Watson: There can only be ‘losers’ from Brexit

Graham Watson, the outgoing president of ALDE. [European Parliament]

This article is part of our special report Brexit: Where to, Brefugees?.

The upcoming UK elections are unlikely to deliver enough certainty about what life will look like post-Brexit, said the former MEP and ALDE leader in an interview with euractiv.com, adding that no winners will emerge from the process.

Sir Graham Watson was an MEP for twenty years, ten of which he chaired the European Parliament’s Justice and Home Affairs Committee and led its Liberal Democratic group. He subsequently presided over ALDE (2011-15) and is now a member of the European Economic and Social Committee.

Watson spoke with EURACTIV’s Editor-in-Chief, Daniela Vincenti.

What are your fears and hopes for this two-year period of negotiations?

My fear is that the deep divisions in the Conservative Party will be no more easily manageable for Theresa May than they have been for any of her recent predecessors. Even with her ‘own’ electoral mandate – which might buy her a brief honeymoon period after 8 June – the argument will keep coming back. And if the prime minister is not able to get her policies through parliament, negotiations with the 27 will be almost impossible.

My only hope is that something goes wrong and she loses the election because the public decides that Brexit was a mistake, allowing a new (Liberal Democrat?) prime minister to reverse the whole Article 50 process. But this scenario seems hugely far-fetched.

In the current circumstances, what kind of trade regime should we hope for?

The Norway model seems the best achievable in the time frame and the most obvious.

Watson: Cameron will never get a 'British' Europe

David Cameron seems to believe he can have a ‘British Europe’, but we will never get it any more than the French or the Germans will get a French or a German Europe. Europe is by nature a compromise, said outgoing ALDE party President Graham Watson.

The direct effect of Brexit on public finances would be to save on its current payments into EU budget. But any savings from direct contribution could be erased if Brexit results in a GDP loss by leaving the single market. Many will also suffer by losing EU grants and regional funding. Who is likely to gain or lose overall from Brexit?

There can only be losers from Brexit, financially and otherwise. My guess is that the UK will lose more than the 27. And it seems highly unlikely that Theresa May will find another £350 million a week for the NHS.

With over 2 million EU workers already in the country, any substantial reduction in that number could have negative effects (skill gaps, wages). What does Brexit mean for the UK workforce? 

The UK’s economic competitiveness depends to a considerable extent on a supply of relatively cheap immigrant labour. Particularly in agriculture, health and care for the elderly. Without foreign workers, for example, our slaughterhouses would close down. It seems to me unlikely that those who voted to leave will appreciate being told to become vegetarian.

The UK is often seen internationally as a gateway to Europe, due to factors such as its language, its pool of international talent and its lower market regulation compared to other EU members. Would it remain like that?

Some of these advantages will remain. And not all change will come overnight. But in the medium to longer term, one might expect that London will lose out to other European financial centres.

Excessive ‘red tape’ is often seen as a disadvantage of EU membership. But EU law underpins many of the key rights that protect workers, such as anti-discrimination legislation and maternity and paternity leave.  Could Brexit alter this for UK employees?

The prime minister has said she will write into law ‘lock, stock and barrel’ existing EU law. And even if, over time, UK governments were to try to dilute workers’ rights in a search for competitive advantage, its trading partners could be expected to have something to say. ‘Red tape’ will always be railed against by businesspeople and politicians. But it will always be with us.

Watson: New drivers for more EU integration will come from outside the Union

The drive for further European integration is not coming from within, it is coming from what is happening in the world outside, from the centripetal forces of globalisation, said European liberals leader Graham Watson, lamenting the lack of vision of European leaders today.

EU workers are already leaving as a result of Brexit (a record number of nurses from the EU are quitting the NHS).  Has Theresa May failed to reassure EU workers living in the UK?

She has clearly failed to quell people’s fears.

Do you think the upcoming elections could reassure EU workers in the UK?

There is unlikely to be enough certainty about what life will look like post-Brexit to reassure everybody. Indeed, one of Brexit’s biggest drawbacks is the uncertainty which will reign for a long time.

EU workers are hired at lower wages sometimes than UK workers. Will there be an increase in wages? 

Consumer price inflation is already being felt in the UK, as a result of Brexit. The addition of wage price inflation would hit living standards further.

How can UK employers best prepare for Brexit’s impact on their EU workforce?

Increased mechanisation, the movement of production outside the UK, greater emphasis on training unskilled UK workers – all these can help. But all involve disruption and probably higher costs.

 

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