POST-BREXIT BRITAIN: A FUTURE BEYOND THE EU? Tuesday 21 May PANELLISTS Gisela Stuart, Chair of Change Britain Sir Simon Fraser, Managing Partner of Flint Global CHAIR Camilla Cavendish, Contributing Editor, Financial Times This forum took place in the week of the European elections, in which Nigel Farage’s Brexit Party won 29 of the UK’s 73 seats in the European parliament, more than any other party. Support for the Conservative and Labour parties fell dramatically and this is set to put pressure on the Tories to back a no-deal Brexit and to push Labour to support a second referendum. Eurosceptic parties in other parts of Europe also made significant gains, yet the pro-Europe centre held, with the Greens and Liberals making waves. The question is how these results will change Europe's internal dynamic. This report is a summary of the key take-outs from the session. Are we going to leave the EU? If so, how and when? “The fact that we had the referendum will irrevocably change the relationship between the UK [and the EU], but also the relationships within the EU,” said Gisela Stuart. She said that MEPs who had previously seen themselves as mediators between the demands of the masses and reaching compromises, had in the past three years found this too difficult to achieve. “I regard the present as a serious failure of the executive,” she said. “For the first time we are having European elections [and understanding the issue] and people are voting on the subject of Europe. Whatever the relationship will be, it will be a more pragmatic and informed one.” Ms Stuart said countries with the single currency would have to do more to politically integrate, while those without it had to create their own configuration – a two-tier Europe, which she said had been inevitable since the introduction of the euro. Sir Simon gave his predictions for the coming weeks: Theresa May would fail to get her deal through parliament and she would be removed as prime minister in June. Following a Conservative party leadership contest in July, a new leader, most likely in favour of a hard Brexit, would go to the EU to try get a deal through, but they would fail. A referendum on “no-deal or remain” or an election to try to secure a parliamentary majority would follow. The first two predictions have since proved correct. Mrs May announced on May 24 that she would step down in June, and the leadership contest is in full swing. Ms Stuart said that if there was a general election, Labour leader Jeremy Corbyn would have achieved a victory simply by virtue of an election happening. She said it would show that he had taken ownership of the party and erased the legacy of former prime minister Tony Blair. What would be Labour’s position on Europe if in government? “Everyone assumed Remain would win,” said Ms Stuart. “Labour finds Europe much easier because we are instinctively internationalist and cooperative, and those who campaigned to Leave were really a very small group.” She said because Labour had believed that the outcome of the referendum would be Remain, the party campaigned for it in order to emerge on the winning side, at which point its own divisions would seem negligible compared with those of the Conservatives. However, she said if centre-right governments gained further ground across Europe then a Labour-led government would find it harder to negotiate. How would the UK vote in a second referendum? If the UK government has to ask the EU for another extension in October, Sir Simon said the EU would need evidence of something that could trigger a change in the country’s stance, such as a second referendum or a general election. “I am a Remainer but if there was a second referendum which [produced] even the smallest majority for Leave, then I would accept it, because I think people now know what they’re talking about,” he said. “The risk is if we have a narrow margin in favour of Remain, then we won’t have resolved the problem.” How will the UK’s position in the world be affected by Brexit? Sir Simon argued that Brexit would damage the UK’s position on the basis that it put in question its relations with the EU and US, its primary means of exerting global influence. If the US-China relationship is to dominate the next decade, then he said other countries needed to decide how they wanted to position themselves. “We would be better off addressing that question as part of the EU,” he said. Ms Stuart countered that the world was changing so much that the EU – an institution that she said struggled to agree on anything – was no longer the answer, and the private sector was likely to play a greater role. This situation was forcing the UK to define its national interests rather than “hiding behind the EU”. Multilateral international arrangements, in which the private sector and government can interact effectively, would be crucial, said Sir Simon. “The way we influence events is by aligning with people with like interests, and those are the western democracies,” he said. A UK-US trade deal? The UK would first need to establish its trade relationship with the EU, said Sir Simon, and then stabilise the preferential trade agreements it has with other countries via the EU. Following this, the UK would be able to pursue trade deals with others, including the US and China. In negotiating a trade deal with the US, the UK’s leverage would be limited, he said. “We have to think about what we can offer them in our market.” If we move into the next stage of negotiations, is Brussels ready? “The only time in my political history where the UK was actually trying to speak European, and understand the way politics worked, was the first Blair administration,” said Ms Stuart. “As a government we have forgotten how the EU makes decisions.” Both speakers agreed that the EU has presented a united front so far, and has shown an ability to negotiate as one entity. “But that was the easy bit, the withdrawal,” said Sir Simon. “When we get into the future negotiation, there will be more divergent interests between the member states and different priorities.” Ms Stuart pointed to the effect of the composition of the new European Parliament and who would take over as president of the European commission from Jean-Claude Juncker. How should the UK maintain high ethical standards when operating with other powers? “What I have always admired about the British is their resilience and their ability to adapt and adjust,” said Ms Stuart. “It’s a world of hard knocks,” said Sir Simon. “You have to deal with countries that you don’t approve of and your objective should be to try to improve them, but boycotting them or not engaging with them in trade is self-defeating. Foreign policy is often about making the least bad choice.” He said, however, that the UK shared many values with other European countries and that the UK had to maintain these links if it went ahead with Brexit. “Democracies need to hold together. If we believe in this way of running society then we need to work with them.” How should the public and private sector work together? Adversarial relationships between companies and governments, such as in the case of Facebook and the European Commission, would need to make way for dialogue, said Sir Simon, adding that it was important for business to address its responsibility in society. “The Brexit vote wasn’t about economics, it was about identity and belonging,” said Ms Stuart, who argued that business and politicians would have to acknowledge this if they wanted to avoid a crisis. Does the UK have the imagination to reinvent itself? “People live their lives in a completely different way from 10 years ago, so we are running to catch up,” said Sir Simon. “And we are trying to think about that within existing structures. It is not just politicians, it’s all of us.” Even the referendum offered two versions of the past, said Ms Stuart. “I thought the UK would engage in an exercise of national renewal, and we have to get there, we have to have that discussion. But the current structures are simply not there.”.