Why Brexit Could Happen Soon, and How It Will Affect Britain

Brexit has teetered on the brink of failure in recent months, as the British Parliament and the European Union have failed to reach agreement on exit terms. But today, those who support Brexit have cause for new hope. Nile Gardiner of The Heritage Foundation discusses new developments across the pond. Read the transcript, posted below, or listen to the podcast.

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Daniel Davis: The Brexit situation has been looking grim, but there is some good news today. Joining us to discuss is Nile Gardiner, director of the Margaret Thatcher Center for Freedom here at The Heritage Foundation. Nile, thanks for being on.

Nile Gardiner: It’s my pleasure, thank you very much.

Davis: So, Nile, there’s some background to get into on Brexit just from recent months, but I want to ask you, today, there is some good news, tell us what that is.

Gardiner: Yes. The good news is that the European Union are sending some very negative messages on the extension of Article 50. Article 50, the Lisbon Treaty, governs the date of departure for Britain from the European Union. And the EU’s chief negotiator, Michel Barnier, just a couple of hours ago made it clear that everyone should prepare for a no-deal Brexit on March 29. So this is exactly the kind of message you want to hear if you believe in Brexit.

And so, the EU is getting cold feet about going ahead with an extension for Article 50. That is good news. And any kind of signal coming from Brussels that the EU is uncertain about moving forward with an extension, this is a big positive.

The ideal scenario for Britain really at the end of next week, March 29, is for Britain to crash out of the EU under a no-deal Brexit. That would be by far the best option right now considering all the alternatives that are in place.

Davis: So what does that mean in practice? What does that mean for visas, for trade, for all sorts of issues if they exit without a deal in place?

Gardiner: A no-deal scenario simply means that Britain trades with the rest of the world under World Trade Organization rules and the British government has already declared that 86 percent of U.K. tariffs will be removed, actually, in the event of a no-deal Brexit.

Some tariffs will remain in place. But compare that with the European Union, which implements tariffs on practically everything. And so, Britain then will look to sign free trade agreements with major countries across the world, including with the United States. Already there are very detailed discussions that have taken place on the U.S.-U.K. free trade agreement.

In terms of dealing with the European Union, I don’t think things are going to dramatically change. I think that there will be a willingness on the part of most countries in the European Union to continue business as usual with the U.K., otherwise it hits their exports.

For example, Germany, which is a huge car producer, 18 percent of their car exports go to the U.K.. And so, for the Germans, they will quickly move forward, I think, with a mini agreement with the United Kingdom in the event of a no-deal to ensure that trade continues to move smoothly between the two countries.

I suspect that most European countries will look to move forward with mini agreements, which have to be done, of course, through the European Union. But I think its in the interest of all EU countries to be able to move forward with these smaller agreements with the U.K. to ensure that trade, investment, exports, etc., continue as usual.

I don’t think that no-deal actually will result in any kind of major disruption. Temporarily in the first few days, I think some things will have to be worked out. But the reality is that British government has been preparing for a no-deal for a very long time. These preparations have been in place for many, many months.

The British government has not been keen to advertise this because they have been keen to secure a deal with the European Union. The EU, however, has not treated Britain in good faith in terms of the negotiations.

But rest assured, if there is a no-deal, the sky is not going to fall in and Britain will continue life as usual as the world’s fifth-largest economy. And I think, from a U.S. perspective, a no-deal actually would be by far the best outcome right now.

Davis: Prime Minister Theresa May had a very difficult time finding an agreement between the EU and Parliament that would be agreeable to both sides. The vote on her deal failed multiple times. Is there doubt as to whether she will remain leader of Great Britain for the rest of the year?

Gardiner: Yeah, I think Theresa May’s days are numbered as prime minister. There’s no doubt about it. She has suffered a collapse of authority over the last few weeks, last few months.

You even have a situation whereby some of her own ministers are voting against her even though they have been subject to three-line whips. So there’s a collapse of Cabinet in a collective responsibility and she cannot maintain control of her own government right now.

There are many individuals inside the British government, including inside her own Cabinet, who are trying to derail Brexit and I think that these Cabinet ministers have played an extremely unhelpful role, but they’re still in place. Their jobs are still there.

Theresa May has lost all authority, frankly. I suspect Theresa May will step down at some stage later this year. And if indeed Brexit is brought in—either at the end of March or, as Theresa May is hoping for, at the end of June—I expect that she will step down soon after Brexit is implemented and that will pave the way for a Brexiteer prime minister, someone who is really fully invested in Brexit, to take over, which I think would be a far better alternative to having Theresa May stay as prime minister.

Kate Trinko: So it’s been a while now since the Brexit vote. Why was it so important for Britain, can you remind us, to take this vote and what are the long-term implications of this leaving?

Gardiner: I was there in the U.K. on the ground on the day of the vote and celebrated the results of Britain leaving the European Union. That’s a great question, why is this so important?

Well, Britain is part of the European Union, and bearing in mind that Britain has been part of the EU now for several decades, Britain has not been a fully sovereign country. So Britain at the moment has no control of its borders, it has no control of two-thirds of its laws, it has no control of its trades, its courts are subject to the rulings of European courts. Britain is, in many ways, a subject of the European Union.

You have bureaucrats sitting in Brussels who decide a huge percentage of British law and this is an unacceptable situation. So the British people have said enough is enough and they want to have their freedom back.

At the end of the day, Brexit is all about sovereignty and self-determination. The right of the British people to decide their own laws, shape their own future, trade freely with whoever they want to trade with across the world. And they will no longer have to take diktats from EU rules, really. This is what it’s all about.

The American people would never ever accept being told what to do by leaders in another country. It would be completely unthinkable and unacceptable. This is exactly the reality of the European Union today. So, Brexit is so hugely important in terms of what it represents for not just British sovereignty, but the principles of sovereignty and self-determination across the world today.

Davis: If Brexit does succeed, that does show that it’s possible to leave the European Union and to go on to be a successful, prosperous nation. Do you think other countries in the EU are watching Britain—

Gardiner: Yes.

Davis: … and that that may encourage them to take similar steps?

Gardiner: I think so. I think Brexit is being watched incredibly carefully by every country in the EU, which is why the EU elites fear Brexit so much because they fear the impact it will have upon other European countries.

I don’t think that right now any other country in the EU is preparing to leave the European Union and no other country is prepared to hold a vote on EU membership right now. Why? Because their leaders fear the outcome of those votes.

If France, for example, held a vote on membership of the European Union, I think it would be very, very tight today. And I think in several other European countries, the vote would be very tight.

In terms of other countries leaving the EU, that’s a matter for those countries to decide. But I think if Brexit is a success, I would not be surprised if in the next decade or so, you may see two or three other countries leaving the European Union.

It could become a flood in terms of an exit. And especially if some governments decide to actually hold referenda on EU membership, which could be a possibility in some countries in the next few years.

So, Brexit is a big game-changer, which is why the European political elites fear it so much, hate it so much, why they’ve made the terms of exit incredibly difficult. And they have treated the EU negotiations as a sort of punishment beating for Britain.

An opinion poll came out in the U.K. this week showing that over 60 percent of Britons believe that the EU has treated the negotiations as a punishment for Britain. So that’s where British public opinion is. It’s a fair reflection of the reality here.

Trinko: So, very big picture here. Let’s say that Britain does leave the EU on March 29, what does the political future look like for Britain as no longer being part of the EU? You’ve talked about Theresa May’s career being in flux, a lot of conservatives in the United States are concerned about the rise of Jeremy Corbyn. Do you think that this could fundamentally change the country in some ways, its political dynamic?

Gardiner: Yeah, I think that Brexit will result in a more assertive and self-confident Britain. Because if you have foreign leaders deciding much of your own law and deciding who can come into your own country, for example, then there’s a lack of self-confidence, which we’re seeing among some people in Britain today who are opposed to Brexit, they don’t really have the self-confidence in Britain’s ability to lead.

The reality is, I think, that Britain will be a far more assertive, stronger power on the world stage outside of the European Union. And that’s what sovereignty and self-determination really delivers, as Americans know so well. These are incredibly powerful principles.

I would expect that Britain will be more prosperous and also more assertive as a global leader in the Brexit era. And it’s significant that in the run-up to Brexit, British unemployment has fallen to a 44-year low. And there continues to be a huge amount of foreign direct investment flowing into the U.K.

U.S. foreign direct investment into Britain rose nearly 20 percentage points in 2017 alone, the last year we have the exact figures for, and it’s a demonstration of the confidence that U.S. businesses have in Brexit.

You’ve seen the likes of Google, Bloomberg, Apple, etc., setting up new headquarters in London in the last couple of years since the referendum, demonstrating that there’s a great deal of business confidence in Britain doing well outside of the European Union because Britain will have lower taxes, they won’t be subject to EU tariffs. Britain will also attract a lot of the best talent from all over the world as opposed to being subject to European Union migration laws and so on.

So Britain will have a lot more control over who it brings into the country and I expect that Britain will seek to bring in the best talent from across the world into the U.K. in the Brexit era.

All the indicators are that Britain will do very, very well under Brexit, will thrive and prosper. And you can’t put a price on freedom, which is, at the end of the day, what Brexit is all about. And it’s something Americans love dearly. The British people love freedom as well, but they haven’t been able to exercise that freedom in the last 45 years or so. And now, they have the opportunity to do so.

Davis: Before Brexit, there was the Scottish referendum. They chose to remain in the United Kingdom. Some have expressed concern that because Scotland was so largely in favor of remaining in the EU, that they may have second thoughts about remaining in the U.K. Do you believe that the United Kingdom itself will withstand Brexit?

Gardiner: That’s a very interesting point. So, in the Brexit era, since the 2016 referendum, support for Scottish nationalism has, if anything, fallen, actually. This is the most striking finding of opinion polls.

There’s no momentum for Scotland to leave the United Kingdom and one of the reasons for that, of course, if indeed Scotland does leave the United Kingdom, it will also be outside of the European Union under Brexit. It would have to apply to join the European Union.

Spain, for example, has indicated that they would strongly resist that because they have their own separatist concerns inside Spain with Catalonia. So the idea that the Scots could simply just rejoin the EU is not necessarily a reality.

They would also be outside of NATO and they would have no real defense. Also, Scotland relies very heavily on subsidies, especially from England. So, there isn’t really the appetite right now for Scotland to leave the United Kingdom.

I would expect if a vote were to be held in Scotland today, it would be even more heavily in favor of staying as part of the United Kingdom than in the last vote.

Trinko: Nile, thank you so much for joining us today.