Black comedy of errors: how the UK accidentally left the Single Market, and other Brexit stories

By on 16/02/2021 | Updated on 16/02/2021
Strained: In 2016, UK PM Theresa May – seen here with German permier Angela Merkel – made a speech committing herself to a hard Brexit; she spent much of her stint as PM trying to soften it again. Credit: Jay Allen/Crown Copyright

Newly published interviews with key figures involved in Brexit reveal how a lack of expertise led to major mistakes – and suggest that the UK government deliberately built an inexperienced team to handle this crucial issue. Catherine Early reports

In October 2016, three months after the Brexit referendum, UK prime minister Theresa May made a speech to the Conservative Party conference at which she set out her ‘red lines’ around the UK’s future relationship with the EU. These effectively ruled out membership of the Single Market or Customs Union – and appeared to signal a sharp hardening of her plans: Number 10 had spent months claiming that the UK could secure its goals without leaving the Single Market.

But according to her then-chancellor Philip Hammond, May simply didn’t understand the significance of her comments. The speech had not been shown to Cabinet members or Treasury officials, Hammond said in a newly-published interview, and when he heard her speak he was “completely and utterly horrified.” It seemed to him to be “almost a coup – a definition of Brexit without any proper Cabinet consultation at all”.

Hammond’s interview is one of several published by research body UK in a Changing Europe, which is recording the perspectives of key players in Brexit’s troubled development. Hammond reveals that May was shocked by financial markets’ reaction to her announcements. Sterling’s dramatic tumble “scared the bejesus” out of May’s team, he recalls; the PM’s focus had been on controlling immigration, and her team hadn’t recognised the economic implications of her red lines.

“If the Treasury had seen the speech, the Treasury would have told them that this is liable to cause destabilisation in markets, because at that stage the markets had not priced in a hard Brexit,” Hammond recalls. “They had all assumed that the trade relationship would continue much as before.”

No kudos for EU knowledge

So the UK’s Brexit journey had begun with the PM accidentally committing herself to a relatively distant relationship with the EU; much of her remaining three years in power would be spent trying to build a workable exit deal around the red lines with which she’d boxed herself in. On such moments, history turns.

If this was an error, though, it seems that the UK almost deliberately hobbled its civil service as officials began negotiating with their counterparts on the Continent. A separate interview with Philip Rycroft, permanent secretary of the Department for Exiting the European Union (DEXEU) 2017-2019, reveals not only that the civil service lacked senior leaders with deep expertise in the EU, but also that the specialists it did have were kept out of key roles.

Neither Rycroft, nor his predecessor as DEXEU permanent secretary Olly Robbins, had significant experience of dealing with the EU. In part, says Rycroft, this was a product of “decades of failure of the British civil service to build up the reputation – the kudos, if you like – of being someone who was an expert in handling European business. There ought to have been, at the senior level, far more folk across government who could have come into that space with the background and knowledge and, indeed, the connections and the relationships to be able to get going from day one.”

Philip Rycroft, photographed in the Cabinet Office during his time at DEXEU. Credit: the FDA/Nicklas Hallen

“The fact that, in order to find somebody to lead this new creation, you have to go to somebody who’d never done any European business – for whom just learning where Brussels was and how it ticked was a big deal – is, I think, illustrative of the relative neglect of the civil service over time of its cadre of officials experienced in doing European business,” Rycroft adds. “There ought to have been a lot more folk around who could have come in ready formed to pick up that huge challenge.”

But Rycroft also suggests that Europe experts were excluded from leading Brexit jobs, because their track record of working with the EU would have been seen by Brexiteers as evidence that they were covert Remainers. This “portrays the huge misunderstanding, A, of the civil service and, B, of the sort of challenge we were going to have – because this was going to be the biggest bloody negotiation the UK has ever embarked on,” he says. “To set off down that track with people who’d never been in that space before was an interesting move.” And soon, those old EU hands remaining in government were heading for the exit: the UK’s permanent representative to the EU, Sir Ivan Rogers, was forced out in 2017.

In Rycroft’s view, the UK’s handling of Brexit was weakened by the failure early on to make and win the argument that civil servants could – no matter their previous relationship with the EU – serve ministers impartially to deliver their goals. Sidelining the civil service’s EU experts, he argues, “plays into this whole ‘the civil service is a bunch of Remainers’ argument, doesn’t it? If you accept that premise from the start, then it marks your cards throughout the whole enterprise. To some extent, the civil service is still struggling with that.”

Severe bruising

Over at the Treasury, Hammond’s officials were also finding themselves the subject of suspicion and criticism. Under his predecessor George Osborne, in advance of the referendum the Treasury had published economic forecasts suggesting that the average household would be made £4300/year poorer by Brexit. Brexiteers were furious, painting the forecasts as a part of ‘project fear’; and when the No vote didn’t prompt an immediate recession, the forecasts were repeatedly used as evidence that Treasury officials were inherently pro-EU.

The Treasury “felt battered” by the accusations that it had conducted some kind of disinformation campaign, Hammond recalls. “People in the Treasury were clear that what they did was produce, objectively, the analysis they were asked to produce, based on the assumptions they were given. Perhaps naively, they were rather shocked to find that they were then placed firmly in the spotlight, centre stage.”

Former chancellor Philip Hammond. Credit: Chatham House/Wikimedia

The finance ministry was “severely bruised” by the experience, according to Hammond. When the government wanted to produce forecasts of the economic impact of no-deal in 2017, he recalls, the Treasury did not want to be in the forefront of the analysis and insisted that it was a cross-Whitehall exercise. And advice on the impact of failing to agree a trade deal with the EU was, Rycroft recalls, led by DEXEU rather than HM Treasury.

Divisions within the Cabinet made it difficult to have a serious discussion about the potential impact of no deal, recalls Rycroft. But civil servants did manage to put an honest and “pretty unadorned” paper on the risks to Cabinet, he says. “When people go about saying, ‘truth unto power,’ those two pieces of work stand out as the civil service doing what it needed to do, despite that very, very fractured political environment,” he recalls.

Ongoing damage

With the Cabinet itself deeply split along ideological lines, Rycroft recalls, the civil service has been caught in the crossfire. “The civil service has been drawn into that ideological debate without being able to assert a position of impartiality and independence loudly enough that has insulated it from the brickbats,” he says. “So it has taken damage.”

Rycroft doesn’t attempt to hide the civil service’s own errors, however – arguing that policymakers hadn’t recognised the sense of dissatisfaction and disenfranchisement out in the country in the run-up to the referendum. “The civil service would have seen elements of that, but did not have the ability to piece it together. The Whitehall I knew was quite good at looking at some long-term trends, like ageing, shifting geopolitical balance of power, the rise of China,” he says. “What they didn’t spend time doing is understanding what was happening with their own population.”

“Because we did not spend time in town halls in Wakefield or Gateshead, to just get a better feel for where the population was at,” says Rycroft now, the referendum’s No vote took most in Whitehall by surprise. The civil service had become detached from its own country, he adds: “That may be true of civil services across the world – I suspect not to the extent it is in the UK.”

The same is clearly true of PM David Cameron, who called a referendum on EU membership to kill the Brexit threat once and for all – and ended up giving the Brexiteers the keys to Number 10. From the very first moment, the UK’s Brexit story has been marked by major miscalculations on the part of key players. Theresa May is far from alone.

For more Philip Rycroft’s views on Brexit and its impact on the UK, read our recent interview.

About Catherine Early

Catherine is a journalist and editor specialising in government policy and regulation. She writes predominantly about environmental issues and has held permanent roles at the Environmentalist (now known as Transform), the ENDS Report, Planning magazine and Windpower Monthly, and has also written for the Guardian, the Ecologist and China Dialogue. She was a finalist in the Guardian’s International Development Journalism competition 2009, and was part of the team that won PPA Business Magazine of the Year 2011 for Windpower Monthly. She also won an outstanding content award at Haymarket Media Group’s employee awards for data-led stories in Planning magazine. She holds a 2:1 honours degree in English language and literature from Birmingham University.

2 Comments

    Leave a Reply

    Your email address will not be published. Required fields are marked *