Denis Staunton: Plenty of options for UK if Brexit proceeds

Until this week, it was hard to find a leading figure in the Leave campaign who seriously believed they were likely to win the UK’s EU referendum on June 23rd. On the Remain side, surface anxiety about a close race did little to conceal an underlying confidence that the economic case for staying in the EU would win the day.

A number of polls showing the Leave side ahead and a prediction by Conservative psephologist and Remain supporter Robert Hayward that the UK would vote for Brexit persuaded Leavers they just might pull it off. This has caused Remainers to consider what might happen if the UK does vote to leave.

Labour MP Stephen Kinnock suggested Remain supporters could use their majority in parliament to stop a post-referendum government from taking Britain out of the European single market.

“MPs will be presented with a very difficult choice in the event of a ‘leave’ vote because we have no idea what a post-Brexit UK looks like, and the referendum will not provide a specific mandate in terms of which Brexit model has the support of the electorate,” he said.

“If the British people voted to leave the EU that’s one thing. But can we really say that they voted for the devastation and destruction of the entire exporting sector of our economy?”

It is true that the question voters will answer is about whether they want the UK to remain in the EU. It says nothing about the kind of relationship Britain should seek to negotiate with the EU if it leaves and the official Leave campaign has made a point of not spelling out its preferred post-Brexit arrangement.

Free movement

As the campaign has progressed, most leading Leavers have ruled out an arrangement similar to Norway’s, which is part of the European Economic Area and has access to the single market. In return,

Norway

must pay into the EU budget, adopt most regulations from

Brussels

and accept the free movement of people.

For a campaign focused on the promise to control immigration, such an arrangement is unacceptable. But Remainers believe the economic shock they expect to follow Brexit could increase political pressure in Britain to retain access to the single market.

Just more than 70 per cent of MPs are campaigning for Britain to remain in the EU and they could influence the post-Brexit negotiations through what a “reverse Maastricht” strategy. This refers to the campaign by Tory rebels in the 1990s to vote down individual pieces of legislation implementing European integration.

Accepting the Norway option would anger voters who backed Brexit because of immigration. They would find that free movement would continue as before and Britain would have no veto over new countries joining the EU. Of all the post-Brexit options, however, it would be the least disruptive for Britain's EU partners, notably for Ireland.

The Common Travel Area could continue, there would be no need for a hardening of the Border and because economic damage to Britain would be limited, the knock-on impact would also be smaller.

Controlled exit

German finance minister Wolfgang Schäuble’s statement to

Der Spiegel

rejecting the Norway option carries no greater authority than any other speculative intervention.

Veteran Brexit advocates Richard North and Christopher Booker have long advocated the Norway option as the first step in what they call Flexcit, a gradual, controlled disentangling of Britain from the EU. North, who runs the argumentative and highly informative blog eureferendum.com, says it is worth accepting free movement to manage a controlled exit.

“Brexit is a process, not an event. Leaving the EU will have to be done in phases. The first phase simply takes us out of the political construct of the EU. Only then do we look at the long road of full separation,” he says.

North's ideas are anathema to the Vote Leave campaign, which has settled on immigration as the key to winning, although they have been adopted by free-market think tank the Adam Smith Institute and by Eurosceptic journalist Ambrose Evans-Pritchard. North is withering about what he views as the ignorance and dishonesty of the official Leave campaign, dismissing its figurehead Boris Johnson as a "flatulent man-child".

If Brexit prevails, a flexible approach to Britain’s disengagement from the EU could become more attractive to moderate Leavers, especially among Conservative MPs. For the Remain majority, however, the Norway option could be a staging post for a journey in the opposite direction.

Their hope lies in a Brexit vote being followed by buyers’ remorse as the economic impact sets in and continental economies continue to recover. If Britain decides to return to the EU fold, it’s better not to be too far outside.

Denis Staunton is London Editor