but there would still be customs and other controls at the border if we crashed out with no-deal and severe delays to just in time manufacturing, ordinary travelers.
The French customs controls were working to rule us, which would cause massive delays at the Eurostar Station in the Gare du Nord in Paris as a bit of reminder of how complicated life might become.
But overall, the government has been working quite hard and spending quite a bit of money on trying to put in place arrangements to mitigate the otherwise terrible effects of crashing out with no-deal.
Business remains deeply worried in a number of manufacturing (cheaps). The automobile industry, aircraft, and others have been saying that this is not going to be good at all for us and it’s going to cause all sorts of difficulties with our supply chain.
And that’s not I don’t think project fear as some people write it off as. This is simply a statement of reality that leaving with no-deal will be a problem.
If you want to be optimistic and (if I was a) Brexiteer I would add one other comment which is to say, well, all that’s exaggerated and not really true, which I don’t agree with, but at least leaving with no-deal gives business clarity and they can start making its plans whereas even going through with Mrs. May’s plan means that for the next two years they won’t know what the future trading relationship would be between the United Kingdom and the E.U. or, indeed, the rest of the world. And that in some ways is the uncertainty even worse for business that you would get with a crashing out with no-deal.
That’s if you want to put a positive grasp on it, but most business leaders who have spoken out, most that I talk to certainly do not favor the crashing out even though it does give you a degree of some kind of certainty, but it’s a pretty back kind of certainty if you’re in business and your business depends upon the United Kingdom being part of a single market.
Bart Oosterveld: Yes, OK. Thank you very much, Sir Peter. (Kenzie), I think we’re ready to take questions from the audience.
Operator: Thank you. At this time, I would like to remind everyone in order to ask a question, please press "star" then the number "one" on your telephone keypad. Again, that was "star" and then the number "one" on your telephone keypad. If you wish to remove yourself from the queue, you may press the "pound" key. We’ll pause for just a moment to compile the Q&A roster.
Our first question comes from the line of Thomas Huff from University of M.A. Your line is open.
Thomas Huff: Thank you. I’m curious. I have been for some time and in prior podcasts I was on, the sort of toxicity of the second referendum idea when, in fact, everything else has failed the politicians seemed to have lost their nerve, and the actual situation of the pro-Brexiteers must have been imminently clear by now that the sort of optimistic Brexit of all kinds of favorable outcomes for Britain have been clearly stated to be not possible. So why would one not conclude since there’s sort of a lock – locking of the minds here in parliament that a referendum would be the way to reaffirm I think as you just – as Sir Peter just said would not so much to overturn the prior outcome as to reaffirm where people understand a very different situation to be today.
Bart Oosterveld: Thank you, Thomas. Sir Peter, I don’t know if you want to add anything to your earlier comments about a second referendum, and then I’ll also ask you kind of on attitudes with…
Sir Peter Westmacott: Well, yes, I’m happy to (address). It’s a good question, and especially from somebody who isn’t living here in the middle of this political maelstrom. It’s a perfectly logical question.
I think I’ll just offer a couple of comments. One, the Brexiteers, even some of those who promised faithfully that at the time of a referendum that all would be fine and the trade negotiations would be in place, and it would be the easiest ever negotiation and Britain held all the cards with the commissioner, all that nonsense as I would describe it, all that’s been shown to be invalid.
Nevertheless, there is a sense that not delivering Brexit on time is contrary to what parliament voted for and contrary to what the people voted for. Now, there’s a lot of loose language about the British people voted this way at 52 percent of the population. It wasn’t. It was 37 percent of the electorate voted for this thing; 52 percent of those who casted their votes.
So it’s not as if people overwhelmingly wanted this outcome. And so I think this – it would be an affront to democracy (and arguably I) (inaudible) because a democracy is not a democracy if is unable to change its mind in the light of changing facts it seems to me.
But that is part of it, and then the other part of it is about, I’m afraid, the way in which our political parties tend to give priority to the unity of their own party rather than sort of the national interest, and they fear that if you don’t deliver on time and you move towards another referendum that this could lead to either early general elections, leadership challenges, and whatever.
There would be some anger amongst people who voted strongly for Brexit and still believe it’s the right thing to do. If there was another referendum, there would be a very toxic campaign. It would take a long time. The uncertainty would continue, and all that is reasons why even some of the people who think that Brexit is a lousy thing to do, they’re nervous about moving towards another referendum, which is why I say that I think it’s only a possibility if all other options have been exhausted by the time we need to take that decision.
So it’s a combination of different reasons which means that a second referendum is problematic even though there are some powerful voices like Sir John Major who’s asking for delay, Tony Blair, former prime minister, who’s saying not just delay but we should ask the British people again because parliament can’t decide and because the deal is so much less good than what the Brexiteers promised, and he’s right by the way…
Thomas Huff: Yes, yes.
Sir Peter Westmacott: … in saying that, but public opinion remains a bit nervous about it and there is a sense of just get the damn thing done which is out there, which is understandable but which doesn’t really convey (since the people who are taking that view must stop to think about) what’s really in the national interest.
Bart Oosterveld: Thanks, Sir Peter.
Ben, comments to add on that?
Benjamin Haddad: Yes I agree and I think the question then becomes what do you put in the referendum? Do you have a referendum between no-deal or the current deal, do you add another line and you have a multiple answers referendum where you’re overturn the initial decision? I mean I think it’s very complex.
One initial failure for that was June 2017 general election where Theresa May could have maybe ran on a specific version of her deal, and instead failed to do that and so had to – she thought that this will bring her increased legitimacy to (impose) her own position, but obviously the result (turned) otherwise.
It’s very complicated to know exactly what the referendum – what a second referendum would mean (indeed), it’s an idea that’s been pushed recently by Jeremy Corbyn reluctantly.
He has been under pressure from some of the rank and files in the Labour Party, especially after a few M.P.s decided to leave the Labour and start their own centrist party that would – this pro-European party, but we know that he is much more a (Euro) skeptic than traditional Labour (back) ventures.
He even took a vacation during the referendum. So he pushed this idea of reluctancy, but I don’t think really wants to embrace it. So I don’t – I think we need much more clarity over what this referendum would mean and what the question would be.
Bart Oosterveld: Thank you, Ben. (McKenzie), as we wait for further questions, let me ask one more question of Ben here about E.U. populism. You’ve talked about the E.U. being unified through these negotiations and that being a major priority and accomplishment frankly of the E.U.
What have others within the European Union learned about the idea of leaving the E.U., how easy or hard it might be, are there parties that have popped up throughout Europe that say well if the British are pursuing this, we should pursue this thinking as well or have a similar referendum and how have the negotiations and the stale mate affected that thinking?
Benjamin Haddad: That’s an interesting question, I think Brexit clearly has been a cautionary tale now for Europeans and is used as such by pro-European politicians. You even see some parties, Euro-skeptic nationalist parties like The National Front have tried to somewhat moderate their message about the question of leaving the European Union, adding obviously that in the – in the case of major Western European countries, you have the Euro, that makes it even more complicated in the case of Britain. However, and I think this is something to welcome in Macron’s letter last week, there’s no room for complacency.
And a lot of the issues that were on the table at the time of Brexit, that explains Brexit from the failures on border control, the sluggish growth on the continent and some of the insufficiencies of E.U. institutions are obviously still there.
And this is why it’s interesting to see that Macron started his letter by saying Brexit should be a wake up call for us, and that clearly in this negotiation, Europeans have stayed united.
But that is not – that does not mean that E.U. works better as a success. So I think clearly using as a precedent to reform the European Union is urgent.
Bart Oosterveld: OK, thank you so much, Ben. (McKenzie) I see we have a question.
Operator: Certainly, and just a reminder, if you would like to ask a question, please press “star” then the number “one” on your telephone keypad. Our next question comes from the line of Steven Lande of Manchester Trade, your line is open.
Steven Lande: How are you doing and thank you for this very timely discussion. I may be the oldest people in terms of following this trade issue since I was involved in the early – in the mid ‘60s when we negotiated with Great Britain and the European Union to adjust their tariff schedules to meet what was in those days the gap requirement.
My question is one, perhaps aimed as much at the Atlantic Council as others, it is very clear that it is not in the U.S. interest, particularly the U.S. business interest, for Brexit to take place, because in the same way it will cause dislocation to Great Britain, it was also cause dislocation to U.S. investment, and certainly (it mattered) on (U.S.’s) security interest.
We sense a rise in right wing influence in the Europeans and of course in new threats from Russia. What would be the reaction if the U.S. business community came out and as some other groups have done, some individual countries, and indicated that this would be a serious cost to us, but more important would have a – would have a negative impact on U.S. investment in the British Isles. Thank you.
Bart Oosterveld: Yes, thank you Steve, so Peter I know you’ve commented on this very specific topic of how do outside voices affect the debate domestic, so I’ll turn to you in a – in a minute. Steve, we did have experts on the – on the – on the business investment side on prior calls and I’ll get those transcripts and opinions to you.
That might be helpful. But Sir Peter, the broader topic perhaps first of how do outside voices affect the domestic debate and then if you are able to comment specifically on U.S. business interests and how their voice might carry, that would be great as well.
Sir Peter Westmacott: Thank you. I would make two comments, first of all (seeing) as the difference between business leaders talking about the reality of jobs and prosperity and trade and manufacturing and political figures who are commenting on the broader issues, which they call a just raise.
I think that it has been quite helpful for leading spokesman for companies with significant manufacturing interests in the U.K. and investments in the U.K. to say what they believe it means for their future investment decisions and whether they will still be able to carry on manufacturing in the U.K., given that so many firms are in Britain. Because it is a business (friendly), English speaking, relatively low corporate tax base from which to gain access to the single market of the European Union.
So I think the firms which have spoken out saying that sort of thing, BMW have done it, Airbus have done it, Honda and Nissan actually announced decisions that they are cutting down on future investment which caused huge headlines because it’s exactly the kind of decision that many others were warning if the Brexit referendum went the way that it did and the government and the Brexiteers said no, no, it’ll be just fine.
It’s not just fine. So I think reality-grounded comments from business leaders with significant business in the U.K. are quite helpful, except that it is very late in that game. We are going to face some (pretty key) votes in the next few days unless game changes.
But it might be that after these votes have been taken and when we are in the new territory if you like of Mrs. May’s deal going down, (and then you’ll) being (voting) against but not necessarily formerly excluded by the parliamentary vote and into extra time, as we say (in football parlance) while we look at something else, possibly even including another referendum.
I think business reality is very helpful to the debate. I don’t think that applies in the same way or certainly not now at a political level. I think foreign political interference tends to fuel emotions usually in the wrong way.
How dare anybody outside our country tell us what to do. We wish to take back our national sovereignty, sovereignty which (actually) doesn’t mean much if you haven’t got the power to do something with it in terms of setting trading rules and technical standards, which demonstrably we wouldn’t have.
But I think that for politicians to enter the debate (rather as) President Obama did, it kind of backfired by saying that that’s all the way at the back of the queue for future trade negotiations with the United States.
So I think politicians should be wary of it, but I think for business to speak out at the right moment, can still be quite helpful to ensuring that there is an informed debate, especially if public opinion is going to be asked to say something on the subject again.
Bart Oosterveld: Thank you very much, Sir Peter. I see no more questions in our queue.
This is a reminder that this was the third in a series of calls that Atlantic Council’s Future Europe Initiative and Global Business and Economics team have hosted. We will continue to host these calls as we’re able to provide insight on breaking news when it comes to Brexit. We are going to circulate a recording and a transcript of this call to its participants.
We want to thank you all again for dialing in today and hope to welcome you to an Atlantic Council call or event again soon. Thank you.
Operator: This concludes today’s conference call. You may now disconnect.