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The Home Front

The Prime Minister told the Civil Service to do no contingency planning for a Brexit. The Cabinet Secretary confirmed to Parliament that none is being done.

This is one of the oddest aspects of a very odd episode in British public life. Of course contingency planning is being done.

It would be a dereliction of duty if it were not. Politicians and civil servants are thinking intensively about what would happen in the event of a Leave vote.

Mark Carney has said that the Bank of England is doing short term planning preparing for turbulence in the bond and currency markets. I am sure that they and the Treasury will be worrying about interest rates and inflation and how to reverse the chill on investment and economic activity that is already evident. Parliamentary Counsel will be thinking how best to draft the legislation for the UK to leave the EU and the Law Officers will be agonising about what is legal under international law. The Foreign Oce will be drafting and redrafting the reassuring messages from the Prime Minister to allies and BIS will be working up arguments to put to inward investors as to why Britain remains a great place to put your money.

Brexiteers like to say that nothing will change on 24th June. But of course it will. First and foremost, the politics will change. Who will be Prime Minister and what sort of policies will her/his Administration wish to follow?

If David Cameron stays in office, with Boris Johnson in Government and Michael Gove promoted, and George Osborne out of the Treasury, then there will be a fair amount of continuity. But more likely we will have a new Prime Minister with a new Cabinet. If Jeremy Heywood doesn’t have a briefing for a new PM (Theresa May is my guess) up his sleeve, he isn’t the mandarin I know.

Just possibly, the politics could get really messy. If the pro EU majority in the House of Commons, or the Lib/ Lab nexus which currently dominates the Lords, rebels against a strongly eurosceptic Administration, particularly if it seeks to act outside international law, then we might have a General Election. This could, with the electorate feeling buyer’s remorse, result in a pro EU Administration faced with an obligation to negotiate an exit. That would lead us into murky political waters.

It will be essential for any Administration to set out its approach to the new world. First and foremost, will it succumb to the temptation to say that there is a democratic mandate to “take back control” by simply repealing the European Communities Act 1972 and leaving the EU straight away? This would be illegal under international law and create chaos.

But as General de Gaulle said “Treaties are like the beauty of young women, they last as long as they last.”

It would be reckless to do it this way because trade and financial flows and tourism and everything else would have no basis in law. And the judges would probably stop it if they tried. So it will not happen…… I hope.

A more likely scenario is that the Government rapidly invokes Article 50 of the Treaty of Lisbon which is the starting gun for a two year process inexorably leading to the UK leaving.

This will be politically very attractive, indeed probably inevitable, as a symbolic burning of boats. But tactically it is unwise since at the end of the process the UK just has to accept whatever arrangements the EU imposes upon us.

The best option would be to announce general objectives for the new relationship with the EU, get a long way down that negotiation and only when an outline deal is in sight invoke Article 50. That maximises the UK’s negotiating hand as it maintains our legal rights and allows us to be troublesome until we are offered a reasonable exit deal.

The PM will appoint a Cabinet rank leader of the negotiations. In 1963 it was Ted Heath, in 1970 Geoffrey Rippon, both based in the Foreign Office. This time it will be a eurosceptic, perhaps Michael Gove, and he will be based in the Cabinet Office with a close link to No 10.

Then there will need to be a negotiating team.

A danger is that all the experts who know how to negotiate with the EU will be seen as compromised.

But an EU treaty drafted by someone who does not understand the minutiae of EU law is very dangerous.

The Government will then need to lay before Parliament a document laying out its objectives for the negotiation on the future relationship with the EU; and the sort of UK policies which it will establish in place of EU policies. This sounds simple. It will not be. There is no consensus, either within the Leave camp or within the Remainers, on these issues. Expect the Government to be torn apart by these political choices.

The Leave campaign has been careful to avoid defining what sort of policies it wants once it has taken control. But now the Government will have to say for example what sort of trading relationship it wants with the EU, how much access to the Single Market. Forget the Norwegian option or the WTO option.

Expect a demand for a new UK option, essentially with full access to Single Market but none of the obligations to pay into the budget or allow free movement of people. Don’t expect to achieve anything like this.

The Government will also have to start the process of defining what sort of policies will replace EU policies. So will we have an Australian style points based immigration system or close our borders or what? Will we have a US style protectionist agricultural support system or a New Zealand style no subsidies system? What sort of competition law, anti-dumping arrangements, and state aid rules will we wish to have? What sort of environmental protection will we enact on water and air quality, on habitats, on emissions?

These issues, though very contentious and normally taking years of debate and parliamentary time, are nevertheless clear political choices. More difficult is what to do about the tens of thousands of references in UK law to EU legal provisions or to the European Communities Act 1972.

Most probably the Government will seek to pass a Henry VIII measure giving them powers to change legislation via secondary legislation. Parliament will object to this and may refuse such powers.

Past EU Directives transposed into UK statute law are not an immediate problem, although there will need to be a vast retrospective stripping out exercise. Transposition of new EU Directives may be quietly neglected, at some risk. But the mass of directly applicable EU Regulations remain in force. And will be joined by fresh ones passing through the EU legislative machinery.

The simplest course would be to pass a UK law saying that all these EU Regulations are now automatically UK law until such time as new UK legislation is passed. But it is not hard to imagine the outrage of Jacob Rees-Mogg to such a move. The alternative, however, will be to have no legislation at all in force for large areas of policy. The pressure on the Parliamentary timetable will be impossible. There is a decade or more of legislation to do in a short space of time. It is why I expect that some EU legislation will still be on the statute book well past the middle of the century.

Our politicians will find a way through. But there will be months, most likely years, of damaging uncertainty for many people and organisations as what the law is applying to their lives and their businesses at any moment in time. The judges must be pretty worried too about what law they are supposed to enforce.

In the midst of all this, how does normal EU business continue and how does the UK act? I cannot see how we could take on our scheduled Presidency of the EU in 2017, nor can I see the UK being anything but a bystander in EU activity. We cannot make useful contributions to legislation or to future policy or even in foreign and security policy, and would probably be cold shouldered if we tried. So we will be present in the room until the Article 50 process runs its course, but absent from the substance.

Some issues cannot be fudged or delayed.

The Northern Ireland authorities will have swiftly to work with Dublin on what a world would look like where there is a land border between north and south. The Home and Foreign Offices will have to think how to handle a Gibraltar with a closed border with Spain. No 10 will have to have soft words for the Scots and perhaps the Welsh who will have voted to remain. Indeed, soft words may be inadequate to deal with the pressure for a new Scottish referendum on independence.

This would add to the political chaos as three separate negotiations take place; with the EU on leaving, with the Scots on their referendum, and between the Scots and the EU on their joining.

Government Departments will have to manage a mindset change. The Foreign Office, which has steadily lost power and prestige to Home Departments, would suddenly become again the focal point for dealing with foreigners. BIS would have to find a team of trade negotiators and my old department, UKTI, would need new resource to find new export markets.

Most important perhaps would be that each department would have to confront the dilemma that regulations are burdensome and distorting, but politically essential; and you can no longer blame the EU for imposing them.

The administrative machine would adjust quite rapidly. But it would face some difficult moments. The most difficult would be if a new Prime Minister decided to act illegally by not following the Article 50 process and perhaps requiring a truncated legislative process to implement new UK laws.

Indeed, if the worst fears such as chaos on the currency markets, street protests in Scotland or Ulster, the French instituting stringent border controls or the M20 becoming a lorry park were realised and emergency powers instituted, what does the conscientious civil servant do? Do you support illegality by a Government? I doubt very much that we will get anywhere near that situation. Britain and the EU Institutions will muddle through and work to find a solution.

But a bit of civil service and political contingency planning now might save us some agony later on.

Even if Whitehall is not to do contingency planning, you can be sure that our continental partners are. Within days of a Brexit vote, there will be a French/German paper outlining their vision of a future European Union and setting out the basis on which there could be a relationship with the UK. It will of course be an opening stance for a negotiation, and it will be unhelpful to us. I expect the draft is in detailed preparation now. I suspect and certainly hope that, no matter what is said in public, our equivalent is also now well past the initial planning stage.

By Sir Andrew Cahn

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