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Grayling's Brexit Bulletin - 17 August 2018

17th August 2018


The BREXIT Bulletin: Combating the BAD side of Brexit

This week POLITICO EU ran a story on the work of two UK based academics alluding to so-called Brexit Anxiety Disorder (BAD).
 
The premise is that Remainers who tend to have a certain socio-economic profile – middle-class, professional and educated – are psychologically struggling with a “loss of behavioural control” over the direction of the country.
 
Associated panic and anxiety is allegedly manifesting itself in a “cognitive dissonance” whereby Remainers are attempting to reconcile two opposing views, namely that Brexiteers backed Brexit because they were “stupid, ill-informed and ill-intended” rather than assuming that Brexiteers made an equally valid appraisal.
 
For those suffering from BAD’s effects there is however, light at the end of the tunnel. Apparently, Remainers will be cured of their psychological trauma and return to “normal” behaviour once the certainty has been provided in the form of the agreement that is struck between the EU and the UK.

In the meantime Remainers are advised to “become more flexible, … to live with the anxiety, tolerate the uncertainty, and work out how they can continue to engage with what truly matters to them in life, rather than getting caught up trying to change things they can’t change”.

Your Brexit Bulletin fully accepts that Remainers may well be suffering from the effects of BAD. However, we would humbly suggest that BAD’s pervasiveness is not solely confined to the ranks of the 48%.

Indeed the experience of a close friend of this publication this week who posted an innocuous post on social media would suggest that Leave minded voters appear to be suffering from the same symptoms.

More worryingly, this particular case would suggest that Leave voters are significantly more willing to publicly display the symptoms, via a torrent of posts abusing the said friend of this publication, drowning out those in support.

Indeed, who as a Remainer would want to publicly engage in a debate that all too quickly degenerates into slander?

It appears that the BAD may in fact be stronger in the Leave camp, perhaps because it’s hard to reconcile the political image of Brexit sold by the Leave campaign with the technical and legal realities of the negotiations.

Over two years from the referendum and with only five and a half months until the UK departs the EU, it appears that the UK electorate still cannot handle a civilised conversation on the issue.

The tone of the conversation is too often made acrimonious, the virulence of which does not make it appetising for others to publicly comment. A reluctance that is perhaps obscuring the opinion of a ‘silent majority’ in favour of re-evaluating the decision to leave the EU.

What cannot be allowed to happen is that those with the ability to influence the debate take seriously the suggested cure for BAD; to tolerate uncertainty, to engage with what actually matters and to stop obsessing over what cannot be changed.

Public affairs professionals are in a position to influence change. Indeed, influence peddling is the raison d’être for the job.

Despite the flack, lobbyists have a duty to inform on Brexit’s impacts and to minimise the uncertainty associated with Brexit. For Brexit really does matter and its effects really could be BAD. Like with any political process it can be shaped for the better.
 



If you have any suggestions about the Brexit Bulletin or want to find out more about a specific aspect of Brexit, please do let us know. Please visit the Grayling Brussels website, follow us on Twitter @TheEULobby, and don't forget to check out our Brexit Papers

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This week's content:

The highlights from the UK

The highlights from Brussels

The highlights from Spain

Dates for your Diary 

The Grayling Brexit Unit is delighted to host a lunch briefing on 18 September from midday to 2pm with Sam Lowe a Senior Researcher Fellow at the Centre for European Reform (CER) specialising in the EU's trade policy, regulatory barriers to trade, customs, rules of origin and of course Brexit.
 
Sam will be looking at Brexit’s impact on the UK’s status vis-à-vis existing EU free trade agreements, the options on the table for the future partnership between the UK and EU and the impact different proposals would have on the UK’s ability to strike new deals with the rest of the world.

If you would like to attend please send a confirmation email to Alexander.Rowlatt@grayling.com



On 4 September from 12:00 to 14:00 we will be holding an event "Will Customs Systems and Trade Implode on ‘Brexit Day?" which will feature various speakers from business and the UK civil service (TBC).

For more information please contact Alexander.Rowlatt@grayling.com 



The highlights from the UK 

Competing Tory factions gearing up for Autumn battle 
Theresa May has been able to hold off her restive backbenchers, largely due to the European Research Group’s reluctance to put forward a workable alternative of its own to the Chequers proposal. That could be about to change, as it emerged this week that Jacob Rees-Mogg and the 60-strong group of Eurosceptics are preparing to launch their own “positive” policy paper on their preferred model for the UK’s future relationship with the EU. This will come as an annoyance to the Prime Minister, who will want to use this year’s Conservative Party Conference to project confidence in the UK’s negotiating position in the approach to October’s European Council Summit.

 
The document is understood to be the handiwork of veteran Eurosceptics, Peter Lilley and John Redwood, who are exploring the various options for tariff and trade that they believe would constitute proper divergence from the Single Market and Customs Union, or, in the words of Rees-Mogg, “what is acceptable in line with the referendum result.” This would mean that, for the first time, Brexiteers on the Tory benches will have an agreed position, set in clear opposition to Chequers, and No. 10 will no longer be able to dismiss the ERG out of hand as all talk and no substance.
 
Meanwhile, around 50 Tory MPs are believed to have formed yet another caucus in Parliament, reportedly titled the “Brexit Delivery Group”, under the stewardship of Simon Hart and Andrew Percy. Rivaling the ERG, the group has formed in anticipation of Brexit clashes when Parliament returns from summer recess and will reportedly seek a “pragmatic middle ground” solution to the Tory Party impasse, while opposing leaving “at all costs.”
 
Jeremy Hunt continues his tour of European capitals in an effort to sell the UK position to EU-27 leaders, this week taking his case to Latvia and Denmark. Hunt may have had something of a spring in his step following comments from the German Chancellor that she wants a “reasonable, negotiated agreement” rather than a “disorderly” divorce, though there remains precious little chance of a major divergence between Merkel and the EU position. Commentators have noted the uptick in Foreign Office involvement with Brexit since Boris Johnson’s departure, as the Government continues to press bilateral engagement as a parallel to the direct negotiations.
 
The Grayling View
As September nears, the temperature is beginning to rise in Westminster. Reports of an ERG Brexit paper and the establishment of the Brexit Delivery Group demonstrate that Tory MPs are feeling increasingly restless, recognising that the success or failure of the whole Brexit process will likely rest on a series of crunch votes in the autumn. The Prime Minister will welcome the efforts of Simon Hart and Andrew Percy to actively seek compromise, but it remains unclear how Chequers in any variation can satisfy the ERG.
 
Particularly troubling for the Government is the apparent decision of Jacob Rees-Mogg and his followers to present their position on the eve of the Tory Party Conference. The Prime Minister will fear a frosty reception from grassroots members and Association Chairs when she takes to the stage in Birmingham. This would place the Government in arguably the weakest possible position for the October Council and raises the already uncomfortable odds of no deal. 

 

The highlights from Brussels

A trial separation? 
Whilst this week has been a quiet one for many in Brussels, Brexit negotiations have continued to push ahead. However, the agenda for the EU-UK Article 50 negotiations, taking place in Brussels on 16-17 August, were anything but detailed. On the agenda for the two days of talks; Ireland/Northern Ireland and the future relationship. Interestingly, the remaining issues of the withdrawal agreement, namely data protection and GIs, were not included.

Getting to the heart of the technical details, the negotiations were attended only by EU and UK officials, with Barnier and recently appointed UK Brexit Secretary Dominic Raab keeping at bay. With no solution to the question of how to avoid a hard border in Ireland in sight, yesterday’s talks were set to be as challenging as ever with little hope of any concrete solutions arising. 
 
The Grayling view
While all attention is focused on the Irish border, we have to wonder why the remaining issues of the Withdrawal Agreement were not due to be discussed this week. Both data protection and GIs remain key priorities for a number of Member States. Having had no confirmation that these issues were settled during the last round of negotiations, it is unlikely that they have already been resolved. It is possible that the EU just did not want to discuss these issues at this moment in time, turning their attention solely to the Irish border and the future relationship.

Nevertheless, such important issues cannot always be pushed back. Brushing a problem under the carpet does not mean it will go away. It may be that negotiators feel the transition period would give enough time to work out these remaining issues. For example, at the beginning of transition, a data adequacy decision could be applied for, with enough time for this to come into force by the end of the implementation period. Or perhaps negotiators were taking a break from discussing these remaining issues, and they will appear again in the next round of negotiations?

 

The highlights from Spain

Brexit brings opportunities and threats
Spain and the United Kingdom have a long history of cooperation and good commercial and economic relations. Bilateral trade between the two countries accounted for £40 billion in 2015, and more than 400 Spanish companies are registered in the UK, according to the British government. The UK is also the first destination of direct investment from Spain in Europe.
 
The decision of leaving the EU has and will have important consequences not only for the UK, but also for the remaining 27 Member States and very particularly for Spain. The effects of Brexit will depend on how the exit occurs and on how the new relationship between countries is articulated.
 
For Spain, there are several key issues that must be addressed. The free movement of people is important to negotiate, since nowadays there are almost 300,000 UK citizens living in Spain and near 150,000 Spanish citizens living in the UK. Tourism is also one of the vital issues, as it is crucial for the national economy. In 2017, British visitors represented 23% of the total of tourists and 21% of the total revenue in the sector.

Another important issue is Gibraltar and the application of the Brexit agreement to this area. The UK has considered that any of the treaties on Brexit should be applied automatically to Gibraltar, but Spain requests this to be negotiated in a separate agreement between the Spanish and British government.
 
Both countries are aware that they have a lot to lose with Brexit and, therefore, will try to reach agreements. However, there will probably be new customs requirements as well as regulatory changes. In all likelihood, there will also be a strong impact on investments and on flows in the production chain in many sectors. Thus, it is advisable for companies to create a Contingency Plan that gathers the different possible scenarios.
 
The Grayling View 
Like any change, Brexit has risks and opportunities. Spain can become an attractive country for investors because of the legal security it offers, the improvement of the economic situation, and its presence in the single market. Therefore, it is important that there is a political stability that encourages investors to bet on Spain. Brexit can also help Spain increase its political importance and become a strategic partner for decision-making at European level.
 
However, it seems that for the moment the Spanish authorities have been more aware of the risks of Brexit than the opportunities it may entail. Spain is in favour of reaching an agreement with reasonable conditions, as well as to establish a period of transition that allows Brexit to be the least traumatic possible. In any case, and for the good of both countries, the goal should be to continue collaborative relations.

 

Dates for your diary

18-19 October 2018 - EU Summit and deadline for negotiations on Withdrawal Agreement 
1 January 2019 - Romanian Presidency of the Council
29 March 2019 - UK expected to leave EU
31 December 2020 - Expected end of transition


Grayling Brexit Unit

Our Grayling Brexit Unit brings together the very best consultants from across the Grayling network and includes those who have direct experience of working alongside the leading political figures charged with negotiating Brexit in London and Brussels.

The Grayling Brexit Unit is here to support, guide and inform the success of your business and identify how the political dynamics will change as a result of Brexit in both London and Brussels. We are your Brexit experts.

Please contact Robert Francis Tel +32 2739 47 34 (robert.francis@grayling.com) in our Brussels team or Jonathan Curtis (Jonathan.Curtis@grayling.com) in London for more information, and check out our brochure.


Grayling Team

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