Civitas
+44 (0)20 7799 6677

The Brexit case is wildly optimistic

In his attempt to reject David Cameron’s claim that Brexit would not be a ‘leap in the dark’, Conservative Work and Pensions Secretary and former leader Iain Duncan Smith announced that Brexit would be a ‘a stride into the light.’ As a leading Leave campaigner, Duncan Smith was trying to argue that there are clear benefits to leaving the EU and that the risks Remain supporters raise are either false or easily solved.

However, a sober look at the challenge of Brexit from the perspective of probability and prediction indicates that, contrary to Duncan Smith’s biblical language, the specifics of Brexit are very much in the shadows, if not in pitch darkness.

The first layer of uncertainty comes from the bickering between Leave campaigns. Three campaigns have substantial support: Vote Leave, Grassroots Out and Leave.EU. There are additional campaigns such as Leave.HQ and party-affiliated movements like Conservatives for Britain and Labour Leave. None of these have committed to the same plan for exit, so it is hard for a voter to know what leaving might look like. Moreover, the leading Vote Leave campaign deliberately avoids presenting a specific exit vision and flirts with the idea of a second referendum – one that is far from certain.

Even if the campaigns united around a specific blueprint for Brexit, there would be no legal certainty that a post-Brexit government would try to implement it. If the Leave campaign wins, exit negotiations will most likely be led by a Conservative government, possibly by a pro-Leave MP rather than David Cameron. The government may have its own idea of the ideal exit, contrary to a plan closer to Ukip values, such as that of Leave.EU.

Whichever set of Brexit aims are adopted, our ability to implement them are subject to many more elements of uncertainty than remaining in the EU. It is inherently difficult to predict outcomes of the hugely complex negotiations that will follow, either in terms of diplomacy or economics. Creating a realistic Brexit vision would require a large set of predictions and assumptions, none of which are guaranteed. The Leave campaigns ignore this uncertainty when they present overly optimistic, almost utopian, visions of exit.

For most Brexit plans to work, a whole host of uncertain conditions would need to be fulfilled. There are far more elements that would need to go right for Brexit to work according to plan, than for continued EU membership to flourish according to Remain’s vision. These are set out in contrast below.

Brexit assumptions
Favourable popular reaction to referendum result;
Favourable media reaction;
Stability of leadership of the Conservative party;
Positive or stable market reactions to Leave vote;
Positive investment and jobs outcome short-term;
Positive EU-UK exit negotiation outcomes;
Positive or neutral negotiation positions from current and future FTA partners;
Prosperity of UK economy mid-term after harsher migration limits;
Painless solution to the Irish border question.

 

Remain assumptions
(No Change)
Britain retains a veto on being part of an EU army;
Britain is not obliged to pay into eurozone bailouts;
Britain can opt-out of excessive centralisation such as a European Public Prosecutor or tax system;
Britain retains ability to resort to Brexit in an emergency.
(Improvement)
Modest trade gains from the creation of the Digital Single Market;
Gains for the City of London from the completion of the Capital Markets Unions;
Boosts to UK exports from completing trade deals with America and Canada (TTIP and CETA)

 

The pro-Brexit assumptions are complicated by the fact that politicians in key countries with which Britain would desire agreements are already saying they are unlikely to prioritise deals with Britain alone: these include New Zealand, Australia, USA, India; and the EU itself. Moreover, the public and the government are very unlikely to be united in the work of driving towards a post-exit vision.

In addition the Foreign Office is currently understaffed to meet the considerable challenge of 1) conducting UK-EU exit negotiations effective, 2) negotiating UK-only trade deals with over 50 current free trade partners, and 3) individually representing Britain on the many international bodies in which Britain is currently part of the EU delegation. It is unclear whether the Foreign Office has any recruitment plans for what Softening the Blow shows would be a serious administrative challenge.

The variables on the Remain side are either much more concrete, indeed are already the case and represent continuity, or hold potential for a pleasant degree of greater growth, rather than being needed just to continue current trade levels. All of the continuity elements are confirmed in the current treaties or in Cameron’s February 2016 renegotiation terms.
In short, all the Remain case needs is for negative things not to happen, for its main predictions to come true. If positive things happen, all the better. However, the Leave case depends on a large number of positive variables all working together in a short time-frame, carried out by a divided population, an unstable government and an overburdened civil service.

  • Jonathan Lindsell