Brexit Update: Beginning of an Eventful Year

With a year of Brexit negotiations ahead, we can look back on eventful weeks in which the battle lines between the various players were increasingly drawn, and the stage increasingly set for what promises to be one of the most consequential events of recent European history.

May outlines plan for a ‘clean’ Brexit
On 17 January, UK Prime Minister Theresa May delivered a major speech on her vision for Brexit, offering observers across Europe an opportunity to gain an insight into what Brexit might actually mean. Her key announcement, that the UK will leave the Single European Market, has disappointed remainers, who have been working to push for the softest possible Brexit. Although this blow was softened by the news that there will be a final UK Parliamentary vote on the eventual Brexit deal, the cornerstone of the speech was the confirmation that, in the crucial trade-off between controlling freedom of movement and single market access, May favours controlling freedom of movement. 

Rodgers’ Exit
Early January brought an interesting development, as Ivan Rodgers, the UK Permanent Representative to the EU, resigned, leaving the UK’s team in the EU temporarily rudderless at a crucial hour. Although he has swiftly been replaced by Tim Barrow, a senior diplomat at the Foreign Office, Rodgers’ departure nonetheless signalled instability at a time when stability is badly needed. This came after a December in which the battle over the meaning of Brexit continued to be waged in earnest.

Barnier puts the cat among the pigeons
On 6 December, Michel Barnier, the EU’s chief negotiator for Brexit, raised a few heartbeats in London in his first press conference since taking up the post. He confounded the hopes of many within the UK government and appeared to adopt a hard-line approach to the UK’s future settlement. Perhaps most stunning was his assertion that there would only be 18 months for the UK to negotiate its settlement after triggering Article 50. This is less than the two years that the UK government had anticipated, and UK government officials were quick to stress that the Brexit process would be the product of mutual agreement between the UK and the EU.

He struck further negative notes, from a British perspective, by stressing that the UK’s deal must be inferior to its current situation as a Member State of the EU. He stated that ‘Being in the EU comes with rights and benefits – third countries can never have the same rights and benefits.’ Such words will alarm many in London who hope for a kind of bespoke deal that could allow the UK to maximise its access to the EU’s single market, while simultaneously imposing controls on immigration. Barnier’s words foreshadow the battle that Brexit negotiations will be.

Hammond calls for transitional deal
The UK Chancellor of the Exchequer, Philip Hammond, signalled on 12 December that the UK government would try and secure a transitional deal for the implementation of the post-Brexit settlement with the EU. Hammond emphasized that the deal would aim at safeguarding ‘financial stability’ and also stressed that the government would not ‘slam all doors shut’ in terms of immigration.

The statements from Hammond are almost certainly aimed at calming business groups, which have signalled significant concerns both regarding the financial unrest resulting from Brexit, and shortages of skilled labour from excessive controls on immigration. There were some signs of success on this front- the pound strengthened somewhat in the immediate aftermath of his statement. 

His comments also once more emphasized Hammond’s position as the most senior voice calling for soft Brexit within the cabinet. His comments are striking, given that David Davis, the Brexit Secretary, has previously stated that such a transitional deal would be unnecessary.