Watch The Article 50 Pea Very Carefully

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In my last post I discussed how the EU, aided by a vigorous UK Remain Campaign, will use time and well-judged leaks and statements to destabilise UK markets, reduce business confidence and undermine political support for brexit in the UK. The aim will be to persuade the British electorate to change their minds, possibly in a new referendum or perhaps after a general election held under adverse circumstances. In that blog, I mentioned that the reversibility of Article 50 would become a key plank of the EU’s strategy, and I predicted that the EU’s lapdogs within the UK Remain Campaign would seek to have the matter determined in the European Court of Justice.

Sure enough, today we see an article in the Daily Telegraph confirming my prediction. Jolyon Maugham QC is one of the key Remain lawyers in the recent High Court action and he has been unstinting in his opposition to brexit. He claims to be merely protecting the sovereignty of parliament but his actions and statements are unmistakably political rather than altruistic. His comments in the Telegraph confirm my worst fears and I would like to explain why.

The High Court ruling is important because it requires that Parliamentary approval is obtained before Article 50 can be triggered by the Government. However, the basis of its judgement touches on the key issue that will become the critical political focus for the next few years: the reversibility of Article 50. The ruling stated that the triggering of Article 50 required parliamentary consent because an Article 50 declaration cannot be reversed and so the very act of triggering it would result in inevitable changes to the law which can only be done through legislation and not by royal prerogative. Now Brexiteers might be comforted by the idea that Article 50 cannot be reversed but the matter will not end with this ruling even if it is upheld in the Supreme Court case on 5 December.

In fact, this ruling temporarily suits the Remain Campaign because the effect of a Parliamentary vote in both houses could be to introduce long delays especially if, as the Telegraph article suggests, the Regional Assemblies/Parliaments also have to provide their separate consent. Delays are the key to the strategy of making the UK electorate change their minds. The longer matters go on, then the more opportunity there is to disrupt brexit talks and foment resistance at home. In the worst case, an intervention by the Scottish Parliament could result in a massive constitutional crisis which could cause huge political instability and shake the foundations of our country to the core. The High Court ruling is only a temporary staging post, however. The Remain/EU strategy will only work if Article 50 can actually be reversed, and in this regard British court rulings will eventually become irrelevant as the reversibility of Article 50 is a matter of EU law and it will be decided in the ECJ. If you read the Telegraph article it is clear that this has been the Remain plan all along. It is ironic and sheer legal hypocrisy that the reversibility of Article 50 can be used in the British courts to support one phase of the EU/Remain strategy (delay), and then taken to a European Court to turn the idea on its head for the longer term EU objective.

There are some who suggest that the Prime Minister should not be appealing the High Court’s decision in the Supreme Court. I think there are 2 ways of viewing this depending on how much you trust her intentions. If she genuinely wants the UK to leave the EU then it could be sensible to get as many of the legal arguments out of the way before Article 50 is triggered as protracted court actions will be more toxic once talks are under way. Alternatively, it may be that as a weak Remainer, complexity and delay might suit her and it may eventually become clear that, contrary to her public statements, she is actually complicit in the EU’s strategy of keeping us in. At the moment she has the benefit of my doubt, but I remain open-minded.

The sad fact is that the legal machinations are completely beyond the control of ordinary voters. That said, a political battle of gigantic proportions is already under way and it is one that will determine the outcome of the brexit war and the complexion of British politics for a generation. Leavers must brace Theresa May’s spine and this will require mass overt action on the streets to remind all MPs and peers that not only should the outcome of the referendum be respected but that when the people are asked a question through a democratic medium then they expect their answer to be put into effect. It is not enough for leavers to sit quietly at home moaning until it is too late. The Remain strategy is already in play and they will marshall the full force of the establishment. We need to oppose it with all the vigour we can find because there is more to this than just brexit. There is a fundamental principle at stake.

How We Could Lose The Brexit War

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After the stunning victory of the Leave Campaign in the EU Referendum, I decided to take a sabbatical from blogging. The result was sufficiently decisive for it to seem that brexit was secure and my confidence was boosted by Teresa May’s remarks at the Conservative Party Conference. I don’t think I have been alone in this complacency. By 23rd June, many voters were fed up with the campaigns, and after carrying out their democratic duty at the polling stations, many joined me in a summer of quiet reflection on a sunbed. The leave campaigns folded or went very quiet, and even though a core of Remainers continued to voice their discontent, it did seem that they were shouting into a strong wind blowing the UK towards the exit door. It was only after the recent ruling at the High Court that my reverie has crumbled, and after a few days of careful thought I have decided that brexit is indeed fragile and unless leavers wake up to the risks we could easily lose, not the arguments, but the outcome. Brexit does not necessarily mean brexit and it could yet be lost.

To some extent the ongoing court action is a bit of a sideshow with one important exception that I will cover later. There is very little chance that MPs will overtly defy the people but they may well demand concessions from the Government as payment for their assent to trigger Article 50. The Government has highlighted that if they are forced to reveal their negotiating position before talks start then their hand will be weakened. To my mind, this slightly misses the point. At some stage the government will have to tell the EU what it wants from the negotiations and the strategy will then become clear. The real risk is not this but the long-term political furore and instability that will accompany domestic debates on, for example, whether the UK should remain a member of the single market. To explain this we need to look at the EU’s likely strategy.

Make no mistake, the loss of the UK from the EU would be a gigantic political blow to the project. It may not necessarily be an economic blow depending on the residual trade agreement but politically it is huge. If the EU tries to punish the UK in a final settlement then both sides will lose economically. On the other hand, if the EU allows the UK to leave without serious economic penalty then other member states will soon start to question their own position. They will look at the UK and ask why they should accept the downside of Brussels’ rule if it is possible to trade successfully as an independent nation? Trade through the Single Market was deliberately built into the EU treaties as a fundamental lever to engineer a political union. Any unravelling of the Single Market will therefore be a direct assault on the long-term strategy of the project and will not be tolerated by Juncker and his colleagues. If mutual economic damage is to be avoided they will therefore conclude that a better strategy will be to persuade the UK to change its mind.

The foundations for such an EU strategy are the courts, time, the markets and the remain campaign (including some of its British MPs). It was central to the recent High Court judgement that Article 50 cannot be reversed once triggered and this will again be addressed when the Supreme Court meets on 5 December to consider the Government’s appeal. Whilst the ruling is convenient for the Remainers’ current campaign, I fully expect that in a volte-face Remainers will later contest the irreversibility of Article 50 as a matter of EU law (and huge irony), in the European Court of Justice. It is an important judgement, and central to my argument that we will be forced to change our mind about leaving. Watch carefully: if Gina Miller and the same applicants take the matter to the ECJ then the overall strategy will be laid bare.

A ruling by the ECJ will take a number of months even under an expedited procedure. By that stage I expect Article 50 will have been triggered and negotiations will have commenced. In my view, there is only one tool to achieve a UK rethink and that is market instability. I expect the EU to try and drag out any talks for as long as possible. Simultaneously, a drip, drip of careful leaks will be used to undermine business confidence, the markets and the pound. Unattributed comments will be downbeat about future prospects and politically sensitive sectors of the British economy (such as banking and motor) will be targeted for special treatment and dire warnings. Talks will seemingly become intractable and business confidence in the UK will come into the cross hairs. At some stage over the next 2 years, a weaker pound is going to feed through to higher prices in the shops and it could have wider effects on interest rates and investment depending on how the government and the Bank of England manage the situation. Growth, that great political football, could reduce and will become a hostage to outside interference. In these circumstances, a further run on Sterling fomented by EU politicking could quickly erode market confidence and result in severe instability. The longer that talks go on, the more likely this scenario becomes.

The financial situation will be exacerbated by simultaneous political instability fomented by the Remain Campaign and aided by special interest groups and experts such as the OECD and IMF. As markets take fright, increasingly loud calls will go up for a change of direction, a second referendum or a new mandate. Remainers and big business with vested interests will protest, MPs will waver and the media will start to take sides with whoever seems to be winning. With such a slim majority, May will struggle to steady the ship. On the other hand, a General Election in such circumstances could quickly become a proxy for a second referendum and I believe the outcome would be highly unpredictable with widespread tactical voting making the result very hard to foresee. Many have said that May would have a clean sweep but I think political and financial events could quickly change that notion. The margin of 52 to 48% is conclusive but not huge, and under difficult economic circumstances there could be many leavers who decide to switch sides even if that meant voting tactically in a general election.

The only way around this is for the UK to seek a quick brexit even if that means a slightly sub-optimal final deal. The damage caused to the UK economy by a quick deal would be far less than the protracted car crash I described earlier. The UK should set hard deadlines for the different stages of the talks and be prepared to walk away at the first sign of EU bad faith and revert to red lines. Simultaneously, the UK should seek allies for a fair break within the European Council. We are far more likely to prevent the scenario I have described by careful diplomacy with other heads of state than by attempting to engage with the Commission and European Parliament. Heads of State will be more likely to be interested in the hard economics of a deal whereas the Juncker crowd and MEPs will remain fixed on their long term strategy for the EU. It is interesting to note that Juncker is aware of this likely tactic and has already tried to take steps to rein in other EU leaders and bolster the role of the Commission and Parliament in the negotiations.

There is one further tactic that May might consider if she really wants to deliver brexit (and I remain open-minded whether she really does), and that is to hold a General Election now rather than later under the adverse circumstances I described. She could get the UK Court cases out of the way, trigger Article 50 and immediately seek a mandate for the talks. The current circumstances seem relatively benign and with the Labour Party in disarray she might well increase her majority significantly. However, the time for an early election is very soon, not later and there is still a risk that it could become a proxy for another referendum. It is a hard call to make.

As for Leavers, we need to prepare for the coming battle. With the demise of VoteLeave and with UKIP somewhat in disarray there is a desperate need for leadership and an active campaign that will again attract cross-party support. Change Britain are forming the basis of a campaign but it is at an early stage and Leave.EU have declared this week that they are returning to active campaigning. There is a planned march on Sunday 4 December. I’m not keen about marching on the Supreme Court so I was glad that the date for the march was brought forward to the day before the judges start sitting. It is far more important at this stage that Leavers make a strong political point to Parliament that we are ready and determined to protect our vote. I hope some readers will also attend. We need to re-establish our networks and prepare because the coming political battle will be far harder than the one we fought earlier this year.