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Analysis
Brexit brouhaha

Brexit brouhaha

Misunderstandings and myths after High Court judgment

by Brian Reading

Sun 6 Nov 2016

On 3 November three judges in the High Court of Justice ruled that the UK parliament must be consulted before Article 50 of the 2009 Treaty of Lisbon can be activated. The government has appealed to the Supreme Court, which is likely to hear the case in early December. Many people believed that the 23 June referendum result would mean immediate exit. It did not. The process for leaving is set out in Article 50 of the Lisbon treaty. Notice is given for the desire to leave, and then the divorce settlement must be negotiated. The Council of Ministers, heads of governments and heads of state, excluding the applicant’s, delegate negotiations to the European Commission president and Brussels administrators.

While the negotiations proceed, the UK otherwise remains a full European Union member. If terms are agreed, they must be accepted by the Council by a qualified majority and ratified by the European parliament. A two-year deadline is set, but can be extended by a unanimous vote in the Council. Handing negotiations to the Commission will result in demands for a ‘hard Brexit’.

Article 50 says nothing about whether the negotiations can be called off. It simply says that, if having left a former member wishes to rejoin, it follows the procedures set for applicants in Article 49 and elsewhere. The notion that activating Article 50 is irrevocable is incorrect, as the clause’s author, Lord Kerr of Kinlochard, has made clear. If activating Article 50 is not irrevocable, there is no need to require the agreement of members of parliament beforehand.

The government failed to make this case stick. Had it done so successfully, there would be no need to pit MPs against popular opinion. When terms are negotiated or deadlock is reached on the deadline, Parliament will have its say in repealing the 1972 European Communities Act. Indeed, when terms are known, a second referendum would seem democratic.

Another myth is that the prime minister can call an early election. Theresa May cannot. The Fixed-term Parliaments Act, which came into effect in 2015, made allowances for two exceptions: the government must be defeated on a no confidence motion; or MPs can, by a two-thirds majority, vote for an early election. A motion on activating Article 50 would not amount to a no confidence motion and would be likely to be carried. All MPs will be looking at their constituents’ referendum voting. None will be turkeys voting for Christmas with the threat of deselection.

The legal proceedings take no account of realpolitik. They add to uncertainty and the divide between people and parliament, especially if the House of Lords gets involved. The referendum result can be viewed in principle as a protest vote against the establishment. Efforts to overturn it can only rebound.

Soft or hard Brexit is now the issue. It translates into federalism versus states’ rights among remaining EU members. The Council has to agree on a negotiating position. This will be difficult. Deadlock is the most likely outcome and unanimity on extending negotiations beyond two years will pit hard and soft against each other. This has all the hallmarks of protracted free trade negotiations. Market volatility is certain.

Brian Reading was an Economic Adviser to Prime Minister Edward Heath and is a Member of the OMFIF Advisory Board.

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