Hard Brexit

Mayday in the UK

A campaigner wearing a Vote Leave t-shirt and holding a British Union Flag, also known as a Union Jack, stands on a Westminster Bridge near the Houses of Parliament in London, U.K., Wednesday, June 15, 2016. The Brexit battle took to London's River Thames as boats supporting the "Leave" and "Remain" campaigns jostled for space, while Irish rock star Bob Geldof harangued U.K. Independence Party leader Nigel Farage using a sound system. Photographer: Luke MacGregor/Bloomberg
A campaigner wearing a Vote Leave t-shirt and holding a Union Jack.
  • Why it matters

    Why it matters

    Theresa May’s lurch into xenophobia and nativism is alienating Europe and putting the British economy at risk.

  • Facts

    Facts

    • Ms. May pledged to trigger the U.K.’s formal exit process by the end of March 2017, and has declared control over immigration to be her priority in Brexit negotiations.
    • The pound has plunged on currency markets, anticipating the economic harm of a hard Brexit.
    • Ms. May demanded that U.K.-based businesses privilege British workers and her home secretary, Amber Rudd, called for them to list their foreign staff.
  • Audio

    Audio

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Conservative Brexiteers  – who campaigned for the United Kingdom to vote to leave the European Union – continue to blather about building an open, outward-looking, free-trading Britain. But the U.K. is in fact turning inward. Prime Minister Theresa May, who styles herself as the U.K.’s answer to Angela Merkel, is turning out to have more in common with Marine Le Pen, the leader of France’s far-right National Front, than with Germany’s internationalist chancellor.

Ms. May set out her vision for Britain’s future at the Conservative Party Conference this month. She pledged to trigger the U.K.’s formal exit process by the end of March 2017, and declared national control over immigration – not continued membership in the EU single market – to be her priority in the upcoming “Brexit” negotiations. That stance puts the U.K. on course for a “hard Brexit” by April 2019.

E.U. governments rightly insist on freedom of movement as a central pillar of the single market, and Ms. May’s nativist lurch has already prompted Ms. Merkel and other E.U. leaders, notably French President François Hollande, to take a tougher line with the U.K.

The pound has duly plunged on currency markets, anticipating the economic harm of a hard Brexit: costly trade barriers – customs controls, rules-of-origin requirements, import duties, and discriminatory regulation – will divide U.K. and E.U. markets and affect nearly half of Britain’s trade.

“British jobs for British workers” was a slogan used by the racist National Front party in the U.K. in the 1970s. Now it has backing in the cabinet.

But Ms. May has not only set the stage for a complete break with the E.U.; she has also adopted a deeply illiberal vision for the U.K.’s future, consisting of economic interventionism, political nationalism, and cultural xenophobia. This unelected prime minister is rejecting former Prime Minister David Cameron’s liberal Conservative manifesto (which won him a parliamentary majority last year), Margaret Thatcher’s embrace of globalization in the 1980s, and Britain’s much longer tradition of liberal openness.

After being a near-silent supporter of remaining in the E.U. during the Brexit campaign, May has now donned the mantle of Brexiteer populism, targeting both “international elites” and Britons with a cosmopolitan outlook. “Just listen to the way a lot of politicians and commentators talk about the public,” she said in her keynote conference speech. “They find your patriotism distasteful, your concerns about immigration parochial, your views about crime illiberal.”

Echoing nationalists such as Le Pen and Viktor Orbán, Hungary’s authoritarian prime minister, she asserted that, “If you believe you’re a citizen of the world, you’re a citizen of nowhere. You don’t understand what the very word ‘citizenship’ means.” Ironically, it is Ms. May’s notion that there is a single way of belonging to Britain’s political community that is un-British.

Ms. May demanded that U.K.-based businesses privilege British workers in the “spirit of citizenship” – another term for what Le Pen calls “national preference.” This is more than just rhetoric. The status of E.U. nationals in the U.K. is a bargaining chip in the upcoming Brexit negotiations. Ms. May wants to keep out future E.U. migrants, whom she wrongly blames for taking Britons’ jobs and depressing their wages. Home Secretary Amber Rudd would go even further. She recently called for U.K.-based businesses to list their foreign staff, in order to “name and shame” companies that do not recruit “enough” British workers. “British jobs for British workers” was a slogan used by the racist National Front party in the U.K. in the 1970s. Now it has backing in the cabinet.

This chauvinism is not just despicable; it is foolish. It has already prompted outrage and threats from other countries. At a time when many companies are reconsidering their post-Brexit investment plans, it makes a mockery of the government’s claim that the U.K. is open for business. Apparently, May’s government expects Citibank to operate in London without American staff, Nissan without Japanese managers, and global companies without their diverse talent.

Even foreign-born doctors who save British lives are no longer welcome; Ms. May wants the U.K. to be “self-sufficient” in health care by 2025. Since one in three physicians in the U.K. is an immigrant, the country would suffer if many now decided to practice elsewhere.

Ms. May’s government experience has been limited to command-and-control functions, overseeing internal security and immigration as Home Secretary in Mr. Cameron’s cabinet. She seems clueless about how an open market economy works, and unaware that international trade, investment, and migration are intertwined. She recently boasted that London is the world’s financial capital, without acknowledging that this is thanks mostly to foreign banks that employ foreign staff (those “citizens of the world”) to serve international markets, including the E.U.’s.

More fundamentally, Ms. May doesn’t seem to realize that immigration controls are trade barriers. It is called “trade” if a British company outsources computing work to Bangalore, and “migration” if Indian programmers do the same work in Birmingham – yet the transactions are analogous. If Poland specializes in construction, and the U.K. wants to procure its services, people have to move between countries to trade.

Officially, the British government remains gung-ho about free trade. In practice, its illiberal politics are taking precedence: Europhobia trumps free exchange with Britain’s neighbors and main trading partners, while xenophobia trumps the need for foreign workers. How long will the rest of its globalization agenda survive? Assuming that it can find willing partners, populism may preclude any trade deal that appears to serve “international elites.” Nationalism may lead Britain to slam the door on Chinese investment, too.

British voters chose to leave the E.U., but they did not specify how; so Ms. May has no electoral mandate for her swing toward illiberalism. But her official opposition is a Labour Party that, taken over by the hard left, is not electorally viable. So, unless the Liberal Democrats can bounce back, Britain may need a new political party (or cross-party alliance) to fight for a country that is outward-looking, liberal, and tolerant.

Copyright: Project Syndicate, 2016.
www.project-syndicate.org

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