2018: the shape of things to come - The year of a Celtic alliance against Brexit

Brexit will dominate UK politics in 2018 as it has for the last eighteen months. There will be no respite. The Phase 1 “divorce” agreement was the easy bit. Now come the all important trade talks. However, there is a very real question over what these trade talks will be about. Judging from its recent conduct, the UK government doesn't appear to have much of a clue.

What we do know is that nothing much is likely to change for the next three years, because Britain intends to remain in the European Single Market and the Customs Union for a transition period. Brussels will be adamant that this means Britain has to observe EU regulations, including free movement, and be subject to the rulings of the European Court of Justice until December 31st 2020.

Since fewer and fewer EU citizens seem to want to come to Britain right now – net migration fell last year by record 100,000 – free movement may not be a burning issue next year. Nevertheless, it will be hard for Brexiteers to endure this EU purgatory. The Tory MP, Jacob Rees Mogg, has complained that Britain will in effect become a “colony of the EU” since we will be subject to laws over which we have no control. Former colonies of the British Empire will regard all this with wry amusement.

The transition period is supposed to be only a temporary subjugation to Brussels, after which Britain will emerge into the sunny uplands of full independence. Britain will shun the bureaucratic EU and start trading on our own terms with the rest of the world. At least, this is the theory. It could be a little difficult in practice since most of the rest of the world is doing its best to trade on the terms set by the European Union. Eighteen months ago, Canada signed a comprehensive free trade agreement, CETA, with the EU, and last year Japan and the EU signed what was hailed as one of the biggest in history, covering 30% of the world's GDP. The idea that Britain can simply ignore the EU Single Market, the biggest and wealthiest free trading area in the world, is fantasy.

The more reasonable Brexiteers realise that they will have to strike some kind of deal with the EU. They say it will be “friction free” and “better than the single market”, though they’ve never made clear how. CETA took 7 years to negotiate and doesn't cover free trade in services, which is 80% of the British economy. The contradictions involved in trying to reconstruct a trade deal with Europe which is as good as the one we’ve just left is likely to drive voters, and many in the UK government, slightly mad. Though we can expect Theresa May will remain in Number 10 in 2018 because no one in their right mind wants her job.

The post-imperial delusion that the Europeans will just bend over and do whatever Britain wants should have been shattered by the Phase I agreement. Boris Johnson famously said that Brussels could, “go whistle” for any €50bn divorce bill. Well we saw what happened to that. 2018 will start with a huge row about what the UK meant by saying if would remain in “full alignment” with the Customs Union in order to avoid a border in Ireland.

The Brexit Secretary, David Davis, said that this was “not enforceable in law”, but the EU will say that it must be made so before trade negotiations can continue. This certainly includes free movement, agriculture, environment, transport, tariffs, non-tariff barriers, regulatory harmony, civil rights and so on. We’ll learn more than we ever wanted to know about beef rules-of-origin. But Ireland has secured what the Taoiseach, Leo Varadkar, calls a “bullet proof” assurance from the EU that there will be no border. The UK appears to have locked itself into remaining in full alignment, to all intents and purposes with the very trading organisation it has just left.

The Scottish government will be watching developments with a mixture of horror, amusement and optimism. The SNP is horrified at the thought of leaving the EU, but like the rest of us has been guffawing at the Mr Bean escapades of the UK negotiators. However, Nicola Sturgeon is increasingly hopeful that hard Brexit will not happen, and that either the UK or Scotland will remain in the single market, or in such close alignment to it that it makes no difference. If Ireland is somehow given a special arrangement that allows the North to remain effectively in the single market then Scotland and Wales will surely demand the same treatment.

The ultimate irony of Brexit is that it has forged a community of interest between all the Celtic nations – Scotland, Wales, Ireland and Northern Ireland – in forcing the UK to honour its promise of full alignment with the single market. The Unionist leader Arlene Foster is for once on the same side as as Nicola Sturgeon as far as avoiding borders is concerned. Who could ever have imagined that? It’s one for all and all for one customs union. We could be seeing a new United Kingdom emerging in which Ireland and the devolved parliaments become a counterbalance to England in confederal British Isles.

In Westminster, the Scottish and Welsh MPs will spend much of the next six months trying to amend the EU Withdrawal Bill on the grounds that it undermines devolution. The question of the repatriation of powers to Holyrood from Brussels has taken a back seat recently. But it will come storming back in 2018 if and when the Scottish Parliament refuses to give legislative consent to the Bill. This will be a constitutional crisis, even though Westminster can overturn it.

The role of the House of Lords will be crucial to developments in 2018, on the devolution issue and on other aspects of Brexit. Emboldened by Theresa May’s recent Commons defeat on giving MPs a vote on the Brexit terms, peers will not hesitate to subject the Withdrawal Bill to rigorous scrutiny. The Daily Mail will not like it. Campaigners for a second referendum on Brexit are beginning to believe it might just happen. Another referendum is most unlikely, but Jeremy Corbyn will be watching the opinion polls very carefully and swinging whichever way the voters appear to be going. Labour has been swinging ever more rapidly towards soft Brexit, and in the New Year may find itself ending up supporting no Brexit at all.

However, this prospect of full alignment with the single market makes it difficult for Nicola Sturgeon to decide the timing of the Scottish independence referendum. When she “reset” the indyref2 timetable in June, she promised to come back to Holyrood in autumn 2018 to map the way forward. Many in the independence movement believe she intends to call a referendum there and then. However, this seems most unlikely.

There’s little evidence that Scottish voters are anxious to go back to the polls, since there remains great uncertainty about where the UK is going and what Brexit means. Indeed, by repeatedly calling for the UK government to honour its promise of full alignment with the single market, Nicola Sturgeon, may have undermined her own case for a referendum. If the UK is to remain in the single market, or in some special relationship with it, then it is difficult to see the justification for an independence referendum – at least at this time.

This will dismay many SNP supporters who think that there will never be a better time to call indyref2. The UK government is in disarray; Brexit is a nightmare; Holyrood's powers are under threat; and most important of all, if there is no independence referendum before March 2019, it will be impossible for Scotland to become independent before the UK leaves the EU. This means Scotland will itself be out of Europe and will have to go through the complex process of readmission. The hostile attitude of the EU towards the Catalan independence movement, which will rumble on in the New Year, should have made clear to Scottish nationalists that they can expect little help from Brussels. The SNP may lose support in the Holyrood elections of 2021, and not be in a position to win a vote for indyref2.

However, Sturgeon can't risk calling an early referendum she might lose, especially after the aborted referendum of 2017. Her authority in her party remains strong, and it seems unlikely there will be dissension in the SNP ranks – at least not in public. But 2018 is going to be a very hard year for Scottish nationalists as they see their dream of an early referendum fade.