Why Theresa May Should Allow Parliament to Vote on Brexit
Were the UK ever wondering how much influence it wields on the world stage, now it knows: a great deal indeed. Despite intermittent runs on the pound and plunging business confidence, Prime Minister Theresa May has doubled down on her government’s commitment to go through with a so-called “hard” Brexit. However, she would be wise to allow her Parliament a vote, for losing the outsized role the UK plays globally would be one of the principal costs.
The UK is already counting the costs of the referendum in terms of currency and stock market instability, coupled with a sustained depression of business confidence. These are harbingers of a series of negative long-term effects. Upon actual departure foreign direct investment would dramatically dwindle; multinational companies would move their headquarters; and a brain drain would ensue. All of this would lead to less growth, higher unemployment, and reduced living standards.
The UK Treasury estimates that British GDP reduction within two years of Brexit would be twice as large compared to remaining in the EU’s single market. The combined cost of renewed tariff and a wide array of non-tariff barriers will be highly impactful. Moreover, the cost of losing the EU “passport” that allows unhindered access across Europe for the UK’s famed service-based industries—banking, insurance, consulting—will markedly amplify the costs of departure.
By subjecting the country to several austerity budgets, former Prime Minister Cameron already compounded these costs by another order of magnitude. As a result, it appears his Conservative Party successor is carving out a different direction. May’s government has embarked on a moderate policy path intended to aid the middle and working classes, an approach more redolent of Margaret Thatcher’s Tory predecessor former Prime Minister Edward Heath.
“One Nation” conservatism is back in Britain, as May appears to be deftly converging on the ideological space of the crisis-ridden Labour Party with policies more akin to former Prime Ministers Blair and Brown rather than Cameron and Thatcher. The irony herein is that the serious economic costs for fully leaving the EU would actually do real harm to the country, not to mention May’s legacy.
The major long-term loss for Britain, however, would be its reduced influence as a world leader. It has long punched above its weight globally speaking, remaining a fairly major world player long after Britain lost its empire, with the special relationship with the United States, a highly capable military, major financial leadership, and first-rate diplomatic skills. The UK has also been an EU leader, one of the top three along with France and Germany. Now England could be left alone, with Scotland leading the way by leaving the UK and rejoining the EU.
All but one of these is soon to falter, starting with the special relationship. President Obama had to say that the UK is still a great ally of the United States, partly because he has to try to dent the damage Brexit is expected to have on the United States. In reality, the UK would be less useful to the United States. Not only is the UK apparently on its way out of the EU, but its diminished economic condition would also force it to pair back what it spends on its military and intelligence capabilities. The UK could compensate for Brexit by doubling what it contributes to NATO, but it would be unable to afford to do so—e.g. its Ministry of Defense is set to lose $800 M in purchasing power from a hard Brexit.
Leaders of the “Leave” campaign have charged that the United States would never remain subservient to a foreign court or a supranational government above its own. The United States, it is true, in its current state would not go down such a road, for it is the world’s sole superpower. But, were it in Britain’s shoes at present it most certainly would—just as the UK wouldn’t if it were the world’s reigning colossus, keeping the shipping lanes open in the East and South China Seas and so forth.
“Leave” campaigners also claimed that Britain on its own would be able to negotiate a favorable trade deal directly with the United States. But Americans are in a foul mood these days, with workers buffeted by the downsides of globalization and temporarily more nationalist and less tolerant than they normally are. And as far as the EU is concerned, it will be forced to play hardball with the UK in order to signal to other EU members that leaving is prohibitive.
What is more, France has begun to look more reliable to U.S. leaders, for not only has Paris continued to take on global leadership—from its Mali military operation to Middle East peace efforts—but a prominent Frenchman recently reminded Washingtonians that France was America’s “original ally.” Thus, if May wants to avoid irreparable harm to the Special Relationship, she needs to use the opportunity the High Court has afforded her and allow the UK Parliament to help her climb down from this treacherous perch.
In fact, if the UK goes through with Brexit, the Special Relationship will be a major consequence irrespective of whether Hillary Clinton or Donald Trump wins the election. The United States simply needs reliable allies more than ever, and the UK will no longer be fundamentally up to the task.
If Britain proceeds to administer this massive self-inflicted wound, the West collectively will appear less reliable, less stable, with the demise of the big U.S.-EU trade deal being the first casualty. The appearance of a diminished Western hemisphere will negatively affect what Asians, Middle Easterners, and Africans think of the United States/UK/Europe. For example, this will embolden Russia and China, possibly even Iran.