The United Kingdom has voted: An interview with Lord Patten

Will Brexit finally become a reality with the Election result?
Yes – at least “Brexit will get done” in the terms in which Boris Johnson successfully defined the issue during his campaign.

In other words, having won a big majority by mopping up original Brexit support, combined with profound Conservative and Labour objections to Jeremy Corbyn’s leadership of the Opposition, Johnson now has a large majority for the exit deal that he negotiated with Brussels before the Election campaign.

So we will leave the EU before the end of January. In some senses that is where the story really starts. Johnson has promised to negotiate a new trade agreement with the EU before the end of the year and not to ask for a longer transitional period.

This is seriously misleading.

The shortest time taken to do a free trade agreement (FTA) was with South Korea. The EU deal took 2½ years to negotiate and eighteen months for approval. Most free trade agreements take 6 to 8 years to negotiate.

There are three obvious problems which will begin to dominate domestic British politics for months and even years.

1. Will we seek an extension to the transitional period at the end of 2020 or risk crashing out of the EU without a deal?
   
   
2. How sophisticated a deal can we do without in return for accepting EU regulations and standards for Brussels opening markets to Britain?
   
   
3. How will business and industry react if it looks as though we intend to settle for a bare bones FTA? The automobile, aerospace, chemical, food and drink and pharmaceutical industries have all raised concerns about risk to their manufacturing competitiveness if anything like this happens. Meantime the hard Brexit right of the Conservative Party will be pressing the whole time for the minimum concessions to the EU.
   
   

It’s called the “United Kingdom”. After this Brexit drama, how united is the Kingdom?
Politically, the United Kingdom is clearly divided in what has proved to be a very successful Conservative campaign. It has in practice subsumed the Brexit Party.

Conservative voters are on the whole older and whiter than others and live outside the main metropolitan centres especially London and the south east. They are likely to be without higher education qualifications. The long-term demographic, especially regarding the young is not good for the Conservatives.

There could be a constitutional threat to the Union in Northern Ireland where for the first time nationalists did rather better than Unionists (with the distinct prospect opening the future of a united Ireland).

But Scotland is a much bigger problem. The Scottish Nationalists (SNP) won 48 of the 59 seats with 45% of the vote. The Conservative vote fell by 4%. The SNP campaigned explicitly for a referendum on independence and there will inevitably be a long term clash with the Conservative government on this. A difficult economic outcome for Britain as a whole will strengthen the SNP’s hand. However it faces its own difficulties in the new year resulting from the criminal sexual assault case that will come to Court in January against its former leader Alex Salmond.

Looking five years ahead, how do you see the future relationship between the UK and the EU?
It will depend on the sort of trade deal that Britain is able to do with the EU. The UK will be treated as a third country and every aspect of our relationship will have to be negotiated line by line. Right-wing Conservatives think that Britain can simply walk away from the EU rejecting their rules and standards, and opting for what is called Singapore-on-Thames, in other words an open market with few regulations. This both misunderstands Singapore and ignores electoral realities (think for example of the row over NHS standards in relation to a US trade deal). My overview is that the UK will be poorer (the Treasury says by 5 per cent), still negotiating on some issues, but getting reasonable deals in areas where we are very strong like research and the life sciences. FDI will be lower and there will have been a steady migration of service and skilled jobs. The immigration problem will have become focussed on a shortage of skills not the absolute number of migrants. We will also be trying to come to terms with the fact that we have to punch our diminished weight rather than punch above it.

How will the UK now go on its own way?
Can the Commonwealth play a role here? Will it? The Commonwealth is a moderately useful partnership of Britain’s former colonies and dominions. Britain’s trade with it is heavily concentrated on five countries – Australia, Canada, India, Singapore and South Africa. Britain has a trade surplus of £4.2 billion with the Commonwealth, heavily dependent on services. Commonwealth markets take 9.3 per cent of British exports, about the same as exports to Germany. Half of Britain’s exports go to the EU representing 13 per cent of GDP. About 3 per cent of the EUs GDP is represented by exports to the UK. It is pretty well impossible to imagine that loss of Britain’s market share in the EU can be made up by an increase in exports to the Commonwealth, not only because of the question of distance. To put the point very simply boosting trade with Commonwealth countries by reducing tariffs and barriers will not make up for what is lost by increased friction in our trade with Europe. A trade deal with the USA is unlikely to be fast or substantial since I cannot believe that Britain will accept big changes to health and safety standards.

Will the UK, despite Brexit, become more closely involved in European defence policy?
European defence policy is more than an oxymoron. EU member states have created mechanisms for planning and co-ordinating defence capability. Some countries have started to increase defence spending. The European Commission has allocated E13 billion to defence research and development in the 2021-2027 budget cycle. President Macron continues to nag others to do more and famously (and not wholly unreasonably) described NATO as “brain dead”. But there are several feet on the brake when it comes to a bigger defence capability to deal with external threats from Russia, to terrorism. First, there is a nervousness about seeming to by-pass the USA encouraging the very American disengagement from Europe which is feared by Macron and others. Second, several states are exceptionally concerned about the domestic implications of increased defence spending. Others are reluctant to see Russia as a threat. Clearly the size of Britain’s defence capacity is likely to be a valuable asset by the EU, but Britain’s own defence spending will be under pressure from lower economic growth. Britain would probably want to be seen as an effective ally of the EU in areas like cyber-security and counter-terrorism. It will be an enthusiastic operational ally of France with whom we already have a defence agreement. But London will want everything to be done in a wider NATO context and will be badly mistaken if it thinks it can trade defence co-operation for trade concessions.

About Lord Patten of Barnes

During his long career, Lord Patten of Barnes, has held several important positions. In addition to being an EU Commissioner, he was the UK’s last Governor of Hong Kong, preparing the former British Crown Colony for the handover of its sovereignty to the People's Republic of China in 1997. Following this very active political phase of his career, Lord Patten was named, among other posts, to the position of Chancellor of Newcastle University, and since 2003 he has been the Chancellor of the University of Oxford.

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