Brexit: And now what ? Cameron succession and the future of CAP

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A new scenery of the post brexit vote’s political drama is opening in the UK and in the continent.

A campaign against the “democratic deficit” in Brussels has led to the removal of a prime minister democratically elected only 13 months ago, and thus years in advance of his statutorily prescribed term.

Members of the EU are making clear to the UK that it needs to invoke article 50 of the treaty without further delays, putting additional pressure on a UK political apparel that finds itself in a totally unknown territory and with a lack of post Brexit vote’s leadership.

téléchargementAccording to Article 50 of the Lisbon treaty, a country wishing to leave the bloc must formally notify Brussels of its intention before negotiations can begin.

Until that happens, the country in question is still considered a full EU member and cannot be expelled from the bloc.

 

 

During the referendum campaign, British Prime Minister David Cameron promised that he would give the required notice immediately in the event of a “leave” victory.

After the vote, however, Cameron announced that he would resign in October and turn the decision to notify the European Union over to his successor, who will likely be a member of the “leave” camp.

To succeed Cameron, a willing politician would have to first win the Conservative Party’s nomination and then survive any potential no-confidence votes in Parliament.

cameron

After that, he or she would have to determine how — and whether — to proceed with the exit process.

Constitutional lawyers have argued that any prime minister would need Parliamentary approval to trigger Article 50.

In light of the doubts plaguing Britain’s people and its ruling party, the United Kingdom could be headed for early elections, either because of insufficient support in Parliament for whoever is picked as the new prime minister or because of the new government’s desire to seek popular legitimation.

If that happens, all bets are off.

Parliamentary crisis ahead?

UK parliamentThe Conservative Party could break into pro- and anti-EU factions.

The Labour Party, which faces a leadership crisis of its own, may elect a pro-EU candidate and promise to work to keep Britain in the bloc.

Smaller parties such as the Liberal Democrats are likely to support any pro-EU governments.

Whether appointed by the Conservative Party or chosen in snap elections, Cameron’s successor could try to negotiate a better agreement for the United Kingdom with Brussels.

Can the 2001/2008 Irish votes be considered as a precedent ?

In 2001 and 2008, Ireland’s voters rejected EU treaties in referendums. Once Dublin negotiated concessions from Brussels, however, the Irish public voted again, this time approving the treaties.

But voting against an EU treaty is not the same as voting against EU membership.

Moreover, when the European Union made its concessions to Ireland, Euroskepticism was not nearly the force in Europe that it is today.

Brussels can no longer afford to make concessions to a country that is leaving the group as it did a decade ago.

Need for post Brexit’s leadership : Who to replace Premier Cameron ?

Who will replace on September 9th election day, outgoing Prime Minister David Cameron at the Presidency of the UK Conservative party ?

The incombant will have the responsibility as UK’s Premier, to negotiate the country’s exit from the European Union.

One of the key decisions that the new Prime Minister will face is when to formally notify Brussels of Britain’s intention to leave the union and to negotiate its departure from the European Union.

This process should last for two years and will set the stage for the future relationships of the UK with continental europe.

Will the UK have continued access to the internal European Market remains a question until then.

share of EU ex UK exports

Source NIES starto

There are multiple implications for Diplomats and Public Affairs professionals as to what will come out of the implementation of Article 50 of the Treaty.

 

Setting agendas and managing reputation will also be at stakes.

 

Voting Schedule :

The voting is scheduled to take place as follows:

  • July 5-12: Successive votes among Conservative members of Parliament narrow the five candidates down to two.
  • The final two candidates go to a ballot of the entire party membership.
  • Sept. 9: The result of that vote is announced.
  • The new prime minister must be sworn in shortly after that. It could happen in mid-September or, as Cameron announced, after the Tory Convention in early October.

 

The Conservative party leadership is trapped by its immigration campaign promises for the « Leave »

david lloyd georgeFor the first time since the breakup of the Liberal Party into a faction led by a former prime minister, Herbert Asquith, and one led by his successor, David Lloyd George, the party has recreated an internal political divide that could result, as it did with the Liberals, in the party’s elimination as a governing entity.

Despite a very engaged campaign for the « leave », none of the five conservative leaders and contenders have specified when Article 50 should be invoked.

 

To understand a puzzling aspect of the Brexit vote one must take into account the facts that most economically vulnerable persons in the United Kingdom and those who have suffered most under the British government’s policy of austerity voted in favor of Brexit.

However, they had the the full knowledge that it would, in all likelihood, turn an estimated positive growth in GDP to a negative and plunge the economy into recession, jeopardizing the entitlements and falling prices on which these persons depend.

Indeed, considerable numbers of voters in economically depressed areas that receive significant amounts of EU aid voted to leave the bloc.

The British public, in alarm at a possible migration inflow of refugees has effectively voted to end cooperation with France and other countries by which refugee camps were maintained — and refugees vetted — outside of Britain.

immigration uk

All candidates have promised to preserve Britain’s access to the EU internal market without accepting the EU principle of free movement of citizens. (Rule accepted by Norway and Switzerland when they joined the European Free Trade Association).

 

hollande et merckelThe proposal seems to be totally unrealistic : EU nations, including heavyweights Germany and France, have maintained that the two issues are linked. With PAC, this will be one of the most contentious areas of negotiation.

Some party elites have spoken about holding a second referendum after exit negotiations with the European Union are finished. None of the five official candidates has mentioned this as a possibility.

 

The position of the five conservative party candidates

1 – Theresa May (Home Secretary)

theresa may

  • May supported the “remain” camp but kept a low profile during the campaign. She shares Margaret Thatcher’s view of the European Union as an agreement among sovereign nations.
  • In a June 30 speech, she said, “Brexit means Brexit. There must be no attempts to remain in the EU or to rejoin it through the back door.” She also argued against a second referendum and early general elections.
  • May said Britain should first come up with a good negotiation strategy and delay formal notification of its withdrawal until early 2017. The European Union favors a quicker declaration, however, and it will likely begin to pressure the United Kingdom as soon as a new prime minister is appointed.

2 – Michael Gover (Secretary of State for justice)

  • michael GoverGove was a prominent figure in the “leave” camp and was once a close ally of former London Mayor Boris Johnson, who notably declined to seek the party leadership position. After the Brexit vote, however, Gove accused Johnson of being ill-prepared to become prime minister, saying, “Boris cannot provide the leadership or build the team for the task ahead.”
  • In his candidacy speech, he said, “The British people voted for change last Thursday. They sent us a clear instruction that they want Britain to leave the European Union and end the supremacy of EU law. They told us to restore democratic control of immigration policy and to spend their money on national priorities such as health, education and science instead of giving it to Brussels. They rejected politics as usual and government as usual. They want and need a new approach to running this country.”

3 – Stephen Crabb (Secretary of State for Work and Pensions)

  • stepen crabbCrabb supported the “remain” camp but now promises to respect the result of the referendum. In a speech, he said, “We will enact the British people’s wishes on the EU. The verdict was clear: There is no going back. A second referendum is out of the question. What the country needs now is a clear direction, not further instability.”
  • He said it is vital to control immigration, a position he claims is supported by the results of the referendum.
  • He wants the United Kingdom to remain close to Europe, but he also wants to end the supremacy of EU law.
  • Crabb has the backing of Secretary of State for Business, Innovation and Skills Sajid Javid, Crabb’s pick for chancellor. According to Javid, who also opposes a second referendum, “In some ways we’re all Brexiteers now. … It is really all about how we get on with it.”
  • Both men espouse a trade solution similar to the proposal that Johnson floated: access to the single market with restrictions on freedom of movement.

4 – Liam Fox (Former Defense Secretary)

  • Liam-FoxFox was one of the most visible “leave” advocates during the referendum campaign. But in the wake of the referendum, he is emphasizing party unity.
  • He said, “In terms of the EU, we need to make it very clear we intend to honor the instruction given to us by the British people. We will leave the EU.”
  • He warned that it would be a “betrayal” of voters if the British government continued to abide unrestricted migration: “I don’t believe the British public would accept the free movement in return for access to the single market. We need to have a more free trade approach.”
  • Speaking on LBC Radio, Fox said, “We can’t allow the Conservative leadership campaign to be dominated by the issues in the referendum; there are many other issues I care very passionately about.”

5 – Andrea Leadsom (Energy Minister)

  • Andrea-Leadsom-685722Leadsom, who supported the “leave” camp, became famous in TV debates over the referendum and used her background in financial services to argue that Brexit would not hurt the British economy. On June 30, she posted on Twitter: “Let’s make the most of the Brexit opportunities! #FreshStart”
  • During the Brexit campaign, she claimed that immigration could “overwhelm” Britain and said her constituents complain about not hearing English spoken when they walk down the street.
  • In May, Leadsom wrote that “without the shackles of the EU, we will have the opportunity to set up free trade, not just with our European neighbors, but also with the 2.2 [billion] consumers of the Commonwealth, as well as the fast-growing emerging economies of the Far East and the Americas.”

 

An example of the post Brexit difficulties to come : Future of CAP and European agriculture ?

cap-history-large_enA major focus of negotiation will likely be the Commoun Agricultural Policy (CAP), a cornerstone of the European Union that accounts for roughly 40 percent of its budget. If the United Kingdom withdraws from CAP when it exits the European Union, it will have serious consequences for the British agricultural sector.

Britain has long dissented from the majority of the European Union on CAP’s subsidy programs.

The United Kingdom is one of the largest net contributors to the CAP system, and annually it receives 1.3 billion euros ($1.4 billion) less from the CAP fund than it pays in.

Nevertheless, roughly 55 percent of agricultural income in the United Kingdom derives from CAP support.

cap beneficiaries 2004

The British Department for Environment, Food and Rural Affairs estimates that from 2014 to 2015, half of England’s farmers would have failed to cover their production costs without support payments.

Even with the payments, 20 percent of farms cannot meet their expenses.

Should Britain leave the European Union and CAP, many British farmers would struggle to maintain production. After all, there is no guarantee that the funds once allocated to CAP would instead go to British farmers after the Brexit.

cap

 

Furthermore, the United Kingdom’s food production and agricultural sector depends to a great extent on the rest of Europe. Roughly 70 percent of Britain’s agricultural and food imports come from the European Union, while about 62 percent of its exports are destined for other EU countries. Some areas of agriculture rely more on this dynamic than others. For instance, the United Kingdom depends heavily on the European Union for imports of fresh vegetables.

On the other hand, a Brexit would afford Britain more autonomy over its agricultural practices.

The European Union has strict regulations on the use of herbicides, pesticides and genetic modification in agriculture, issues currently voted on by member states and administered by the European Commission and European Food Safety Authority.

Until June 28, when the bloc granted an 18-month extension, it appeared that EU officials would let Monsanto’s license for glyphosate, an herbicide and crop desiccant, expire on June 30.

rapesse cropsBut these policies have cost the United Kingdom’s agriculture sector; in 2015, for instance, restrictions on neonicotinoids, a class of insecticides, adversely affected British rapeseed crops.

Compared with many of its peers on the Continent, the United Kingdom is more amenable to these processes, and separating from the European Union would certainly open up the market for products treated with them.

Even so, since the United Kingdom will likely strive to maintain a close trade relationship with the rest of the Continent, it may not benefit much from its liberalized agricultural policies.

A Double-Edged Sword

uk farmersEven if the exit negotiations end up being amicable and both sides agree to preserve as much of their existing trade relationship as possible, tariffs are likely to increase.

As a result, British farmers will be forced to compete, perhaps with less support, in a less open market.

Not only will less favorable trade conditions hurt farmers who relied on export markets, but they may also drive up food prices in the United Kingdom.

This outcome is not set in stone, however.

Though Norway is neither an EU member nor a CAP participant, Oslo still has access to the EU internal market.

For the United Kingdom, the CAP program is something of a double-edged sword.

Despite the net loss the country sustains as a CAP fund contributor, many of its farmers depend on the subsidies and protections that CAP and the common market provide.

Even though the agricultural sector accounts for a small percent of Britain’s overall gross domestic product — less than 1 percent in 2013 — cuts to subsidy programs could deal a major blow to the farming sector.

Failure to maintain subsidies would rouse opposition from farming lobbies and could put smaller, less competitive farms out of business.

cameron cap

And if Prime Minister David Cameron’s eventual successor decides to curtail farming subsidies further, British farmers will face an even greater struggle to compete in the global agricultural market.

Unless and until withdrawal negotiations begin, these issues will remain unresolved.

If the terms of the Brexit are unfavorable enough, some British operations might move back into the EU trading bloc.

For now, though, the future of Britain’s agricultural sector hangs in the balance.

 

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About Frank Farnel

International Public Affairs and Business Development Professional
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