Brexit: What Next?

In our new and revised version of Cutting the Gordian Knot: A Roadmap for British Exit from the European Union, Rory Broomfield and I set out a series of important steps the UK must take if it is to make a success of Brexit. Some of those steps are daunting, to be sure, but since the people have spoken and new Prime Minister Teresa May has said “Brexit means Brexit,” there are some hard decisions to be made.

How we envisage the Brexit process unfolding is as follows:

• Her Majesty’s Government must realize that the option of entering the European Economic Area (EEA), even as a transitional move, is a dead end. EEA membership still allows the EU too much control over the UK’s law-making process and borders for it to satisfy the expressed will of the Brexit voters, who voted for the option whose slogan was “Vote Leave – Take Control.”
• Moreover, the EEA option is not attractive to the EU. Its own advice is that EEA membership would require a treaty change, something that EU leaders will have no appetite for. It will establish a precedent that would break the back of the EU principle of “ever closer union.” Just as EU leaders could look forward to making that a reality without recalcitrant Britain, they would be forced to think again with the prospect of other member countries demanding a form of associate member status.
• Instead, both sides should realize that invoking Article 50 of the EU treaties is what is required. It ends the application of the treaties to the member state concerned – Brexit means Brexit. Article 50 is intended as a deterrent to leaving, and the EU will need to see its applicability confirmed.
• Once Article 50 is invoked, the UK and EU will spend two years trying to conclude a deal over ending the UK’s participation in the treaties. It will likely include the phasing out of programs, the status of the UK as regards EU agreements with other countries and international organizations, and arrangements for UK and EU nationals resident in the other jurisdictions. It should be noted that such an agreement will require the consent of the European Parliament, which is not a given. A trade deal may well take longer than the two years allowed, and so may be pursued separately.
• Domestically, the UK will need to extricate its own laws and regulations from the EU’s. We believe that this job is virtually impossible for Parliament to undertake on its own, and too important to be left to government departments and civil servants. We therefore recommend a Royal Commission on Regulatory Reduction be empowered to look for what EU-inspired regulations need to be either ratified or repealed, and present the entire deal as a package to Parliament, in order to depoliticize the issue. This suggestion is similar to CEI’s U.S. proposals for a Regulatory Reduction Commission.
• Next, the UK will need to look to its prospects for international trade, and to market-based domestic reforms. Those will be covered in future blog posts.

In the meantime, you can read the entire report here.