The Road to a Bad Brexit

Britain’s miserable Brexit debate took another bad turn on Monday when Prime Minister Theresa May delayed a vote on her withdrawal agreement with the European Union. At this late date there still is no consensus in Parliament on whether or how to proceed—and most of the ideas lawmakers are floating are bad in one way or another.

The argument in London now concerns whether to pursue a no-deal option, Mrs. May’s deal for a permanent customs union, a trade deal that mimics Norway’s with the EU, or a new referendum to free lawmakers from the burden of deciding. Presumably someone will eventually have to pick some option.

Yet it’s also false to frame this as a decision that will determine Britain’s future forevermore. Britain and the EU will both change in coming years. New opportunities will arise to improve on whatever Brexit settlement emerges now either by reconfiguring a trade deal or negotiating a new relationship after a hard, no-deal Brexit. Before that can happen, Britain and the EU have to learn from the fiasco of the past two years.


One lesson is that unhappy countries have to be ready to leave the EU, and not merely willing. Greeks discovered this in 2015 when their euroskeptic government and voters concluded its weak and unreformed economy couldn’t withstand a departure after all. Britain is no Greece, but its Brexit faction is reckoning with the consequences of its own economic-policy shortcomings.

The political class under Labour and the Tories spent a generation moderating Margaret Thatcher’s supply-side reforms, burdening the economy with more spending and more red tape. Britain’s economy still grew, especially under Prime Minister David Cameron. But GDP growth obscured regional disparities and shortfalls in productivity and innovation that will hold back an independent Britain.

As a result, businesses aren’t wrong to warn of dire consequences if they lose the trade benefits of EU membership that offset some of the efficiency losses produced by bad domestic policy. This fact bedevils Brexit politics and points up a strategic error by free-market Brexit supporters. They thought leaving the EU would trigger a Thatcherite policy renaissance. Instead, an earlier reform resurgence would have made a clean break from the EU easier.

The same goes for the border between Northern Ireland (part of the U.K.) and the Republic of Ireland remaining in the EU. The imperative to maintain a soft border free of customs checks is paralyzing Brexit, and it’s happening because a peace process that started more than 20 years ago still hasn’t produced a durable settlement. Pro-Brexit politicians made matters worse with cavalier attitudes to Britain’s partners in Dublin that damaged trust. Former government minister Priti Patel last week suggested the threat of food shortages should have been used as leverage against Dublin, a ghastly reminder of the famine of the 1840s.

This broader context illuminates the true nature of Mrs. May’s failures. She made a good Brexit all but impossible by pursuing a Labour-lite domestic program that bottles up the dynamism Britain needs to unleash. Then, after losing an election she called, she propped up her government with help from a Northern Irish party entwined in sectarian politics.

There are also lessons here for the rest of the EU. Brussels doesn’t deserve all of the rap it gets for failing to respect the democratic will of British voters. The European Commission, German Chancellor Angela Merkel and French President Emmanuel Macron have to represent voters in 27 other states who for now seem willing to tolerate the EU’s balance of economic benefits and political costs.

But that political support is brittle. Brussels has missed opportunities to work with Britain to create a settlement that might be more palatable to more European voters. The bloc’s leaders say free internal migration should be all but inviolable, a view growing numbers of voters reject since the 2015 migration crisis. This belief limits options for a trade deal now.

EU mandarins also fixate on adherence to common regulations as a precondition for trade. Those rules are becoming ever more interfering and controversial, and voters everywhere are demanding more local authority. Brussels could have used Brexit talks to develop a new model based not on standardizing rules but on trusting one’s neighbor. Doctrinaire thinking about how to create a functioning single marketplace is blocking the creativity the EU needs to adapt to changing voter demands.


Mrs. May now says she’ll ask Brussels for reassurances on the future of the Irish border, whatever that means. She could still lose a vote in Parliament, and tumble out of power. The best outcome would be for ardent Tory Brexiteers to install a Prime Minister who truly believes in Brexit and has the economic vision to make it work. The Brexit faction could then rise or fall on its governing competence rather than on the volume of its carping.

Yet Parliament might punt instead, elevating a tepid Brexiteer or an outright Remainer from the Tories. Or a new election could deliver power to Labour leader Jeremy Corbyn, whose views on Brexit seem either confused or disingenuous and whose party is as divided on it as the Tories.

Such political chaos proves that this fiasco is about far more than Mrs. May’s negotiations in Brussels. Neither Britain nor the EU was politically or intellectually ready for Brexit. A failure of leadership has made the breakup far more difficult and damaging than it had to be.


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