In praise of can-kicking

We’ve voted to leave the EU. What happens now? Well no-one is quite sure and that is already causing problems.

Early signs suggest that some businesses will respond by freezing recruitment, postponing investment and relocating jobs out of the UK. How much of this will happen is anybody’s guess but as the period of limbo drags on, it is likely that many firms will decide that life would just be easier for them somewhere else. This uncertainty, says Duncan Weldon, is poisoning our economy. Many economists are predicting a recession.

The trouble is, it is very difficult to see how this is likely to end. There are a number of options for designing Britain’s new trade relationships with the rest of the world but all of them have their problems. The Norway (EEA) and Switzerland (EFTA) models, while giving us access to the single market, would still allow freedom of movement which is what many Leave voters thought they were rejecting last week.  Beyond that, any option which restricted freedom of movement would almost certainly also involve restrictions on trade. Were these options put to a referendum, it is unlikely that we would get a majority for any of them. All of them will be unpopular for different reasons.

Whatever deal is hammered out with the EU will also take time. Anything which is agreed then has to be ratified by at least 20 member states. As this BBC graphic shows, there are a number of fences at which the deal could fall. Even the first one is proving hard to jump as British politicians, from both the Remain and Leave camps, insist they will not invoke Article 50 until they know what the deal will look like and EU leaders are saying they won’t start negotiating until the UK invokes Article 50. That is an indication of how the negotiations are likely to go.

Given the standoff, it is difficult to see the process starting soon. David Cameron has already passed the decision onto his successor. It is likely that, whoever gets elected, will insist on seeking a fresh mandate before taking such a momentous decision, so we are probably looking at another election and the selection of new ministers before anything happens. Once the party conferences are out of the way and the Conservatives have organised a no confidence motion in themselves, which they now need to trigger an election, it will be getting close to Christmas. No-one likes autumn elections, especially not late-autumn ones. And after Christmas everyone is off skiing….

Well you can see where I am going with this. There are plenty of plausible excuses good reasons for putting off Article 50 until at least the spring of next year. Even then, it may be that no-one actually has the bottle to do it. As the ramifications of leaving the EU become clear, the thought of being the politician who took the final decision to wreck the economy might be too much even for Boris Johnson. As Janan Ganesh said, he and Michael Gove looked terrified after the result of the vote was announced:

[O]n the morning after the referendum, the two men wore the haunted look of jokers at an auction whose playfully exorbitant bid for a vase had just been accepted with a chilling smash of the gavel.

David Allen Green said last week that, the longer Article 50 is put off, the greater the chance that it will never happen.

The fact is that the longer the Article 50 notification is put off, the greater the chance it will never be made at all. This is because the longer the delay, the more likely it will be that events will intervene or excuses will be contrived.

As he said in his FT piece, there is now a stalemate:

Nothing can force the UK to press the notification button, and nothing can force the EU to negotiate until it is pressed. It is entirely a matter for a Member State to decide whether to make the notification and, if so, when. In turn, there is no obligation on the EU to enter into negotiations until the notification is made. There is therefore a stalemate. If this were game of chess, a draw would now be offered.

It is possible, then, that this may simply become a feature of British politics.

It is not impossible to imagine that the Article 50 notification will never be made, and that the possibility that it may one day be made will become another routine feature of UK politics – a sort of embedded threat which comes and goes out of focus. The notification will be made one day, politicians and pundits will say, but not yet.

It’s rather like West Berlin during the Cold War. The longer time went on without a Russian invasion, the less likely it seemed that there would be one, even though the threat was still there. Eventually the city went back to business as usual.

Until Article 50 is triggered, the UK remains a full member of the EU. We could therefore go on like this for some time. Britain may still be about to leave the EU in 2020.

None of the non-EU models look particularly attractive or would have majority support among the voters, so can-kicking might actually be the best option of all. Over time, as the possibility of leaving looks less and less likely, Britain will return to business as usual. The certainty of Brexit uncertainty will become the new normal. The longer that goes on, the more businesses will settle down and start recruiting and investing again. Many will decide that the aggro of relocating isn’t worth it after all.

So here’s to fudge, avoidance, muddle, procrastination and a bit of good old British pragmatism. It may yet save us from oblivion.