Joe Owen, is an associate director of the think tank The Institute For Government where he’s leading the research into Whitehall’s preparation for exiting the EU. He explains how the Institute aims to help the Brexit process and why negotiating a deal for Brexit is more complicated than any other trade deal
At what point did the Institute For Government start to research the impact that Brexit would have on the workings of parliament?
We moved quickly after the referendum to set up a Brexit team and soon after began putting out explainers and comment pieces looking at what some of the options are and how the process should run.
The first Brexit paper that the Institute wrote came out about a week after the referendum and the key recommendation in it was not to set up an individual Brexit department. Our argument was that this kind of thing is better centrally managed in a Cabinet office as a coordination role and, in some respects, I think we have been vindicated with the recent move to bring the negotiations into the Cabinet office.
Who do you see as being the main audience for your Brexit research?
Traditionally our main audience is the Government. We were set up to try and make the Government more effective. We try and work with the Government of the day to focus on some of the challenges that they face and put forward recommendations. We don’t make policy recommendations. We don’t say, using the Brexit example, that this is the right kind of Brexit and this is the wrong kind of Brexit. We set out what we think the options are. We look at the structures and processes for how Government should deliver, not what Government should deliver. So traditionally our audience is the Government of the day and the focus is on the civil service and ministers and politicians.
For Brexit, however, we have cast the net slightly wider. We look at how we can inform the debate and inform those who are looking to Government and who are looking for answers and trying to understand what is a very complex and multifaceted issue.
When the Institute of Government began looking at Brexit did you envisage it unravelling in the way it has done?
It was clearly going to be a hugely complicated process. Anyone who says that they knew how it would play out is probably not being entirely honest. No one has done this before. There is no precedent to look to in terms of how this would work and there have been a number of twists and turns that I think not many people predicted.
What do you see as the biggest challenge facing the Government when it comes to Brexit now?
One of the big challenges that we have got at the moment is the divisions in parliament. The Prime Minister has to come up with a compromise that not only satisfies the EU side, but also the various parts of the UK side – the differing views within the Conservative party and parliament more broadly.
Last year’s election result was a real spanner in the works, with the Government failing to secure an overall majority. The Prime Minister has to walk a tightrope to keep different parts of her party and the DUP on board. The election was called to try and boost her Parliamentary position, giving the Government more leeway to get a deal through – but it did the opposite.
Do you agree with many of the reports that state that a ‘no deal’ Brexit is now increasingly likely?
I think that the priority on both sides is to get a deal. These stories of stockpiling food and medicines, etc. etc., which may be exaggerated – we are yet to see much info from the UK Government, show that no deal is a really big deal. And it would be a very big deal not just for the UK, but also for the EU. Both sides are keen to avoid it. About 80% of the withdrawal agreement is done, but there are certainly some thorny issues left. As we start approaching crunch time it’s not necessarily surprising that the rhetoric around no deal is increasing. But no deal is definitely still a prospect and it’s likely there will be some high drama in the Autumn.
Why is Brexit so different from other trade deals?
With most international trade deals, if one of the two sides realise that they can’t find a landing point and there is not a deal that can be done, they can just walk away from the table. Nothing changes, they’ve just failed to unlock any additional benefits.
The Brexit process is unlike that. Once you’ve pressed go on the ticker for Article 50 the two-year countdown to exit is the default. If there is no agreement between the two sides, things don’t carry on as they are. It’s the opposite, you get the most significant change in the shortest amount of time. It puts quite unique pressures on the negotiators to try and find a way through.
When it comes to the needs of business in particular, do you think the Government is listening to their needs?
I think that the transition period is seen as quite a big victory for business. That was something that large business groups at least were pushing for from relatively early on. They managed to win the argument with the UK Government and now there is agreement with the EU, although obviously, it’s bound up with the other withdrawal issues. But the point stands that the transition is an example of Government listening to business. However, I think that business has been further removed from the Brexit process than you would probably expect to see in a normal international trade agreement.
Part of the challenge is that Government is focussing firstly on negotiating with itself, between the ministers, and secondly negotiating with the EU. Those two things have been the priority and perhaps the views, the details and positions from business have not been quite as actively listened to as you would probably expect. That will need to change.
Why does business now need to be more involved in the Brexit process?
Business needs to be listened to if this is going to work, for two reasons: one in terms of negotiations and one in terms of actual implementation and preparation for life outside the EU.
In terms of the negotiations, even with the ‘brightest and the best’ inside Government working on this, there is a huge amount of detail that they will need to beam across when we start talking about the future relations, from specific regulations about chemicals to product labelling. For a handful of quite bright people in the centre of Government trying to understand how important each of those hundreds and thousands of regulations means to the specific businesses, there is a chance that they will overlook things.
You need to bring in expertise, views, perspectives from outside Government to really understand the implications of what is agreed around the negotiating table in Brussels.
In terms of the implementation, Brexit is not just about Government getting ready for life outside of the EU. Take a no deal scenario. The Government could pull a rabbit out of a hat and say on the 28 March 2019, guys don’t worry we’re ready, we’ve got all of these new IT systems in place, we’ve got new manpower and new infrastructure and don’t worry it’s all fine. But if the people who have to use those new systems and processes, who have to interact with Government, businesses of all shapes and sizes, if they are not ready there will still be disruption.
You see this in typical big changes that the Government does where one of the hardest bits is actually making sure that everyone who needs to use new systems and processes is ready to use them.
HMRC, for example, is running a programme making tax digital, which it’s had to delay the roll out of because there have been challenges around getting small businesses to react. With automatic pension enrolment, some businesses were given up to six years to adapt. Brexit could be a much more significant change than either of those things for some businesses. It’s not to say that you need the same amount of time, but you do need to be active in communicating, both in terms of letting people know what is going to happen and listening to the concerns of the people who will actually be at the thick end of implementing any change.