The Gamble that Failed: The Brexit Election and what happens next

Professor Steve Peers

Last week’s early UK election ended with the surprising result of a ‘hung Parliament’, in which no one party had a majority of the seats in the House of Commons. What does this mean for the Brexit process going forward?

First of all, there’s a simple message for Theresa May’s Conservative party: they failed. Epically. The Prime Minister called this election three years early specifically to ask voters to increase her slender majority of seats in the Commons, in order to give her a mandate to carry out her Brexit plan. Voters refused – giving her fewer seats and a minority government instead. Of course, some voters must have voted on other issues, but the ‘Brexit negotiation mandate’ was the express reason for calling the election, and was repeatedly invoked by the Prime Minister throughout the election campaign. And while it’s true that the Conservatives are the largest party, that’s hardly comparable to the political legitimacy of a majority government – and again, that ignores the specific rationale for calling the election in the first place.

Having said that, the largest party is entitled to attempt to form a government, and the Conservatives are currently trying just that, in negotiations with a Northern Ireland party, the Democratic Unionists (DUP). That party has many of the same Brexit objectives as the Conservatives (see their manifesto here), including maintaining simplified border crossing with the Republic of Ireland (other UK parties, as well as the EU side in the Brexit talks, have this objective too). Together, the Conservatives and DUP will have a small majority of seats in the House of Commons.

What are the implications of this? Such a slim majority of Commons seats is vulnerable to defections, and in any event it’s not yet known whether the DUP will commit to support any proposed legislation. Furthermore, the government is now more vulnerable to rejection or major amendment of legislation by the House of Lords. While there is a constitutional convention, known as the ‘Salisbury Convention’, which commits the House of Lords not to block proposals for legislation tabled by a government which were mentioned in the winning party’s manifesto, it’s arguable whether this Convention applies where there is a minority government.

This applies even more so to the Brexit policy of this government, since the Prime Minister explicitly requested voters for a bigger Commons majority to combat the hypothetical prospect of the Lords voting against her Brexit agenda. In effect, she asked voters: “Give me a big majority so the Lords don’t meddle with my Brexit plans”. And the voters answered: “No”. In the circumstances, if the Lords block any government Brexit bills, they would not be frustrating the popular vote – but rather giving effect to it.

There is another option for a Commons majority to get its way, if the Lords blocks the adoption of legislation: the Parliament Acts, which allow the Commons to override the Lords.  However, there is a problem of timing here. If the Parliament Acts are invoked, the legislation in question comes into force after a one-year delay. But there are only 21 months left before Brexit Day (29 March 2019). Factor in the months necessary for Brexit-related Bills to pass through Parliament, and overriding the Lords is not a very plausible threat. Mrs Thatcher used to say that the problem with socialism is that you eventually run out of other peoples’ money. Maybe; but the problem with Mayism is that you eventually run out of your own time to negotiate Brexit.

Underpinning all this is the changed dynamics of UK politics as a result of the election. When the ‘Article 50 Act’ was passed earlier this year, there were enough votes in the House of Lords to support guaranteeing EU citizens’ rights in the UK, as well as parliamentary scrutiny of the Brexit deal. But eventually Labour Lords abstained on these amendments, and so the Bill was adopted without them. Labour’s abstention may have been because the party did not want to be accused of blocking the Article 50 process, and/or because the party was worried (in light of opinion polls) about facing a snap ‘Brexit election’ if it did.

Now the position is transformed: a) the Article 50 Act has been passed, so Labour cannot be accused of blocking the process; and b) the ‘Brexit election’ has already been held, resulting in an unexpected increase in Labour votes, seats, momentum and opinion poll ratings. Although Labour still lost the election, it is now far more likely to welcome a further election than to fear one in these circumstances.

Substantive issues

Let’s now examine how this changed political dynamic could affect the details of the Brexit process. The government plans to propose a Great Repeal Bill that would convert the bulk of EU law into UK law as from Brexit Day, as well as other Brexit-related legislation (on immigration and customs, for example). Under the new political environment, the opposition parties, possibly with Conservative defectors, have a bigger opportunity to pass amendments or to block such bills.

For instance, amendments could include: guarantees for the rights of EU citizens in the UK; limiting the government’s power to reduce social and environmental standards without a further Act of Parliament; effective parliamentary scrutiny of the negotiations; the role of the devolved legislatures; and parliamentary approval of the final deal. It seems unlikely that there are enough votes to demand a further referendum on the terms of the final Brexit deal, but there might be enough to require the government to seek some form of interim participation in the EU single market, pending negotiation of a subsequent post-Brexit trade deal. (While the Labour manifesto, as discussed here, ruled out continuing free movement of persons, arguably a brief continuation, with use of a safeguard clause like that in the European Economic Area, would not contradict this).

This brings us to a key Conservative party position that the new composition of the Commons could in effect rule out: the ‘no deal is better than a bad deal’ argument. One of the least edifying moments of the campaign was the Prime Minister’s endless repetition of this mantra in one of the debates, accompanied each time by bellows of support from her ardent admirers. This was always an implausible threat due to the damage to the UK economy it would likely cause if it were carried out. But now it is politically implausible to, for the government could well struggle to find a parliamentary majority in both Houses to carry such a threat out. (Labour, and other opposition parties, explicitly oppose the use of this threat).  

In particular, Parliament might be unwilling to repeal the European Communities Act to give effect ‘no deal’, or at least unwilling to repeal it in advance if the government wants to repeal it in advance of Brexit Day (ie, unilaterally breaching its EU law obligations set out in Article 50). On this point, it’s essential to recall the Supreme Court ruling in Miller, to the effect that EU law is part of the domestic legal system largely because of the European Communities Act, rather than executive powers. The ‘no-deal’ threat was always unconvincing in light of political economy; it is now even more unconvincing as a matter of parliamentary arithmetic.

One final observation on the ‘no-deal’ scenario: it is particularly incompatible with the position of the Conservatives’ planned partner, the DUP, because (as noted above) the latter is keen on maintaining the absence of controls on the border with the Irish Republic. Since customs issues are an exclusive EU competence, this cannot work out without some form of treaty with the EU. And the EU’s negotiating guidelines rule out a separate deal on this issue: other issues (including difficult questions about financial payments) must be settled as part of an overall package.

It’s technically possible that the EU might change this position and negotiate a separate deal on this issue, even if there’s no deal overall. But how likely is it? Some Leavers argue that the EU’s negotiation position will swiftly fall apart, and the UK can get whatever it wants from the talks. Yet they said things like this throughout the referendum campaign, arguing that immediately after the referendum vote the EU would beg the UK to do a trade deal on the UK’s terms. To borrow from some Brexiteers’ favourite genre (WWII films), German car makers would call Angela Merkel to tell her “For you, ze var is over”; and Merkel would in turn call other EU leaders to say “Ve haf vays of making you talk”.

None of this happened, of course. Nor did the parallel fantasy that Brexit would soon be followed by Nexit, Frexit and the rest as other EU countries held key elections. Instead, domino after domino stood firm, and populist party after populist party ditched unpopular anti-EU policies after a series of electoral defeats. Some Brexiteers said there’d be an orgy of countries leaving the EU; but the UK is the only one who showed up to it. When it comes to analysis of EU politics, maybe it’s time to swipe left on those Brexiteers.

Conclusions

The British public was asked to give its verdict on Theresa May’s Brexit strategy. Since the referendum, we’ve heard her sneering at Remain voters and alleging that the EU wanted to undermine the election, while her angry tabloid allies ranted about “enemies of the people”, “crushing the saboteurs” and “Blue murder”. After a year of this rhetoric, British voters have politely asked the loud woman to turn down the volume – refusing her explicit request to back her Brexit strategy and implicitly asking for a rethink. Sadly, having campaigned in Hard Rock, it seems that Mrs. May is incapable of governing in Easy Listening. But as always, it ain’t over until the Mother of Parliaments sings.

Barnard & Peers: chapter 27

Photo credit: Daily25

The judgment in Miller: Representative Democracy Strikes Back

Professor Steve Peers

Yesterday the UK’s Supreme Court gave its long-awaited judgment in the case of Miller (and a parallel Northern Ireland case), concerning the process of the UK leaving the EU. There’s already a detailed analysis of the constitutional law aspects by Professor Mark Elliott here. So my post will summarise the key elements of the judgment, and put it into the broader context of the Brexit process and the role of Parliament.

There are two main issues in the case: the role of Parliament in triggering the Article 50 process, and the role of devolved legislatures. Like the Supreme Court, I’ll take these two points in turn.

Role of Parliament

The Supreme Court, like the High Court ruling in Miller, began by pointing out that it was not ruling on the merits of Brexit, or on any the substantive details of how it would take place. It was only ruling on which political bodies in the UK have the power to send the Article 50 notice to the European Union, thereby starting the clock ticking on the timetable for Brexit. The central question in the case was whether the government could start the process, by means of the ancient ‘Royal prerogative’, or whether some action by Parliament was also necessary.

While the Royal prerogative traditionally gives the British executive power to decide (among other things) on the negotiation and ratification of treaties, and the withdrawal from such treaties, international treaties have no effect in domestic law without an Act of Parliament to give them effect.  In general, the royal prerogative cannot be used to confer rights or remove rights of individuals. Given that the UK’s EU membership is largely regulated by an Act of Parliament – namely the European Communities Act – does it therefore follow that an Act of Parliament (or some other form of consent by Parliament) is necessary to authorise the government to begin the process of removing those rights?

The Supreme Court ruled by a majority (8-3) that Parliamentary consent was indeed necessary. It did so by pointing to the particular nature of EU law – a ‘dynamic’ process of new law-making by EU institutions, which takes effect as part of the domestic law of the UK by means of (primarily) the European Communities Act.  

In reaching this conclusion, the Supreme Court touched on a number of important points. Most significantly, it expressly stated that the judges were not deciding the question of whether an Article 50 notice could be revoked after it was sent, or whether any conditions could be attached to it (para 26). This compares to the High Court, which had accepted the agreement between the parties that the notice to withdraw from the EU could not be revoked.  

This is significant because some would like Parliament or the public to consider whether to withdraw the Article 50 notice, with the result that the UK remains in the EU, when the terms of the final agreement to leave are known. That objective is obviously not feasible in principle unless Article 50 is indeed revocable – although there might be another route to the same end: an indefinite suspension of the two-year time limit for leaving the EU.

A case will soon be brought before the Irish courts on this point, seeking to obtain a reference to the ECJ to clarify the issue. The Irish courts – or the courts of any other Member State – now need not be concerned by any possible awkwardness stemming from taking a different view from the UK courts on this issue. Furthermore, if the revocability issue is somehow brought before a UK court, any lower court can see that the Supreme Court has deliberately left the issue open, and so can consider the issue afresh.  

Next, the Supreme Court provided a neat – if belated – answer to the argument that EU law membership has rescinded parliamentary sovereignty. It observes (paras 60 and 66) that EU law only applies in the UK as a matter of domestic law because Parliament had agreed to this in the European Communities Act. It followed that Parliament could always curtail or abolish this domestic effect of EU law, if it chose.

The Supreme Court also ruled that Parliamentary involvement in converting EU law into British law, by replacing the European Communities Act with a planned ‘Great Repeal Act’, was not sufficient to substitute for the role it should have in triggering the Article 50 process (para 94). Its discussion of the European Union Act 2011 (para 111) does not address head on the argument some have made that this act requires a further referendum before leaving the EU. For a number of reasons, the judges confirm that the referendum result is not legally binding – although they also acknowledge its political significance (leading up to para 125). Finally, it makes clear that legislation (ie an Act of Parliament) is required to trigger Article 50 (para 123). A parliamentary motion won’t do – meaning that parliament will have more chance to influence the result.

       

Devolved legislatures

What about the position of the UK’s devolved legislatures, in Scotland, Northern Ireland and Wales? First, the Supreme Court ruled that those provisions of the Westminster legislation setting up these bodies which require them to act in accordance with EU law do not require those legislatures’ consent to the UK withdrawing from the EU. Secondly, it ruled that the ‘Sewel Convention’ – the informal constitutional rule that Westminster will not normally legislate in areas of devolved powers without devolved legislatures’ approval – was not a legally binding rule. Finally, it also ruled that the Good Friday Agreement did not address the Brexit issue.

Comments

What does the judgment mean for the Brexit process, and for parliamentary democracy more generally? On Brexit, it means that the government needs Parliament to adopt an Act to trigger Article 50, and it intends to propose a bill to this end very soon. Before becoming an Act of Parliament, a bill needs majority support from both Houses of Parliament. While, in light of the referendum result, there is no prospect that a majority of MPs will reject triggering Article 50, the bill is potentially subject to amendments – although the government may try to argue that amendments to its short, highly focussed bill are inadmissible.

But certainly the opposition parties will try. The Labour party has announced plans to table a number of amendments; the Scottish National Party says it will table 50 amendments; and the Liberal Democrats will propose holding a referendum on the final agreement reached by the UK and EU. In the House of Commons, the combined opposition would need around ten Conservatives to join them to pass any amendment. The House of Lords has to pass the bill too.

For a good overview of possible amendments, see this post by Professor Jeff King. In my view, one particular key amendment is essential: ensuring that an Act of Parliament must be passed to approve the UK/EU Brexit deal. That will give Parliament, in 2019, the full power to decide what to do then, from the range of possibilities available.

Anticipating one popular amendment, the government conceded already today that it will publish a White Paper on Brexit. However, rather cynically it seems that the White Paper will only be published after much of the parliamentary scrutiny has taken place. And it has been rightly suggested that an impact assessment would be much more useful.

While the Miller judgment means that arguments over Brexit primarily shift from the courts to parliament, it is not quite the end of legal proceedings. As noted already, the Irish case about the possible revocability of Article 50 will soon be launched, and the Miller ruling is expressly neutral on this point.

Furthermore, the ruling arguably strengthens the contention in a planned case (Wilding and others) that Parliament must also vote on whether the UK should leave the European Economic Area (EEA), a separate treaty that extends the EU single market to some non-EU countries.  I’ve previously blogged on that planned case here, and I can update the status of the case, thanks to Chelvan of No5 chambers, who is acting for one of the claimants (led by Ramby de Mello, for the second Claimants). The permission hearing in the case is due 3 February, and these claimants are arguing that (1) as with the European Communities Act, the royal prerogative does not give the executive power to issue an notice under Article 127 of the EEA; and (2) following the Miller judgment, the exercise of the prerogative without authority of an Act of Parliament will lead to a destruction of fundamental rights and freedoms conferred to UK and EEA nationals living and residing in the UK. As Miller confirmed, the referendum result is advisory; and in any event, it was an expression of political will with respect to leaving the EU and not the EEA.

What about the broader impact of the judgment? It is striking that in every respect, the judgment places the Westminster Parliament at the centre of the Brexit debate. By rejecting use of the royal prerogative to trigger Article 50, the ruling gives Parliament the power to set conditions upon the executive’s conduct of Brexit talks, and ensures that a broader public debate takes place. By affirming that the referendum result was not legally binding, it guarantees that legal authority remains with elected Members of Parliament – buttressed with unelected Lords – rather than the general public. And by asserting that devolved assemblies do not have a veto over Brexit, it entrenches Westminster’s decisive role in the national political debate. Miller raised deep questions about a number of developing tensions in the fabric of British constitutional law: between direct and representative democracy; between Parliament and executive; and between devolved powers and UK-wide government. To every question, the answer was, in effect: the Westminster Parliament.

Of course, there are practical limits to Westminster’s legal authority; and the judgment expressly recognises them. The outcome of the referendum vote is an unavoidable political reality. And so is the convention of seeking seeking the views of devolved assemblies – even though the government has already rejected their views, and intends to proceed against the opposition of the majority of voters in Scotland and Northern Ireland, and (as regards ‘hard Brexit’ at least) against the opposition of the government of Wales and the Plaid Cymru party (see their recent position paper). Furthermore, the executive has many ways to influence the conduct of Parliament’s business.

But for all these caveats, the judgment has certainly returned a degree of power over Brexit to the mother of Parliaments. The outcome of the debate over the Article 50 bill, in conjunction with the battle to come over the ‘Great Repeal Bill’, will determine how important Parliament remains as Brexit unfolds.

Despite many constitutional lawyers’ criticism of the technicalities of the judgment, in my view it at least fully expresses the traditional spirit of the UK constitution – and Parliament’s historic role in British political life. I’m an infrequent visitor to the Houses of Parliament, but I’ve experienced Ian Paisley push rudely in front of me in a queue, Dennis Skinner swear randomly at me in a lift, and Liam Fox glare angrily at me in a corridor. (Reader, I glared back at him). It’s the birthplace of boundless political dreams – yet also the graveyard of countless political careers.

Westminster's position may not last. Many have legitimate concerns about Parliament: the Hogarth cartoons displayed on its walls remind us that concerns about its scandals stretch back through the centuries.  There are valid arguments for further decentralisation of power to the regions, cities and devolved assemblies; for direct democracy; and for the efficiency of executive power. But for now, its pivotal role in the deciding the key aspects of Brexit can only be welcomed.

Barnard and Peers: chapter 27

Photo credit: the Telegraph

Hard Brexit Benefits? Change Britain’s £24 billion of unicorns

Professor Steve Peers

On Boxing Day, the pro-Leave group ‘Change Britain’ produced a ‘report’ (actually a press release with an annex) claiming £24 billion worth of benefits from a ‘hard Brexit’ – leaving the EU without participating in the single market or customs union. This claim was widely repeated uncritically by the press – although a later critique of the economics by Jonathan Portes was published, and the economic analysis in the report was also fisked by Sam Bowman.

Their comments cover a lot of ground, but it’s worth standing back and looking at the report as a whole – and at how poor the debate over Brexit has become.

The report produces its £24 billion sum from three sources: a) no further contribution from the EU budget; b) future trade deals; and c) cutting back ‘red tape’. Let’s look at each of these in turn, and then note what the report neglected to mention.

EU budget contributions

The report starts with the UK’s contribution to the EU budget: £19 billion if the UK budget rebate is not counted; £14 billion if the rebate is taken off; and £10 billion if the amount spent from the EU budget in the UK (on things like farm subsidies, research and regional development) is deducted. Change Britain accepts that the possible savings are £10-14 billion.

So this necessarily admits that the £19 billion figure – which was the basis for the £350 million/week number ‘on the side of the bus’ during the referendum – was a lie all along. It was a lie because as I point out here, with further details and links, the rebate money is never ‘sent’ to the EU, and the UK has full control over how that rebate money is spent and whether the rebate is retained in future.

Starting by admitting (albeit only indirectly) that they previously told a huge lie is not a good beginning for the report’s authors, since it puts the credibility of anything else they say in question. But let’s give them the benefit of the doubt and examine their other claims separately.

Cutting back ‘red tape’

The report estimates possibly several billion pounds savings from scrapping some EU laws – concerning the issues of air pollution, animal welfare, data protection, GM foods, chemicals regulation, air passenger compensation, battery pollution and company law. These estimates should have been accompanied by numerous health warnings.

First, as Portes points out, these estimates (and the trade estimates), taken with the estimates on contribution savings, mix up several different things: public finances and business costs. Adding the numbers together is economically incoherent.

Secondly, most or all of the ‘red tape’ referred to has a non-economic value: many people prefer cleaner air, more privacy and better treatment of animals, for instance, quite apart from the impact on GDP. There may, in any event, be indirect economic costs from pollution and less secure data, among others.

Thirdly, in some cases there may be savings to business but not the overall economy. Take air passenger compensation: if passengers are not compensated for delayed flights, the airlines save money – but passengers no longer have that compensation money to spend. True, airlines might pass their savings on to passengers in general – but still the passengers who previously received the compensation money will no longer be getting it. Either way, how would the overall economy benefit? The same goes for cuts to workers’ holiday pay and other worker benefits that business groups sometimes campaign for (though not on this occasion): cuts will save businesses money, but how will the corresponding cuts in workers’ spending power make the economy as a whole better off?

Fourthly, some of the laws concerned are related to market access to the EU – most obviously, the biggest proposed saving, data protection law. As I discuss here, EU data protection law limits data transfers from non-EU countries without an ‘adequate’ level of data protection. Scrapping that law (which would be complicated anyway by the right to privacy in the ECHR and the separate Council of Europe data protection Convention) would mean limits on market access to the EU. This would surely have an impact on the economy. 

Future trade deals

The report claims that the UK would generate exports to non-EU countries by signing its own trade deals. It calculates these increased exports by taking EU estimates of the trade effect of new deals with certain countries and assuming that the UK would benefit from 15% of that increase, because the UK has 15% of the EU’s trade with non-EU countries. As Bowman points out, this is nonsense: the percentage of EU trade with non-EU countries which is held by the UK varies widely and depends on many factors.

Moreover, country where the biggest possible trade benefit exists in the ‘asked for a trade deal’ list – Korea – already has a trade deal with the EU, under which UK trade has already increased. (The EU document which the Change Britain report links to even refers to the EU/Korea deal as being in force already. Change Britain either a) did not read this document – which it uses as a key source – and is moreover ignorant of the EU/Korea deal generally; or b) it is simply telling a blatant lie.)

So while it’s theoretically possible that the UK could sign a better trade deal with Korea than the EU did, the benefit of that deal would not be anything like the £25 billion claimed. Certainly, the report provides no evidence of this. Indeed, the UK will be worse off re exports to Korea after Brexit unless it convinces Korea to agree to a UK-only version of the existing deal.

Moreover, several other countries referred to in the report have agreed a trade deal with the EU which is not in force yet: Canada and two ASEAN states (Vietnam and Singapore). Others are negotiating with the EU (USA, India, Japan, Mercosur, several other ASEAN states). The report’s estimates could therefore only be valid if (a) the EU trade deals agreed or under negotiation are respectively either not ratified or not agreed; and (b) the UK is able to negotiate trade deals with those states.

Note that trade deals are not that easy to negotiate or ratify: the US has also had trouble doing a trade deal with the Mercosur states in South America, and the Change Britain report itself notes that the trans-Pacific trade deal might not be ratified. The report also fails to refer to the obvious increase in imports from the countries concerned that would follow from such trade deals. Finally, it one reason there is no EU/India trade deal is a dispute between the UK and India during the talks. Obviously Brexit will not solve that problem.

In any event, if the UK stayed in the single market but fully left the customs union (like Norway), it could still sign its own trade deals with non-EU countries. 

Costs of leaving

The report says nothing about costs of leaving the single market – estimated at 4% of GDP by the IFS, for instance. Maybe those forecasts are incorrect, but the Change Britain report doesn’t even acknowledge their existence, never mind try to rebut them. In practical terms, for instance, how much will it cost to hire extra customs officers after leaving the customs union, or extra border guards and other immigration staff after ending free movement of people? In Change Britain’s fantasy world, these people must be invisible, or work for free.

Conclusion

An interesting coda to the Change Britain report: late last night, Michael Gove, the head of the official Leave campaign, went on Twitter to debate with Jonathan Portes about it. Portes repeatedly asked Gove to confirm if he had read the report, and Gove repeatedly avoided answering. Instead he demanded Portes first tell him how he voted in the referendum. How is that relevant to a debate over the issues?

And how can Gove assert simultaneously that he is certain Brexit will be economically beneficial and sneer that he is tired of ‘expert’ economic forecasting? The Change Britain report – or any other economic assessment of Brexit – necessarily involves making some hypothetical assumptions. The alleged ‘savings’ from red tape reduction and new trade deals both rely on such assumptions. So Gove is in effect taking the effect of Brexit on faith, assuming without evidence (since he won’t debate the issue in detail) that the ‘experts’ he agrees with must be right about the future, and the ‘experts’ he disagrees with are wrong about it. That’s not an argument against experts; it’s just confirmation bias. To be fair, though, the number on the side of the bus wasn’t confirmation bias. Rather, it was a lie.  

Scribbled without numeracy by incompetent interns; published without scrutiny by hungover journalists; cheered without irony by back-stabbing politicians. Six months after the referendum vote, the debate over Brexit deserves better than this report. We can only cross our fingers for 2017.

Barnard & Peers: chapter 27

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