UK Prime Minister Theresa May’s letter triggering Article 50 is winging its way to European Council president Donald Tusk and will be delivered later today.
The letter – signed by the PM last night and already en route in the hands of the British ambassador to the EU Sir Tim Barrow – officially starts the two-year process of negotiating the divorce and the big question of whether the country is heading for a hard or soft Brexit.
The trouble is, there’s no clear definition of what hard or soft means in this context, and that uncertainty seems likely to have an impact on the UK economy and its core industries as the Brexit negotiations rumble on. The value of sterling is already on the slide today in anticipation of the trigger being pulled.
A hard Brexit could mean no compromise on issues like free movement of people, exit from the single market and trading with the EU based on World Trade Organization (WTO) rules, which would mean tariffs on trade.
At the other end of the spectrum, a soft exit might involve some form of membership of the single market, in return for surrendering some sovereignty, such as free movement of people (unlikely given the government insistence on immigration curbs) or acceptance of EU laws, and continuing to pay into the EU fund.
Other issues such as the rights of EU nationals in the UK and vice versa, travel visa requirements, the future of customs union, cross-border security and the UK’s access to collaborative scientific projects are all up in the air.
Theresa May will tell MPs today that “it is my fierce determination to get the right deal for every single person in this country”, and “as we face the opportunities ahead of us on this momentous journey, our shared values, interests and ambitions can – and must – bring us together”.
Earlier today, Chancellor Philip Hammond acknowledged that there would have to be “give and take on both sides” and that not being “full members” of the customs union and single market would “have consequences”.
“We understand that we can’t cherry pick,” he told the BBC’s Today programme this morning. Meanwhile, a leaked report from the German government seems to suggest that Chancellor Angela Merkel wants to complete the process in just 15 months and will oppose “all forms of individual agreements” as this could lead to a split in the 27 EU states.
Theresa May’s letter is several pages long and sets out her vision of how Brexit will proceed, including the key elements laid out in the white paper published a few weeks ago. Tusk will acknowledge the letter swiftly but is not expected to provide a detailed response until later this week – probably Friday, according to BBC news reports.
The tough stuff then begins. The government is expected to publish details tomorrow of its “Great Repeal Bill”, which will endeavour to convert EU law into domestic legislation and repeal the European Communities Act, which says EU law is superior to UK law.
Once set in motion, Article 50 cannot be stopped except by unanimous consent of all member states, and any deal must be approved by a ‘qualified majority’ of EU member states – but can be vetoed by the European Parliament.
While the response from the EU is awaited, industry outside the UK is already somewhat more combative. The VDMA – which represents Germany’s manufacturing industries – argued this week against making any unilateral concessions to the UK, saying that preserving the EU single market was “more important for the industry than the short-term facilitation of trade with the UK”.