22 July 2016

What will be the implications of Brexit for the Union? How should the UK Government involve the Scottish, Welsh and Northern Ireland governments in the Brexit negotiations? Akash Paun discusses a recent Institute for Government event that explored these issues with senior officials from the Scottish and Welsh Governments.

Working out the terms of the UK’s exit from the EU and its post-Brexit status will involve the British Government in parallel negotiations overseas and at home. A deal will need to be struck with the rest of the EU. And that deal will have to be agreed and ratified domestically, at Westminster but also with the governments in Edinburgh, Cardiff and Belfast.

In theory, Westminster might seek to assert its sovereignty and impose a Brexit deal over the objections of the Scottish, Welsh or Northern Ireland governments. But this would be to rip up the long-established and now legally-recognised ‘legislative consent convention’, under which Westminster seeks devolved agreement before legislating in devolved areas. It would also trigger political deadlock, legal battles and ultimately the possible breakup of the UK. As noted by Ken Thomson, Director General Strategy and External Affairs for the Scottish Government, some in government see the EU referendum result as meaning that ‘the Union is back in the melting pot’.

Scotland is the headline story here, since 62% of voters, the Scottish Government and a significant majority of the Scottish Parliament were pro-Remain. For Scotland to be pulled out of the EU and Single Market against its wishes would be seen in Edinburgh as ‘democratically unacceptable’, Thomson pointed out, and could create the conditions for a second Scottish independence referendum.

But Northern Ireland is tricky too, since Brexit raises the spectre of a hard border appearing between north and south of the island, putting at risk the gains of the peace process.

Wales poses no existential threat to the Union – and its voters narrowly favoured Brexit in any case. But in Cardiff, as Carys Evans of the Welsh Government told us, fiscal issues are a particular cause for concern. Some £600m of EU funding flows to Wales each year to support things like agriculture, regional development, infrastructure and research. Losing this would be a serious problem, especially given that Wales is already ‘relatively under-funded in relation to its needs’ under the Barnett funding system.

Conscious of these risks, the new Prime Minister, like her predecessor, has emphasised that all efforts will be made to find common ground with the devolved governments. Indeed, before even completing her ministerial reshuffle Theresa May visited Scotland to tell First Minister Nicola Sturgeon that Article 50 of the Lisbon Treaty would not be invoked without ‘a UK approach and objectives for negotiations’ having been agreed.

This is a positive start. And, our panellists confirmed, it was immediately followed up at the official level by serious discussions about the machinery of government that will be needed to make a reality of this commitment. These developments build on existing programmes designed to improve Whitehall’s understanding of and engagement with devolution. But ultimately much will come down to politics and the degree of willingness to negotiate in good faith and to seek a compromise acceptable to all sides.

Ken Thomson highlighted that the Scottish First Minister has in fact not rushed headlong towards a second independence referendum, but is instead exploring all options by which Scottish interests can be defended. This might include the possibility of establishing a new status for Scotland within both the UK and EU (or at least one that would maintain closer integration with the European Single Market), even while England withdraws more decisively. Scotland will expect to be dealt with on the basis of ‘parity of esteem’ in the domestic negotiations to come.

But experience and Institute for Government research shows that this has not always been the guiding principle of negotiations between the UK and devolved governments. There are no binding or legal rights for devolved governments to be involved in discussions around EU matters. Consequently, consultation with the other governments on such issues takes place on terms principally set by UK ministers.

This has been the cause of frustration in the past. During the (now-redundant) renegotiation of the UK’s terms of EU membership prior to the referendum, for instance, devolved governments were kept at arm’s length from the talks. The UK Government took the view that ‘relations with the EU are the responsibility of the Parliament and the Government of the United Kingdom as a whole.

This approach was not seen as appropriate in the context of Brexit talks, however, with the stakes so much higher. Instead, our panellists argued that intergovernmental relations should better reflect the fact that the UK is ‘a voluntary union of nations‘, and that the EU referendum had produced ‘four results, not one result’. Intergovernmental meetings should be recognised as negotiations between governments with their own priorities and mandates, rather than being treated as another type of Cabinet committee, on which the UK Government has a particular set of objectives it wishes to advance.

Issues to resolve between the four nations will include fiscal matters, immigration and freedom of movement, and questions about whether competences repatriated from Brussels will be devolved or retained at Westminster. The negotiations will by necessity reopen the devolution settlements and raise questions about the constitutional future of the UK. All this is likely to require ‘more federal thinking’ though not necessarily the creation of a fully federal constitution.

Can the UK rise to this challenge? All those involved in our event recognised the difficulty of finding an agreement acceptable to all levels of government in the UK and EU. On a more positive note, however, Carys Evans argued that reconstituting the UK’s relationship with the EU could be treated as a shared project that might have the potential to strengthen intergovernmental collaboration, rather than driving governments apart.


 

Further information

Find out more about 'Brexit: the implications for the Union', and watch video highlights of our key speakers.

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