EUROSCOPE. Brexit mires Britain in uncertainty

It’s been a month since the British general election, whose results proved no less surprising than the Brexit referendum that had taken place a year before. Jeremy Corbyn – who many (including those within his own party) believed he was unelectable – led his party to its biggest gain in a poll since 1945, wresting the Conservative’s comfortable parliamentary majority from under their nose. While much remained uncertain in the immediate aftermath of the election – as voters and markets waited for the terms of its deal with the right wing Democratic Unionist Party of Northern Ireland – hopes rose that the election result made it more likely that Britain would exit Europe in a “softer” way than the government had been indicating to date.

After all, Prime Minister Theresa May had pegged the election as an opportunity for the public to give their verdict on her Brexit plans, including her insistence on leaving the customs union and the single market, as well as her determination to play hardball with Europe. “No deal is better than a bad deal” was a line repeated by the prime minister and others in her cabinet as an apparent sign of their willingness to walk away from the table, and their confidence that Europe would, despite its tough talk, be willing to accommodate Britain’s demands.

Formally little has changed: discussions between the two sides began as had originally been scheduled on June 19 led by Brexit Secretary David Davis on the British side and Michael Barnier on the European side, while off-the-record briefings to sections of the British media suggest Britain plans to maintain its tough stance. A Downing Street source told The Telegraph last weekend that the Prime Minister was prepared to “storm out” of Brexit talks over the terms of Britain’s exit – including the over €100 billion that could be demanded by Europe as part of the “divorce bill”. Earlier this month, a motion by rebel Labour MP Chuka Umunna to keep Britain inside the EU if the government failed to negotiate a deal and keep Britain in the customs union and single market failed as the Labour front bench joined the Conservatives in opposing it. At a Times newspaper event in June, Brexit Secretary Davis confirmed that Britain would leave the customs union and single market by March 2019.

The bravado has continued too with Andrea Leadsom, the leader of the House of Commons, calling for broadcasters to be “a bit patriotic” in their coverage of Brexit, while the trade secretary Liam Fox on Thursday accused sections of the media of preferring to see Britain fail than Brexit succeed.

At the same time, it’s hard to ignore the optimism felt by many sceptical of Brexit, as the economic consequences of the referendum have begun to become clearer, as has the message from Europe that Britain’s hopes of “having its cake and eating it” hadn’t a hope of succeeding.

In a speech on Thursday, Barnier reiterated Europe’s red lines – which he warned were not “fully understood across the channel” – which included the indivisibility of freedom of movement of goods, persons and services, no sector-by-sector participation in the single market (“you cannot be half in and half out of the single market,” he insisted) and the need for EU members to abide by its regulations.

His comments come as the impact of the decision to leave the EU has begun to be felt more and more acutely by Britons: according to Office for National Statistics figures released on Thursday household disposable incomes fell at the fastest rate in six years in the first quarter of the year, as a result of high inflation (the weakness of the pound in the wake of the referendum has played a major a role in this).

The British Retail Consortium recently warned that retailers would struggle to protect consumers from rising costs and that shop price inflation loomed. Brexit has also left Britain with a personnel crisis: while the NHS is already contending with large numbers of EU staff (particularly nurses) leaving Britain at a time the country has been struggling to recruit domestic staff (a recent survey by the main nursing association found that tough working conditions meant that British staff were also leaving the profession at a high rate), there are indications that skilled professionals too are considering their future in Britain. A report by law firm Baker McKenzie earlier this month found that over half skilled EU workers in Britain said they were likely to leave Britain before the end of Brexit negotiations.

Businesses, whose voices became lost in the run-up to the general election, have returned to speak more confidently about their concerns. In a speech on Thursday night at the London School of Economics, Carolyn Fairbairn, director general of the business lobby group CBI, called for the country to remain within the single market and the customs union till the final deal was in force – something she said would be essential to providing business with the certainty it needed. The risk of “multiple cliff edges” was already casting a “long shadow over business decisions,” she said, pointing to examples of the ways in which business decisions were being made at the expense of Britain.

All this comes at a time when the mood across Europe is more optimistic than ever, particularly as the union struck a free trade deal with Japan, pouring cold water on the argument of some Brexiteers that it was only by moving out of Europe that Britain could further its relations with non-EU nations, particularly in Asia. The tie-up with Japan could have been particularly significant for Britain, given the success of both nation’s auto sectors.

Such is the atmosphere in Britain, that there are even questions whether Brexit will happen at all. The political editor of a prominent BBC news programme said earlier this week that some supporters of Brexit had begun to fear that Brexit “may not actually happen” or could be put on hold as a result of tough economic conditions.

Whether this is the case or not, one thing is clear: far from delivering certainty, last month’s general election has made Britain’s future more uncertain than ever.

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