Some 77 days have passed since Britain voted to leave the European Union. Yet this period has been strangely reminiscent of 77 years ago, after Neville Chamberlain declared war on Nazi Germany: a phony war. Theresa May, the prime minister, has created a new Department for Exiting the EU and put three leading Brexiteers in charge of the process. But little else has happened. Article 50 of the EU treaty, which would kick off negotiations, has not been invoked. And May’s mantra, “Brexit means Brexit,” has become a tired cliché.
David Davis, secretary of state for the new department, had another go in Parliament on September 5. Brexit, he explained helpfully, meant leaving the EU. He added that this implied taking back control of borders, laws and taxpayers’ money. He brimmed with cheer about the opportunities it would bring. Yet when asked specific questions— Would Britain quit the EU’s single market? What migration controls would it seek? Would it stay in Europol? When would negotiations start?—he gave only vague answers.
That may be quite sensible, for a reason he also offered: that it is more important to get Brexit right than to do it quickly. His department is a work in progress. He has 180 officials and a further 120 in Brussels, but he needs more. As he spoke, he was flanked by his two Brexiteer colleagues, Boris Johnson as foreign secretary and Liam Fox at the Department for International Trade. The three men have been having the usual turf wars and squabbles over exactly what Brexit should entail.
In China for the G20 summit, May disavowed several pledges made by Brexiteers before the referendum. She said she was against an Australian-style “points” system for EU migrants (though mainly because it might let in too many, not too few). She refused to back Leavers’ promises to transfer saved EU budget payments to the National Health Service or scrap a value-added tax on fuel bills. The not-so-subtle message was that, though the three Brexiteers may be nominally in charge, the real decisions will be taken by her and by Philip Hammond, her chancellor, both of them Remainers.
These two may have welcomed a second Asian intervention: the unusual publication by Japan’s foreign ministry of a Brexit paper. Japanese companies, it said, were huge employers in Britain, which took almost half of Japan’s investment in the EU last year. Most of that came because Britain is a gateway to Europe. The paper advised May to try to retain full access to the single market, to avoid customs controls on exports, to preserve the “passport” that allows banks based in London to trade across Europe and to let employers freely hire EU nationals.
The case for staying in the single market is simple: Economists say this will minimize the economic damage from Brexit. A “hard” Brexit that involves leaving the single market without comprehensive free-trade deals with the EU and third countries would mean a bigger drop in investment and output. Brexiteers claim that many countries want free-trade deals and the economy is proving more robust than Remainers forecast. Michael Gove, a leading Brexiteer and former justice secretary, scoffed that “soi-disant,” or so-called, experts predicting economic doom had “oeuf on their face.”
May has ruled out an early election and a second referendum. She refuses to provide a “running commentary” on her Brexit plans. And she insists she can invoke Article 50 without a parliamentary vote. Yet she is being urged by some to delay, since it would set a two-year deadline for Brexit that can be extended only by unanimity among EU leaders. In a thoughtful paper for the think-tank Open Europe, Andrew Tyrie, chairman of the Treasury committee, says the government should first decide what sort of Brexit it wants, adding that its leverage is greater before it pulls the trigger. He suggests waiting until the French election in the spring or even the German one in September.
Yet May might not be allowed to wait by her own party, let alone by fellow EU leaders eager to get Brexit out of the way before the European elections in mid-2019. The phony war may soon turn hotter.
© 2016 The Economist Newspaper Ltd., London (September 10, 2016). All rights reserved. Reprinted with permission.
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